Health Systems of Australia and New Zealand

Health Systems of Australia and New Zealand Diana MS Hetzel, John D Glover, and Sarah K McDonald, Public Health Information Development Unit (PHIDU), Torrens University Australia, Adelaide, SA, Australia Ó 2017 Elsevier Inc. All rights reserved. This article is an updated version of the previous edition article by John D. Glover, Diana M.S. Hetzel, Sarah K. Tennant, volume 1, pp. 255–267, Ó 2008, Elsevier Inc.

Australia Introduction Geography Australia is the world’s largest island and smallest continent. Geographically, it lies in the southern hemisphere surrounded by the Pacific, Indian, and Southern oceans and is separated from the Asian continent by the Arafura and Timor seas (Figure 1). Australia’s landmass stretches over 7 700 000 km2 and is contained by 25 760 km of coastline. Australia is the driest inhabited continent and features a wide range of climatic zones, from tropical regions in the north, through its arid interior, to the temperate areas of the south. The majority of people live along the southeastern coastline.

Demography Aboriginal and Torres Strait Islander peoples have been the original inhabitants for over 40 000 years. There are no

accurate data regarding the size of their populations before European settlement in the late 1700s, although a plausible estimate is of 750 000–800 000 people, divided into about 500 different cultural groups (Madden and Jackson Pulver, 2009). However, following colonization, the size of the Indigenous population decreased rapidly as a result of introduced diseases, violent dispossession of land, and repressive disruption of culture and communities; and this decline continued well into the twentieth century (Australian Bureau of Statistics (ABS), 2007). Today, Australia is home to an estimated 23.2 million people (ABS, 2013a). The population represents a great diversity of ethnic backgrounds, resulting from waves of migration from many countries over the last two centuries. In 2013, people born overseas made up over one-quarter (27.7%) of the total population (ABS, 2013b). In 2011, Australia’s Indigenous population was estimated to be 3.0% of the total population.

Indian Ocean Northern Territory Pacific Ocean Queensland Western Australia South Australia

New South Wales

Victoria Southern Ocean

Tasmania

Figure 1

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Australian Capital Territory

Tasman Sea

Map of Australia.

International Encyclopedia of Public Health, 2nd edition, Volume 3

http://dx.doi.org/10.1016/B978-0-12-803678-5.00028-X

Health Systems of Australia and New Zealand

The population is contained in six states, two major mainland territories, and other minor offshore territories. The states are New South Wales, Victoria, Queensland, South Australia, Western Australia, and Tasmania. The two mainland territories are the Northern Territory and the Australian Capital Territory. About 64% of the total population lives in the capital cities of the states and territories. Remarkably, 86.1% of the total land area is occupied by only 2.9% of the population (Figure 2). Remote areas of Australia are disproportionately populated by Indigenous Australians, with almost half (45%) of all people in very remote areas and 16% in remote areas being Indigenous compared with 3.0% Indigenous representation in the total population (ABS, 2013c). This distribution presents challenges in ensuring appropriate access for nonmetropolitan communities to preventive and treatment-based health services. Australia’s population is aging because of continued low fertility, and increased life expectancy, leading to proportionally more older people in the population. However, the Indigenous population is relatively young, with a median age of 22 years, compared with 36 years for the non-Indigenous population (Figure 3; ABS, 2014). It is predicted that the number of people living into older age will increase, together with the average age of the population. As life expectancy rises, the chance of living long enough to suffer from age-related diseases and disability also increases; and aging and population growth are estimated to account for 23% and 21%, respectively, of the projected increase in total expenditure on health and residential aged care over the period 2003–2033 (Goss, 2008).

Economy and Government Australia is a prosperous nation with an established capitalist economy. It has an internationally high standard of living and a gross domestic product (GDP) per capita above the average for the Organisation for Economic Co-operation and Development (OECD). However, significant socioeconomic inequalities remain across the population, particularly for Indigenous peoples and other disadvantaged Australians. The Commonwealth of Australia is a constitutional monarchy with a federal system of government, within which there are four divisions: Commonwealth (federal), state, territory, and local. As such, the formal powers of the Commonwealth Parliament are limited to areas of national importance such as trade and commerce, taxation, foreign relations, defense, immigration, and quarantine. However, constitutional amendments, commonwealth-state agreements, and the use of grants to the states and territories have seen the Commonwealth gain influence in regard to other areas including industrial relations, financial regulation, health, and education (ABS, 2007). The overlapping of certain fiscal and functional responsibilities results in regular disagreement between the Commonwealth and the states and territories, especially in the funding and administration of the health-care sector (Healy et al., 2006).

Health of Australians Historical Trends A substantial decline in mortality in Australia occurred during the twentieth century, with a major improvement in life

Darwin

Brisbane

Perth Sydney Adelaide

Canberra Melbourne

Hobart

Figure 2

Population density, Australia, 2001.

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Population per km2

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Health Systems of Australia and New Zealand

Age (years) 65+ 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 20

16

12

8

4

0 Percent

4

8

12

16

Non-indigenous males - AUSTRALIA

Non-indigenous females - AUSTRALIA

Indigenous males - AUSTRALIA

Indigenous females - AUSTRALIA

20

Figure 3 Age structures for the Indigenous and non-Indigenous populations, Australia, 2011. Source: Public Health Information development unit, University of Adelaide.

Deaths per 100 000 population 700 600 500 400 Circulatory diseases 300 Respiratory diseases 200 Cancer 100 Injury 0 1900

Infectious diseases 1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

Year Note: Age-standardized to the population at 30 June 1991. Source: AIHW National Mortality Database.

