Health

Reimagining Emergency Response Funding Paradox: A Smarter, Patient-Centric Model for Emergency Medical Services

"If we only fund what’s measured by movement, we risk moving people who never needed to be moved at all."
— Hon David Butcher, GG International Advisor and former Minister of Commerce (1988-1990), New Zealand

Challenge

The Wellington Free Ambulance (WFA) operates the only free emergency ambulance service in New Zealand, serving a broad and diverse catchment across the Greater Wellington region. Under the current funding model, WFA is only reimbursed when a patient is physically transported to hospital. This system incentivises unnecessary transports and creates strain on both ambulance services and the hospital network:

• Patients who do not require hospital admission are still taken to Emergency Departments (EDs) due to funding constraints, contributing to ED overcrowding.
• Elderly patients frequently endure prolonged waits, often placed in overnight hospital beds or left to find their own way home—sometimes from facilities up to 1.5 hours away.
• The pressure to meet growing demand has driven WFA to expand its ambulance fleet, with each new ambulance costing over NZD 1 million.
• This cycle created financial inefficiencies, patient stress, and a system unintentionally working against its own capacity goals.

Strategy

At the request of the WFA, GG International’s Government Policy and Funding Unit deployed a three-person expert team—Hon David Butcher, John Third and Matte Birchler — to assess the current funding model and propose viable alternatives. Their strategic response included:

• A system-wide cost-benefit analysis, mapping patient flows, hospital capacity, and response unit utilisation.
• Identification of perverse incentives in the transport-based funding structure that led to suboptimal patient outcomes.
• Benchmarking with international emergency response models where payment was based on attendance and triage, not solely on transport.
• Recommendation for the introduction of fast-response motorcycle units, enabling rapid triage without full ambulance deployment, especially in non-critical incidents.
• Proposal for a new funding model based on:
  • Per patient attended, not per patient transported.
  • Recognition of hospital cost savings (e.g., avoiding $1,000+/night inpatient admissions).
  • Improved triage leading to more effective resource allocation.

Transformation

The final report presented in December 2022 outlined a bold but logical transition pathway for the WFA, reshaping how value is recognised across the emergency care continuum. Key outcomes included:

• Shift in policy dialogue: Government stakeholders began re-evaluating emergency response funding based on actual clinical need rather than physical movement.
• Operational testing: WFA began early-stage implementation of motorcycle responder units in selected urban and semi-rural areas.
• System savings modelled: Analysis revealed potential multi-million-dollar savings annually for the public health system by reducing unnecessary hospital admissions.
• Improved patient care: By empowering responders to assess and manage in place, elderly and vulnerable populations experienced less disruption and better continuity of care.

By funding the care, not just the transport, emergency response becomes smarter, fairer, and more sustainable.