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Home -> Business -> New Zealand's health service reforms - lessons for the UK & NHS

New Zealand's health service reforms in the 1990s: Lessons for the UK & the NHS

Written: November 2011
Published: 19th December 2011

The UK's National Health Service is no stranger to controversial reforms at the hands of all political parties, but what's not widely known in the UK is that New Zealand's health service was created almost 10 years before the UK's NHS on virtually the same basis. Moreover, like the NHS, New Zealand's system is also no stranger to reforms of a type that are almost identical and every bit as controversial. In the early 1990s, after half a century of incremental change, New Zealand's health service was put through radical changes without precedent and in a short period of time. These changes soon proved to be largely ineffective and in some ways damaging not only to costs - which largely went up - but to people's health, which suffered. In this podcast we'll be looking at the astrology of those reforms.

Creating the system

The health service of New Zealand was set up in 1939, just before the second world war began. This is in contrast to many other countries which began to set up their universal healthcare systems after the second world war had finished, in parallel with their recognition of their citizens' right to health which was enshrined in 1948's Universal Declaration of Human Rights. The UK's NHS is one example of this; it was founded in exactly the same year that the UN Declaration was signed.

Prior to 1939 New Zealand's health provision was a mixture of private and charitable. From 1939 onwards the universal coverage was in place, funded through national taxation and running alongside the private system.

In 1991 a new government was elected on a platform of incremental change but instead embarked on a rapid and radical programme, and on the 1st of July 1993 many of those reforms were implemented: purchasing and provision were separated, a for-profit system was introduced, with organisations controlling hospitals structured as businesses subject to ordinary company law. Later, in 1997 the radical reforms would begin to be reversed in some key ways: the for-profit system was altered into a not-for-profit system, and in 2001 the funder-provider split was removed.

Supposedly the idea behind the changes of the early '90s was to increase productivity whilst managing costs. Isn't it always? If that was the true aim then history shows that it not only didn't work, in some ways it backfired. People's health went down, and costs mostly either stayed the same or went up. The rhetoric was the same as we have had in the UK over the past decades from politicians of all parties, and of which David Cameron is the latest proponent: i.e. the government must cut-back its funding, and free enterprise must and will step into the gap. Furthermore, that profit-driven companies will be more efficient at doing healthcare and will be able to keep down the costs of doing it too.

Supporters of this viewpoint say that New Zealand's reforms of the early 1990s are a lesson about how implementing the right thing can be done wrongly and thus produce undesirable consequences. Indeed, some say that the problems were caused by mixing two systems: the original welfare system, with the business and markets models of the for-profit system. Opponents say that it wasn't just the implementation that caused the problems, it was the structural changes themselves, and the incorrect underlying philosophy that drove them.

No matter which side of the fence you sit on, one of the most remarkable parts of New Zealand's story is that in the late 1990s the politicians started to back-pedal, reversing some of their reforms and softening their policies. They even started campaigning for election on a promise of rolling back some of the changes. They talked of the system changing to how it would have been had their been no radical reforms, only a continuation of the incremental ones. The funding cutbacks were undone: the government restored their investment in the health system to more or less the previous levels, organisational structures were abolished, re-simplified and brought back under the Ministry of Health. The for-profit companies were changed into not-for-profit ones.

Having said that, the growth of private provision doesn't seem to have been affected: in 1980 there were 163 private hospitals in New Zealand with 5139 beds, as compared to 186 public hospitals with 26,345 beds. In 2002 there were 360 private hospitals with 11,341 beds, as compared to 85 public hospitals with 12,484 beds: 

New Zealand Health Service statistics
Source of data: research paper in New Zealand Parliament's library

Bringing things all the way up-to-date, albeit very briefly, New Zealand politicians - just like their counterparts in the UK - are still arguing about the role and uses of privatisation, internal and external markets, and the profit-motive. The country now has an insurance-based system,

New Zealand's chart

To lay the astrological foundations, let's start with the chart for New Zealand itself.

