Authors Greg Woolley and Gary Baird. First published on the EY website.
In brief
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:
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.
Immediate opportunities to deliver more value for the business include:
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.
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.
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.
