PESTLE Analysis for Healthcare Systems

The assignment requires students to conduct a PESTLE analysis of the New Zealand healthcare system, identifying key factors that impact its functioning. It includes references to relevant sources such as the Ministry of Health, OECD, and Commonwealth Fund reports on healthcare systems. The analysis aims to provide insights into the strengths and weaknesses of the system, as well as potential challenges and opportunities for improvement.

Running head: Health Services management
Health Services Management
Student name
Email ID

Health Services management 1
Table of Contents
Introduction..............................................................................................................................2
Answer 1....................................................................................................................................2
Treaty of Waitangi.................................................................................................................2
Role of the principles.............................................................................................................2
Answer 2....................................................................................................................................4
Health Funding:......................................................................................................................4
Health Structure:....................................................................................................................5
Health Legislation:.................................................................................................................5
Answer 3....................................................................................................................................6
Health care spending..............................................................................................................6
Population..............................................................................................................................7
Physician Capacity.................................................................................................................7
Medical/Information Technology..........................................................................................8
Answer 4....................................................................................................................................9
Major challenge......................................................................................................................9
Vision and Mission Statement...............................................................................................9
Strategic Management process...............................................................................................9
PESTLE analysis on Health care system of New Zealand..................................................10
Conclusion...............................................................................................................................13
References...............................................................................................................................14

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Introduction
Health care services can be defined as the services which provide the access to utilize the full
range of Medicaid services. It can also be explained as services which help in maintaining
and improvising the health of the individuals through the prevention, diagnosis and treatment
of diseases, injury, illness and other physical and mental deterioration in human beings. It
further involves all the activities regarding primary care, secondary care and tertiary care
along with public health care.
The purpose of health care services is to provide the best treatment to the people. It aims at
diseases free country. It also aims at generating awareness among people about the health
diseases and how to have a healthy life and how to safeguard the body from any critical
diseases.
Answer 1.
Treaty of Waitangi
Treaty of Waitangi is an agreement which took place in 6th February 1840 and signed by the
members of British crown and chiefs of Maori from the North island of New Zealand. This
agreement defines the relationship between Maori population and New Zealand’s
government. This is an important document for the history and political constitution of the
state of New Zealand. Treaty of Waitangi is a policy which acts as protecting measure for
Maori. This policy helps in protecting Maori from adverse effect of colonization (Came,
Cornes & McCreanor, 2018). This policy also helps Maori to enjoy the advantages of new
society, as the communities of Maori are the chief user of health services and health must be
taken as a priority area. The three principles of Treaty of Waitangi are:
 Partnership
 Protection
 Participation
Role of the principles of Treaty of Waitangi in the New Zealand’s new strategies of national
health:
Treaty principles implies in many acts of parliament. The principles of Treaty play an
important role in the education system of New Zealand and the way they work. At New
Zealand the government system is highly affected by the Treaty of Waitangi which is called
as Te Tiriti o Waitangi in the language of Maori (Wilson, 2017).

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The relationship between Maori, indigenous people and everyone else is regulates by the
policy called Treaty. This policy ultimately protects the rights of Maori and Pakeha (non-
Maori) by convincing the government to behave reasonable and act in good faith towards
Maori and take the responsibility of in regards with grievances. This policy also introduces
some principles which suggest that all the people under New Zealand are equal. In the past,
when the resources and the land of the Maori were taken illegally and unfairly at that time
Waitangi tribunal took all the legal decisions to benefit the Maori.
Incorporation of principles of treaty: It has taken various steps to improvise the health care
system of New Zealand with the help of government as it has increased the annual tobacco
tax by 10% to reduce the smoking rates. To minimize the alcohol related harm it has
introduced the policy called National Drug Policy 2015-2020. To reduce the obesity rate,
Childhood Obesity Plan was launched in 2015. In order to raise healthy kids, health target
was established in July 2016. The initiative has been taken to have healthy families in New
Zealand that makes the families to think differently about the causes behind poor health. New
Zealanders future strategies can be explained by the statement ‘All New Zealanders live well,
stay well, get well’ is central to this strategy. The most important word in this statement is
‘All’ which implies the fair and great health system which considers all the people equal and
takes care of all the key groups including Maori. It also aims at providing good services to
disabled people. The principles of Treaty of Waitangi has played vital role in the New
Zealand’s new strategies of national health which can be described as follows:
 Partnership: It is one of the principles of treaty of Waitangi which describes the
relationship between the Crown and Maori. As per this relationship Maori is required
to share in decision making in regards with their health services to further increase its
regulation over their own health. This principle of Treaty of Waitangi helps in serving
a helping hand in decision making in regards with health strategies. Important
decisions such as; to reduce the smoking rates, it has increased the annual tobacco tax
by 10% and to minimize the alcohol related harm it has introduced the policy called
National Drug Policy 2015-2020 according to the evidences mentioned in Ministry of
Health, 2017 (Ministry of Health, 2017).
 Protection: This principle called ‘Protection’ makes the Crown obligate in regards
with the protection of the interest of Maori in terms of health. It includes the
preventive strategies and health promoting activities which ultimately improvise the