New Zealand has come into being through a process of successive events and legislative amendments, rather than a single declaration of nationhood or independence. However, arguably the most decisive moment in its progress towards its current form of existence was the legal beginning of its self-government in 1853.

The New Zealand Constitution Act received Royal Assent in 1852 and subsequently came into force at midnight on the 17th of January 1853. This paved the way for the first ever general election which followed later in the year, and which in turn produced the first ever parliament which sat for the first time the following year, 1854.

A few decades further on saw the granting of Dominion status to New Zealand, however despite this event being marked by toasts and a proclamation it didn't supersede the 1853 event in terms of either practicalities or the national psyche. I've also looked into earlier moments, but again the 1853 chart stands out to me both legally and in view of the process of forming a national unity. Consequently that's the chart I decided to use as the foundation chart for studying the country's health service.

And so to the chart:

New Zealand's 1853 chart
New Zealand's chart
17th January 1853, Wellington

In New Zealand's chart the Sun is at 26 degrees Capricorn, near to the IC which is at 24 degrees Capricorn. The MC is therefore at 24 degrees Cancer. The cusps of the 6th and 12th houses - which are the houses of the nation's illnesses and thus relevant to its healthcare system(s) - are at 24 degrees Pisces and 24 degrees Virgo respectively. To keep the astrology relatively simple we will focus on just these degrees so don't worry about the rest of the chart, and I'm rounding the degrees to the nearest half a degree.

There is also a chart for New Zealand calculated for the year 1906. Briefly touching on it, Mars is at 20 degrees Capricorn, conjunct the south node at 20-and-a-half Capricorn, and Saturn is at 24 degrees Pisces.

Health system's charts

The law creating the national healthcare system goes under the name 'the Social Security Act 1938', and was passed on the 14th of September 1938. It came into force on the 1st of April 1939.
SSA38 - law passed
SSA38 law passed
14th September 1938

On the 14th of September 1938 the Sun conjoined Neptune at 21 degrees Virgo, very close to the 12th house cusp of New Zealand's 1853 chart. When the Act entered into forced the following year Neptune was at 21-and-a-half degrees Virgo, closely opposed by Jupiter at 21 degrees Pisces, thus straddling the axis of the 6th and 12th houses in the 1853 chart. In other words, New Zealand's health system was born with a Jupiter-Neptune opposition across 21 degrees of Virgo and Pisces. It also has an Ascendant of 21-and-a-half degrees Capricorn.
SSA38 law into force
SSA38 law came into force
1st April 1939

On a side note, the Moon in New Zealand's chart is at 18-and-a-half degrees Aries, and Saturn in the health systems chart is at 19-and-a-half Aries, having crossed the exact position of the Moon between the time when the Act was passed - which is arguably equivalent to its conception - and it coming into effect - equivalent to its birth. What's more, the Moon in the health system's chart is at 20 degrees Leo, in trine to the 18-19 degrees Aries placements. These configurations symbolise practical action being taken to look after the nation's bodily matters.

Transits in the 1990s

After five decades of step-by-step, incremental change, astrologically we would expect something major to be going on transits-wise when a radical shake-up is brought about from the outside in, and that's exactly what we find.

In the early '90s Uranus and Neptune were, for the first time in 172 years, conjunct. They were within orb for several years before and after, with the exact conjunction happening 3 times in all: February, August and October 1993. The exact conjunctions took place at 19 and 20 degrees Capricorn, and were preceded by Saturn crossing those degrees a few years earlier in 1990, paving the way. All three of these planets transited across the aforementioned degrees of New Zealand's chart and the chart of the national healthcare system between 1990 and 1997.

Uranus-Neptune conjunction 1993
Conjunction of Uranus and Neptune, August 1993.
The conjunction was exact on three occasions;
the chart shows the middle one of the three.

