Health funding ‘crisis’

Health spending has always been under pressure.Is it now a crisis? ‘Crisis’ suggests an unusually critical situation, but health under funding has long been an ailment.

Health care has increased substantially over the last half century, but so have the costs. Drugs and technology have improved and cost a lot more, and a growing and ageing population puts further pressures on budgets.

What the Government does on health in next month’s budget will be interesting. More money is likely (the previous government kept spending more) but it is unlikely to be enough.

The prime Minister and the Minister of health have both been sending out signals that spending may be compromised. They are claiming health ‘underfunding’ is worse than they thought.

Dave Armstrong has some details in Toss a healthy bit of funding at DHBs and voters will turn a blind eye to almost anything

I’m not sure about that, health doesn’t seem to play an obviously significant part in elections.

It has also been revealed that necessary spending on infrastructure has been delayed by a number of district health boards because they were under such pressure from the previous government to show an operating surplus

That’s why buildings at Middlemore Hospital with toxic mould and sewage leaks behind asbestos walls will need $123 million to be repaired. It seems that the mantra of the last government regarding health infrastructure was ‘a stitch in time causes an operating deficit that looks bad so please don’t ask for money or there’ll be trouble’.

Middlemore is just one example. The Clinical Services block at Dunedin Public Hospital has had leaking and asbestos problems for years. A replacement hospital in Dunedin has been delayed, and now it is over to the new government to try to keep an election promise.

Even though the Labour Party pledged $8 billion to health during the election campaign, Health Minister David Clark thinks that won’t be enough. It is estimated that $14 billion will be needed over the next 10 years for infrastructure alone.

Jacinda Ardern has found health finances are even worse than she expected. She identified $10 billion worth of capital expenditure needed whereas the previous government set aside just $600 million.

I don’t think it is unusual for incoming governments to discover costs that they hadn’t taken into account when making election promises.

The previous National government would rightly argue that it spent billions on health. Spending increased under its watch, but was it enough to meet rising demand? With failing infrastructure and frustrated salary workers who haven’t had a raise of ages, I would say no.

Despite disingenuous claims by Labour health funding kept increasing under the National government. But health funding is never enough.

So what’s the solution? Ask most health professionals and they would suggest a substantial investment in infrastructure and pay rises for hospital staff, especially nurses and those at the bottom. But given about 60 per cent of health expenditure is for salaried staff, that is a considerable cost.

Nurses are currently negotiating for wage increases, and are threatening to go on strike.

And that is the problem for this Government. They may want nurses and others to be paid fairly, but where is the money coming from? During the election campaign, Ardern and Grant Robertson were at pains to point out they wouldn’t touch the corporate tax rate or John Key’s 2008 tax cuts for the wealthy.

This reticence to change the wealth distribution might have helped them get elected but now they either have to find the money elsewhere or disappoint underpaid nurses, many of whom would have voted for them.

So that’s the unenviable health dilemma that this Government faces over the next three years.

The immediate dilemma is the budget currently being finalised. We will find out how much of a boost health funding will get next month.  The only certainty is that it won’t be enough.

2 Comments

  1. Blazer

     /  April 2, 2018

    a’ hospital pass’…from outgoing minister ‘close but no..cigar’…Jonathan Coleman.

  2. Kitty Catkin

     /  April 2, 2018

    $75,000 seems ‘fair’ to me.

    Of course, if the nurses have a large pay rise, there will be even less money for the needed repairs.