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1. THE NEW
ZEALAND
HEALTH CARE
SYSTEM

2. Contents
1.What is the role of govenment?
2. Who is coveredand how is insunence financed?
3. What is covered
4. How is the delivery system organized and
financed?
5. What are the key entities for health system
governance?
6. What are the major strategies to ensure quality
of care?
7. What is being done to reduce disparities?
8. What is being done to promote delivery system
integration and care coordination?
9. What is the status of electronic health records?
10. How are costs contained?
11. What major innovations and reforms have been
introduced?

3. THE ROLE OF GOVERNMENT
Beginning with passage of the Social Security Act in 1938, a consensus has
developed in New Zealand that government has a fundamental role in
providing for the population’s health care needs.
Responsibility for planning, purchasing, and providing health services, as well as
disability support for those over age 65, lies with 20 geographically defined district
health boards (DHBs), each of which comprises seven locally elected members
and up to four members appointed by the Minister of Health.

4. • Private health insurance is offered by a
variety of organizations, from nonprofits
and “Friendly Societies” to for-profit
companies, and accounts for about 5
percent of total health expenditure.
• About one-third of the population has
some form of private insurance,
purchased predominantly by individuals.
PRİVATELY FİNANCED
HEALTH CARE:
• All permanent residents have access to a
broad range of services,
• Nonresidents, including tourists, are
charged the full cost of services by public
health care providers, unless treatment is
related to an accident, in which case they
are covered by a nofault accident
compensation scheme.
PUBLİCLY FİNANCED HEALTH
CARE:

5. Your Education
SAFETY NET:
• Primary care is mostly free for
children age 13 and under and is
subsidized for the 98 percent of the
population enrolled in the networks
of self-employed providers known as
primary health organizations (PHOs).
• A “high-use health card” is also
available, upon application, to
patients who have had more than 12
GP visits in a year.
SERVİCES:
• The publicly funded system covers
preventive care; inpatient and outpatient
hospital services; primary care via private
providers (excluding services such as
optometry, adult dental services,
orthodontics, and physiotherapy); inpatient
and outpatient prescription drugs included
in the national formulary (see below);
mental health care; dental care for
schoolchildren; long-term care; home help;
hospice care; and disability support
services.

6. WHAT İS COVERED?
• Accounted for approximately 12.6 percent of total health
expenditures in 2014, with the largest portion going to outpatient
services.3 There are no deductibles in the public sector. • GP
copayments fell during the period 2002–2008, when there were
significant increases in government funding for primary care, but
copayments have been increasing since then. • For drugs prescribed by
GPs and private specialists, copayments are required for the first 20
prescriptions per family per year (NZD5.00, or USD3.40, per item), after
which there are none.
COST-SHARİNG AND OUT-OF-POCKET SPENDİNG:

7. Westmire Academy Freshmen Orientation 2018
Special Tips
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The ratio of GPs to specialists is
about 2:3. An average of 3.48
GPs work together in each
practice, assisted by practice
nurses. Nurses are salaried and
paid by GPs and have a
significant role in the
management of long-term
conditions (e.g., diabetes),
incentivized by specific
government funding for chronic
care management. Patients
enroll with a GP of their choice;
in smaller communities, choice
is often limited. Most GPs
Primary care:
01
: Most specialists are employed by DHBs and salaried for
working in a public hospital. However, they are also able to
work privately in their own clinics or treat patients in
private hospitals, where they are paid on a fee-forservice
basis. The impact of this “dual practice” on the public
sector remains under-researched.Private specialists are
concentrated in larger urban centers and set their own
fees, which vary considerably; insurance companies have
little, if any, control over those fees, although insurers will
pay only up to a maximum amount, meaning that patients
pay any difference. In public hospitals, patients generally
have limited choice of a specialist.
Outpatient specialist care
02

8. Westmire Academy Freshmen Orientation 2018
Special Tips
FOR A COMPLETE WESTMİRE EXPERİENCE
e, GPs’ income is derived from
government subsidies, which
include payments from the
Accident Compensation
Corporation and copayments
from patients. Some patients
subscribing to private insurance
may be eligible to claim for a
copayment
Administrative
mechanisms for
paying primary care
doctors and
specialists:
01 02
Public hospitals receive a budget from their
owners, the DHBs, based on historic utilization
patterns, population needs projections, and
government goals in areas such as elective
surgery.. Certain areas of funding, such as
mental health, are “ring-fenced”—the DHB
must spend the money on a specified range of
servicesPublic-hospital services are provided
largely by consultant specialists, specialist
registrars, and house surgeons.
Hospitals:
03

9. Westmire Academy Freshmen Orientation 2018
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FOR A COMPLETE WESTMİRE EXPERİENCE
. DHBs deliver a range of mental
health services (including
secondary services), such as
forensic, acute inpatient, and
community-based services, and
provide support to primary care
providers; they also fund
nongovernment providers of
community-based services.
Mental health care:
01
DHBs fund long-term care for patients based on needs assessment,
age, and means-testing.many older or disabled people receive home
care. Respite care is available for informal or family caregivers, and in
some circumstances ongoing financial support is provided Disability
support services for those under age 65 are purchased directly by
the Ministry of Health. Some disabled people opt for individualized
funding, which enables disabled people to directly manage their
disability supports. End-of-life care in New Zealand is provided in a
range of settings, including hospitals, a network of hospices, aged
residential care, and the individual’s home Home care services are
all provided by nongovernment agencies
Long-term care and
social supports:
02
03