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health services for Maori. It also provokes the whole state for seeking opportunities to
improvise the health services for Maori. To protect the people of New Zealand it has
taken various measures and conducts so many programs such as The Health of
Ministry has become the spender of approximately four hundred bariatric surgery
operations in the past years. It has also introduced guidelines regarding Physical
activity in 2015 which involves the suggestions of healthy eating and regular physical
activity (Ministry of Health, 2017).
 Participation: This Principle talks about having equal chance of participating in
opportunities and outcomes. It also aims at making positive participation of Maori in
health services in regards with all the levels. This principle helps in having equal
opportunities related with health services as compare to all. Here participation implies
equal participation of every individual existed in New Zealand have equal right to
participate in the programs conducted by the government and The Ministry of Health.
For instance, programs like National Cycling Education System, Urban Cycleways
Programs, and Fruits in Schools Programs and many others.
Answer 2.
Health Funding:
Ministry of Health is mainly responsible for all the health related issues in New Zealand
whether it is about funding, structure and legislations. Here in the health funding at New
Zealand the shortfall is due to the current model of health spending that is Beveridge Model
is not that effective for the population of New Zealanders. As per the current model of health
funding, the expenditure of providing health services is not effective for long term. The
current model includes the cost of serving health services in such a way which is acceptable
to current demand of public but sooner or later it will be forbidden. The current model is
designed in such a way that it will ultimately lead New Zealander behind the developed
world in terms of health services (Ministry of Health, 2016). The current model is not able to
be upheld. The current model of health funding system often prevents resources from being
used to find out the actual benefits.
The recent arrangements are lacking in terms of showing the consequences of health funding.
The arrangements being complex making it difficult to make choices in regards to prioritize
funding or long term benefits and advantages from investment. The Beveridge Model not
being flexible may not change quickly at the time of changes in demand. The design and

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service mix may take little time to tackle the shifts of demand. The arrangements of funding
and contracting often provoke the health care system to keep repeating the same things as
they have been doing till date even at the time of change in demand, besides suggesting and
ordering them to work as per the demand of the public. Some of the arrangements have their
big hand in doing great difference between the groups on the basis of services.
Health Structure:
In New Zealand all the health related activities is controlled by Ministry of Finance and it
further involves Principle Secretary, Public Health Authority, Health Care Agency and
National AIDS Council. According to PMC, Health Structure of New Zealand involves
inequalities between different people living there. Maori, pacific and low income group of
people faces higher level of chronic illness. This is due to inequitable health outcomes.
People such as Maori and pacific people in New Zealand get to faced several differences in
the health care treatment. They do not get the perfect treatment by the doctors as they are
partial towards Maori, pacific and low income group of people. Health care structure of New
Zealand suggests health equity which implies equal opportunity of getting the health
treatment for every individual existed in New Zealand. The main aim of systems restructuring
is closing the health gap which has been directed by social policies and population health
approach. The main reason behind morbidity, mortality and inequitable health outcomes is
chronic illness. The health gap between Maori and non-Maori people is getting increased day
by day even having several measures to reduce the health gap. This is due to the poor
implementation of the measures taken by the health structure of New Zealand to reduce the
shortfalls and gaps of health services.
Health Legislation:
The legislation under Health service management are seemed to be performing well but there
are some acts which are not serving properly as per the requirements of the population at
New Zealand. This shows that there is a shortfall of health care services. So the health care
legislation department must focus on reducing the gaps occurred due to poor implementation
of the acts. This is in regards with the mental health legislation. Many of the views has been
expressed in regards with the mental health legislation, the mental health (Compulsory and
Treatment) Act 1992 (The Act). New Zealand itself has proud on its reputation in terms of
socially progressive legislation. In spite of this some part of the act has failed to give the true

