One of the odd aspects of the government’s plan to Americanise the public health system – i.e by making healthcare access more reliant on user pay charges and private health insurance – is that it is happening in plain sight. Earlier this year, the official briefing papers to incoming Heath Minister Simeon Brown cited the rising costs of healthcare, the decline in life expectancy here as opposed to Australia, and a raft of other signs of systemic failure before concluding:
The Government has options to change this dynamic and address the affordability of the health system, such as investigating a greater role for user pays health care or insurance, changing models of care or increasing targeting of services…
Hmm. Clearly, by “affordability” Treasury is referring to the well-being of the government’s books, and not to the members of the public who are already struggling to pay GP fees and prescription charges. Likewise, “targeting” as used above is a synonym for means testing (or for worse, see below) and is not a Treasury clarion call for the “targeting” of services to Māori or Pasifika communities who have heightened health needs.
As the Americans have amply proven, resorting to the briefing papers options would do the exact opposite of addressing the “affordability” of healthcare for patients. What’s being envisaged is a system of offloading more of our future healthcare costs onto patients, while targeting the provision of public health services far more narrowly.
It may seem obvious to you and me that a health system based on the American model of the ability to pay will result in the same dire outcomes. Pots of money will be spent on a wealthy, over-medicalised elite, while poor or non-existent care will be provided to ordinary families who will be living only one paycheck away from being bankrupted by a bad accident, or by a serious medical condition.
In all likelihood, the state of the public health system will be the coalition government’s biggest headache going into next year’s election. With that in mind, the rhetoric and the gaslighting are already well under way, via the constant repetition of two highly misleading message lines (a) “There is no funding crisis in public health”and (b) “People don’t care who provides their treatment.” Let’s take those two claims in turn.
Denying the Crisis in Health Funding
Here’s PM Christopher Luxon December 2024: “We’ve got more money going into health than ever before.’ A message Luxon had also conveyed here. And did so again this week, here. The same message was repeated by Health Minister Simeon Brown here and also here and also here this month in a speech to the NZ Business Health Forum:
This Government has invested a record funding boost of $16.68 billion (over three years) in health to help the sector plan for the future….
Each time, Brown got his funding figures seriously wrong. As several analysts have pointed out, the $16.68 billion boost, is spread over six years, not three:
Mr Brown has often stated the Government is putting “a record $16.68 billion additional into health”, which his predecessor Shane Reti explained last year was three annual sums of about $5.5 billion for Health New Zealand Te Whatu Ora to cover the six years to 2030.
Moreover, it is all but meaningless for the government to claim the gross figure for Vote Health as “unprecedented” and as “a record.” Of course it is. An increase to the overall figure goes without saying, given the realities of (a) inflation, (b) a growing and ageing population presenting with multiple and more complex health conditions, (c) rising healthcare costs (d) rising labour costs for medical staff recruitment and retention (e) rising levels of unmet need, etc. etc.
To repeat: the increase in the gross figure for Vote Health that Luxon keeps on parroting is irrelevant. A more relevant measure is the percentage of the nation’s wealth (GDP) allocated to public health, and that – despite the looming demographic realities – has been virtually static for years. According to Treasury, it will rise to 10% of GDP over the next 30 to 40 years ( duh!) partially as the result of our ageing population:
Treasury forecasts health spending will grow from around 7 per cent of GDP in 2020/21 to more than 10 per cent by 2061, unless the model of health service is changed. The increase is driven by the rising cost of healthcare and increasing demand, including from an ageing population structure.
In the meantime, the most realistic indicator of current funding realities is the Health spending per capita. On that score, the recent news has been bad. As the health economist Peter Huskinson pointed out in NZ Doctor last year:
In the year to June 2024, [Health funding] amounted to $4829 per person at current prices….Budget 2024 sees the amount of day-to-day spend per person on health next year at current prices reduce by 3 per cent to $4686 per person: $143 per person less in real terms.
That’s right. In Budget 2024, there was a stunning reduction by the coalition government in its per capita spending on public health, even compared to the Key government. The trend can best be seen in this graph, where the red equates to Labour-led governments, and the blue to National-led ones:
The conclusion is inescapable. Despite Luxon and Brown’s best efforts at spinning the story, the state’s spending on public health system has been going sharply backwards under the coalition government. Voters will be needing to look elsewhere for relief.
Who provides the care?
