Te Whatu Ora – What We Now Have, What Are Its Risks And What Should It Be Done To Make It Better For Patient-care

Alternative heading: How can we get out of this
crap?

Ian Powell

Health system
commentator and blogger

Former Executive Director,
Association of Salaried Medical
Specialists

Presentation to New Zealand Branch Annual
General Meeting

Australian and New Zealand Oral
Maxillo-Facial Surgeons

Queenstown

5 August
2023

In a nutshell the main features of the new health
system, which came into force on 1 July 2022,
are:

• increased influence of business consultants
  in design and operation;
• marginalisation of the
  influence of those with experience in health
  systems;
• driven by structural rather than cultural
  change;
• removal of a level of statutory
  decision-making close to the point where most community and
  hospital healthcare are provided;
• vertically
  centralised decision-making setting the foundations for a
  control culture; and
• threatened by failure to
  address widespread workforce shortages and increasing health
  demand.

When it came into office in October 2017
then Prime Minister Jacinda Ardern’s government ignored
the two main imperatives that required urgent focus –
severe workforce shortages, made more difficult by rising
health demand and the top-down leadership culture of the
Ministry of Health.

Instead it focused on further
centralising an already centralised health system through
massive restructuring.

The health system that we now
have

Te Whatu Ora (Health New Zealand) has inherited
a new health system largely devised by business consultants.
This is akin to the wisdom panel-beaters designing traffic
roundabouts or Auckland Mayor Wayne Brown writing a book on
etiquette. The main beneficiaries are business consultants
(or panel-beaters but perhaps not book
publishers).

Compounding this fundamental error was
the incompetent decision to restructure the whole health
system in the midst of the pandemic instead of working to
fix these key pressures on the system.

Hospital
occupancy

Hospital occupancy is an excellent summary
barometer for highlighting the precarious position that
political and other decision-makers have now put the health
system in.

In 2022 our public hospitals hit 100%
occupancy more than 600 times. That is, on average, each day
roughly two public hospitals around the country were running
at an occupancy higher than they were resourced
for.

Hospital occupancy of 100% was occurring back in
2017 but nowhere of this magnitude. Hospitals were in crisis
in 2017. In 2023 it would be more appropriate to call it
scary crisis+. Carnage might not be overstating
it.

Behind high occupancy is ‘bed blocking’ where
patients can’t be admitted to the wards from emergency
departments because they are already fully occupied.
Emergency departments become overcrowded. Diagnoses and
treatments are delayed and planned surgery cancelled. The
terminally ill are not spared.

The risks that we now
have

Crises in health systems are the genesis of
risks – to patients (including access and safety),
workforce health and safety, innovation, quality, and
systems improvement.

Our current crisis won’t be
addressed until its immediate causes are resolved – severe
workforce shortages and rising health demand (particularly
acute and chronic illnesses).

However, these causes
will not be resolved until there is a substantial culture
change within Te Whatu Ora that enables it to focus much
more thoroughly on addressing them. The problem is that the
new entity is well short of possessing that prerequisite
culture.

The ‘culture’ of Te Whatu Ora’s
leadership is totally consistent with the restructuring that
created it. It is the most vertically centralised national
entity that our health system has ever had.

Its prime
culture driver is vertical centralisation. It is as
destructive as the culture of running the health system as a
commercial market was in the 1990s; arguably more
destructive.

This, and the distance between its top
leadership and from where healthcare is provided, makes its
culture top-down. What is needed therefore is a shift to a
culture that is engagement based, empowering and
relational.

Commissioning and localities

One
word more than any other is used to describe the operational
role of Te Whatu Ora – ‘commissioning’. It is a
central part of the Pae Ora Act.

It is a relatively
new term in our health system. Under former Director-General
Chai Chuah it was used but more by way of title than
anything substantively new.

In the National Health
Service in England commissioning has been used on and off
since the 1990s depending on the particular ideological whim
at the time. Each time it has been in fashion it has had a
different meaning. Currently it appears to be out of
fashion.

In our context commissioning can best be
described as funding and planning, both nationally and at a
district level. But, in addition to commissioning, Te Whatu
Ora is also responsible for the operational delivery of
health services that was previously undertaken by the
DHBs.

To enable commissioning to be actioned locally,
the Pae Ora Act establishes what are called localities who
are to undertake locality planning, supposedly central to
it.

