Challenges and opportunities

The New Zealand Health Strategy will use New Zealand’s many strengths to deal with challenges and make the most of opportunities for the health system.

New Zealand’s health system is strong

By measuring our performance against international benchmarks, we can see that New Zealanders usually get the health care they need when they need it and that most New Zealanders are generally happy with the health services they receive.1

Among New Zealand’s strengths are:

  • a publicly funded, universal health system with a committed and highly trained workforce
  • health services with a strong focus on primary care and a widely supported focus on wellness
  • a unique public health and no-fault accident compensation system, which serves the whole population throughout their lives
  • a strong desire for health and social services to work better together
  • local decision-makers in district health boards (DHBs) who are well positioned to respond to community needs and integrate services
  • a growing best practice evidence base developed through research
  • Māori and Pacific health providers, connected to their communities and modelling integrated approaches to health.

… and connected to a changing world

New Zealand will always be geographically distant from the rest the world. But we are now more connected with it than ever, as people move around the world, technology markets become global and the internet spreads knowledge and cultural practices.

This international context will continue to shape New Zealanders’ experience of health. It means our system needs to be aware of developments and effectively draw on and absorb global ideas and evidence.

Global challenges

  • Health and social services must be provided to increasing numbers of older people who are living longer.
  • The health burden of long-term conditions, such as heart disease, diabetes, depression, dementia and musculo-skeletal conditions, is growing.
  • Benefits need to be assessed in light of affordability as new technologies and drugs emerge and expectations about health services rise.
  • The global workforce is highly mobile.
  • New infections and antibiotic resistance are emerging.
  • Climate change has health and social consequences.

We face challenges

‘Given New Zealand’s ageing population… it is critical that the health system includes in its planning specific actions to manage this demographic change.’
–Non-governmental organisation

New Zealanders are living longer, and every year, more of us are aged over 65 years. This is good for individuals and their families. But it does mean social and health services will have to adapt, and it challenges the health system to find ways of providing services that are still affordable.

Keeping an older person healthy and independent can involve more health and social services than are needed for younger people. Older people are also more likely to have a disability and to have more than one health condition. We want a health system that supports people to live longer but also to spend more of that life in good health.

Dealing with long-term conditions is a particular challenge with an ageing population. Dementia is one example. We expect the number of New Zealanders with dementia to rise from about 48,000 in 2011 to about 78,000 in 2026.

Obesity is becoming more common and has long-term health and social impacts. Among New Zealand children as a whole, 10% are obese, but the rate is 30% in Pacific children.2

Some of New Zealand’s population groups do not benefit from the health and disability system as much as others. For example, while New Zealanders overall are living longer, Māori and Pacific peoples still have lower life expectancies than the population as a whole (see the graph below). People with an intellectual disability can also expect to live for 18–23 fewer years than others.3 Disabled people generally experience worse health than the rest of the population. 29% of disabled people rated their health as fair or poor compared with only 4% of non-disabled people.4 Children are another population that may not access the health services they need because they depend on others for that access.

Life expectancy at birth, by ethnic group, 1950–2014

This graph shows that life expectancy has improved for all groups between 1950 and 2014. Life expectancy is higher for women than men, and for non-Māori compared Māori and Pacific people, and for Pacific people compared to Māori people. For Māori males, life expectancy has risen from 54 years to 73 years. For Māori females, it has risen from 56 years to 77 years. For non-Māori males, it has risen from 68 years to 80 years, and for non-Māori females it has risen from 73 years to 84 years. For Pacific people, data is only available for 2005 to 2014. For Pacific males, it has risen from 73 years to 75 years, and for Pacific females from 78 years to 79 years.
Source: Complete New Zealand Period Life Tables – time series summaries: Life expectancy by age
and sex, 1950–52 to 2012–14
from Statistics New Zealand.
‘The cost of providing health care in a way that adequately meets current public demand is becoming prohibitive and … we will quickly fall behind the developed world in this important task if we persist with the current model. It is unsustainable.’
–Non-governmental organisation

New Zealand’s total health and disability spending is about $18 billion, or about 9.5% of gross domestic product (GDP); this covers spending in the public, private and non-governmental organisation (NGO) sectors, including ACC expenditure.5 As a percentage of GDP, the total is slightly over the OECD average but consistent with most OECD countries. New Zealand is unusual in that taxpayers fund most of its health expenditure – about 7% of GDP.6 Health makes up about 22% of government spending.