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impression on this presumption of New Zealand (O’Brien, 2014). There are total three points
of arguments which are as follows:
Increasing use of compulsion under the act
The movement towards recovery philosophy in mental health
Recent developments in human rights under the 2006 united convention for the Rights of
Persons with Disabilities (UNCRPD).
It has been argued that New Zealand is in need to respond to this international trend and
follow a single capacity based standard in regards to overall sector of health for treatment
without permission. It has also been recommended that the rates of use of mental health
legislation should be closely evaluated and reported in order to reduce overall compulsion in
mental health care.
Answer 3.
Health care spending
The National Health Service (NHS) of United States follows Affordable Care Act 2010
which established the shared responsibility among government, individuals and employers
(Mossialos, Djordjevic, Osborn & Sarnak, 2017). In 2014, 17.2% of GDP was spent on health
care. Moreover, per capita spending on health care amounted to $9,364. Per capita spending
on pharmaceuticals was estimated to be $1,112 and per capita out- of- pocket health care
spending amounted to $1,034.
On the other hand New Zealand health care system in order to serve the need of the
population is decentralized with funding of community health board. In 2013, total health
care spending was 10.9% of GDP. Moreover, per capita health care spending amounted to
$4,038 and per capita out- of- pocket health care spending amounted to $263 (The Common
Wealth Fund, 2017). New Zealand was lacking behind in providing equal treatment to the
people and providing good treatment to disabled people: Healthcare spending was unequal.
Hospital Funding
Most of the population of United States depends on private and public insurance to access
their services of health care. The services of National Health Service (NHS) are totally free of
cost for the residents. They charge very low fee for assigning prescriptions. They only charge
for the medicines. The primary employer of health care professional is government. The
general practitioners (GPs) which are recruited by the NHS are the independent contractors

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who perform as gatekeepers for the health system. The largest subsidies mainly focused on
the individuals with income between 100% and 250% of the federal poverty level. Hospitals
at US charge very less of funds and deduct the cost in case of hospital stays and copayment of
physician visits.
Both the United States and New Zealand spends on hospitals as they ultimately going to
deliver health services to the people. In US, the total care beds per 1,000 population
amounted to 2.5 in 2013 and the average duration of stay for curative care was estimated to
be 5.4 days. In the year 2010, hospital spending per discharge was estimated to be $21,063.
In New Zealand, hospital discharges per 1,000 population was 132 in 2013 and average
duration of stay for care was 5.2 days. In 2016, total care beds were 2.7 per 1,000 population
(The Common Wealth Fund, 2017). Both the countries tries to build as many hospitals as it
can so to tackle every different group of people whether it is pacific group or Maori group.
The services of National Health Service (NHS) are totally free of cost for the residents in the
hospitals. They charge very low fee for assigning prescriptions. They only charge for the
medicines (Mossialos, Djordjevic, Osborn & Sarnak, 2017).
Population
The population of United States is 321.19 million while in New Zealand there are 4.60
million people. There is a great difference between the population of US and NZ. United
States have 14.5% of its population aged 65 years or above, while in New Zealand it is 14.4%
(The Common Wealth Fund, 2017). Under US, 27.3 million people were not insured in the 1st
quarter of 2016; about 8.6% of the population has become down from 9.1% in 2015. In
January, 2014 the amendments in Affordable Care Act has increased the share of insured
people in US (Mossialos, Djordjevic, Osborn & Sarnak, 2017). On the other hand, In New
Zealand per capita public and private health expenditure are $3,291.80 USD. Primary care
health services are free of cost for the children under and equal to the age of thirteen. About
90% of people are registered with self-employed providers called as primary health
organizations.
Physician Capacity
The capacity of physician is more in New Zealand and less in United States. Here Physician
capacity implies the number of people the physician can see at a time. The physicians at New

