NGO Health & Disability Network

Briefing to Incoming Minister

October 2014

The Ministry of Health has worked with the NGO Health & Disability Network for more than 10 years, but barriers that stifle the optimal effectiveness of our sector still exist.

Non-government health and disability providers receive approximately $2-4 billion1 annually in Vote Health funding (approximately 25% of the overall non-departmental health operating budget), and play a significant role in the New Zealand healthcare system.

Many NGO health and disability providers also receive government funding from other government agencies through grants and contracts, but government struggles to quantify this, despite mandatory reporting for many providers through the Charities Register.2

Our strong community roots mean NGOs are vital to support a focus on patient-owned care, improve health literacy and reduce demand on hospital EDs and tertiary health services, but we must be engaged at a system level to ensure barriers are removed and opportunities to contribute to the whole health system are taken advantage of.

As the new Minister, our key messages to you are:

EQUITY – We must create equity across the whole health system by aligning incentives for government and NGO providers through greater consistency of Crown funding models and fairer approaches to pricing and contracting.

DHB INTERACTION – The health spend could be used more effectively through active partnership with the NGO sector and improvements to the way the DHB system operates, as it currently creates unnecessary duplication and a ‘postcode lottery’ of services.

LONG TERM FOCUS – A collaborative, investment approach to the health and well-being of our nation will result in cost savings and better health outcomes.

COLLECTIVE IMPACT – Take advantage of the NGO collective impact across all aspects of the health system by ensuring NGOs are engaged at all levels of policy development, planning, service delivery and decision-making.

1 Source: Ministry of Health’s Vote Health estimate from website www.health.govt.nz/new-zealand-health-system/key-health-sector-organisations-and-people/non-governmental-organisations2 The Ministry of Health’s Vote Health estimate of $2-4 billion includes funding to PHOs, which are not eligible for membership of the NGO Health and Disability Network. Not all eligible NGO providers are members of the Network, but our analysis of the Charities Register data identified $1.255 billion of government funding paid to our 450 members, indicating that overall government funding to the non-profit NGO sector is probably under-estimated.

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EQUITY

The funding discrepancies between DHBs and the inconsistency in purchasing models compromise our ability to deliver nationally consistent services and provide equity of access – leading to a ‘postcode lottery’ for people using the health system.

The complex procurement process of different funding models used by multiple government funders requires a significant volume of administration for NGOs – especially those that provide services across multiple regions. Some services are purchased per bed day, while others are fee-for-service or partially bulk funded. This is inefficient for both the NGOs and the government. Currently a single individual receiving home-based support or residential care services can be funded by ACC, the Ministry of Health and a DHB, all of whom have their own reporting and compliance expectations. A joined up, person-driven approach to funding is urgently needed to meet the diversity of needs.

Government’s recent streamlined contracting initiative and commitment to reduce the audit burden are welcome moves, but so far they have only impacted on a very small number of providers.

Rates paid by government for NGO services are usually lower than those paid for the same services in DHBs. This was highlighted in the recent aged care sector’s pay parity campaign Who Cares? and by mental health and addiction NGOs’ Fair Funding campaign.

Rates paid to NGOs across the country vary widely too,3 despite the fact that NGOs are required to operate to the same National Services Framework (NSF) and National Health and Disability Services Standards (NHDS). It is only reasonable to also have a nationally agreed pricing structure in place.

Despite the Government giving DHBs annual inflation-related Contribution to Cost Pressure (CCP) funding adjustments, these are not routinely passed on to NGOs. Furthermore, NGO services are regularly required to re-tender for contracts, but DHB services are not.

Uncertainty in the tenure and viability of short-term contracted services creates anxiety for health consumers in the wider community and is a particular issue for the most vulnerable populations.

3 The Fair Funding campaign identified prices for the same NGO service varying by $33,389 per FTE across different DHB regions: www.fairfunding.org.nz/fairfunding

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DHB INTERACTION WITH NGOs – MAJOR IMPROVEMENT NEEDED

The NZ Public Health and Disability Services Act 20004 empowers the Crown and DHBs to organise national, regional and local services for optimum effectiveness, but a properly co-ordinated approach to community health services is not evident.

