Education And Debate

Quality improvement perspective and healthcare funding decisions

BMJ 2003; 327 doi: (Published 21 August 2003) Cite this as: BMJ 2003;327:439

This article has a correction. Please see:

  1. Ashley Bloomfield, public health leader (,
  2. Robert Logan, chair2
  1. 1National Screening Unit, Ministry of Health, PO Box 5013, Wellington, New Zealand
  2. 2National Health Committee, PO Box 5013, Wellington, New Zealand
  1. Correspondence to: A Bloomfield

    Efforts to apply explicit prioritisation processes to healthcare funding decisions have had mixed results in New Zealand. But a quality improvement approach has advantages over existing prioritisation approaches

    New Zealand, along with other countries, developed more transparency in making decisions about prioritising healthcare funding during the 1990s.1 2 In New Zealand, prioritisation approaches drew heavily on economic principles and used empirical evidence.

    This paper reflects on experience with prioritisation of healthcare funding in New Zealand, identifying the benefits and also the shortcomings. It examines whether quality improvement, which is receiving increasing attention in New Zealand and internationally, is useful in making funding decisions both across and within services. We argue that a quality improvement approach has several advantages over existing prioritisation approaches, and we provide examples of how such an approach might be applied.

    New Zealand's experience with priority setting

    In the late 1980s and early 1990s, many developed countries restructured their healthcare systems, in part to improve efficiency and address rising costs. In New Zealand, major reforms in 1992 resulted in a purchaser-provider split with a strong emphasis on contracting and regulated competition. The Core Services Committee, now the National Health Committee, was established to advise the minister of health on the health service's priorities.3 A key task of the committee was to advance public debate and understanding of limited healthcare resources and the need to ration services.

    The committee proposed that prioritisation decisions should be explicit and transparent and based on four principles, which have underpinned much of its subsequent work: effectiveness, efficiency, equity, and acceptability.4 Drawing on this work, a number of regional and national funding agencies developed prioritisation processes and attempted to apply these to funding allocation decisions. In 1999, the national Health Funding Authority added the principle of Maori health to those of the National Health Committee when …

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