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Zealand are more active than the physicians in United States. In 2010, per capita average
annual number of visits to physicians in US was 4.0. However, such figure was not even met
in the year 2012 by New Zealand and it was 3.7. In the year 2013, the number of practicing
physician per 1,000 population in United States and New Zealand were estimated to be 2.6
and 2.8 (The Common Wealth Fund, 2017). The high capacity of a physician helps in
tackling high number of patients and the less capacity of a physician can handle fewer
patients at a time. As per the study of 2014 one physician can handle 700 patients in a day in
New Zealand and as compare to New Zealand one physician can handle 500 patients in a day
(Mossialos, Djordjevic, Osborn & Sarnak, 2017). Therefore it can be concluded that the
physician capacity in New Zealand is higher than the capacity of United States.
Medical/Information Technology
In New Zealand, the only industry body which represents the importers, manufacturers,
exporters and distributors of medical devices is Medical Technology Association (MTANZ).
MTANZ helps in improvising the health care system of New Zealand by giving access to the
patients to avail the best medical services. It contributes in the growth and innovation of
medical industries. It works critically with the government in order to maintain the regulatory
and economic environment which further helps in the growth and innovation of medical
services in New Zealand (Mossialos, Djordjevic, Osborn & Sarnak, 2017). It acts as a strong
supporter for New Zealanders in researching and manufacturing the medical devices for
international markets. MTANZ, in order to ensure the access of patient in regards with
medical services keeps it continuity in engaging policy makers, regulators and health care
professionals. It also maintains the good relationship with Ministry of Health, Ministry of
Business Innovation and Employment and NZ Health Partnerships in order to promote the
health care system. It aims at making better decisions by highlighting the importance of
economy and underlining its potential for the future. It also conducts researches to have the
most efficient medical devices for New Zealand. To enhance the development, manufacture
and export of niche medical technologies, it also maintains the great working relationship
with Universities, Crown Research Institutions and Government departments. MTANZ
involves the calendar of seminars and workshops which further assist the members of the
association. In 2013, MRI machines were 11.3 per million population. In 2015, usage of
electronic medical record by primary care physician was 100% (The Common Wealth Fund,
2017).

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On the other hand the market of Medical technology of United States is the largest market in
all over the world with a market size of about 140 dollar billion. It also represents the 40% of
the global market of medical devices. The medical devices of US are highly recommended by
the doctors and hospitals because of its innovations and high technology products. The
institute of medicine called as National Academy of Medicine. It is an independent and non-
profit and non-government organization. It provides great advices to improvise the health
care system of New Zealand to the policy makers. The centres of disease control and
prevention organized research programs to protect the health of the public and they also
conduct the health awareness programs for the public to warn regarding unknown diseases
(Mossialos, Djordjevic, Osborn & Sarnak, 2017). In 2014, MRI machines were 38.1 per
million population. In 2015, usage of electronic medical record by primary care physician
was 84%.
Answer 4.
Major challenge for health care system of New Zealand:
New Zealand was lacking behind in providing equal treatment to the people and providing
good treatment to disabled people: Healthcare spending was unequal.
Strategy:
A healthcare strategy needs to be formulated that offers full range of services in which
health-delivery organizations are guided with a system that provides services for specific
medical conditions in appropriate locations. The delivery of high value care should be the
aim of the strategy to all the people of New Zealand irrespective of gender, income, religion,
etc. The costs and outcomes for every patient should be measured in advanced with the
continuous tracking of progress. This will help in equal healthcare spending in all the regions
by way of optimizing the type of care delivered in every region. Proper arrangements need to
be made in the hospitals for the disabled people such that they can easily access the
healthcare services.