Saturn made its first exact aspect to the placements in both charts in early 1990. Uranus made its first in 1993 when the most 'liberalising' reforms were implemented, and Neptune made its first in 1994.

As the transits of Uranus and Neptune across these degrees took place, Saturn moved into new aspects with them: first a semisextile in 1992 and '93, then a semisquare in 1994 and '95, and finally a sextile in 1995 and 1996. During these latter years Saturn was moving through the last third of Pisces, across the 21 and 24-to-26 degree areas.

The theme and the timing of the radical reforms of its health service is intimately tied into the gradual, forwards-and-back movements of these planets. By the time the aspects were over the country had started to clean up the mess that had been created. Under these transits, it's as if an alternate reality has overtaken you and you're having to endure an encounter with someone delusional, where reality takes a back seat and an uncontrollable madness grabs hold of the wheel no matter how much you protest. What is meant to be a Utopia is revealed to be a Dystopia, and you can't wait for the nightmare to end and things to return to normal. Because the Sun is involved it goes beyond healthcare, right to the heart of the nation, its leaders, and its core identity.

That the conjunctions were in Capricorn shows that the delusions were based on particular business models. Utopia was synonymous with a business haven, and business heaven. Except it wasn't, and when reality bit the heaven was shown up to be a damaging, dystopic, business hell.

The people of New Zealand paid the price in huge sums of wasted money and with their bodily health when management decisions overrode professional judgements.

Back to the UK

Back to the UK in 2011 and we have David Cameron, Andrew Lansley and their colleagues preaching the same gospel: the markets can and will save us. Time has moved on but the message remains the same. At a conference on 26th-27th October 2010 organised by the world's seventh-largest private equity firm Apax Partners, there was a session called 'Reform Revolution: Changing Healthcare Dynamics in Emerging vs. Developed Countries' in which an advisor to David Cameron named Mark Britnell said:

"The NHS will be shown no mercy, and the best time to take advantage of this will be in the next couple of years."

He also said:

"In future, the NHS will be a State insurance provider, not a State deliverer."

This was not long after Mr Britnell had resigned as NHS director-general for commissioning and system management, and moved to a job at KPMG, the renowned consultancy firm, where he now works as a partner and its Head of Healthcare for the UK and Europe. At the time of writing he still sits on a government panel pertaining to reform of the NHS, and has said that his comments were taken out of context and misrepresented by the media. In fact, the Apax conference brochure itself quotes him in this context, presumably without his complaint - he seems to be only complaining that his words in a 'private' conference have become publicly known about. The issue of what he was doing making such statements at a conference organised by a private equity and venture capitalist firm seems not to be the crux of the matter as far as he is concerned. Before giving the brochure's own context for Mr Britnell's words, here is Apax Partners' own description of its conference:

"The conference 'Opportunities Post Global Healthcare Reforms': The Apax Partners Global Healthcare Conference, which took place in New York in October 2010, came at a momentus time for professionals across the healthcare spectrum. All around the world, those in the industry are grappling with the conundrum of how to provide for ageing populations and increasingly complicated healthcare demands in an age of budget cuts and deficit reduction. Over the past five years, the healthcare team have
advised Apax Funds on equity investments totalling over $ 3.5 billion."

Source: Apax Partners brochure

Another description by Apax of their October 2010 conference reads:

"This year’s conference once again brought together a select group of healthcare executives and other leaders from around the world to debate in a candid setting the key issues impacting the delivery and financing of healthcare services including providing insight on business opportunities post global healthcare reform."
Source: Apax website via

A description from a different website of the previous year's Apax-organised conference described it like this:

"The Apax Partners Global Healthcare Services Conference is an invitation only event held every year and features leading healthcare figures from around the world. An Apax Partners conference in Nov 2009 called 'Capturing opportunities in the context of global health reform', brought together '35 distinguished health care leaders from the United States and 35 from around the world for a deep, rigorous dialogue in a candid setting.' Speakers included David Nicholson CEO of the NHS."
Source: PowerBase website

