THE DOMINION POST

Little miracles
D3

INSIGHT

SECTION

SATURDAY, FEBRUARY 13, 2010

Another round of surgery

H
EALTH MINISTER Tony Ryall has his scalpel out, determined to give the health system its own gastric bypass, and the 81 primary health organisations are first under the knife. The result of Mr Ryalls surgery could have a significant impact on what happens when you visit your doctor, dentist or community nurse. He plans to slash the number of agencies in half to 40, saying the move will bolster the remaining PHOs freeing up money for doctors clinics to spend on patients and offering a wider range of health services. His detractors and those PHOs facing extinction see it as the end of cheaper visits to the doctor and a host of health programmes running in communities nationwide. Primary health organisations collections of doctors, midwives and other health professionals working together were started by the Labour government in 2002 as part of its primary healthcare strategy. Organisations were given a hefty dollop of funding and tasked with managing peoples health in the community so that fewer wound up in hospital. The letters you receive in the post reminding you to get a breast check or to vaccinate your children are the result of PHOs. So are cheaper doctors fees although theyre still creeping up in some centres, large subsidies have slowed their climb and kept them below $20 for people living in lower socio-economic areas. Some PHOs are also able to refer patients to social workers. All those benefits come at a cost, though, and PHOs now suck up about $715 million a year, with about $541m going directly to GPs in patient subsidies and the rest spent on specific health programmes. Money is tighter now the Government indicated to district health boards in December that there would be only $400m of new health spending in this years Budget and the high cost of the PHO system has attracted Mr Ryalls attention. He demanded an investigation last year when it was discovered that PHOs had squirreled away $115m in cash and investments since 2002, instead of spending it on health promotion programmes. Then, just before Christmas, he gave PHOs an ultimatum to strip $25m from their combined budgets with one eye firmly on the $33m the organisations spend

The Government has signalled big changes to the primary health organisations that provide medical care in the community. Kate Newton reports on plans to improve the system that delivers you cheaper visits to the doctor, dentist and local nurse.

81
primary healthcare organisations nationwide currently

40
PHOs to remain after the cutback

$715m
annual national PHOs budget

$33m
spent in PHO management fees alone
on management costs. That has to come down, Mr Ryall told The Dominion Post this week. Were starting to talk to primary care at the moment about how we can make some savings in administrative programmes. Most of those savings will come from mergers and the number has already started to come down. Southland and Otago district health boards have agreed to replace the nine PHOs currently serving the two districts with a single PHO across the entire region. Three Eastern Bay of Plenty PHOs have also agreed to merge. Mr Ryall says theres still a way to go. This month, he wrote to five district health boards the Wellington regions Capital and Coast and Hutt Valley, and Waitemata, Auckland and Northland asking them to give their PHOs a hurry-up. In Capital and Coasts district, which stretches from Wellington City to Waikanae, there are seven primary health organisations. In the Hutt Valley, there are five. Too many, Mr Ryall says. This is an issue of geography. He cites Cannons Creek in Porirua East as a prime example. Theres about three or four PHOs operating there. Its two, actually well, three, counting

CONTINUES D2

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D2

THE DOMINION POST

SATURDAY, FEBRUARY 13, 2010

INSIGHT
Some of the smaller ones [PHOs] have their niche markets. Weve got to make sure . . . that we dont lose the positive things that they provide.
KEN WHELAN, CAPITAL AND COAST DHBS CHIEF EXECUTIVE

dompost.co.nz

This is setting out to destroy what was a widely accepted system.

ANNETTE KING LABOUR DEPUTY LEADER

Some PHOs dont seem to be much more than a postbox organisation where the money flows through from the DHBs to individual clinics.
JACKIE CUMMING VICTORIA UNIVERSITY

There are some that are doing a very good job and there are some that seem to be making much less of an impact.
TONY RYALL HEALTH MINISTER

PHOs fearful about going under the knife

FROM D1
the single clinic one PHO runs in Mungavin Ave but hes got a point. If theyre all serving the same purpose and population, why not pool resources? Mr Ryall certainly thinks it would help. We see some real benefits in bringing them together in larger groups or larger networks of providers. Its very hard to make an impact if youve got such limited resources. He insists he wants to retain primary health organisations: The future of the PHO approach is very positive. Not all have earned the right to dodge the axe, though. There are some that are doing a very good job and there are some that seem to be making much less of an impact. Mr Ryall demurs when pushed to name the under-performers, saying he doesnt want to single them out. There are some that do more than others. Wherever the duds are, he wants district health boards to merge, amalgamate, slice and dice them within the next year. He firmly believes the changes will improve primary health in New Zealand. This is a very exciting thing if we can realise the true vision of the primary health strategy.