While vital, health spending isn’t everything. If it was, the United States would have the best health system in the world. Thanks to privatisation, the US system excels only for the elite few able to pay the system’s elevated costs. Due to the coalition government’s quaint ideological fixation on private sector delivery, New Zealand seems to be hellbent on adopting the socially inequitable US model, and repeating all of its mistakes.
As mentioned above, the second main theme in the government spin on health funding is that the public doesn’t care who provides the treatment – public or private. This is gaslighting. When adequately funded, public provision of healthcare is inherently more efficient, and equitable, especially when it comes to the early detection and preventative care of the more complex cases occurring in the community at large.
This isn’t merely my opinion. This week, health professionals have been sharply critical of the government’s decision to outsource $50 million to the private sector, in order to carry out 10,579 gynaecological procedures by the end of June.
Frustrated senior doctors say millions of dollars of taxpayer money going to private hospitals to do elective operations could help many more patients, if it was invested in the ailing public system… Dr David Bailey – lead obstetrician-gynaecologist for the [Northland] region – said while it was good news for those patients, it would not fix the chronic underfunding and neglect of the public service over many years.
“Had that money been available over the last 12 months, we could have treated many more patients than they are going to do with this. This is a political move, to make them look good.”
His team’s prior offers to do extra shifts in public hospital wards to help clear the backlog had been turned down for lack of funding. Dr Bailey also told RNZ that cases for inclusion [within the $50 million fund ]were declined, because they were deemed too “complex.”
“So they were already selecting those who were easiest to operate on. And then patients self-selected because a large proportion of them refused to travel,” he said. “Essentially it was disproportionately advantaging relatively well-off white women, rather than those who were most in need – who are typically people who live a long way from Auckland, north of Whangārei, who are our highest needs patients and also the most complex.”
This looks like the classic, inequitable American healthcare model, in full bloom. Those easier to treat were those whose conditions were less advanced – partly because those affected had been able to afford the initial costs of GP visits, scans and all the other modes of early detection.
At the same time, many of those who could not afford those GP bills, or who were living in rural communities with fewer health facilities had seen their conditions advance past the point where they would be readily selected for care. The whole process seems to have been tailored to “cherry pick” those cases amenable to quick solutions –thereby enabling the government to claim the maximum reductions in waiting lists.
The government’s hostility to state provision – where it be in the building of national infrastructure, or in the delivery of quality healthcare – has nothing to do with efficiency, or cost reduction, or social equity. The prime goals are political, not medical. As mentioned, the future options cited in the briefing paper to Simeon Brown – i.e. increasing the user charges in health, and the narrower “targeting” of health care in future would have clear social repercussions.
The ACT Party Health policy has already talked about adopting “a productivity focus on patient care” and a productivity perspective” to healthcare delivery. Ask yourself. As a current or prospective patient, are you ‘productive’ enough to qualify for care?
Finally, here’s an example of how the government is already headed down the path of imposing extra user pays charges on a public already struggling to access primary healthcare. Last year, the government chose to hold down its increase in the part-funding of GP practices- the so-called “ capitation” fee – to only 4% despite the evidence presented that cost pressures on GP practices rose by 6.4% last year, on top of a 5.88% increase in the preceding year.
To make up the shortfall, the government gave struggling GP practices the green light to increase their fees to patients by up to 7.7%, which in some regions, is resulting in patients facing a $70 bill for visiting their GP. The long term costs of care delayed or denied by these cost barriers are simply not in the government’s equation.
The options on offer to GPs are: screw your own clinical practice, screw your patients and/or be screwed by the coalition government. That seems to be the direction in which health funding and delivery are headed. Like the Americans, we are facing the prospect of needing to pull out a credit card well before reaching the hospital ward, and/or becoming reliant upon the merciful decisions made by private sector health insurance companies. Last year in the US, we saw how that turned out.
Good luck, and good health. In the public health system’s current political settings, we’re all going to need both.
This is Lorelei, De-luxe
M J. Lenderman is becoming an omnipresent guest presence on any number of recordings by friends, relatives and neighbours. The pleasantly plaintive “Dancing In The Club” comes from the recent de-luxe re-release of This is Lorelei’s excellent Box For Buddy, Box For Star album from last year.
BTW, This Is Lorelei is the folkier, funnier solo project of Nate Amos, better known perhaps for his more abrasive work with the band Water From Your Eyes.