Private hospitals – cream only please….


Health Minister Tony Ryall’s announcement last week of policy changes under which District Health Boards will have wider scope to contract private hospitals to perform elective surgery was not surprising. It was signalled well before the last election and follows National’s pro-private bias.

Most commentators have seen it as merely tweaking the arrangements Labour had in place whereby it kept the door open to the private sector throughout its decade in government. They say Ryall is just nudging it open a bit more to increase the flow of funding to private hospitals.

Previously DHBs were free to contract the private sector to meet elective surgery targets or utilise funding left over at the end of the financial year. Ryall however wants boards to look for longer-term arrangements which he claims will be more cost-efficient. He says this will help the public sector to meet its targets – getting more operations for less dollars.

Ryall is careful to say this is not intended to undermine public health. He says private contracts should only be agreed by DHBs where “the long term viability of their (the DHB) resource and delivery is not undermined.”

Senior doctors have pointed to the policy leading to a loss of staff from the public sector to better paying jobs in private operating theatres. It’s easy to see their point. How often in the last few years have we heard public hospitals cancelling surgery because of staff shortages? In some cases patients have been brought in for operations two or three times only to be sent home through lack of available staff.

District Health Boards have been silent on the government proposals. They won’t risk getting offside with their new minister. Green Party MP Kevin Hague, who was Chair of the West Coast DHB until last year’s election campaign has the credentials to comment with authority and the freedom to speak publicly. He is heavily critical of Ryall’s proposal and has proposed an alternative which would be cheaper and more efficient.

Hague points to the extra capacity which already exists in the public sector and how this could be more easily utilised if DHBs were forced to enter more co-operative arrangements to provide elective surgery. Currently each of the 21 DHBs runs its own booking system for surgeons, anaesthetists and operating theatre staff. Waiting lists grow when there are shortages but when there is spare capacity this goes to waste when it could be used to operate on patients from other DHBs.

The astonishing thing is that neither the Minister nor Ministry of Health officials know the overall utilisation rate of our public health surgical services. Tony Ryall was asked for this information at a select committee a few weeks back and couldn’t provide the answers. This is surely basic information he should have had before he authorised new surgical operating theatres to be built – in time for the 2011 election – and before DHBs offer contracts to the private sector.

Kevin Hague says that if he had his way our surgeons, anaesthetists and theatre staff would not be employed by separate DHBs but would be employed by a new national body (New Zealand Surgical Services perhaps) with the responsibility to allocate resources to maximise the use of existing operating capacity for the benefit of patients.

Ryall has told boards he expects more regional co-operation but this is a far cry from directing the resources of the health system to be fully utilised for the benefit of the public. He prefers to allow DHBs to engage in “patch-protection” and let the private sector pick up for the inefficiency in allocation of our national public health resources.

Meanwhile the private sector will hound DHBs and the minister for lucrative contracts to provide elective surgery. They want to do just the high volume, short-stay “…ectomy”-type operations which involve a couple of days in hospital and a tidy profit provided by taxpayers. If there are complications they will bundle patients off to our public hospitals for treatment.

It’s true Ryall’s announcement won’t represent a dramatic change from the present but it will weaken public health provision, strengthen private provision and increase pressure on more people to take out private medical insurance. This in turn reduces pressure on the government to fully fund public health provision.

DHBs with the public sector as their first priority should resist the pressure from those who simply want the cream from the top of the health budget but in the meantime Tony Ryall has serious questions to answer about the under-utilisation of our public health services.

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