Figure 4

Death rates by major causes, Australia, 1907–98.

expectancy. A ‘health transition’ occurred, from a pattern of high mortality from infectious diseases to one of lower overall mortality from noncommunicable diseases and injury (Figure 4). From 1951, trends in death rates from major causes were evident, with the rise and partial fall of two ‘epidemics,’

coronary heart disease and stroke, and lung cancer (Hetzel, 2001). However, for Indigenous peoples, the picture was significantly worse. In the late 1990s, the life expectancy at birth of Indigenous Australians reflected life expectancies that were

Health Systems of Australia and New Zealand

a 100 years behind those for non-Indigenous people (Hetzel, 2001).

Current Health Status Today, the overall Australian population is one of the healthiest when compared internationally using indicators such as life expectancy, birth and death rates, incidence of disease, and self-perceptions of health status. Australian life expectancy at birth, for example, is among the highest worldwide; and the infant mortality rate was 3.3 deaths per 1000 live births in 2012, a decrease on the rate in 2011 (3.8 infant deaths per 1000 live births) (ABS, 2013e). Infant mortality rates in the Indigenous population are higher than the equivalent rates in the non-Indigenous population, although there has been a significant closing of this gap in recent years (Australian Institute of Health and Welfare (AIHW), 2014a). In 2009, the overall mortality rate in Australia was among the lowest of all OECD countries, at 687 deaths per 100 000 population, second only to Japan (613 deaths per 100 000 population) (AIHW, 2014). In the two decades since 1990, Australia has seen its ranking among OECD countries also improve greatly for colon cancer deaths (from 23rd to 7th) and chronic obstructive pulmonary disease deaths (from 27th to 16th) (AIHW, 2012). Australia’s change in ranking from 1990 to 2009 also improved for deaths due to lung cancer (16th to 10th), coronary heart disease (23rd to 18th), stroke (13th to 8th), breast cancer (15th to 12th), and suicide (14th to 11th) (AIHW, 2014a). Smoking rates have continued to fall, with the ranking improving from middle third to best third (AIHW, 2012). However, obesity rates (based on measured data) are among the highest in the world, with about one in four Australian adults classified as obese (AIHW, 2012). Self-assessed health status provides an indication of a person’s perception of his/her overall health. In 2011–12, the majority of Australians aged 15 years and over considered themselves to be in good health, with 85% reporting their health status as good, very good, or excellent (AIHW, 2014a). However, 25% of Indigenous Australians reported their health as fair or poor – nearly double the rate of non-Indigenous Australians (ABS, 2013d). Regardless of how health is measured, good health is not shared equally by all Australians. There are significant differences in health depending on sex, age, area of residence, ethnic background, employment, income, and level of education. Many of these differences are avoidable. As indicated, Aboriginal and Torres Strait Islander peoples generally have much poorer health than the population as a whole; other vulnerable groups include disadvantaged children and young people, people with mental illness, those living with disabilities, jobless families, refugees, and the frail aged (Table 1(a)). Socioeconomic disparities in health are evident in the prevalence of chronic diseases (e.g., heart disease and diabetes) and their associated biomedical risk factors (such as obesity and overweight, high blood pressure, smoking, physical inactivity), which are an increasing social and economic burden in Australia (Table 1(b)). These diseases are major contributors to the extent of illness, disability, and premature mortality in the population and are estimated to make up the greatest proportion of the burden of disease, mental health problems,

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and injury for the Australian population as a whole (about 80%) and for particular subgroups (Mathers et al., 2000).

The System to Address Indigenous Health in Australia One of the recommendations of the United Nations Working Group on Indigenous Health is the right to respect Indigenous peoples’ traditional medicines and health practices (United Nations Working Group on Indigenous Health, 1994). For Australia’s many Aboriginal and Torres Strait Islander peoples, colonization resulted in significant erosion of culture, languages, customary health practices, and ownership of spiritual lands. Unlike the individualistic biomedical model, the Indigenous concept of health is broad, encompassing the wellbeing of the whole community and linked to the health and spirit of their sacred lands. However, neither the term ‘health’ nor the term ‘well-being’ fully captures the Aboriginal concept of living a life of value (Carey, 2013). The National Aboriginal Health Strategy definition indicates that achieving health and well-being is an attribute of communities as well as of the individuals within a community, and it identifies cultural wellbeing – along with physical, social, and emotional well-being – as equally important (National Aboriginal Health Strategy Working Party, 1989). Culture and identity are central to Aboriginal perceptions of health and ill-health; and an ongoing and active relationship with ‘country’ means that the health of community land plays an important role in determining the health of the people themselves (Green, 2008). Today, inequalities exist for Aboriginal and Torres Strait Islander peoples at all ages and in all settings, the result of detrimental events experienced throughout a lifetime. The legacy of colonization produced pervasive social and cultural change and led to complex effects on health and well-being, many of which have been cumulative over generations. The resulting trauma, loss, and disempowerment contributed to the further erosion of culture and community and undermined the holistic nature of Indigenous health and well-being, and it is difficult to determine the extent to which traditional approaches to healing are still practiced in some form by Aboriginal communities. Aboriginal and non-Aboriginal practitioners and scholars have long identified social inequality, racism, and oppression as the key issues affecting Indigenous well-being (Daniel et al., 1999; Paradies, 2006; Awofeso, 2011). Over the last three decades, the Indigenous population has advocated for greater funding and control of culturally responsive health services to address their health needs. Today, the state and territory governments provide funding primarily through mainstream hospitals, community clinics, and Aboriginal Community Controlled Health Services (ACCHS). The ACCHS approach to service delivery is broad and encompasses an Indigenous model of health. The federal government provides funding for a range of Indigenous-specific primary health care and substance misuse services, which are largely delivered in community-based settings. However, most secondary and all tertiary medical services are provided by the mainstream health system, which remains largely insensitive to the specific cultural needs of Aboriginal and Torres Strait Islander peoples. There are increasing numbers of trained

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Health Systems of Australia and New Zealand

Table 1a

Key demographic and health indicators, Australia, various time periods from 2008 to 2013a

Indicator Outcome indicators Life expectancy (years) At birth Males Females At 65 years Males Females Infant mortality (rate) Avoidable mortality (rate) Mortality (rate) Health status Self-rated health: % rating health as fair or poor Chronic diseases Diabetes mellitus (%) Males Females Heart, stroke, and vascular disease (%) Males Females Risk factors Current smokers, 18þ years (%) Males Females Obese, 18þ (%) Males Females

Australia

Indigenous cf. total populationb

Lowest cf. highest socioeconomic statusc

79.7 83.1


10.6 years
9.4 years

n.a.d n.a.

