CEO Update, 7th March 2018


Prime Ministerial support for industry and businesses

On the 1st and 2nd of March Kate Reid (NZHIT Chair), Ross Peat (Deputy Chair), Kate Rhind (Board member) and I attended the ANZLF annual meeting held in Sydney.  Kate Read, Ross and I are members of the ANZLF’s Health Technology Working Group, which made a presentation to delegates on the initiatives we’re working on for 2018 (more on this later).

The ANZLF’s annual meeting is an opportunity for business leaders and politicians from Australia and New Zealand to get-together and discuss the development of trade, business and social ties between both countries.  At this year’s meeting there were eight Ministers from New Zealand (including the Prime Minister Rt Hon Jacinda Ardern) who were joined by Ministers and the Prime Minister from Australia.  It was a privilege to be involved alongside nearly 1,000 trans-Tasman business leaders during the Forum’s activities held over the two days.

The significance in being involved with the ANZLF and attending this meeting are two-fold – 1) we’re representing NZHIT member’s interests and demonstrating our commitment to the trans-Tasman relationship, 2) the trading opportunities and business-political relationships are crucial for our members to be able to grow and prosper in an ever-constraining local marketplace.

During the ANZLF luncheon the two Prime Ministers spoke about the importance of the respective relationships and how the business communities in both countries have an important part to play when it comes to the prosperity enjoyed by their citizens.  The speech by our PM was especially interesting given the newness of this government and demonstrated an excellent grasp of the issues and opportunities.

As many NZHIT members will attest, we are experiencing an increasing amount of pressure from the public sector that is making it extremely difficult to continue to invest and trade in the NZ health sector.  We now have members who are bypassing the NZ market and going straight to export opportunities as the local environment has become far too complex and difficult to develop and launch innovative health IT solutions.

Hence, I was very pleased to hear our Prime Minister make specific reference to “delivering productive growth”, “remain committed to generating prosperity through trade”, “how we can make it even easier and speedier for SMEs to do business across the border”.

She went onto say that – “we know that the digital economy will be a key driver of innovation and growth, with immense potential to boost productivity and competitiveness and connect people who would otherwise be excluded….. I want to ensure our digital policy is of the highest standard, representing the commercial reality in which our businesses operate”.

The Prime Minister’s full speech is worth reading as it contains some key messages of support for businesses and industry players.

I mentioned earlier in this update that we’re participating in the ANZLF Health Technology Working Group and were very pleased to represent the proposed initiative to develop a “digital health passport”. This initiative was very well received and will be progressed to the next stages over the coming months.  I’ll provide more information and please don’t hesitate to make contact if you’d like to discuss it further.

The procurement merry-go-round – things are getting tense!

In my article above I’ve referred to the difficult environment that private business operators find themselves when trying to make headway in the NZ health sector.  There are two main concerns that I’m told about on a very regular basis –

1)      The very difficult, complex and drawn-out procurement processes that not only create a drain on member’s resources but increasingly seem to result in massive cost implications on taxpayer’s hard-earned dollars.  There’s a “ready, steady, stop!” approach that has to be of concern to all New Zealanders as there is a flow-on impact to the country’s ability to provide healthcare services to its citizens, both now and into the future as demand and complexity of care requirements increase.

2)      The increasing practice of publicly funded entities setting themselves up in a way that competes with the private sector.  There is nothing wrong with competition - an open market encourages this as a means to deliver innovation and value.  However, problems arise when the market becomes imbalanced and, for example, one party has access to “free” investment capital and is also the procurer of services that it may then buy from itself.  Technically, there’s also nothing wrong with this as long as it comes with transparency, accountability and governance that ensures value has been delivered and taxpayer funds are spent on the services it was provided for in the first place.

Both of these points are related as we’re seeing decreases in efficiencies and effectiveness from some public-sector decision-makers that causes nervousness in the market environment.  There are plenty of examples that all of us will be well aware of, including the recent news that the “problem plagued National Oracle Solution” is now being investigated by Deloitte. 

I applaud the Minister of Health’s decision to question this programme. Unfortunately, not only have we got yet another large national procurement process under scrutiny, but the taxpayer is now paying a consulting firm’s fees to find out what’s going wrong and what needs to be done about it. Surely, the double-bang implications of this situation can no longer be justified?

NZ Health Partnerships Ltd was established in the aftermath of the struggling Health Benefits Limited.  Both entities have been the subject of considerable cynicism as the promised savings to the health sector are yet to be realised (or, if they have we’re yet to be shown them).  Whilst both publicly funded organisations were established under the previous government’s watch it will be very interesting to see how the new government deals with this issue. 

This is not the only example of both governance and management processes making it very difficult to trade in the NZ health sector environment.  We’re all aware of the Waikato DHB’s Smart Health situation and will be expecting the findings of the two investigations to be made available (it’s our taxes that have been spent after all). The smell of the National Infrastructure Programme (NIP) and Project Swift still lingers whilst the recent National Bowel Screening ROI process has raised multiple eyebrows across the sector.

One of the countries largest regional support agencies recently told its industry partner network that they’ll be increasingly expected to “pay to play” if they want to keep doing business with them.  This agency expects the current (very) low investment in technology spend across its DHBs to continue, or perhaps possibly decrease, whilst putting the onus back onto the private sector to fund additional spend in areas such as innovation.

This is only touching the tip of the iceberg and I’m sure there’s yet more to transpire on this topic in the coming months.  NZHIT’s position is that New Zealand must have an environment that encourages innovation, investment and the delivery of value to everyone involved in the health sector and beyond.  There are huge opportunities to position this country as a leader in the innovation, implementation and operation of health technologies that benefits this country and can be traded with the rest of the World.

Public and private sector operators have to collaborate and find ways to work together that takes advantage of each other’s strengths.  This is the only way to deliver increased efficiencies and create more effective ways of providing the healthcare system of the future that our citizens expect.

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