Budget 2023: $5 prescription fee scrapped - but National would bring it back

Patients will no longer face a $5 top-up fee for funded prescriptions – but the new policy will not survive a change in Government.

The National Party confirmed it would reinstate the fee if it was elected this year.

The removal of the prescription co-payment was the centrepiece of spending on health in Budget 2023.

Health Minister Ayesha Verrall said it would ease household budgets while relieving pressures on hospitals. About 135,000 adults did not collect their prescriptions because of cost in 2021-22, Verrall said.

The National Party, however, said it was not keen on the policy.

”We would not have universal zero fees,” National’s finance spokesperson Nicola Willis said.

“We would expect that there would be some New Zealanders who would still pay a prescription charge.”

When National Party leader Christopher Luxon was asked about Labour’s initiative, he said: “We certainly don’t support that.”

National noted that high-needs patients could already get free prescriptions, and some pharmacies offered them free. Verrall noted that these were mainly “big box” pharmacies which could afford to “loss-lead”, unlike community pharmacies.

The removal of the fee was applauded by advocates and frontline staff, who said the $5 charge often determined whether patients collected their medications or not. The $5 co-payment was charged per item, meaning people with complex conditions could face large monthly bills.

Kathryn Chapman, a nurse living in a rental property in Pukekohe. Budget case study. 18 May 2023. New Zealand Herald photograph by Jason Oxenham

Pharmacy Guild chief executive Andrew Gaudin said it would make a “huge difference” to some patients who could not afford the fees and “had to make difficult choices when they are sick”.

The policy, costing $618 million over four years, was based on a University of Otago study that showed lower-income households who received free prescriptions were less likely to be hospitalised and spent fewer days in hospital than similar families who paid a fee.

It was one of only a few new health initiatives in the Budget. Most of the health spending was announced last year as part of a plan to allow greater long-term planning.

The other main initiative was $118m to reduce surgical waiting lists. This was announced alongside a goal of cutting surgery waiting times to a maximum of 12 months by the middle of next year.

That ambitious target excluded orthopaedic surgeries, such as knee and hip operations. Verrall admitted these made up a large proportion of the waiting lists but said Te Whatu Ora could not guarantee that the 12-month target could be met in this area.

There was more support for GPs, who along with pharmacies and community providers are being called on to do more heavy lifting this winter to reduce pressure on hospitals.

This included more funding for physiotherapists, mental health support and additional nurses in GP clinics to assist with complex problems that couldn’t be “crammed into a 15-minute appointment”.

The overall 5 per cent lift in funding for primary care was the largest in 11 years, Verrall said.

However, General Practice NZ chair Bryan Betty said a 9 per cent increase was needed “just to stand still”.

‘It’s not much’

Kathryn Chapman, a registered nurse in Auckland, says many in her profession have one eye on Australia. But her focus is closer to home.

“When we work with Māori and iwi providers, we are not really working for the money, it is more for our people. We have a commitment to that.”

For that reason, she was hoping for more ambitious and concrete measures in this year’s Budget to fill workforce gaps and lift incomes.

As a nurse working in the community, she earned less than her hospital counterparts. A mother of three teenage children, she is the sole income earner in her household.

The Government is working on pay parity in nursing, and the focus will shift to community nurses later in the year.

Chapman, who is a clinical lead for an immunisation centre in Papakura, noted the generous provisions in the recent Australia Federal Budget. It included a 15 per cent pay rise for aged-care nurses and a A$10,000 boost for registered nurses.

“That’s why a lot of us are leaving for Australia.”

An investment of $63 million in Budget 2023 would allow 500 new nurses to be employed in New Zealand.

“It’s not much,” Chapman said. “Funding 500 more nurses when we need 4000.”

She applauded some measures in the Budget, in particular grants for Māori nursing and midwifery training, from which she had benefited herself.