19.1 22.0 3.7 135.9 573.0

n.a. n.a. 1.7 timese 3.7 times 2.0 times

n.a. n.a. n.a. n.a. n.a.

14.6

1.7 times

n.a.

5.1 4.2

2.6 times 4.3 times

1.5 times

5.5 4.5

1.6 times 1.8 times

2.0 times

18.3 14.1

2.0 times 2.5 times

n.a. n.a.

27.5 27.5

1.4 times 1.7 times

n.a. n.a.

Note – Rates are as follows: for infants, deaths under 12 months of age per 1000 live births; for mortality, age-standardized rate per 100 000 population; for avoidable mortality, potentially avoidable deaths before age 75 years per 100 000 population, indirectly age-standardized. a Data are for various time periods: life expectancy, 2010–12; infant mortality, 2008–12; mortality, 2012; avoidable mortality, 2010; chronic diseases, risk factors, and self-rated health, 2011–13. b ‘Indigenous cf. total population’ shows the variation between the rate for the Indigenous population and the rate for the total Australian population. For mortality rates, the comparison is between Indigenous deaths in selected states and the Northern Territory and the total population for Australia. c Socioeconomic status is based on the area of residence: comparison is between the most disadvantaged areas and least disadvantaged areas, each comprised of approximately 20% of the population. d n.a., no recent data available. e Shows infant mortality rate from selected Australian states. Source: Public Health Information Development Unit, University of Adelaide.

Aboriginal and Torres Strait health workers and Indigenous medical and nursing practitioners, but still far fewer than are required, given the perilous state of Indigenous health. Indigenous Australians are still more likely to live in conditions considered to be unacceptable by general Australian standards and detrimental to health: overcrowding, poorly maintained buildings, high housing costs relative to income, and, in some remote areas, a lack of basic environmental health infrastructure, such as reliable power supply, adequate sanitation, fresh and nutritious food, and appropriate shelter. In the period 2010–12, life expectancy at birth for Indigenous Australians was estimated to be 69.1 years for males and 73.7 years for females. This was a gap to non-Indigenous life expectancy of 10.6 years for men and 9.5 years for women (Council of Australian Governments Reform Council, 2014). This situation is overtly inequitable, and there is an urgent need to remedy the profound disadvantage in health and well-being experienced by Indigenous Australians.

The Mainstream Australian Health System Although Australia consistently ranks in the best-performing group of countries for healthy life expectancy and health expenditure per person, its dominant health system is complex, largely biomedical in focus, and characterized by a wide variety of service providers and funding and regulatory mechanisms (AIHW, 2014a). Health service providers include general and specialist medical and nursing practitioners, other health practitioners, hospital staff, community health workers, pharmacists, and Aboriginal health workers.

Funding and Expenditure In 2012–13, health expenditure in Australia was AU$147.4 billion, 1.5% higher than in 2011–12 and the lowest growth since the mid-1980s (AIHW, 2014b). Almost 70% of total health expenditure during 2011–12 was funded by governments, with the Australian Government contributing 42.4% and state

Health Systems of Australia and New Zealand

Table 1b Key demographic and health indicators, Australia, earlier time periods from 1997 to 2005a

Indicator Outcome indicators Life expectancy (years) At birth Males Females At 65 years Males Females Infant mortality (rate) Avoidable mortality (rate) Mortality (rate) Ischemic heart disease Males Females Lung cancer Males Females Female breast cancer Health status Self-rated health: % rating health as fair or poor Chronic diseases Diabetes (%) Males Females Heart disease (%) Males Females Risk factors Current smokers, 18þ years (%) Males Females Overweight (preobese), 15þ (%) Males Females Obese, 15þ (%) Males Females Health determinants Educational participation (%) Unemployment (%)

Australia

Lowest cf. highest socioeconomic status b

78.5 83.3


3.8 years
2.2 years

18.1 21.4 4.8 176.6 674.8


1.5 years
0.9 years 2.0 times 1.8 times 1.3 times

70.5 58.7

1.3 times 1.3 times

54.5 23.7 26.8

1.5 times 1.3 times No difference

15.8

1.7 timesc

4.0 3.2

2.3 times

4.0 3.7

2.0 times

26.2 20.4

2.0 times 2.0 times

40.5 24.9

0.9 times 0.9 times

17.8 15.1

1.4 times 1.7 times

78.6 5.0

0.8 times 2.5 times

Note – Rates are as follows: for infants, deaths under 12 months of age per 1000 live births; for avoidable mortality, potentially avoidable deaths before age 75 years per 100 000 population, indirectly age-standardized. Educational participation is proportion of 16-year-olds in full-time education; unemployment is the proportion of the labor force who are unemployed. a Data are for various time periods: life expectancy, 2003–05; infant mortality, 2003; avoidable mortality, 1997–2000; chronic diseases, risk factors, and self-rated health, 2004–05; education participation, 2001; unemployment, 2003. b Socioeconomic status is based on the area of residence: comparison is between the most disadvantaged areas and least disadvantaged areas, each comprised of approximately 20% of the population. c Based upon data from South Australia. Source: Public Health Information Development Unit, University of Adelaide.