District Health Boards are responsible for achieving population health outcomes, but the NGO sector contribution to local health outcomes is rarely acknowledged.

Government investment in workforce development is currently focused on the needs of DHBs, with few opportunities for NGOs to engage as part of a robust, system wide workforce planning approach. The NGO sector is critical to resolving some of the complex problems that exist in NZ communities and the workforce that supports the NGO sector must be recognised.

Many DHBs, predominately those with large deficits, do not engage with the NGO sector and subsequently reduce funding or access to community services as a way to manage annual budget deficits. We are aware of instances where DHBs actively resist funding community services because they will reduce demand for DHB services and result in empty beds. This type of patch protection is not the intention of the Public Health and Disability Services Act 2000 and will fail to deliver the population health gains expected in our country.

Many areas are reaching crisis point as NGOs struggle to maintain focus on delivering quality services with this sinking lid approach to funding.

The aftermath of the Canterbury earthquakes saw increased trust and an open disclosure approach, where providers felt comfortable discussing problems as they arose and learning from errors. This experience needs to be shared nationally, as it shouldn’t require a major disaster to elicit collaboration.

Your Ministerial priorities and letter of expectations will be hugely influential in how DHBs plan. There is a need for these to drive for greater consistency across the country and to support meaningful collaboration with NGOs – involving us in funding and planning processes. Some DHBs do this well and could positively impact the others by sharing their expertise and experience.

4 Excerpt from Section 1 of the NZ Public Health and Disability Services Act 2000. “Purpose of the Act [paragraph (5)]: “the Crown and DHBs must endeavour to provide for health services to be organised at either a local, regional, or national level depending on the optimum arrangement for the most effective delivery of properly co-ordinated health services.”

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LONG TERM FOCUS REQUIRED

Substantial differences exist in health outcomes and life expectation for people marginalised by disability, mental health, ethnicity or socio-economic status.5 For example, rates of illnesses such as rheumatic fever and skin infections are much higher among Māori and Pacific peoples.6

A prevention/public health approach (prevent, promote, protect) is less costly than treatment7 and NGOs can be your answer to this.

There is a desperate need for cross-party approaches to issues like child poverty, which have a huge impact on demand for health services. These are not quick-fix problems that can be solved in one, two or even three political terms – they need consistent support and long term strategies over decades to ensure an enduring focus on public health issues.

An investment in child health pays off as it results in better health outcomes in adulthood – while the short-term costs may be higher, the long term savings are significant. Treat health as an investment, not a cost.

NGOs’ diversity, agility and flexibility are vital to addressing chronic conditions like smoking and obesity. Community groups’ advocacy often draws attention to such issues and works to change public attitudes over many years. Government, however, is often slow to get involved and first to leave. Government funders actively discourage (and even penalise) advocacy and speaking out, despite the Auditor-General’s guidance acknowledging the independence of NGOs. Then, when progress is made, government is too quick to turn its attention and resources to a new issue.

In March 2011, the New Zealand Government committed to a goal of NZ becoming smokefree by 2025. Smoking numbers are well down on previous years, so government already appears to be diverting resources away from smoking cessation services as the problem is perceived as solved. This is not the case – those who still smoke face multiple challenges (often intergenerational and environmental), so they require more intensive services and support. Of particular concern is the impact of maternal smoking during pregnancy on the child – an area where we have seen the fewest gains. With other long term issues, government must be more responsive to community advocacy and resource organisations over many years to achieve results.