And now here is the brochure's context, which clearly describes Mr Britnell's qualifications to speak authoritatively on the topic:-

"After many years of record investment, the emphasis now has switched to value for money and, in order to achieve its goal, the new government has opted for a programme of de-centralisation and liberalisation.  As KPMG’s Global Head of Health with 20 years experience in public and private healthcare administration, Mark Britnell is very well placed to comment on the next wave of reform. “In ten years under New Labour, a lot of money has been spent, outcomes are slightly better and staff are better paid.” .... Although the coalition has promised to ring-fence NHS spending, healthcare inflation rises faster than real inflation so as Britnell goes on to state: “The NHS has been challenged to improve outcomes on a budget that will fall in real terms.” ... The incoming health minister has embarked on radical decentralisation in order to take power away from the managerial class that had grown rapidly in the Blair years and place it firmly in the hands of General Practitioners (GPs). In a radical departure for the NHS, some 40,000 GPs will control 80% of the budget. Britnell estimates that this move will result in the loss of 60-70% of the managerial class and a more rigorous focus on costs: “Because it is their business, GPs are likely to be far more hard-nosed than the state was in negotiating prices.” While the incentive to drive down prices is clear, the lack of bulk purchasing power will have the opposite effect. “GPs will have to aggregate purchasing power,” continued Britnell, “and there will be a big opportunity for those companies that can facilitate this process.”

In the next section of the brochure the title is 'From provider to insurer' and the paragraph reads:

"The other change that Britnell sees in the UK is even more fundamental: “In future, the NHS will be a state insurance provider not a state deliverer.” In future ‘any willing provider’ from the private sector will be able to sell goods and services to the system. Britnell comments: “The NHS will be shown no mercy and the best time to take advantage of this will be in the next couple of years.”  The monolithic arm of state control will be relaxed which will provide a huge opportunity for efficient private sector

This is how Apax describes itself, taken from its website:

"Apax Partners is an independent global partnership focused solely on long-term investment in growth companies. Funds advised by Apax Partners typically invest in large companies with a value between €1bn and €5bn. The Funds invest in five sectors: Financial & Business Services, Healthcare, Media, Retail & Consumer, Tech & Telecom." and As the businesses that Apax Funds invest in become global, it is our view that those private equity firms that are best able to add value and support them internationally will flourish. Those that operate on a global basis will be able to spot emerging trends early, support the growth of global companies and use the world's stock markets most effectively. The firm currently has a global network of 10 offices in three continents and employs over 300 people. The portfolio companies in which our funds invest employ in excess of 270,000 and have an enterprise value in excess of €72 billion."

And that's not all. In a speech to businesses at the 'Exporting for Growth' conference held in London on the 10th of November 2011, David Cameron himself said:

“From the health secretary I don’t just wanna know about waiting times, I wanna [sic] know how we drive the NHS to be a fantastic business for Britain that is exporting healthcare, expertise, knowledge and technology around the world.”
Source: footage on Downing Street's channel on YouTube

The difference for the health systems of New Zealand and the UK is that it is no longer Uranus and Neptune transiting through Capricorn, but Pluto, the planet representing the process of killing off and re-building, but also the god with the power to release vast subterranean wealth. So the questions become 'In whose image, according to whose design, according to which models is the NHS being killed off and re-built from the ground up?' and 'what is the role of wealth-creation in the NHS?'

Related links:

New Zealand's Parliamentary library research paper

New Zealand's Health Reforms in Context

Martin McKee's blog - 'Tales from a travelling public health professor' - mentions the New Zealand health reforms

Apax Partners - official website

Medeguy blog about Apax Partners conference

PowerBase - page about Apax Partners conference

David Cameron's speech - the No. 10 Downing Street website's transcript version differs considerably from the version David actually delivered:
Downing Street's transcript version

Delivered version

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