But these localities have little resemblance to
what the Simpson review recommended which was that they
function as relational based networks working with and
resourced by their relevant DHB.

Now localities are
considerably watered down and under the express control of
the vertically centralised Te Whatu Ora.

Further,
internal Te Whatu Ora restructuring currently underway is
leading to a loss of staff working at a district level on
the functions of what is now called commissioning. This is
directly relevant to localities.

As these functions
are shifted ‘upstairs’, staff who performed them at a
district level are losing their positions.

To
reinforce this point, the staff at the former MidCentral
DHB, who developed the locality approach that excited the
Simpson review, now find their positions disestablished.
Does irony get better than this?

Replicate this across
the country and no wonder that the implementation of
localities has stagnated. When even a former head of New
Zealand’s state services can’t get any sense from his
inquiry to Te Whatu Ora on the role of localities, no wonder
confusion is rampant.

The future of localities is
precarious at best. If National leads the next government
after October’s election they are most likely ‘gone by
lunchtime’. Should Labour lead it, they are most likely to
splutter along in a leadership vacuum.

Unhappy
workforce

In the days of DHBs in any particular
district, each DHB was the biggest employer, Now Te Whatu
Ora is the biggest employer in the country. Unfortunately,
arguably it also has the unhappiest workforce.

In
part, with the exception of its highest levels, this is
because they went to it not by choice but legislative
transfer. Most came from the DHBs with a smaller number from
the health ministry.

We now have a committed workforce
that has been destabilised by substantial restructuring
which has been poorly explained and lacks a convincing
intellectual construct. It feels disrespected and devalued
with the inevitable outcome of demoralisation.

Those
closer to the ‘clinical frontline’ were already fatigued
and many burnt out. Those further away from this frontline,
but essential to its performance, are devalued, demoralised
and many of them in the process of being shown the
door.

When Tony Ryall became health minister in late
2008 he initiated a harmful populist slogan of shifting
resources from the ‘back office to the frontline’. He
introduced an arbitrary cap on the number of so-called back
office staff.

This neglected the reality that
overwhelmingly these demonised back office staff were
integrated into what specialists and other health
professionals did at the front line.

This included
ward clerical staff, booking staff for outpatient clinics,
schedulers for operating theatres, information technology,
secretaries, and operational service managers. It also
included data analysists.

The effect of the upwards
centralisation under the guise of rationalisation today
under Health New Zealand has strong with Ryall’s
demonisation. Devaluing leads to demoralisation.

This
has come to a head with the failure of Health New Zealand to
provide accurate data that informs the effectiveness of the
health system, such as case emergency department
admissions.

The cause is the loss of experienced data
analysts to the system. The push factor is the destabilising
and devaluing restructuring both leading up to and after the
formation of Te Whatu Ora. The pull factor is the
opportunity to practice their skills elsewhere outside the
health system.

Making the health system work better
for patient care

So how can Te Whatu Ora make the
health system work better for patient care. The first thing
to be said it that restructuring the recently restructured
system is not the way to go. There is no magic bullet. Given
what the workforce has already been put through, it
doesn’t deserve to suffer more destabilisation.

Pae
Ora Act purpose clause: aligning health system internal and
external moralities

In order to function effectively
health systems require two aligned ‘moralities’ –
internal and external. Internal moralities reside within the
ethos of its workforce reinforced by their professional
colleges and associations. This is a rich strength that
health systems benefit from.

External moralities
define the overall parameters, including distinguishing
characteristics, of health systems, beginning with
legislation. The Health and Disability Commissioner Act,
including its requirement for informed consent, is a case in
point.

Legislation governing how the health system
should be structured and why is a critical external
morality. The starting point is an act’s purpose clause.
In the case of the Pae Ora Act, its purpose is characterised
by its brevity, nebulousness and misplaced focus.

The
purpose of the Act is to provide for the public funding and
provision of services in order to:

1. protect,
   promote, and improve the health of all New Zealanders;
   and
2. achieve equity in health outcomes among New
   Zealand’s population groups, including by striving to
   eliminate health disparities, in particular for Māori;
   and
3. build towards pae ora (healthy futures) for all
   New Zealanders.

The first purpose is
uncontestably correct and uncontestably vague on its own.
Similarly, so is the third purpose with its apparent bent
towards population health.