EN WHELAN, Capital and Coast District Health Boards chief executive, is in no doubt that PHOs have improved New Zealanders health. The issue is, could that have been achieved with fewer [PHOs]? What he privately thinks doesnt matter now, he says Mr Ryall has indicated the number of PHOs in the district has to drop and its up to Mr Whelan to make sure that happens. Any changes have to preserve the progress made so far, he says. Some of the smaller ones have their niche markets. Weve got to make sure . . . that we dont lose the positive things that they provide. Labour deputy leader Annette King is watching and fuming about the destruction of her baby. As Labours health minister in 2002, she oversaw the creation of the first PHOs. Then, the idea was much the same as the vision Mr Ryall extolls networks of health workers who could provide a wide range of services through one organisation: including midwives, doctors, dentists, nurses, immunisation, skin surgery, CT scans, and nutrition planning. That was the vision and that was the dream. Not all of them have achieved that vision, Ms King concedes. It would be fair to say that they arent all even. That could be an issue of time, she says sea-changes in health have always happened slowly. Youve really only just got this thing humming, in my view. She fears cutting the number of PHOs will force the model back towards a GP-focused service, with

Steering a lean ship: Dr Bryan Betty of the Porirua Union Health Service with two-year-old patient Veltha Chin. The PHO that runs the clinic is based entirely in Cannons Creek.

Photo: KENT BLECHYNDEN

Across the same street, two sides of the same coin

N ONE side of Bedford St in Cannons Creek, Porirua, cars line the footpath outside Ora Toa Medical Centre. Across the road, flash new digs are going up at No 221 the home of the Porirua Union and Community Health Service. Both doctors clinics are full of patients. Both have staff who care deeply about what happens to those patients. Theyre not so different and yet theyre run by completely separate organisations,

each with its own management and its own set of enrolled patients. The Ora Toa clinic at 178 Bedford St is one of four medical centres run by Ora Toa PHO, Wellingtons only Maori-run primary health organisation. Porirua Union is the main clinic run by Porirua Health Plus PHO. If Health Minister Tony Ryall has his way, the two would likely be merged. Bryan Betty, a doctor at Porirua Union, says that should not have to happen. Were a very small PHO but were very

responsive and we actually run a very lean ship. Porirua Health Plus is unique among the Porirua PHOs because it is entirely based in Cannons Creek, he says. With only 5300 patients, the organisation can tailor its approach unlike large PHOs that have to aim for the lowest common denominator. Were able to focus on the issues in this area. One of the initiatives the organisation runs is aimed at keeping people with chronic heart problems out of hospital.

It had cards printed with traffic light colour-coding red for high-risk, orange for medium-risk and green for low-risk that doctors at the clinic give out to patients to take home as a reminder of how to stay healthy. The illustrated cards have very simple messages dont eat takeaways, try to do some gentle exercise every day but they are instructions easily forgotten away from the doctors office. The patients love them, Dr Betty says. They stick them on the wall at home.

Without the extra funding the PHO system provides, even such a simple initiative would be harder to set up, he says. The clinic already has plans to offer some of the services that Mr Ryall is keen to see. Were interested in bringing specialists and nurses on-site here to deliver services rather than refer people to hospital. Mr Ryall has visited the clinic and Dr Betty hopes it left an impression. I think hes aware of the issues.

few resources to provide anything else. This is setting out to destroy what was a widely accepted system. Unlike Mr Ryall, she sees no problem with having several PHOs operating in the same, small geographic area. Does it matter? I bet theyre full of patients. Whats different from having several [similar] businesses in the same area? If the management fees are a concern, they could be trimmed without disestablishing or merging PHOs, she says. If he wanted more combining of back-room functions, theres better ways of doing that. You get that now. You get one

Local knowledge: Ara Swanney, manager of Porirua Health Plus PHO in Cannons Creek, says: The reason weve increased the immunisation rates is because we have staff . . . who know those people and go to their homes.
Photo: KENT BLECHYNDEN

PHO that does the managing contracts for the smaller PHOs. Ms Kings greatest fear is that PHOs that will be squeezed are the small ones that serve a high-needs population on an already tight budget. The only survival I see for something like [Newtown-based] SECPHO is to join together with someone else. Ms King and Mr Ryall agree that some PHOs are better than others, but finding an objective measure of whether they have lifted the health of their communities is difficult. PHOs are not currently compelled to report against any targets, though most publish glowing annual reports on their websites. The Health Ministry has never conducted a full review of how PHOs are performing. Last year, Capital and Coast District Health Board became the first and so far, only DHB to commission a report into the performance of its PHOs. The result was cautiously positive. Avoidable hospital admissions had increased overall in the district from 2003, but fell among people enrolled with a PHO. The decline was even steeper for children aged four and under. Likewise, visits to the emergency department fell for enrolled patients. More people with diabetes were receiving their annual check-up and fewer needed to be hospitalised. Around 2000 people each month use the community radiology services, run through Capital PHO, where they can receive free CT and MRI scans, rather than having to be referred to a hospital or pay for private care. Immunisation for two-year-olds across the district is sitting at 88 per cent, up from 79 per cent three years ago. Some individual PHOs have done

