Health workers' wallets have fattened, but hospital productivity has dipped in spite of massive funding boosts from the Government, a Treasury report says.
The report, looking at a three-year period from July 2001 to July 2004, found that hospital spending had jumped 13.4 per cent, but measurable hospitaloutputs only rose 4.7 per cent.
The two-year-old report, released under the Official Information Act, said that equated to a 7.7 per cent drop in productivity.
By contrast, over the three years to June 30, 2001, hospital efficiency increased 1.1 per cent. It found 60 per cent of the increase over the period went into staff costs, with over half of that going into pay rises for workers.
Spending on doctors had risen by 30 per cent - half going into hiring new staff, with the other half going to pay increases.
The report recommends better information tracking in the health sector so value for money can be better monitored and better performance management incentives put in place.
The report's authors said only about 25 per cent of the country's 21 district health boards' (DHBs) activities were measurable - mostly inpatient hospital activities. It said reduced efficiency was one explanation for the figures.
Plausible alternative explanations included a rise in outpatient attendances, which were not measured, an increase in the quality of care and possibly outcomes as a result of the extra funding and greater patient satisfaction. But these could not be verified on the information available. The report said some measures of hospital efficiency such as "day-case rates" and length of stay were improving.
The report follows a long line of Treasury memos to Finance Minister Michael Cullen raising concerns about productivity in the sector.
National has made political capital out of the issue, with health spokesman Tony Ryall producing figures showing the number of people receiving elective operations has hardly changed over the past five years.
Health Minister Pete Hodgson today said the report underlined the challenges New Zealand faced in meeting the rising cost of healthcare along with the public's rising expectations.
Issues included the increasing cost of drugs and technology, retaining good medical workers and an ageing population.