It is the second purpose
which has serious credibility issues. Health inequities and
disparities are overwhelmingly driven by social determinants
of health such as low incomes, poor housing, limited
educational opportunities, and social and community
contexts.

While “striving to eliminate” them is
one third of the Act’s overall purpose, these determinants
are outside the control of the health system. Eliminating
them requires government actions; legislation and policies.
Health systems can mitigate but not eliminate.

By
failing to give a clear steer on the purpose of the health
system, the clause defaults to allowing a new vertically
centralised leadership to emerge in the way it has –
control.

Consequently, in order to improve the
external moralities of our health system, the purpose clause
of the Pae Ora Act should be amended to include the
following:

1. Mitigation rather than elimination of
   health inequities and disparities.
2. Recognition of
   role of social determinants of health on inequity and
   disparity, including the role of the Act’s health entities
   to advise government of their ongoing impacts on health
   status.
3. Placing at a systems level adherence to
   healthcare provision being
   patient-centred.
4. Integration between care in
   communities and care in hospitals, including clinically led
   and developed pathways between them.
5. The culture
   within Te Whatu Ora to be relational based on engagement
   with and empowerment of its health professional
   workforce.
6. Emphasis on Te Whatu Ora’s role to
   provide national cohesion rather control of healthcare
   provided locally.
7. Explicit responsibility of Te
   Whatu Ora for the wellbeing of its
   workforce.

The rationale for these suggested
amendments to some extent has already been discussed and/or
is discussed further below.

“If you don’t take
the temperature you can’t find a fever”

Towards
the end of last year I got together with my political
opposite Heather Roy (former ACT MP, health spokesperson and
deputy leader). We agreed to work on a joint paper to Te
Whatu Ora on how to make the system we now have work better
for patients.

Our approach was that this was not the
system we would have designed. A vertically centralised
system such as this was unlikely to address nuanced local
population needs. Nevertheless the system is what it
is

The two of us came from different parts of
political spectrum and often had conflicting positions.
However, the joint paper was not a compromise document.
Instead it was a shared developed consensus based on
pragmatism.

The paper was not about funding. However,
we did recommend that funding should be seen through an
investment lens recognising that bodies such as the
International Monetary Fund have concluded that investment
in health was good for developed economies.

The paper
was titled Te Whatu Ora: Achieving Patient Centred Care
and Wellbeing followed by a subheading: “If you
don’t take the temperature you can’t find a
fever”.

The recommended approach was to incorporate
the matters discussed below as much as practical by way of
policy rather than substantive structural or legislative
change.

It was sent to Te Whatu Ora on 16 January,
distributed widely throughout the health system, and
published in three instalments by
Newsroom.

Patient Centred Care

Our
starting point was putting the patient first through what is
known as ‘patient-centred care’. Health professionals
are familiar with this term but usually in the context of
treating the individual patient in front of
them.

Patient-centred care should also be given a
systems purpose, making it the yardstick of decision-making.
Every non-clinical decision, before proceeding further,
should be assessed on whether it advances or hinders
patient-centred care.

Incorporate subsidiarity
principle

Incorporating the principle of
subsidiarity in the culture of the health system goes to the
heart of ensuring patient-centred care.

Most
healthcare innovation, service design, configuration, and
delivery is done locally by health professionals. Good
clinical sense also makes good financial sense.

An
increased level of greater local decision-making is
important for continuous quality improvement. It is the core
of sustainable systems improvement.

Consequently the
subsidiarity principle should be incorporated into Te Whatu
Ora’s culture, including its strategic and operational
functioning.

Integrated care

The passing
of the Pae Ora Act meant a loss of the legislative
requirement for integrated care between community and
hospital. This was to the detriment of patient-centred
care.

Focussing horizontally between care in
communities and care in hospitals significantly improves
patients’ access to and quality of healthcare. It also
plays a significant role in constraining acute hospital
admissions (keeping people out of hospital).

The
internationally recognised pioneering work of the former
Canterbury DHB in developing health pathways between
community and hospital based care is instructive.

It
demonstrated that horizontal integration is where the most
significant healthcare improvements can be made from within
the health system. This includes mitigating some of the
impacts of the external social determinants of
health.

Te Whatu Ora needs to recognise this and work
hard on integrating community and hospital care as a matter
of policy priority.