even better. Porirua Health Plus, which has 5300 enrolled patients 5100 of them high-needs lifted its child immunisation rates from less than 70 per cent to more than 90 per cent in less than six years. There was less improvement in other areas. The rate of breast and cervical screening has barely risen since the first Wellington PHOs were set up. The gap between Maori and Pacific people and the rest of the population is closing, but still exists. The big success story has been access with subsidised doctors fees, far more people in poorer areas can afford to visit their GP. Low-cost access clinics, which receive extra funding, have largely stuck to their promise to keep fees affordable for the deprived populations they serve, with no more than $20 charged for a visit at any such clinic. Improved access has created a major unforeseen problem, though in some areas, such as Titahi Bay and the Kapiti Coast, it is just about impossible to enrol with a doctors clinic because they are already swamped. More people are clearly getting through the doctors door, but what is the care like once theyre inside? Jackie Cumming, director of Victoria Universitys Health Services Research Centre, is frustrated by the lack of data. Had somebody at the Health Ministry actually done some national analysis, it would have been far easier to work out how many PHOs are needed and where, she says. I think that would have been really useful what are the patterns there? Which are the PHOs that have done well? Some certainly need to go, she says. On any grounds 81 is probably way too many PHOs.

GOING FOR THE DOCTOR

Primary health organisations run the subsidy scheme for visits to the doctor, but while the subsidy is the same nationwide the actual fees can vary greatly even within the same district health board area.
Under 6 Capital and Coast DHB Cheapest Most expensive Hutt Valley DHB Cheapest Most expensive Wairarapa Cheapest Most expensive MidCentral DHB Cheapest Most expensive Hawkes Bay DHB Cheapest Most expensive Tairawhiti DHB Cheapest Most expensive Free $34 Free $20 Free Free Free $12.50 Free $9 Free Free 6-17 Free $50 Free $36 18-24 Free $53 $10 $36 25-44 $10 $60 $10 $38 45-64 $10 $60 $10 $38 $29 $33 $15 $38 $15 $47 65+ Free $53 Free $38 $28 $31 $15 $38 $15 $47

$20 $25.50 $27.50 $27 $32 $33 $10 $33 Free $32 $15 $15 $34 $36.50 $15 $37 $15 $37

Free Free Free $11 $16.50 $16.50

Free Free $16.50 $16.50

The fees above are sourced from information available through each DHBs website.

There are some that would probably not be missed much. Some of the work weve done suggests that some PHOs dont seem to be much more than a postbox organisation where the money flows through from the DHBs to individual clinics. Before the Government swings a scythe through PHOs, though, it needs to work out exactly what it wants them to be, she says.

ONY RYALL has said he wants to see PHOs offering more sophisticated services, such as minor surgery and permanent radiology clinics. That would probably rule out the smaller PHOs that lack the financial and physical resources, but

anecdotally are often the best performers, Dr Cummings says. The bigger ones will be much more likely to survive. That could hurt the people those small organisations currently care for. If suddenly Kapiti isnt its own one and its part of the Wellington one, is it going to work as well? You have to have people in there who understand those communities. If we undermine any of that . . . thats when well be in trouble. She is sceptical that culling PHOs will be cost-effective. The resource saving wont be as much as they think it will be. Many PHOs link in with a PHO management company so they get those economies of scale already. Creating larger one-stop shops

that offer a host of medical services will also cost money. The fundings got to come from somewhere so that may well be where the government gets the private sector building those. Among those bracing for change is Cathy OMalley, chief executive of CompassHealth, a PHO management company that runs Wellingtons three largest PHOs Kapiti PHO, northern suburbs-based Tumai mo te Iwi, and Capital PHO, which has 155,000 enrolled patients. PHOs are going to have to bulk up, she says. The three PHOs have already agreed in principle to amalgamate within a year, a move that will create a super-PHO serving the needs of 238,000 people, or 86 per cent of the Capital and Coast population. She insists smaller pockets of people such as the older Kapiti population will not suffer from being absorbed into the new, bigger organisation. Just because its part of a bigger group doesnt mean that you lose the local flavour and community. Ara Swanney, who manages Porirua Health Plus PHO in Cannons Creek, disagrees. I dont know that being all one thing would be such a good thing because this population here in the east would disappear into the bigger population. Being small has major advantages, she says. The reason why weve increased the immunisation rates is because we have staff . . . who know those people and go to their homes. All that could be lost if the PHO is swallowed by a larger one, she believes. Were a bit nervous about what might be going to happen. Uncertainty is the sort of thing that makes it a bit more challenging.