In October of 2010, New Zealand announced alterations to its universal health care program that caused a significant amount of concern over its efficiency. Problematic for any public health care system, efficiency in comparison to cost-effectiveness, has received its fair share of examination by many countries in recent years as nations with higher incomes are experiencing increases in their ageing populations. With health care costs rising in response to the demand, New Zealand instituted budgetary cuts to its system with the hope their public hospitals can continue to function at a high level. With 77 percent of the expenses funded by the government and with private health care systems increasing in prevalence, efficiency is a major priority for New Zealand’s public hospitals. The purpose of this project will be to examine specific financial and utilization factors, determine if the public hospitals in New Zealand are efficient and then present a strategy to improve the system, should that be necessary.

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The Ministry of Health in New Zealand has established 21 District Health Boards that are entrusted with the authority to operate health care in their local communities. Although the prevalence of private insurance has increased in recent years, all hospital visits are free of charge if an individual is referred by a primary care physician. However, an issue New Zealand struggles with is critical surgeries often take months to schedule. Therefore, many people have to wait quite some time before they are able to have their condition treated. This is one of the reasons for the increase in private insurance policies that are fairly inexpensive and an example of how public hospitals in New Zealand can improve their efficiency.

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The factors that will be examined to further delve into this issue are:
Utilization Indicators:
1. Number of Beds
2. Number of Admissions
3. Occupancy Rate
4. Average Length of Stay
5. Total Inpatient Days
6. Total Outpatient Visits
7. Emergency Room Visit
8. FTEs per Occupied Beds
9. No of Surgeries performed
10. No of Nurses per physician
11. Average Hourly Rate
12. Fringe Benefits as a % of Salary

Financial Indicators:

13. Inpatient Revenue per Patient Day
14. Inpatient Revenue per Admission
15. Revenue per patient per day
16. Inpatient Costs per Patient Day
17. Outpatient Revenue %

After examining the available literature and conducting a comparison with the data from the above referenced factors, a conclusion on the state of selected public hospitals in New Zealand will be made in regards to their efficiency. The next and final step, will involve suggesting a process for these hospitals to improve upon their performance. This is no small task as this issue is problematic for nearly every nation’s health care system. The results of this study should indicate that New Zealand’s public hospital system could very well be an example for other countries to follow in terms of efficiency and utilization.