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Health policy missing in action

Last updated 05:00 31/08/2014

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The book Dirty Politics has overshadowed this election, pushing health policy to the fringes - and that's upset the health insurance industry.

In a bid to put health back on the agenda, Roger Styles, chief executive of the Health Funds Association, surveyed every major political party on how they felt about private insurance. Around 30 per cent of the population has private insurance but it is steadily becoming more costly as a result of increasing treatment costs.

The association wanted to hear parties' views on whether private spending, largely through health insurance, would fill the gap between the 7 per cent of GDP currently spent on health and a projection of 11 per cent by 2060.

The survey also asked about Treasury's options for keeping spending down, such as cutting health services, rationing and bringing in "co-payments" from patients for the cost of treatment.

The association also asked whether the parties would enact policies to stimulate the uptake of private health insurance.

In mid-2013, Treasury published long-term forecasts for Government spending. It said: "The projections in our Resume Historic Cost Growth scenario suggest that healthcare costs would grow from around 6.8 per cent of GDP in 2010 to more like 10.8 per cent in 2060, a big change. And some people might see even that projection as conservative."

The responses from some parties were disappointing, said Styles.

"National's solution to anything was growing the economy, which was quite dismissive," he said.

Just as it felt NZ Super was sustainable at a retirement age of 65, despite the ageing population, National said it felt the same about the sustainability of funding healthcare.

Labour did not answer, instead providing this response: "Labour is committed to a strong public health system which is funded predominantly by taxation. We do, though, recognise the important role that the private sector plays in providing a choice for all New Zealanders . . . and we believe that funding that meets demographic change and rising cost pressures while requiring efficient and cost-effective delivery of health is what New Zealanders expect from health services, and that is what Labour will deliver. We realise that further co-operation between public and private health will be necessary going forward to ensure appropriate provision of widespread service, and this is something which we are committed to achieving."

The Mana Internet and Maori parties had nothing to say on the questions.

Just when the fiscal pressure comes onto the health budget is, Styles said, "anybody's guess". A focus on efficiency under National had resulted in a temporary stemming of the tide of health inflation. Stemming sector wage rises, extending the coverage of Pharmac and cost-sharing in procurement between DHBs had all played a part.

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"The Government's done quite well in keeping a lid on health inflation to the extent that they have got wage settlements of 1 per cent for nurses, but that's tested the good-will of the sector, and these efficiencies are a bit of a single hit."

Styles predicted major gaps would emerge again in the next two to three years.

The association's previous plan was to push for health insurance tax rebates for over-65s, as well as the removal of fringe benefit tax on premiums paid by employers for workers.

"The fiscal reality is that's not likely to happen," Styles said.

For now, the association would settle for a debate similar to the one the Retirement Commission led on the retirement policy.

"The future of health funding is a similar-sized problem. In fact, it might be bigger, and the solution is not as easy," Styles said.

- Sunday Star Times

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