How Health Care Is Organised
The New Zealand health system is made up of public, private and voluntary sectors which interact to provide and fund health care.
Department Of Health
The Department is the principal adviser to the Minister of Health on health issues. It administers relevant legislation, funds programmes and ensures the provision of essential services. It collects and disseminates information, liaises and consults on health matters, monitors and reviews health programmes and is responsible for ensuring that its work is underpinned by a focus on the Government’s desired health outcomes.
Regional Health Authorities
In July 1993 four Regional Health Authorities were established as independent Crown Agencies with their own Board of Directors.
The primary objective of Regional Health Authorities is to ensure that the population in their regions receives optimum value from the health and disability support services funding, entrusted to the Regional Health Authorities within the parameters of Government policy. The RHAs purchase health procedures by way of
tendering for services and contracting with health care providers, i.e. hospitals (CHEs), rest homes, etc.
Other Care Providers
Health care provided by general practitioners is also partially funded from the public purse, as are referrals to specialists and laboratory diagnostic services. Dental care is provided free to dependent children under 18 years of age. Eighty per cent of the cost of pharmaceuticals is met through public funding. A number of private hospital services are subsidised, and a range of private and voluntary organisations receive funding for services they are contracted to provide.
Accident compensation levies cover 4.2% of health care costs for services provided in the public and private sectors.
The private sector provides a wide range of health care options. Forty-five per cent of the population has private health insurance, meeting 3.5% of the total cost of health care.
An active voluntary sector incorporates a wide range of organisations which provide care, support, health education and research. Health care is also provided informally by families and relatives, and this is recognised through the growing provision of home support services in the public and voluntary sectors.
Health Expenditure
General taxation funds an estimated 77% of the total costs of health care. This funding is primarily disbursed
through the Department of Health, which distributes funds to area health boards, and a wide range of health professionals and organisations providing services to the public. It also includes funding for health-related expenditure through other government departments such as Social Welfare, Defence and Police.
Over recent years governments have introduced a number of measures to curb health spending, while maintaining services. Area health board funding, which makes up nearly 70% of the Department of Health’s budget allocation, has come in for particular attention.
A population-based method is used to determine funding for the boards. It takes into account the age and gender of the population in each region, by adjusting for the expected resource use of each age/gender group, derived from national levels. Special health needs are also considered, through calculations based on socio-economic factors.
In 1992 the Government expanded the ability of the boards to charge each other for cross-boundary service provision. From February 1992, the boards began receiving revenue from inpatient and outpatient user charges.
Service statements have been developed by the Department of Health, in consultation with health service providers. These are designed to provide guidance to the area health boards on the content and structure of services provided by each board. The statements provide a
national perspective on the key elements comprising a service, as well as the policy and legislative parameters for each service. Each board will design and provide the services in accordance with its own strategic and financial planning processes. These may reflect their assessment of local needs and resource priorities.