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Why now is the time for Health New Zealand to take a platform approach?

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In a moment when the imperative is rapidly improving public value of health service delivery, reducing complexity is the fastest path to a sustainable model for Health New Zealand.


In brief

  • Health New Zealand (Health NZ) is undergoing a fundamental reset to enable efficient and effective delivery of frontline services, improving both patient and staff experience.
  • As part of the reset, there is a nationwide focus to optimise spending by making day-to-day operational practices as efficient as possible.
  • Modernising the back-office operations via a platform approach will enable transformation at speed and scale, enabling AI to reduce the administrative burden on staff.

Health New Zealand is under substantial pressure to significantly reduce operating expenditure at a time when the cost of providing our nation’s healthcare is continuing to rise. The FY 24/25 budget has been set at $28b, a $1.43b increase from FY 23/24 – and yet spiking health costs are causing an estimated overspend of $130m a month.

While short-term cost cutting may solve the immediate budget challenge, more fundamental change is needed. Modest productivity gains will not be enough. Health NZ is looking for a leapfrog approach – moving from the current operating models, legacy systems and ways of working to a new, modern, value-for-money health system.

Significant productivity gains can be found by digitising and automating manual processes and workflows. When admin tasks are automated, this frees up busy professionals and allows clinicians to spend more time focussing on patient care. There’s also real potential to reduce the risks associated with human error, compliance and data security, and deliver substantial cost savings.

This doesn’t need to be through a big-bang transformation programme: it can be through targeted, incremental change. By unleashing a platform approach on one process or function within a region to test and measure benefits, Health NZ can redirect gains and scale rapidly towards further transformational change.

Embracing a platform approach can offer cost advantages. Platforms enable agencies to adopt standard, simplified processes and workflows, allowing them to benefit from reuse rather than having to develop bespoke processes and systems themselves. Additionally, platforms provide user experience and automation benefits today, allowing time to modernise the underlying technology.

Platforms are also a critical step if Health NZ is to unlock the cost savings associated with AI. A fundamental change is coming. The AI capability we have today is the worst we will ever have, with AI use cases getting better every day. AI capabilities will be part of the Health NZ reset, requiring a shift in thinking. Instead of focusing on improving how people are currently doing their work, we should rethink what work needs to be done.

This is the time to explore how AI can assist decision-making processes or reduce manual effort by putting tailored knowledge, data and recommendations into the hands of those that need it. For example:

  •  AI driven rostering tools can optimise staff shifts, creating efficiencies that reduce overtime
  • AI assistance can guide doctors in evaluating and recommending next steps for patients with specific diseases, improving patient outcomes and accelerating clinical decision-making

But tools like this require robust platforms with quality data management. For Health NZ, these only exist in pockets today, and due to the fragmented reality of the technology landscape, are not integrated and optimised.

Based on our experience of developing a global large language model (LLM) or AI system for our own use – and that of our clients – experimentation needs to be happening now. The opportunity is for Health NZ to explore AI-based tools and build confidence in appropriate use cases. No one wants to be the person who bought the last great steam engine. You want to be the visionary who bought the first car.

Where could Health New Zealand start?

Immediate opportunities to deliver more value for the business include:

  • People processes – At approximately 100,000 people, Health NZ has the largest workforce of any organisation in Oceania. Standardising and automating basic HR processes, including onboarding/offboarding, asking for travel assistance and requesting leave, would not only take out costs but could also improve security and the employee experience. Having a single, automated offboarding process would ensure people’s access to internal systems is turned off when they leave the organisation. A consistent experience would also help to create a more unified culture.

    In Canada, a leading healthcare provider has selected ServiceNow and EY Canada to transform its HR function, starting with automating the onboarding journey and associated processes. The expected benefits include improved productivity for new joiners, better visibility of the recruitment pipeline and strategic workforce requirements, and process optimisation.

    Onboarding of staff could be further enhanced by leveraging AI to develop differentiated learning solutions that are tailored to a specific role and geography / district. Through customised and engaging learning experiences, staff can have accelerated impact and rapid upskilling. All this can be delivered through a platform with dynamic content to suit the learners needs.
  • Software asset management – In parallel to off-boarding automation, licence optimisation would avoid over-licensing and remove redundant or obsolete software, cutting unnecessary expenses. It would identify and support the risk mitigation of under-licensing, which often involves significant financial penalties. In turn, getting the licence counts right, and negotiating on organisation-wide licence volumes, could also allow Health NZ to get more favourable terms from vendors.

  • Process digitisation and automation – Health systems have multiple areas, including booking and scheduling, requests for information, legal workflows and work allocation, where process digitisation and automation could substantially reduce costs. As just one example, automated outpatient scheduling and reminders not only remove an administrative burden but have also been shown to reduce the financial waste of ‘no-shows’. In the NHS, the cost of ‘no-shows’ has been calculated at £1.2 billion in 2021-22 with 6.4% of appointments missed, further exacerbating waiting times and patient outcome deterioration. Online booking and smart scheduling, powered by AI, has seen a 30% fall in non-attendances in a pilot, with more investment committed by the NHS to build on initiatives that reduce ‘no-shows'[1].

In Australia, health departments are finding opportunities to leverage technology to optimise administrative processes at a function level. In finance, customer engagement and financial reimbursement processes have been digitised, enabling an enhanced customer experience, transparent reporting and process efficiencies of more than 30% driven by automation and prioritisation. At the same time, in-house legal functions are implementing digital portals for internal end users, and automating and optimising work intake, allocation and delivery to increase productivity and reduce the costs of outsourced legal services.

Time is of the essence

Taking costs out of existing disparate, largely manual, back-office systems will only get Health NZ so far. The big opportunity lies in taking a platform-based approach and pressing hard and fast to standardise, streamline and automate back-office processes for the entire organisation.

However, simply having platforms will not unlock benefits. Workflows and processes must be adopted by back-office and frontline staff alike. Our learnings from large-scale change and system integration, highlight the criticality of sufficient change management and working with users to embed change – generating buy-in from clinicians and staff on-the-ground is key.

This could be done by rapidly proving innovations and then scaling them across Health NZ realising the key value gains of the reform and New Zealand’s first truly national health service. 

Summary

Health New Zealand is undergoing a fundamental reset to improve the delivery of front-line services, enhancing both patient and staff experiences. The focus is on optimising spending by making day-to-day operations more efficient.

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