The cost of providing health services through the current model is unsustainable in the long term. The Treasury estimates that, if nothing were to change in the way we fund and deliver services, government health spending would rise from about 7% of GDP now, to about 11% of GDP in 2060 (see the graph below). It is essential that we find new and sustainable ways to deliver services, investing resources in a way that will provide the best outcomes possible for people’s health and wider wellbeing.

Projected government health spending as a percentage of GDP

This graph shows that government spending as a percentage of GDP has risen from around 4% in 1972 to around 6.5% in 2014 (based off history and Budget 2012 forecast). However, this has not been a steady rise. For example, spending was lower in the mid-80s compared to the early 80s, and spending was higher (around 7%) in 2008-09 than it was in 2014. The projection for 2015 to 2057 shows a steady rise to a spend of around 11% of GDP.
Source: Health Projections and Policy Options for the 2013 Long-term Fiscal Statement from the Treasury.

An independent review of New Zealand’s health funding system7 noted three ways in which funding arrangements sometimes prevent resources from being used to achieve the best possible outcomes.

  • Present arrangements may not clearly show the results that we get from health spending, making it hard to prioritise funding or take into account long-term, cross-sectoral benefits from investment.
  • When demand changes, service mix and design may not change quickly enough to deal with it. Often our funding and contracting arrangements encourage health services to keep doing things as they have always done them, instead of allowing them to work differently.
  • Some funding arrangements contribute to disparities between groups in their access to services, and sometimes they widen the gap in unmet need.

New Zealand’s health workforce also faces challenges. It is ageing – 40% of doctors and 45% of nurses are aged over 50 years.8 It also has a large unregulated workforce (numbering about 63,000), including care and support workers, or kaiāwhina, who often have limited access to training. Many of our workforce have trained overseas – 42% of our doctors, 32% of our midwives and 26% of our nurses. This means we need to continually invest in training so that our health workforce has the skills needed to meet the health needs and expectations of caring for New Zealanders.

New Zealanders’ needs and expectations are themselves changing. These changes are happening not only because the population is ageing but also because it is becoming more ethnically diverse. In Auckland, for instance, around 39% of residents were born overseas; Asian populations are growing the fastest and now represent almost one in four people living in Auckland.9

... but we have many opportunities

By focusing on preventing illness and by making healthy choices easy, we can help people either to avoid developing long-term health conditions or to slow the development of those conditions. An important part of this focus involves providing universal health services and public health initiatives that cover the whole population. In addition, tailored approaches are needed for some individuals and population groups so they can access the same level of service and enjoy the same outcomes as others.

In New Zealand, we have a strong and growing knowledge base, developed from research, about what contributes to good health, from birth into adulthood.10 This knowledge will be an ongoing resource to guide policies that help children to start out on pathways for healthy growth and development. Early intervention can help prevent some health conditions that can occur later in life.

We can keep expanding our thinking about who contributes to health by tapping into the skills of individuals, families and whānau, communities and businesses. Building stronger partnerships with them will help us to do this.

Like other sectors, the health sector can benefit from advances in technology and related infrastructure such as broadband. When routine tasks are automated, skilled staff can focus on what they do best. Sharing information in appropriate ways across organisations and with patients and families and whānau can let us know who is missing out and what isn’t working so we can change it.

In summary, our system may be functioning well enough today, but we can’t guarantee that it will be tomorrow. This strategy provides an opportunity to improve our health system and wider social services, so that in the future we are better able to support the health and wellness of New Zealanders. A key to our success in making these improvements will be our ability to work together.

1. See the Health and Independence Report 2015 and the 2013 Commonwealth Fund International Health Policy Survey of eleven countries.
2. See the Health and Independence Report 2015.
3. See the 2011 Health Indicators for New Zealanders with Intellectual Disability.
4. See the Social and Economic Outcomes for Disabled People: Findings from the 2013 Disability Survey from Statistics New Zealand.
5. See the OECD Statistics website.
6. See Affording our Future from the Treasury.
7. See From Cost to Sustainable Value: An Independent Review of Health Funding in New Zealand.
8. See Health of the Health Workforce Report 2015.
9. See the 2013 Census Quickstats for the Auckland region from Statistics New Zealand.
10. For example, Growing Up in New Zealand and the Dunedin study.

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