Culture

The failure
of those responsible for focussing on structural rather than
cultural change is ultimately behind the worsened crisis the
health system now finds itself in.

Culture is the most
decisive driver of system effectiveness. Patient-centred
care can’t be achieved without the right culture.

No
sector in New Zealand has such a large concentrated critical
mass of intellectual capital. It is the best resource Te
Whatu Ora has to draw upon. Those who do the job know best
how to improve it.

It should therefore ensure that
decision-making is distributed as close to the workplace as
practically possible. This involves workforce empowerment,
including what is known as ‘distributed clinical
leadership’ (as distinct from formal clinical leadership
positions).

Workforce shortages

Whether
one describes the severity of the workforce shortages as
crisis, scary plus+ or even carnage, top priority needs to
be done to address it. Te Whatu Ora’s recently announced
workforce strategy falls well short of what is
required.

In the past and for good reason there has
been a stronger emphasis on retention than recruitment.
There is a relationship between the two; stronger retention
benefits recruitment when natural attrition
occurs.

But this has changed since salary increases
were severely constrained from the 2010s, not by DHBs, but
by both National and Labour-led governments. This is
compounded by the aging of the workforce.

There is not
a single labour market in Te Whatu Ora’s health
professional workforce. They vary from specialists to nurses
to (and between) the numerous critical allied health
professional groups.

The reality is that, depending on
the occupational group, Te Whatu Ora has to compete
domestically in a wider private labour market (such as
scientists) or internationally in an Australian labour
market (especially in the case of medical specialists
compounded by their significantly longer training
requirements).

Consequently, it needs to engage
directly with the applicable unions to develop recruitment
strategies targeted at the specific occupational groups and
their different labour markets.

External social
determinants of health

I’ve previously discussed
the significance of external social determinants of health.
They are the biggest driver of health demand and cost,
including being the most consistent factor in rising DHB
deficits from the early 2010s. Health consequences include
increasing chronic illnesses and acute demand.

Te
Whatu Ora needs to recognise and act on the importance of
mitigating social determinants. It should also advocate for
government to make the necessary policies and legislative
changes to eliminate them. Neither Te Whatu Ora nor the
other new health entities can do the latter.

Major
capital works

Te Whatu Ora has inherited the
legacy of a fiscally irresponsible approach to major capital
works, by central government over many years.

This
inheritance is hospital rebuilds which are poorly equipped
to cope with future demand. Examples in the late 1990s and
2000s include Auckland, Rotorua and Wellington
Hospitals.

But in the 2010s it got worse. The
Christchurch acute services block business case was
submitted by the DHB to the health ministry before the first
earthquake in 2010.

By the time of the much delayed
opening of the new facility 10 years later, it lacked the
capacity to meet even existing healthcare demand. This looks
like being replicated at Dunedin Hospital.

The problem
is that initially there is a high level of clinical
engagement at the hospital level in terms of assessing
existing health demand and future proofing it.

This
leads to a business case which goes to central government
where the process gets delayed, clinical and local
operational expertise is marginalised, and arbitrary
downsizing is the outcome.

Under the Pae Ora Act major
capital works are now at greater risk of this not only
continuing but also escalating. This is because there is no
longer a local statutory body charged with representing
their defined population’s health needs.

Te Whatu
Ora needs to recognise this and work to ensure that rebuilds
are consistent with the clinical and operational expertise
which leads to business cases and that this expertise is
actively engaged with.

Further, it needs to require
that approved rebuilds make good clinical and environmental
sense, and are future proofed for anticipated health
demand.

The way forward

The way forward to
enabling Te Whatu Ora to make our new health system work
better for patients is to base it on ensuring
patient-centred care as Heather Roy and I
advocate.

This presentation today is timely. Since we
published our joint paper in January. I’ve been giving
further thought about how this might best be progressed.
Here are some thoughts to expand on:

1. Empowering
   regions and districts.
2. Networks.
3. Role of
   local government.
4. Polyclinics as part of local
   integrated care systems.
5. Role of primary care
   organisations.

Empowering regions and
districts

The regions and districts within Te
Whatu Ora should be empowered to make decisions relevant to
the design and provision of local hospital and community
services.

Don’t restructure again. But drop the
top-down control culture inherent in vertical centralisation
and go relational.

