Gordon Campbell on the rise in prescription charges

It would be nice to think that the basis for yesterday’s decision to raise prescription charges wasn’t just “ We haven’t lifted them for 20 years” and/or that it didn’t sound like much of a price rise if like Health Minister Tony Ryall or Prime Minister John Key, you were earning over $200,000 a year. In reality, the $2 part charge rise should be considered within the wider context of whether the cost of access to health care – from getting to and from a doctor, to paying for the visit, to paying the prescription charges at the pharmacy is now putting primary healthcare beyond the reach of many on low incomes. It is a climate that risks creating choices between people paying for food or paying for medecine, or choosing between getting one’s own prescriptions or getting those needed by other family members.

In that situation, yesterday’s price hikes are probably better considered as the straw that could well break the camel’s back. A extra burden to the vulnerable, and wrong in principle. Besides the impact of the cost rise per se, the change seems entirely out of whack with any rational health policy based on increasing the access to primary health care. One of the ironies of yesterday’s announcement was that the $40 million expected to be saved by this move would – apparently – be diverted to paying for the treatment of a range of conditions, such as our Third World rates of rheumatic fever among children. Duh. Perhaps if families at risk could afford to get access to a GP and to suitable medicines in time, some of the costs of treating such conditions would be prevented.

Hone Harawira’s claim that yesterday’s changes were “ callous” is entirely apt – and that callousness was epitomised by Health Minister Tony Ryall’s jaunty recommendation on RNZ’s Checkpoint programme last night that if people did have problems in meeting the new prescription charges, they should just get along to WINZ and ask for support. Right. To WINZ. Always a sympathetic ear, always willing to help. The government has a different sort of trade-off in mind:

Health Minister Tony Ryall said the $5 cost would be applied to the first 20 items of medicine per family each year, so no family would pay more than $100 a year for their prescription costs. The current maximum for prescription costs was $60 a year. The revenue gained from the price rise would be used to increase the number of elective operations and scans and to improve cancer services.

Not sure what elective operations Ryall has in mind, but the prescription charge increase will provide part of a funding boost of $97 million over the next four years for improvements in cancer treatment.

Most of that is to provide more elective surgery and better and faster services for cancer patients, including dedicated nurses to coordinate care.
Mr Ryall says it will ensure that cancer treatment is as fast in New Zealand as anywhere in the world.

These are, once again, invidious choices. The government seems intent on taking more money from those on low incomes in order to ensure that cancer treatment “is as fast in New Zealand as anywhere in the world.” I’m sure there is a need to improve cancer treatment in New Zealand. (Every aspect of the health system needs more money.) But hiking prescription charges to help pay for elective surgery, for more scans and colonoscopies and for 40-50 more specialist nurses dedicated to the care of cancer patients looks like Ryall is merely robbing Peter to pay Paul.

More user charges are, apparently, on the way in next week’s Budget. As Key says, a zero Budget doesn’t mean no change at all. It means some things will receive more money, some will receive less. And besides, as we saw with the GST/tax cut trade-off, government assurances that such changes would be fiscally neutral have proved to be worthless in the past. The wealth transfers that are due to be announced in next week’s Budget, one suspects, will be very much like yesterday’s effort. More will be required from those on the bottom, in order to shore up services to those further up the income ladder.

Austerity Sucks ( Jobs, Retail Spending etc)

It’s been a bad fortnight for the geniuses who think that cutting jobs and government spending in the midst of a recession is a really, really good idea. The anti-austerity revolts by voters in France, Greece were bad enough – but can austerity survive the defection of the Wall St Journal?

One reason the unemployment rate may have remained persistently high: The sharp cuts in state and local government spending in the wake of the 2008 financial crisis, and the layoffs those cuts wrought.

The Labor Department’s establishment survey of employers — the jobs count that it bases its payroll figures on — shows that the government has been steadily shedding workers since the crisis struck, with 586,000 fewer jobs than in December 2008. Friday’s employment report showed the cuts continued in April, with 15,000 government jobs lost.

But the survey of households that the unemployment rate is based on suggests the government job cuts have been much, much worse…

Reason being, the WSJ points out, there has been a flow-on effect from the loss of government jobs to those in the private sector who formerly relied on government contracts, and the economic activity that they generate :

The unemployment rate would be far lower if it hadn’t been for those cuts….: If there were more government jobs now, for example, it’s likely that not as many people would have left the labor force, and so the actual unemployment rate would be north of 7.1%.

And just in case you’re wondering where the latest round of Germany – inspired austerity mania is taking Europe, read this and be very, very afraid.