New Zealand: #20 in the 2020 World Index of Healthcare Innovation

Introduction

New Zealand ranks 20th overall in the World Index of Healthcare Innovation, with a score of 45.97. The island nation ranks highest in Quality (64.66, #6), with high scores for patient-centered care and infrastructure. However, New Zealand ranked below the median on the three other WIHI dimensions: Choice (35.69, #23); Science & Technology (30.32, #21); and Fiscal Sustainability (53.22, #25). Notably, while New Zealand’s debt-to-GDP ratio is low (31.7%), health care spending is growing rapidly.

Background

New Zealand’s socialized health care system was first established in 1938, with a taxpayer-funded government-run system providing mostly free care at the point of service. What had been a largely fragmented system was consolidated into a single payer in 1997, with hospitals and clinics mostly run by a government agency called Hospital and Health Services. Private hospitals represent a niche sector focused on elective surgery and long-term care.

New Zealand’s publicly funded system covers inpatient and outpatient hospital services (at public hospitals), preventive care, and primary care via private providers (with the exception of optometry, adult dentistry, orthodontics, and physiotherapy). It also covers inpatient and outpatient prescription drugs listed on the national formulary, mental health care, long-term care hospice care, and disability support services.

Public hospitals are essentially free of charge, with no mechanism to shift costs to patients. As with many socialized systems, the government strictly regulates prices and access to care in order to keep a lid on costs. Similarly, the Pharmaceutical Management Agency uses mechanisms like reference pricing and tendering to establish prices for publicly subsidized drugs dispensed via hospitals and community pharmacies. If the patient wishes to purchase an unsubsidized drug, he or she will pay the full out of pocket cost. This strategy has helped keep drug expenditure per capita as the fourth-lowest in the organization for Economic Co-Operation and Development (OECD).

Quality

The overall quality of New Zealand’s health system ranked 6th in the WIHI analysis. New Zealand’s exceptional quality ranking was bolstered by its modern health care infrastructure, at 3 of 31. However, New Zealand ranked 19th regarding measures of preventable disease.

Choice

New Zealand ranked 22nd for overall patient choice. Although New Zealand held a high subcategory rank for its affordability of health insurance (5 of 31), its low subcategory ranking in access to new medicines (28 of 31) offset this rank.

Science & Technology

In the WIHI analysis, New Zealand ranked 21st in overall innovation. New Zealand’s EHR adoption rate is near the top third of countries (12 of 31), but its contribution to medical innovation lagged behind (28 of 31).

Fiscal Sustainability

New Zealand’s long-term fiscal sustainability ranked near the median at 16th. New Zealand ranked respectably in its debt-to-GDP ratio (7 of 31) and growth of health care spending over the last decade (6 of 31) but performed poorly in its public health spending per capita (25th).