This should be drilled down further
by its regions and districts being empowered to have a
proactive engagement culture with its health
professionals.

The greatest relevant experience and
expertise over how to improve hospital and community health
services rests with this workforce.

We need an
engagement culture that empowers them to be in the
engine-room of decision-making. We need an engagement
culture that will better enable improved healthcare within
hospitals, between hospitals, within communities, and
between communities and
hospitals.

Networks

While representing
salaried specialists and other senior doctors and dentists,
I was proud to have been part of popularising clinical
networks. I was influenced by innovative developments in
Scotland and New South Wales.

A positive feature of
the 2000s and 2010s was the emergence and development of a
range of these networks – nationally, regionally between
DHBs, and between community and hospital care.

They
included cardiac and trauma nationally and integrated
community and hospital care beginning in Canterbury. Their
strength was in part because they were clinically developed
and led.

Equally important was that they worked on a
relational rather than structural basis. This gave them the
necessary oxygen to be innovative rather than constrained by
organisational structures.

They could not determine on
their own. But their oxygen enabled them to provide
independent expert advice unobstructed.

Unfortunately,
but consistent with vertical centralisation, Te Whatu Ora is
moving to bring these networks directly under its
operational structure. This lacks insight. It is most likely
to stifle innovation and consequently compromise quality
improvement and cost-effectiveness.

Te Whatu Ora needs
to drop this move and recognise the value of relational
rather than control
culture.

Polyclinics

Te Whatu Ora should
be innovative and plan to provide non-surgical facilities
for local integrated care systems; in other words,
polyclinics.

These should provide general practice
care (particularly in areas of GP shortages), 24/7 urgent
care, less complex hospital care (including outpatient
clinics and visiting hospital specialists), relevant
diagnostic support, and relevant allied health professionals
services.

There are several embryos of polyclinics
throughout New Zealand which do excellent work. One that
comes immediately to mind is the innovative Horowhenua
health centre in Levin established by the former MidCentral
DHB. I would not yet call it a polyclinic but it is moving
in that direction.

I hope to see this picked up and
run immediately south of Horowhenua on the Kāpiti Coast
where I live.

Enhanced role for local
government

The Local Government Act requires local
government (city and district councils) to improve community
wellbeing. Accessible and comprehensive quality healthcare
is integral to wellbeing.

Councils are also already
responsible for public health matters such as water
sanitation and food safety, including requirements to
involve medical officers of health employed by the former
DHBs.

The Pae Ora Act requires consultation, albeit
tokenistic and sidelined, with local government over
localities and locality plans. While the future of
localities is precarious, it still sits there in the
legislation.

Councils need to enhance their role by
providing a statutory voice for the health status needs of
their populations. Some are already considering this. Te
Whatu Ora should encourage this rather than be
dismissive.

Primary care
organisations

The Heather Simpson review
envisaged, over time, localities replacing primary health
organisations (PHOs). This was in the context of DHBs
picking up their organisational functions.

But this
was overturned by the abolition of DHBs leaving PHOs
continuing in an uncertain limbo.

Over the past four
years I have become more engaged with primary care and have
developed a much better understanding of the valuable role
of PHOs.

While varying and acknowledging there is some
limited scope for rationalisation, they do invaluable work.
Backed by impressive data, they know their populations’
health statuses well.

They have become the most
reliable and experienced institutional glue remaining across
primary care. Te Whatu Ora should embrace then and support
their continuation.

What would Mark Twain
say?

New Zealand now has a system largely devised by
business consultants were also the main beneficiaries. But
insufficient work was done in advance on how the new system
might work. Te Whatu Ora was left to build a plane while
flying it or build a house without an architect’s plan and
resource consent.

The tragedy of the ‘health
reforms’ is not just that they threw the baby out with the
bathwater. They also threw the bath out. If our health
system is to be protected and enhanced, the baby at least
needs to be retrieved.

It is depressing. However, I
would like to share something my father once said to me.
First, if you come up with an idea or turn of phrase that
you want to impress people with, say Mark Twain said it. His
rationale was that no one would ever know! He got that
right.

Second, when things seem bad, say that Mark
Twain once said that while the glass is always half full
rather than half empty, if in doubt put a small drop of
whiskey in it. I can’t fault this fatherly
advice.

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