13 May 2024

Heath funding fails to keep up with inflation or demand - doctors' union

6:26 am on 13 May 2024

Emergency department sign

A lack of preventative care at a GP meant many were going instead to emergency departments. (File photo) Photo: RNZ / Marika Khabazi

Taxpayer money going into health every year is failing to keep pace with inflation or demand - and one in three New Zealanders missing out on healthcare of some kind, a doctors' union report says.

Some experts argue it is time to consider alternatives ways to pay for healthcare - some form of "ring-fencing", which could also take it out of the hands of politicians.

In its recent report Anatomy of a Health Crisis, the Association of Salaried Medical Specialists calls for an urgent independent inquiry into health funding.

Lead researcher Harriet Wild said the government's health spend as a percentage of gross domestic product had flatlined since 2010.

It now sits at around 7 percent, compared with an average of 12 percent in 14 comparable countries, including Australia, Britain, Canada, the United States and various European nations.

"The cost of ill health far outstrips the amount we spend on the health system, and a healthy population is a productive population," Wild said.

Tauranga GP Luke Bradford saw patients every day who were caught in the revolving doors of the health system.

"If you don't get preventative care, then you end up in the emergency system. If you end up in the emergency system, you end up in the hospital.

"And then the hospital can't deliver planned care and therefore people who need planned care deteriorate and they need more support in primary care, so primary care gets busier and can't support people so they end up in emergency care... and you end up in this cycle where people can't get their health needs met, and that's just terrible."

'A national scandal'

University of Otago Centre for Health Systems director Professor Robin Gauld said health funding had never been sufficient to meet current demand - let alone future need.

"It's a national scandal, it really is, and we've just come to accept it over time that it's OK for people to be suffering without the required treatment they should be given.

"It's deeply inequitable. If you've got money, you're fine, you can go private. It's the less-well off, it's Maori and Pasifika, who are missing out."

How is healthcare funded overseas?

In Britain, healthcare, including GP visits, is funded out of general taxation, supplemented by National Insurance contributions.

In Australia, it is a combination of federal funding and the Medicare levy.

Under Germany's social insurance model, citizens are required to sign up to not-for-profit health insurers.

Canada's national health insurance model provides care through a single, government-run insurance fund.

Gauld said ring-fencing health funding - such as through a 1 percent levy on earnings - would take the politics out of it.

"It's a big jump to go from where we are to there, but we did it with ACC [the Accident Compensation Corporation].

"And 50 years on, with the 50th anniversary of ACC, it's probably timely to be thinking, how do we extend this to cover all healthcare?"

Inequality researcher Max Rashbrooke said making GP appointments and dental care free would cost more than $3 billion a year - but this was cheaper than how things stood currently.

His research two years ago (based on Treasury estimates) put the economic cost of ill-health between $10bn and $27bn a year.

Rashbrooke said he was agnostic on the question of which funding model New Zealand should adopt, but it was obvious that chronic under-funding was costing the country.

However, while health spending increased massively under Labour - topping $26bn in the last Budget, up from less than $17bn in 2017 - it was not clear what it had achieved, Rashbrooke said.

"Sometimes there is this feeling that we pour huge amounts of money into the health sector and it's a big black hole.

"So I think a really systematic look at spending and what it achieves in health is well overdue."

Govt working to reduce pressure on hospitals - Reti

Health Minister Dr Shane Reti told RNZ that the government had no plans to review the arrangement for health funding.

He supported the recommendations in the ASMS report to reduce pressure on hospitals and boost capacity.

The government was already working on initiatives to do just that, such as cutting the number of avoidable hospital admissions for pre-schoolers by dealing with respiratory illness in the community.

"I am also working hard to open ICU beds or resource ICU beds and looking at what's necessary to discharge from hospital into the community through hospital in the home and other avenues.

"A Commission of Inquiry into health funding, that's not an active work stream that I have or envisage in the short-term."

While the contents of the Budget were still confidential, Dr Reti confirmed it would include "new money" for health.

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