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External environment
PESTLE analysis on Health care system of New Zealand:
The PESTLE analysis act as strategic tool to achieve the desired goals as it ultimately
provides the strengths and weaknesses to the examiner. It helps in making plans to achieve
the set goals. It helps in understanding external factors of the dynamic environment which
influence the organizations. It involves factors such as political, economic, social, legislation
and environmental factors. So the PESTLE analysis of health care system can be explained as
follows:
Political: In New Zealand the focus of government is increasing day by day and there is also
increasing pressure of government on Health Care professionals in New Zealand. This further
implies that the government is focussing on savings. The usual questions which are asked by
the government are:
Which services are being excluded in coming years?
What are the types of expenditure they have to manage?
Will there be any change in medication in coming years?
Therefore the political factors in New Zealand affect the Health care system very much.
Sometimes due to unfavourable political factors Health care system gets affected very badly
as it often pressurize the system to act in a certain way (Sekaran & Bougie, 2016).
Economic: In New Zealand, economic crisis still exists. According to the report of
government it is still showing the continuous growth in spending on health care per capital.
Due to economic factors in New Zealand the health care professionals seemed to be
confusing related with the current model. They have the confusion regarding current model
that whether it will work for future or not (Strategic planet, 2011).
The decreases in disposable income of the consumer affect the people of New Zealand who
are using health insurance to avail the health services.
In New Zealand, there is increase in number of customers groups who are likely to force
down the prices of the health care services.
Social: Increase in aged population in New Zealand can be proved as threat for the health
care services because they require more of health services as compare to adults. There is also
increase in the number of population who are suffering from HIV/AIDS and obesity.

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Therefore it is a total threat to health care service management (Kotler, 2000). These diseases
are spreadable so it contains lot of health risks. Patients and care takers have became more
demanding due to the high requirements of both. They are more informed as needed.
Technological: Technological environment in New Zealand is based on Medical Technology
Association (MTANZ) which is the only industry body which represents the importers,
manufacturers, exporters and distributors of medical devices MTANZ helps in improvising
the health care system of New Zealand by giving access to the patients to avail the best
medical services (Chernev, 2018). The advancement of the medical technology emerge many
benefits for the New Zealand on the basis of services and systems. It seemed to have the
opportunities in some of the fields of health care system:
Technology related with new information and communications
Customized services and treatments
Social media for health care system
Therefore technological factors are also affecting the health care system of New Zealand.
This is the era of new technologies which makes the work easier. So it is very important to
consider technological factors of health care system while decision making.
Legal: Legislations are the rules and acts under health care system which affects the whole
system very much. Health legislation act as a helping hand to serve every person in the New
Zealand equally. There are some acts on the basis of which nobody can discriminate between
different groups of people. Health care services will be providing to every individual in New
Zealand (Sarwar, Ramachandran & Hosseinian-Far, 2017). There are also many restrictions
which restrict the health care services and also pressurize the Ministry of health.
Environmental: Environmental factors are the factors which affect the health care services
very much. Environmental factors such as change in trends, climate change, and others. One
of the factors such as climate change can spoil the medicines (Newton, 2014). There are also
many factors which affect the health of the people in New Zealand which are air pollution,
exposure to hazardous substances in the air, water and soil can affect the health of the people.
Natural and technological disasters are also the factors which affect the health care services.

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Strategy Implementation
The implementation of the strategy requires expanding the geographic reach of healthcare
services which will assist in serving more patients with the help of strategic expansion
especially in areas where poor people resides. It requires improving value rather than only
increasing volume. It must be ensured that there is no discrimination made on the basis of
gender, religion, disability, etc. Also, the performance indicators need to be developed with
respect to equality and diversity that will continuously monitor the performance of healthcare
organizations.
Strategy evaluation
This is the final step of the strategic management process in which the chosen strategies are
evaluated and in case of any shortfalls corrective measures will be taken by the New Zealand.

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Conclusion
Health services are the services which provide the access to utilize the full range of Medicaid
services. It aims at providing best treatment to people and having the diseases free country.
Treaty of Waitangi is an agreement which defines the relationship between Maori population
and New Zealand’s government. This is an important document for the history and political
constitution of the state of New Zealand. Treaty of Waitangi played very important role in
establishing new strategies of health in New Zealand, earlier in New Zealand Maori people
and other people get different types of treatment. Maori and pacific people don’t get the equal
opportunity of having health treatment as others but after the implementation of Treaty of
Waitangi it has changed. All the individuals living there get equal opportunity of having
equal treatment. There are also many gaps and shortfalls in the health structure, health
funding, health legislation which suggest the need of improvement in the health structure of
New Zealand. In addition to this the essay also includes the comparison between New
Zealand health care on the basis of health spending, health structure, population and
physician capacity. It also includes the whole process of strategic management process and
the main strategic intentions of New Zealand to have the diseases free country. In the essay,
there is also PESTLE analysis which helps the New Zealand to know the external factors
influencing health care services.

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