Innovative, community-focussed and consistent solutions are needed to address the growing complexity of New Zealanders with long-term conditions. Investment in self-management support and enhancing workforce capability across the sector

5 Equally Well, Te Pou, 2014.6 The Public Health and Disability Services Act 2000 requires the health and disability system to promote “the inclusion and participation in society and independence of people with disabilities” [paragraph 1 (a) (ii)] and “to reduce health disparities by improving the health outcomes of Maori and other population groups” [paragraph 1(b)].7 Morgan and Simmonds, Health Cheque 2009 cite US evidence of a 4:1 return (in terms of quality adjusted life years gained) from investing in prevention and primary healthcare, as compared to hospital treatment.

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are examples where the NGO sector can work closely with government agencies (including DHBs) to achieve a system wide approach.

If government wants greater accountability and evidence of service effectiveness to support funding decisions, it needs to fund research and evaluation when purchasing services, as current service provision rates do not enable NGOs to fund this themselves.

COLLECTIVE IMPACT

The Ministry of Health could do more to enable a collective impact model using evidence-based ways of making major change. Alliance contracting that trusts providers to understand each other’s strengths and weaknesses is a good approach, but there are others too.

We need to take a multi-sectoral, collective, integrated planning approach and work across government, while listening to those, such as community-based non-profit providers, who work with this country’s most vulnerable and high-needs populations and are attuned to their communities. The Ministry of Health needs to recognise it is only part of the system – it is still too siloed.

Despite documents like Kia Tutahi and Statements of Intent (SOIs) that talk of being responsive to communities, current community engagement is not systemic – it is driven by a few insightful (sometimes courageous) public servants. Sadly when they move on, dialogue often ends. Community-led, co-design models should be more prevalent.

Whānau Ora, the social sector trials and Healthy Families are moves in the right direction, but so much more could be done to move services to primary care and community settings with adequate resourcing.

Ministerial appointments

The NGO voice is absent from too much decision-making. Ministerial appointments to DHBs and other statutory bodies can address gaps, such as the need for particular skills or representation of ethnicity.

Our analysis of DHB members’ profiles shows good levels of clinical, financial and governance experience on most Boards, but we perceive a lack of non-profit experience, and therefore limited knowledge of the range and value of effective community services.

While we recognise the need for balance when you are making your decisions on Ministerial appointments, we recommend you view experience in the non-profit community sector as a useful and important factor that can make a valuable contribution to DHB/statutory body governance.

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Appendix 1Non-profit NGO sectorNon-profit, non-government organisations have a long, well-established record of contribution to New Zealand’s health and disability sector. They provide flexible, responsive and innovative frontline service delivery, which is vital to supporting government initiatives such as lifting immunisation rates, reducing rheumatic fever, managing diabetes and improving support to help smokers quit.

Statistics NZ data

Statistics NZ’s NZ Non-Profit Institutions Satellite Account: 2004 identified 97,000 non-profit organisations in New Zealand. Of these, 2,210 were health sector non-profits contributing $466.8 million to GDP. Statistics NZ recently announced that it will update the Satellite Account, which is now well out-of-date and appears to have significantly underestimated the economic value of the sector judging from more recent Charities Register data.

Charities Register data8

The DIA Charities website shows 1,993 registered charities identify their main sector as health (7.3% of the 27,384 registered charities in NZ) and 922 registered charities are focused on working with people with disabilities.

Current Ministry of Health figures indicate less than half of these charities are Vote Health funded.

Healthy civil society

Some policy-makers and politicians bemoan the number of NGOs and try to orchestrate mergers through funding mechanisms, instead of viewing the number as a sign of healthy civic participation and social capital.

NGOs are the vehicle through which citizens can contribute to their communities and express engagement. There is strength in various sizes of organisations as they can respond to different needs and don’t impose a one-size-fits-all approach. There is economic sense in mobilising an unpaid workforce through NGO volunteers, but this enthusiasm will be lost if communities feel a loss of ownership of the community organisations they helped set up.

8 Charities are a sub-group of non-profits – i.e. all charities are non-profit, but not all non-profits meet the criteria to be registered charities.