and territory governments, 27.3% (AIHW, 2014a). The remaining 30.3% ($42.4 billion) was paid for by patients (17%), private health insurers (8%), and accident compensation schemes (5%). Hospitals represented the largest area of health expenditure (with a proportion of 40.4%), and public hospitals accounted

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for AU$53.5 billion (AIHW, 2014a). The overall health expenditure estimates mainly represent health spending on health goods and services, such as pharmaceuticals, services by medical practitioners, and hospital care, as well as related activities, such as research and administration. It excludes areas such as the training of health practitioners and the ‘insurance component’ of private health insurance premiums; the former is regarded as expenditure on education and the latter as expenditure on insurance (AIHW, 2006). The Australian health system is largely funded through taxation and a small personal income tax–based health insurance levy (Healy and Hall, 2011). The federal government’s contribution is made primarily via two national subsidy schemes: Medicare and the Pharmaceutical Benefits Scheme (PBS). These schemes subsidize payments for services provided by doctors, optometrists, and psychologists, and for a high proportion of prescription medications. Medicare has operated since 1984, and its three objectives are to make health care affordable for all Australians, to give all Australians access to health-care services, and to provide high-quality health care. In its present form, the scheme guarantees all residents of Australia free public hospital care, subsidized access to their doctor of choice for out-of-hospital care, and subsidized medications (Healy and Hall, 2011). Medicare and the PBS also provide larger rebates for those who are eligible for income-support payments (such as for unemployment or disability), and there are additional health-care provisions for members of the defense forces, and war veterans and their dependents (AIHW, 2006). The PBS subsidizes the cost of a broad range of prescription medications and is an integral part of Australia’s health-care system. Before a medicine is subsidized by the PBS, it is assessed by the Pharmaceutical Benefits Advisory Committee for its clinical effectiveness, safety, and cost-effectiveness compared with other treatments. Once recommended, a price is negotiated between the manufacturer and the federal government and the medicine is listed (Healy and Hall, 2011). In 2010–11, 201 million pharmacy services were subsidized, which included 188.1 million PBS prescriptions claimed at a cost of AU$8.8 billion (AIHW, 2012). Until about a decade ago, the PBS was widely recognized as a world leader in controlling government expenditure on pharmaceuticals, while providing consumers with equitable access to affordable medicines. However, using a comparison across 13 countries, Australia is now 40% more expensive than the United Kingdom across the board for all its top pharmaceuticals and the third highest country after the United States and Germany (Clarke, 2013; Clarke and Fitzgerald, 2011). Australians can also purchase insurance from private health insurers to cover services in private hospitals, as well as those provided in public hospitals for private patients and associated medical services. Additional schemes cover other allied health and other professional services, including some complementary health services. In response to a decline in private health insurance membership, the federal government introduced a 30% rebate on membership fees in 1999 and a policy of lifetime cover in 2000. In March 2014, 47% of the Australian population had some form of private hospital cover and 55% had some form of general treatment cover (Private Health Insurance

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Health Systems of Australia and New Zealand

Administration Council, 2013). On 1 July 2014, the Australian Government Medicare levy temporarily increased from 1.5% to 2%, to fund a new National Disability Insurance Scheme.

Regulation The federal government’s regulatory roles include overseeing the safety and quality of pharmaceutical and therapeutic goods and appliances, managing international quarantine and pandemic outbreaks, ensuring the safe supply of blood products, and regulating the private health insurance industry (AIHW, 2014a). State and territory governments are responsible for licensing private hospitals (including freestanding day hospital facilities), and each state and territory has legislation relevant to the operation of public hospitals and to public health. There is also a role for governments in the regulation of food safety and product labeling, safe handling and disposal of hazardous substances, sale of alcohol and tobacco products, air quality, and other relevant regulations. Local governments within states and territories deliver most environmental health programs (AIHW, 2014a).

Hospital and Health Service Operations State and territory governments have principal responsibility for the operation of the hospital and health-care system. They receive substantial funding through the Medicare agreements that exist between each state and the federal government and also apply state revenue to the operation of recognized hospitals (AIHW, 2014a). These funds are also applied to public health and preventive and community health services, including mental health and dental services, health promotion, immunization, injury prevention, and screening programs for diseases such as breast and cervical cancers (AIHW, 2014a). The private hospital system accounts for approximately 30% of total hospital expenditure, and private hospitals receive their revenue from charges that are largely reimbursed through private health insurance funds. The private hospitals are a mixture of private, for-profit, and taxable hospitals; charitable not-for-profit hospitals; and community not-for-profit hospitals.

Health Workforce In 2012, there were almost 600 000 people working in health occupations (Health Workforce Australia, 2014), with the largest group being nurses and midwives. There were 1124 full-time equivalent nurses and midwives employed for every 100 000 people, 374 medical practitioners, 85 psychologists, and 15 podiatrists (AIHW, 2014a). The health workforce has been undergoing considerable growth in recent years, partially in response to shortages of certain personnel (such as doctors, dentists, pharmacists, and nurses) because of an aging workforce, changing work practices, and demand in areas such as Indigenous health, rural health, and general practice. In 2010, the Council of Australian Governments (COAG) brought about a major reform of health practitioner regulation: a nationally consistent law was passed establishing a National Registration and Accreditation Scheme (the National Scheme) and the Australian Health Practitioner Regulation Agency (AHPRA), responsible for implementing the National Scheme across the nation.

