The Elephants in the Room

On Tuesday night, the Digital Health Association (DHA) held its annual shindig at the Beehive, where 400 vendors, health providers, Te Whatu Ora brass, Sir Ashley Bloomfield, some visitors from Australia and the Minister of Health Dr. Shane Reti gathered to talk shop.

The timing of the event was grim: the day before, Minister Reti had announced the public health system had effectively being put into receivership, with Te Whatu Ora Chair Lester Levy being revealed as the new Health Commisioner, effectively taking over the entire public health system after most of the Board had resigned.

"I want to mention the elephant in the room" said Dr Reti at the end of his speech and went on to discuss a previous body blow to public health, the cancelling of $330m in funding for digital health projects, including the long-running Hira project which was at the centre of Te Whatu Ora's much-vaunted data interoperability plans.

Leigh Donoghue , Te Whatu Ora's well-respected Head of Data and Digital, must be feeling like he caught one hell of a hospital pass since he took over the role last year. But he didn't show it as he took the stage after the Minister, running through the progress his team has made since he took on the job. "Performing while reforming" as he described it, is no mean feat: the health system runs on a sedimentary layers of thousands of apps and many systems that are at end-of-life, so just keeping the lights on is an achievement, let alone transforming the OS.

Dr Reti left shortly after his speech, without mentioning the other, much bigger elephant that came with Levy's appointment - a Cabinet-mandated mission to make annual savings of $1.4 billion, or an additional 5% of an already stretched-too-thin health budget.

The Government's now-familiar talking points that these savings would only come from stopping the wastage in the profligate 'back office' that every government department seems to have mysteriously created and overfunded over the last six years, and front line services will be unaffected, didn't survive the first hour of the announcement. The inconvenient truth is Aotearoa's health system is chronically underfunded, and like a baby born into abject poverty, its failure to thrive is simply due to a lack of resources. Further reducing funding is akin to fining the parents of the baby when they can't afford to buy formula and nappies.

Despite raising Vote-Health by almost 25% to nearly $6,500 per person , New Zealand's healthcare spend is still significantly less than the countries we like to compare ourselves with. It now sits at around 7 percent , compared with an average of 12 percent in 14 comparable countries, including Australia, Britain, Canada, the United States.

Every year, successive Governments tip in more cash to the health budget, and every year, the pūtea doesn't keep pace with inflation, population growth and demand. And over the last few years, all three of these drivers have been running hot, so it's no wonder that the system is spending 5% more than budgeted for.

"This overspend is a consequence of recruiting clinical staff ahead of budget and having operating models that are not affordable," Te Whatu Ora CEO Margie Apa told RNZ this week.

The extra 2900 nurses recruited in the last year would cost, by RNZ's calculation, $30-35m a month, and are sorely needed.

None of these problems are confined to New Zealand: the NHS is on the verge of collapse after decades of underfunding. In Australia, where many of our nurses and doctors are heading, they are in turn losing staff to the UK, and the Australian Medical Association has released a post-budget report showing planned surgery wait times in public hospitals are now the longest on record. Meanwhile, Australia's $22b private health system is teetering under financial pressure, with private providers and insurance companies at loggerheads over funding agreements: fully insured 'gold cover' maternity patients, for example, are getting walloped by out-of-pocket costs of up to $10,000 to give birth in private hospitals.

Back in NZ, Dr. Levy isn't mincing his words. On RNZ's Checkpoint yesterday, he made it clear that Te Whatu Ora has "spending problems all over the show", and that the agency was just too big to be financially sustainable. But he also promised that no clinical roles would go.

Then this morning, a leaked restructuring proposal written by Te Whatu Ora CEO Margie Apa seemed to show a different view.

According to the RNZ , "the plan confirms a freeze on filling vacancies - including, it appears, at the clinical coalface - until the organisation's financial freefall is turned around. That out-of-control party at the elusive back office also seems to have been shut down by noise control - according the the leaked plan, "(Te Whatu Ora's) budget to the end of 2023 showed spending on the back office was back on track, if not slightly under 2022's spend."

