A report by the New Zealand Taxpayers’ Union has warned that flatlining healthcare productivity might impoverish New Zealand if not dealt with.
“Productivity in the Health Sector: Issues and Pressures” investigated the recent failure to achieve efficiencies in the health sector and offered possible opportunities for reform.
According to the report, health spending is expected to grow from 6.2% of GDP in 2016 to 9.7% of GDP by 2060, which will worsen public debt by 205.8% of GDP by the same year.
“While superannuation receives a lot of attention from politicians, health spending is actually expected to grow at a faster pace – nearly ten cents in every dollar in the economy will be devoted to health spending by 2060. If we can reduce that spending by achieving efficiencies across the sector, public debt will be much more manageable for taxpayers,” said Taxpayers’ Union.
The report recommended the best approach for reform, which includes improving ways to acquire private health insurance.
“Our report argues that the best approach for reform is in line with OECD recommendations: the Government should not up-end the entire sector, or introduce American-style private markets, but instead seek to introduce incremental reforms that deliver better returns for every dollar the taxpayer spends,” said the union.
“Examples include increasing the proportion of Government-appointed DHB members and tying their remuneration to financial performance, amalgamating some DHBs, and allowing the use of Kiwisaver for purchasing private health insurance."
In the next three weeks, the Taxpayers’ Union will release three briefing papers focusing on areas of waste in the health system.