Australia is currently dependent on overseas-trained practitioners to fill vacancies in public hospitals and private practice, particularly in rural and outer suburban areas where locally trained professionals are reluctant to work. In 2009, onequarter (18 458) of working doctors in Australia obtained their first medical qualification overseas. The number of temporaryresident overseas-trained doctors arriving in Australia to work in ‘areas of need,’ such as rural and remote areas, increased significantly from 2003. Some specialties are highly reliant on international medical graduates, particularly general practice, psychiatry, and obstetrics/gynecology; for example, one-third (35% or 9191) of general practitioners were overseas-trained in 2009–10 (Health Workforce Australia, 2012).

Health-Care Reform Reform moves slowly in Australia as both tiers of government must concur on any proposed changes (Healy et al., 2006). In recent years, initiatives have included reform of the Australian Health Care Agreements; efforts to address national priorities by way of the Australian Health Ministers’ Conference and the Council of Australian Governments; national funding for the prevention of chronic and complex conditions, electronic health records, and improved safety and quality of hospital care; and better national health information. In 2011, the Australian Government established Medicare Locals to plan and fund extra health services in communities across Australia (AIHW, 2014a). They were created as local organizations, to coordinate and deliver services to meet particular local needs (AIHW, 2014a). On 13 May 2014, the Australian Government announced that the 61 Medicare Locals would be replaced with a smaller number of Primary Health Networks, to be operational from 1 July 2015. Local Hospital Networks (LHNs) are also being established across the country to improve delivery, coordination, and access to health services (AIHW, 2014a). LHNs are small groups of local hospitals, or an individual hospital, linking services within a region or through specialist networks across a state or territory. Ongoing areas of concern are Indigenous health, rural and remote health, socioeconomic disparities in health, cost containment, an aging workforce, and the increasing burden of chronic conditions. The challenge for the Australian health system will be in managing the relationship between these demands, the health workforce mix, and the levels, types, and quality of services supplied in response.

New Zealand Introduction Geography New Zealand or Aotearoa (in Maori – the land of the long white cloud) is an archipelago with over 700 offshore islands, which lies in the southwest Pacific Ocean to the east of Australia (Figure 5). Its three main islands, the North and South Islands and Stewart Island, are spread over 1600 km and have 18 000 km of coastline, and an area of 268 000 km2. The northern outlying islands are subtropical in climate, while those in the south are subantarctic; between these extremes, the climate is cool to temperate.

Health Systems of Australia and New Zealand

North Island Tasman Sea

Pacific Ocean South Island

Figure 5

Map of Aotearoa – New Zealand.

Demography New Zealand was the last habitable landmass in the world to be discovered, by the ancestors of Maori, over 1000 years ago. In 1840, the country became a British colony when more than 500 Maori chiefs and representatives of the British

Figure 6

Population density, New Zealand, 2001.

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monarch signed Te Tiriti o Waitangi, the Treaty of Waitangi. The Treaty still governs the relationship between the Crown and Maori and has been interpreted in the health system through the principles of ‘partnership, protection, and participation’ (Ministry of Health, 2003). Today, about one in seven New Zealanders identify themselves ethnically as Maori. As the country’s original inhabitants, Maori culture is a key element of the New Zealand identity, and the Maori language (Te Reo) is spoken fluently by more than 160 000 people. Maori are disadvantaged compared to most other groups, with lower life expectancy, living and housing standards, and educational attainments, and poorer health. They share these characteristics with Pacific Islander (Pasifika) peoples in New Zealand. The Pacific population consists of at least 13 distinct languages and cultural groups, with the Samoan community the largest (49%), followed by Cook Islanders (22%), Tongans (19%), Niueans (8%), Fijians (4%), Tokelaueans (3%), and Tuvaluans and others (3%) (the totals add to more than 100 because multiple ethnic identities can be given) (Cumming et al., 2014). New Zealand has an estimated 4.51 million people, predominantly of New Zealand European ethnicity (74.0%), with significant Maori (14.9%), Pacific (7.4%), Asian (11.8%), and Middle Eastern/Latin American/African (1.2%) populations. The majority of the population resides in urban areas (87%), and approximately three quarters (76%) live in the North Island (Figure 6). The population of New Zealand is aging, although the Maori and Pacific populations are younger than the New Zealand population as a whole. The median age of the Maori ethnic group was 23.9 years on 5 March 2013, 14.1 years younger

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Health Systems of Australia and New Zealand

than that of the total population. Only 5.4% of Maori are aged 65 years and over, compared to 14.3% overall. The Pacific peoples are also a younger population.

New Zealand has an established capitalist economy, with a relatively high standard of living and a GDP per capita below the OECD average in 2011. Its economic performance improved significantly over the 1990s following a sustained period of low economic growth during the 1980s, although a major imbalance has been built up in the economy over the past four decades, in the form of persistent current account deficits producing a net external liabilities position equal to 85% of GDP. Significant socioeconomic inequalities exist across the population: Maori and Pacific peoples are more disadvantaged across all socioeconomic indicators than New Zealanders of European backgrounds. New Zealand is a parliamentary democracy and a constitutional monarchy. In 1996, the electoral system was changed to a mixed member proportional representation system, which has increased the representation of smaller parties in the Parliament and government. There is a single chamber in the Parliament, whose powers are the approval of government revenue raising and expenditure, and the enactment of legislation. Maori have had separate representation in the Parliament since 1867. More than 3000 crown entities, funded by the state, perform a variety of functions and include the 20 district health boards (DHBs) which operate the country’s hospitals, and nine crown research institutes (Cumming et al., 2014).

