top of page
Search

Health NZ is the new centralized public health-care monolith. Its Chair is charged with running our entire health system, which makes that job by far the "biggest" one in the country, after the Prime Minister and Finance Minister, in terms of size of the budget and number of staff. A few years ago the Chair was Rob Campbell, who is the Chancellor of the Auckland University of Technology (AUT). He's also a former Chair of SkyCity Entertainment Group. Campbell was sacked over a political attack he made about National's Three Waters policy, according to Radio NZ, which reported how he "took to LinkedIn to criticize policy as a thin disguise for dog-whistling on co-governance".


The new Chair of Health NZ is Lester Levy, a "Professor of Digital Health Leadership", who also works at the Auckland University of Technology. Levy was once an adjunct at Auckland University & former colleague of mine. He was also a Chair of the much loved (not) Auckland Transport. Yesterday The Post revealed Levy is dividing his time at Health NZ with another job - his professorship at AUT. To deflect criticism he wasn't giving full attention to "turning around" NZ's health system, Levy told a Member of Parliament that he was putting in "at least 10 to 12 hours a day, seven days a week". He said he did no undergraduate teaching at AUT & some on-line postgraduate courses. This is what I don't get - if he is spending those hours on Health NZ, how much time is AUT getting out of him? How much time is he spending with undergrads, which is the most important part of a professor's job? How much time is he spending on research for AUT if he's seven days a week on Health NZ?


Here's the rub. When I worked in the United States, one of my colleagues, Ben Bernanke, who had his office at the time in the Woodrow Wilson School for Public Policy, became Chairman of the US Federal Reserve. Princeton University gave him several years of full "leave", which to my understanding was with no pay. Similarly when another colleague there, Alan Krueger became Chair of the US President's Council of Economics Advisers, he was also granted "leave" from the University. After the leave expired, both were required to return to give their full, undivided attention back to teaching Princeton undergrads, as well as researching & publishing articles. In cases where staff wished to be away for longer, their employment was ended. I assumed that when Levy took the Health NZ job, he was put on full leave from AUT, though it appears that has not been the case.


At a deeper level, Health NZ should, of course, never have been created & the fortunes of the health of every NZ'er thrown into the hands of one person. One such oversized, central authority with one supreme boss is a non-starter. National, ACT & NZ First need to think about the future of our health system properly, and realize the incentives are wrong, and will not be fixed by buying new IT systems, bringing in a Digital Health Leadership "expert", blaming "back-office" managers for screwing up and arguing prevention can do the trick, as Levy has argued stated. Instead we are witnessing the end of the era of single public payer - single public supplier health-care. Whether it is Campbell, Levy or the next person, they wont save NZ's health system given its present structure, which has to redesigned. It requires both the knowledge and will of the PM, who must first persuade the public there is a better way. I suggest the greatest priority of Chris Luxon is to fly without delay to France, or Singapore, and learn about how things can be done better - how better health-care quality can be delivered for lower cost than Health NZ will ever be able to achieve.


Sources



The Biden administration has announced that the US government's Medicare public health program is negotiating discounts with pharmaceutical companies on 10 drugs. The discounts will range from 38% to 79% when the negotiated prices take effect in 2026. The bargaining will save Medicare $6 billion per annum, according to the Department of Health & Human Services. When a large buyer purchases from many competing sellers, it can often get a lower price. Economists call it "monopsony" power. (By contrast, "monopoly" power, which can be illegal, occurs when a big seller - not buyer - affects the going price). Pharmac runs this model in NZ - it's a good feature of our health system. Pharmac just needs to be well-funded & run by competent people who know what are the best drugs to buy.


As for those folks who believe its best not to purchase from the private sector when it comes to health-care (and education) services (which includes NZ's Far Left Labour Opposition Leader, Chris Hipkins) if NZ didn't buy drugs from pharmaceutical companies, then no Kiwi would have access to a single drug or pill. Does Hipkins actually know that fact? I'm not aware that Hipkins or Jacinda Ardern have ever manufactured any product or service at all, let alone the Pfizer (Covid) vaccine, for that matter. More generally, the Pharmac-style model should be applied throughout our health system in the sense that many private (as well as public) sellers should supply our system, with their services funded on behalf of all Kiwis by a government agency. Like the firms that supply Pharmac, the hospitals supplying our health system should compete so the government gets the highest quality product and uses its monopsony power to negotiate a good price. But that's too much common sense for it to ever be adopted by any NZ political party.


Sources:

Home: Blog2

SUBSCRIBE

Thanks for submitting!

CONTACT

Robert MacCulloch

bottom of page