So who knows what's really going on. More importantly, where's all this heading? Let's assume Dr Levy can find a few thousand people who it turns out aren't required in the new 'right sized' health system. We're still around 10,000 doctors, nurses and other clinicians short , and with an aging population that is living longer, a billion dollar health deficit will look like small change in the coming years if we don't make some big changes to the way we fund and deliver services. And that's not factoring in another pandemic, perish the thought.

So what's the prescription? How do we deliver more health services, to more people, with less money?

At the end of his Checkpoint interview, Dr Levy may have given us clue. When asked about the role of digital health under his watch, he finished up on a positive note. "Digital health and telehealth... there's a lot of opportunity" he told RNZ. "It's not just about saving money, it's about creating opportunities for patients that are more user friendly. Whatever's rational, relevant and coherent will be looked at as an opportunity."

In the absence of a formal brief, 'rational, relevant and coherent' is more than enough to work with.

One of the more startling facts that emerged at the Digital Health Association workshop before the Beehive event was that 75% of patient experiences is still paper based. (I found that out myself last week, when my Dad was discharged from routine surgery and we got a printout of the discharge notes, rather than an email that I could share with family.)

Until that foundational stuff is fixed, you can forget about AI and apps. Rational, relevant and coherent means moving first and fast to fix the data problem, with an interoperable patient record that can be shared across the health system to public and private providers, with consented access to the data to enable new, innovative patient experiences to be delivered. International health data standards such as FHIR are already in place. Think Open Banking, for health data.

There been a lot of money spent on the big-picture stuff, such as the National Data Platform which will drive evidence-based policy decisions with insights into medication demand, service gaps, and public health trends.

The now-paused Hira project hit a milestone in June with the release of an updated patient record, but it still falls short of full interoperability. And with Te Whatu Ora needing to deliver more services with less resources, it's hard to understand the logic of halting work on the one transformational project that offered so much potential to deliver efficiencies.

DHA CEO Ryl Jensen made this point at the time the pause was announced. “To hibernate Hira now", she said, "when this programme was advancing towards operationalising connectivity and system enablers such as standards, API development for information flow, security, and connecting disparate applications, seems nonsensical.”

So if the government isn't going to do it, we can only hope Dr Levy lets the private sector in. And when he does, let's also hope he buys Kiwi-made. As Orion Healthcare's CEO Brad Porter said in a post-DHA event LinkedIn article this week, we have the technology.

Along with Orion, which has successfully stood up patient records across the world, (including here in the the post-quake South Island with HealthOne ) we have plenty of other companies with solutions ready to go that meet Dr Levy's rational, relevant and coherent brief. Companies like the Bill English-backed Eightwire , which has built Medicly to connect with GPs' patient management systems. Then there's Medtech Global and Indici, the country's leading providers of those GP systems.

To tame the countless APIs that are slowing down the traffic, Propagator can enable niggle-free interoperability.

In terms of data security and sovereignty, we have Catalyst Cloud , which provides a secure onshore alternative to sending sensitive health data overseas.

To mobilise these solutions, Spark Health is standing by.

If it's infrastructure Dr Levy needs, look no further than Waikato's health IT specialists DataTorque Ltd or TMG Cloudland .

And while he's in Kirikiriroa, he could get his AR/VR training for nurses and surgeons sorted with the team at Company-X .

And for patient portals, I'm sure both Manage My Health and Webtools would be more than happy to help.

The list goes on and on, and on - these are just some of the companies I bumped into in Wellington last week. The talent and ingenuity of the Kiwi healthtech sector is more than a match for the challenges we face. So imagine if in 12 months at the next DHA event we looked back on 2024 and rather than being the worst of times, it turned out to be the turning point.

Yes, there's no doubt the health system is in crisis. There's also no doubt mistakes have been made. But to paraphrase Kamala Harris, we need to unburden ourselves of that and focus on what can be. And as MC Doug Healey put it when he wrapped up the speeches at the Beehive, "if you want to go far, go together".

Come on Health New Zealand | Te Whatu Ora , leshgooo!