Other health disparities are also evident. The overall infant mortality rate was 4.2 infant deaths per 1000 live births in 2012, with a rate of 4.7 for the Maori population, which had improved significantly from a rate of 7.0 in 2011. In the National Health Survey 2012/13, non-Maori adults generally rated their health higher than Maori adults (Ministry of Health, 2013). Maori adults have higher rates of most health conditions, with differences most notable for some cancers, asthma, chronic obstructive pulmonary disease, ischemic heart disease, stroke, and diabetes (Ministry of Health, 2013). Since the 1990s, improvements in New Zealanders’ health have been most evident for ischemic heart disease, cervical cancer, road traffic injuries, alcohol-related diseases, and control over HIV/AIDS. Other conditions have continued to increase, however, such as diabetes (French et al., 2001). Cancer has been the leading cause of death since 1993; and other major causes are ischemic heart and cerebrovascular diseases. Some key health indicators and disparities in health indicators are in Table 2. In 2013, the prevalence of daily smoking among European New Zealanders aged 15 years or above was 13.9%, but Maori smoking rates (32.7%) were twice those of non-Maori, with elevated rates also apparent for Pacific peoples (23.2%) (Health Promotion Agency n.d.). Proportionally more Maori people die from heart disease, lung cancer, and chronic respiratory diseases than non-Maori. Despite the continued disparities in health, there have been some gains for Maori health over the last decade, with an improvement in areas such as asthma and other respiratory problems, immunization, and mental health (Cumming et al., 2014).

Health of New Zealanders

The System to Address Maori Health in New Zealand

Historical Trends

Prior to European settlement, Maori customs, similar to those of other Polynesian peoples of the Pacific islands, recognized land as the sacred trust and asset of the people as a whole community. After colonization, the loss of ancestral land undermined Maori identity and well-being and the social links between families and within tribes; and, with the loss of the resources necessary to sustain well-being, the health of the people also deteriorated (Durie, 2001). The Maori philosophy toward health, Te Whare Tapa Wha, is based on a wellness or holistic health model – a four-sided concept representing four basic beliefs of life: Te Taha Hinengaro (psychological health), Te Taha Wairua (spiritual health), Te Taha Tinana (physical health), and Te Taha Whanau (family health). Knowledge of whakapapa (one’s ancestry) and whenua (land) are also important. It was not until 1983 that the Department of Health allowed awhina (healers) to work alongside doctors in hospitals. There has been a growing awareness that the key to Maori wellness lies in a more holistic approach and that rongoa Maori (traditional Maori healing) practitioners and practices need to be combined with Western health methods to give people the best of both healing systems. Today, health policy for Maori people is governed by He Korowai Oranga, the Maori Health Strategy. The original He Korowai Oranga has been updated to ensure it continues to provide a strong platform for Maori health for the future and expands the aim of He Korowai Oranga from whanau ora

Economy and Government

Over the last 130 years, there has been a shift from the predominance of infectious diseases and from significant levels of infant and childhood mortality, to that of chronic and degenerative diseases of late adulthood as the main causes of death (Statistics New Zealand (NZ), 2006). A major contributor to the decline in the size of the Maori population until the 1890s was deaths in the New Zealand Wars and associated dislocation, susceptibility to disease, and reduced population in the reproductive ages (Statistics NZ, 2006). This decline eased partly because of improved health as Maori developed immunity to diseases introduced by the non-Maori population. For a small country, the impact of the two World Wars and the 1918 influenza pandemic on death rates of all young adults, especially males, was substantial.

Current Health Status The New Zealand population is one of the healthiest when compared internationally; for example, its life expectancy is above that of the USA and the UK, but slightly below that of Australia. Life expectancy at birth for the years 2010–12 was 79.3 years for males and 83.0 years for females. However, there were marked ethnic differences in life expectancy over this time period: for example, life expectancy at birth was 76.5 years for Maori females and 72.8 years for Maori males, compared with 83.7 years for non-Maori females and 80.2 years for non-Maori males.

Health Systems of Australia and New Zealand

Table 2 Key demographic and health indicators, New Zealand, various time periods from 2004 to 2013a

Indicator

New Zealand

Outcome indicators Life expectancy (years) At Birth Males 80.2 Females 83.7 Infant mortality (rate) 4.2 Avoidable mortality (rate) 68.1(non-Maori) Mortality (rate) Ischemic heart disease Males 85.9 Females 47.3 Lung cancer Males 28.0 Females 21.2 Female breast cancer 18.3 Chronic diseases, 15D years Diabetes (%) Males 6.4 Females 5.1 Ischemic heart disease (%) Males 6.0 Females 3.9 Stroke (%) Males 2.2 Females 1.7 Asthma (%) Males 8.9 Females 13.0 Risk factors Current smokers (% age 15 years) Males 18.7 Females 16.4 Overweight (not obese) (%) Males 38.4 Females 30.0 Obese (%) Males 30.3 Females 32.2 Health determinants School retention (%) 82.6 Unemployment (%) 6.2

Maori cf. total populationb


7.4 years
7.2 years 1.1 times 2.6 times

1.6 times 2.0 times 2.2 times 3.4 times 1.5 times

1.2 times 1.3 times 0.9 times 1.2 times 0.5 times 1.2 times 1.3 times 1.5 times

1.9 times 2.6 times 0.8 times 0.8 times 1.5 times 1.6 times 0.8 times 2.0 times

Note – Rates are as follows: for infants, deaths under 12 months of age per 1000 live births; for avoidable mortality, potentially avoidable deaths before age 75 years per 100 000 population, age-standardized; for mortality by cause, deaths per 100 000 population, age-standardized. Risk factor expressed as percentage (crude) and comparison with Maori based on percentage (standardized). School retention is the proportion of young people staying at school to their 17th birthday; unemployment is the proportion of the labor force who are unemployed. a Data are for various time periods: life expectancy, 2010–12; infant mortality rate, 2012; avoidable mortality rate, 2004–06; mortality, 2011; chronic diseases and risk factors, 2012/13; school retention, 2013; unemployment, 2013. b ‘Indigenous compared with total population’ shows the variation between the rate for the Indigenous population and the rate for the total New Zealand population. Sources: NZ Ministry of Health; Statistics New Zealand; NZ Ministry of Education.