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Appendix 2NGO Health & Disability NetworkOrigins

The NGO Health & Disability Network (formerly the Health and Disability NGO Working Group) has partnered with the Ministry of Health since 2002 to implement the Framework for Relations between the Ministry and Health and Disability NGOs.

The Framework identifies key areas (communication, consultation and capacity/capability building) where working together can strengthen the sector and achieve better health outcomes. It complements the Kia Tutahi Standing Together Relationship Accord between the Communities of Aotearoa NZ and the Government of NZ.

Recent project work has delivered governance training for non-profit Board members, funded further development of the NZ Navigator online self-assessment tool and is supporting NGOs to meet requirements of the Vulnerable Children Act.

Network membership profileWe had 450 NGO members and 38 affiliates of the Network as at 23 September 2014. (These NGOs range from small providers with one FTE employee, to large multi-million dollar agencies with more than 2,600 paid staff.) Ninety-seven percent of Network members are registered charities. Based on data from the Charities Register,9 we know the following:

At least 30% are incorporated societies so will be affected by the proposed Incorporated Societies Act reform due to commence in 2015.

The new Accounting Standards for Not-for-Profit Entities, which take effect from 1 April 2015, will affect virtually all our members.

Our 450 member NGOs received $1.255 billion in combined annual government funding.10

Approximately half received a total of $187 million in bequests, donations/koha, and other grants and sponsorship.

Member NGOs paid more than $1 billion in annual salaries and wages to 15,686 full-time staff and 18,444 part-time staff.

In an average week, a total of 3.4 million hours were worked by paid staff and 143,246 hours provided by over 30,845 unpaid volunteers.

Almost one third of member NGOs had a net annual operating deficit in their last reported financial year, so had to draw on reserves to continue delivering services.

The activities of the NGO Network extend far beyond the voting membership as many non-members attend Forums and workshops and provide input via Network projects and surveys.

9 Charities register data downloaded 13 May 2014. Data is not verified by DIA Charities and is only as accurate as the accuracy of the information provided by listed charities.10 Current government IT systems cannot easily identify what proportion of this is Vote Health funding.

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Appendix 3NGO CouncilThe elected NGO Council connects with health and disability organisations to hear views and convey issues and ideas to the Ministry. The Council is made up of three Māori Health representatives, and two representatives from: Pacific Health, Mental Health and Addictions, Personal Health, Public Health, and Disability Support Services.

NGOs that receive Vote Health funding (i.e. have contracts with the Ministry of Health and/or DHBs) are registered to vote in a maximum of two categories as follows:

199 in Disability Support Services 104 in Public Health

134 in Mental Health and Addictions 100 in Māori Health

89 in Personal Health 23 in Pacific Health

The current elected members of the NGO Council are:

Disability Support Clare Teague NZ Disability Support Network WellingtonMark Brown LIFE Unlimited Hamilton

Māori Health Carole Maraku Te Menenga Pai Trust WellingtonChristine Maxwell Nga Ngaru Hauora O Aotearoa DunedinDonna Matahaere-Atariki (Vice-Chair) Arai Te Uru Whare Hauora Ltd Dunedin

Mental Health Marion Blake Platform Charitable Trust Wellington& Addiction Shaun McNeil Richmond Services Ltd Wellington

Pacific Health Eleni Mason Pacific Health Service Porirua Inc PoriruaVacancy due to a resignation in August

Personal Health Kathryn Jones Laura Fergusson Trust Christchurch(Chair) (Canterbury)Sarah Mulcahy Royal NZ Plunket Society Napier

Public Health Sione Tu’itahi Health Promotion Forum of NZ AucklandWarren Lindberg Public Health Assn of NZ Auckland

Contact details:

Council Chair Kathryn Jones Ph 03 335 0544 or 021 0311 557 kathryn.j@lftcant.co.nz

Secretariat secretariatngo@gmail.com

Website www.ngo.health.govt.nz

Facebook www.facebook.com/HealthDisabilityNGONZ

Twitter https://twitter.com/NZHealthNGOs

A list of NGO members of the Network is available upon request.

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