Health funding lagging behind inflation and demand, doctors warn

New Zealand’s annual health funding is not keeping up with inflation or growing demand, leaving one in three citizens without necessary healthcare, according to a report by the Association of Salaried Medical Specialists (ASMS).

The report, Anatomy of a Health Crisis, urges an independent inquiry into health funding.

Health funding in New Zealand

Harriet Wild, the lead researcher, pointed out that the government’s health spending as a share of gross domestic product has remained unchanged since 2010. Currently, it is about 7%, compared to an average of 12% in similar countries such as Australia, the UK, Canada, and the US.

“The cost of ill health far outstrips the amount we spend on the health system, and a healthy population is a productive population,” she said, as reported by RNZ.

Health funding in New Zealand deemed a national scandal

Professor Robin Gauld, director of the University of Otago Centre for Health Systems, called the funding situation a “national scandal.”

“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,” he said, as reported by RNZ. “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.”

He proposes ring-fencing health funding through a specific levy on earnings to remove political influence.

“It’s a big jump to go from where we are to there, but we did it with ACC [the Accident Compensation Corporation],” he said. “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?”

New Zealand government focusing on alleviating hospital pressure

Health Minister Dr Shane Reti said the government has no plans to alter the current health funding structure. However, he supported the ASMS report’s recommendations to alleviate hospital pressure and increase capacity.

“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,” he said. “A Commission of Inquiry into health funding, that’s not an active work stream that I have or envisage in the short-term.”

Amid broader discussions on the country’s evolving healthcare needs, a recent report by the Financial Services Council has highlighted the significant shift in health insurance coverage among New Zealanders.