(healthy families) to pae ora (healthy futures). All Primary Health Organizations (PHOs) are required to develop a Maori Health Action Plan appropriate to the needs of their enrolled population, to contribute toward reducing health inequalities. In addition, Maori-led programs designed to improve healthcare access are aimed at developing Maori provider services

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and supporting self-sufficiency, and enhancing mainstream services through provision of culturally safe care.

The System to Address Pacific Health in New Zealand On a population basis, Pacific communities also experience poorer health outcomes in New Zealand. For example, Pacific male life expectancy is 6.7 years less than the total male population of New Zealand and Pacific female life expectancy is 6.1 years less than the total female population. Pacific health status remains unequal with non-Pacific, across almost all chronic and infectious diseases. Like Maori, poor health outcomes are related to social determinants, such as income, employment, housing quality, and education. ’Ala Mo’ui is a combination of a number of Pacific languages meaning ‘pathways to the essence of life force.’ It represents the holistic view of health and well-being, encompassing the physical, mental, cultural, and spiritual dimensions that are important to Pacific people: Tongan (’Ala Mo’ui), Niuean (Ala Moui), Samoan (Ala), Cook Island Maori (Ara), Tokelauan (Ala), and Tuvaluan (Ala). ’Ala Mo’ui: Pathways to Pacific Health and Wellbeing, 2014–2018 sets out the priority outcomes and actions for all Pacific and non-Pacific health, disability, and other relevant agencies that contribute to achieving better health outcomes for Pacific peoples, families, and communities (Ministry of Health, 2014). There is a shortage of health practitioners with an understanding of Maori and Pacific health perspectives and cultures. To this end, the government adopted the Raranga Tupuake Maori Workforce Development Plan 2006, with the aims of removing barriers to Maori and Pacific people entering the health workforce, actively attracting Maori and Pacific people into the sector, and implementing measures to retain existing workers (Health Workforce Advisory Committee, 2006). The Hauora Maori Training Fund helps DHBs develop Maori staff in the nonregulated health and disability workforce and provides access to training programs to develop formal competencies in their current roles and improve potential to move into other roles. Continuing inequalities in health between Maori, Pacific, and other New Zealanders indicate that more remains to be done. The achievement of good health for Maori and Pacific peoples necessitates an approach that goes beyond building their capacity to manage their own health needs and the provision of culturally specific health services. It also requires access to culture and heritage, amelioration of existing socioeconomic and other inequities, and greater opportunities for cultural expression within society’s institutions (Durie, 1999).

The Mainstream New Zealand Health System New Zealand has a predominantly publicly funded, universal coverage health system with services provided by public, private, and nongovernmental sectors. The Minister of Health has overall responsibility for the health and disability system, and the Ministry of Health (MOH) is the main advisory body to the government on policy issues. The organization of these health services in New Zealand has undergone considerable change in the last two decades, from a ‘purchaser/provider,’ market-oriented model

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Health Systems of Australia and New Zealand

introduced in 1993, to a more community-oriented model in 2013. In 2000, the purchase and provision of services were brought back together into the same organizations, and decision making was devolved to 21, now 20 community-focused DHBs (Cumming et al., 2014). The Minister works through the MOH to enter into accountability arrangements with DHBs via the National Health Board, determines the health strategy, and agrees with government colleagues how much public money will be spent on the delivery of services. DHBs are Crown entities responsible to the Minister of Health (administration is through the MOH). Each board has up to eleven members, seven of which are elected by the community, a minority are appointed by the Minister, and at least two must be Maori. The role of DHBs includes planning, funding, and ensuring the provision of health and disability services to a geographically defined population, in keeping with national priorities and Ministry guidelines on essential service provision (Ministry of Health, 2005). Services are delivered by a range of providers including public hospitals, nonprofit health agencies, iwi (tribal) groups, or private organizations. Funding is allocated to DHBs using a weighted population-based funding formula.

Funding and Expenditure The New Zealand health-care system is largely a publicly financed system, with the government funding 82.7% of national health-care expenditures in 2012, with the remaining 17.3% paid by individuals – a level well below the OECD average of 27.7% (WHO, 2014). In 2012, New Zealand’s public expenditure on health care was equivalent to 10.3% of GDP, just above the OECD average of 9.3%; and total health expenditure was around NZ$14.5 billion (New Zealand Treasury, 2013). Private health insurance payments account for only 4.9% of national health expenditure (Cumming et al., 2014). Although the private health insurance share of national health expenditures is modest, about 38% of New Zealand adults held private health insurance in 2013.

Regulation and Operation of the Health System Government funding of health services means that all New Zealand residents receive free inpatient and outpatient public hospital services, and subsidized prescription medications. The New Zealand Public Health and Disability Act 2000 gives DHBs overall responsibility for assessing the health and disability needs of communities in their regions, and for managing resources and service delivery to best meet those needs. Although capitation funding replaced fee-for-service funding of general practice, patients continue to pay additional fees, though these have generally reduced. Most prescriptions have a co-payment of NZ$5 per item (Cumming et al., 2014). Basic dental services are free for children; adult dental care and optometry are paid for privately. Long-term care is funded through both public and private mechanisms (Cumming et al., 2014). In July 2002, not-for-profit PHOs began operating to promote a population focus to health service delivery, with particular emphasis on reducing the cost of access to services. This represented a new direction for primary health care, with a greater emphasis on population health and the role of the community, health promotion, and preventive care.