10. Westmire Academy Freshmen Orientation 2018
What are
the key
entities
for health
system
governanc
e?
Some, like the Health and Disability Commissioner (whose function is to
champion consumers’ rights in the health sector), operate at arm’s length
from the central government. Others are “crown agents,” with their own
boards, and are required to follow government policy. Key national
arrangements are:
• The ministry has two subcommittees: the Capital Investment Committee,
which advises on matters relating to capital investment in the public health
sector, in line with the government’s service plans; and the National Health
IT Board, which advises on the implementation and use of information
technology systems. • Health Workforce New Zealand leads and supports
health and disability workforce training and development. • NZ Health
Partnerships, supported and owned by New Zealand’s 20 DHBs, is tasked
with enabling those DHBs to collectively maximize shared services
opportunities.
• The Health Quality and Safety Commission is working toward what is
known as the New Zealand “triple aim”— improved quality, safety, and
experience of care; improved health and equity for all populations; and
better value for public health system resources. • The Health Promotion
Agency develops and enables health-promoting policy, initiatives, and
environments. • The Health Research Council invests in a broad range of
research on issues important to New Zealand.

11. What are the major strategies to ensure quality of care?
DHBs are held formally accountable to government for delivering
efficient, high-quality care in hospitals, as measured by the achievement
of targets across a range of indicators. These include six “health targets,”
published quarterly, that aim to stimulate competition among DHBs. In
addition, DHB performance on waiting times, access to primary care, and
mental health outcomes is publicly disclosed.Data on individual doctors’
performance, however, are not routinely made available.PHOs and GPs
receive performance payments for achieving various targets.Since 2014,
public hospitals have been required to conduct “Patient Experience”
surveys of randomly selected patients. The Health Quality and Safety
Commission publishes the findings. Certification by the Ministry of
Health is mandatory for hospitals, nursing homes, and assisted-living
facilities. All practicing health professionals must be certified annually by
the relevant registration authority
The Ministry of Health is also working on quality improvement in DHBs.
“Clinical governance” has been implemented in most DHBs. The Health
Quality and Safety Commission aims to increase the focus on quality and
coordinate DHB activities, such as those aimed at improving the patient
journey, safer medication management, reducing rates of health care–
associated infection, and standardizing national incident reporting

12. What is being done to reduce disparities?
Health disparities are a concern in New Zealand. Maori and Pacific
Island people have shorter life expectancies than other New
Zealanders (by seven and five years, respectively) and experience
greater difficulty in gaining access to health services. Through much of
the 2000s, a multisector policy approach saw investments in housing,
education, and health, as DHBs and primary health organizations were
required to develop strategies for reducing disparities. Many PHOs
were created especially for Maori or Pacific populations. The post-
2008 government has focused on specific initiatives such as “Whānau
Ora,” a policy designed to integrate health and social services.

13. What is being done to promote delivery
system integration and care coordination?
District-level alliances (partnerships between DHBs and PHOs) are driving stronger
system integration by changing service models. Some alliances have begun to form
partnerships with local social agencies. The primary care sector has begun exploring for
the most appropriate model of general practice and enhanced primary care that will
meet future demand. The “health care home” model is being implemented in several
districts, with support and resourcing shared between DHBs and PHOs. Four system-
level performance measures were implemented in 2016. These assess performance at
the system level, and success is dependent on the contributions of individual providers
or organizations. This reliance on multiple contributions drives the integration of services
and providers and requires an effective alliance.
Westmire Academy Freshmen Orientation 2018

14. What is the status of
electronic health records?
The ability to access and share accurate clinical information is central to the New
Zealand Health Strategy. In 2015, the Ministry of Health announced the Digital Health
Work Programme 2020. The program aims to ensure appropriate access to health and
wellness information facilitated by a single electronic health record. A recent survey
found that 359 of 992 general practices have implemented provider portals, giving
after-hours facilities and some hospital emergency departments access to primary care
information. The Health Information Standards Organisation promotes the development
and use of standards to ensure interoperability between systems, and SNOMED CT
(Systematized Nomenclature of Medicine—Clinical Terms) has been endorsed as a
national standard for clinical terminology in New Zealand

15. Westmire Academy Freshmen Orientation 2018
How are
costs
contained?
Cost control in DHBs has been closely monitored by the Ministry of Health,
with a significant reduction in deficits over. As public hospitals are
essentially free of charge, there is no mechanism to shift costs to patients.
The Ministry of Health has recently taken on the functions of the former
National Health Committee. The Pharmaceutical Management Agency uses
mechanisms such as reference pricing and tendering to set prices for
publicly subsidized drugs dispensed through community pharmacies and
hospitals

16. What major innovations and
reforms have been introduced?
The updated New Zealand Health Strategy, launched in 2016, consists of
two parts: the Future Direction, and the Roadmap of Actions 2016.In
addition, it identifies five strategic themes for driving change: 1) improving
patient literacy and empowerment; 2) emphasizing prevention, early
intervention, and community care; 3) improving system performance; 4)
integrated and collaborative health care delivery; and 5) technological
innovation. These actions, organized under the five themes listed above, will
ultimately contribute to the stated goal that “all New Zealanders live well,
stay well, get well, in a system that is people-powered, provides services
closer to home, is designed for value and high performance, and works as
one team.”
Westmire Academy Freshmen Orientation 2018

17. References
14. Minister of Health, New Zealand Health
Strategy: Future Direction (Ministry of Health,
2016).
15. Minister of Health, New Zealand Health
Strategy: Roadmap of Actions 2016 (Ministry of
Health, 2016).
International Profiles of Health Care Systems
(EDITED BY Elias Mossialos and Ana Djordjevic
London School of Economics and Political Science
Robin Osborn and Dana Sarnak The
Commonwealth Fund)