The New Zealand Health Strategy (2013) provides an overall framework for the health sector. To support this direction, the 32 PHOs are funded on a population basis through a needs-based capitation formula. This aims to reduce inequalities by directing resources to communities in greatest need. PHOs involve a team of health practitioners offering public health and health-promotion initiatives, and primary care for their enrolled populations. Community participation in the PHO governing process allows people a voice in the planning and delivery of services in their communities. Following the November 2011 election, the government shifted the focus of the public sector from outputs to results that benefit families and communities (Cumming et al., 2014). In 2012, the Prime Minister announced 10 high-level targets across the public sector. The MOH is leading the delivery of those in the areas of increasing immunization and reducing rheumatic fever cases among children (Cumming et al., 2014). A new Health Quality and Safety Commission replaced the government’s Quality Improvement Committee in mid-2010 and is intended to increase the focus on quality, while better coordinating the varied approaches to quality improvement across DHBs (Gauld, 2011). New Zealanders have had access to subsidized pharmaceutical drugs since the 1930s. Since 1993, the Pharmaceutical Management Agency of New Zealand (PHARMAC) has managed around 2600 prescription medicines and related products subsidized by the government. Many drugs are purchased in bulk by PHARMAC via a tendering system, which helps contain the cost of drugs. Those on low incomes or who are high health-care users receive subsidies for medical and pharmaceutical costs. In 2012–13, the community pharmaceutical budget was NZ$784 million (PHARMAC, 2014). In 2012, the management of the national immunization schedule, assessment of new vaccines, and purchasing of medical devices for hospitals transferred to PHARMAC from the MOH. PHARMAC has been successful in controlling New Zealand’s expenditure on pharmaceuticals and is a key reason for the nation’s low pharmaceutical prices (Cumming et al., 2010). Not surprisingly, PHARMAC has been a regular point of contention in debates around potential free-trade agreements, particularly the Trans-Pacific Strategic Economic Partnership, which may affect its ability to operate (Gleeson et al., 2013).

Health Workforce In 2010, there were 12 867 registered medical practitioners in New Zealand: one-third were general practitioners, just over one-third were specialists, and just under one-third were junior doctors in hospitals (NZ Government, n.d.). However, as a small country, New Zealand has difficulty retaining its medical and other health graduates, losing many practitioners to other countries able to offer better remuneration and working conditions (Health Workforce Advisory Committee, 2006). New Zealand is the developed country identified by OECD with the highest level of inflow and outflow of health professionals (Zurn and Dumont, 2009). It recruits from many countries but also loses many doctors and nurses, including recent international recruits, to Australia. In part, the high level of international recruitment to New Zealand is an attempt to compensate for the high level of outflow of doctors to Australia (Buchan et al., 2011). Consequently,

Health Systems of Australia and New Zealand

New Zealand has one of the highest proportions of overseastrained doctors (approximately 40% of its medical workforce) of any western country (OECD, 2009). The patterns defined above are largely replicated in relation to nurses (Hawthorne, 2012). By 2005–06, New Zealand had among the highest proportion of foreign-born (29%) and foreign-trained nurses (24%) in the OECD, plus the second highest OECD expatriation rate for nurses (23%) (Zurn and Dumont, 2009). There is also evidence that the situation will worsen. The aging population, greater incidence of key chronic diseases, and changing expectations of practitioners and consumers are likely to further increase pressure on the existing New Zealand health workforce (New Zealand Institute of Economic Research, 2004).

Health-Care Reform The New Zealand health-care system has undergone numerous waves of change since the early 1990s. A move away from a competitive, market-driven model, to one that focuses more on improved population health and greater consultation with health-care providers and communities regarding the strategic directions of the health system, has improved waning public confidence (Cumming et al., 2014). Issues of equity of health outcomes across the population remain an ongoing challenge, particularly for Maori and Pacific Islander peoples and others who are socioeconomically disadvantaged.

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Further Reading

Relevant Websites

Atmore, C., 2015. The role of medical generalism in the New Zealand health system into the future – future challenges. N. Z. Med. J. 128 (1419), 50–55. Australian Bureau of Statistics (ABS), 2007. Year Book Australia, 2007. ABS, Canberra. Australian Bureau of Statistics (ABS) and Australian Institute of Health and Welfare (AIHW), 2011. The Health and Welfare of Australia’s Aboriginal and Torres Strait Islander Peoples. ABS, Canberra. Australian Commission on Safety and Quality in Health Care (ACSQHC), 2015. Vital signs 2015: The State of Safety and Quality in Australian Health Care. ACSQHC, Sydney. Australian Government, Department of the Prime Minister and Cabinet, December 2014. Reform of the federation white paper: roles and responsibilities in health. Issues Paper 3. (Online). https://www.federation.dpmc.gov.au/sites/default/files/ issues-paper/Health_Issues_Paper.pdf. Australian National Preventive Health Agency (ANPHA), 2013. State of Preventive Health 2013: Report to the Australian Government Minister for Health. ANPHA, Canberra. Australian Institute of Health and Welfare (AIHW), 2000. Changes in Australia’s disease profile: a view of the twentieth century. In: Australian Institute of Health and Welfare, Australia’s Health 2000. AIHW, Canberra, pp. 340–364.

Australia http://www.abs.gov.au/ – Australian Bureau of Statistics. http://www.aihw.gov.au/ – Australian Institute of Health and Welfare. http://www.health.gov.au/ – Australian Government Department of Health. http://www.healthinfonet.ecu.edu.au/ – Australian Indigenous HealthInfoNet. http://www.naccho.org.au/ – National Aboriginal Community Controlled Health Organisation. http://www.publichealth.gov.au/ – Public Health Information Development Unit, The University of Adelaide. New Zealand http://www.maorihealth.govt.nz/ – Maori Health. http://www.moh.govt.nz/ – New Zealand Ministry of Health. http://www.moh.govt.nz/pacific – Pacific health. http://www.stats.govt.nz/ – Statistics New Zealand.