KEY POINTS:
The sheer volume of laboratory tests has long been eyed by budget-conscious district health boards. For some time, they have considered it an obvious cost-cutting avenue. Over the past two years, four health boards in Wellington and the South Island have acted. No longer do they pay for
tests ordered by specialists for private patients. The practice is clearly inequitable but that has not deterred contemplation of it by Auckland's three district health boards, which have pointed in a public consultation document to its potential use.
Some have tried to defend this withdrawal of funding on the basis of consistency. They contend it is logical for private patients to pay for their laboratory tests, just as they pay for other parts of private operations, rather than having that part of their care financed by the state. The argument does not hold up. If consistency is the aim, it could be applied far more effectively by making everyone pay a small fee for laboratory tests, just as they are charged a fee for medicine. This would have the plus of introducing added discipline to testing, the demand for which seems to be on a never-ending upward curve.
What is being proposed means, in fact, that private patients would, yet again, pay twice for treatment, once through their taxes and, further, through paying for their tests. This is no minor matter, given that, although tests routinely cost from $10 to $500, they may be up to $2400. Some conditions may require several tests. What could be a substantial cost will follow hard on the heels of a sizeable bill for specialist assessment.
In many instances, of course, the tab for this closing of the public purse will be picked up by insurers. But even if an individual's policy covers this, it is sure to result in an increase in premiums. The Health Funds Association has estimated that if all South Island health boards took up the practice, it would probably result in a 0.5 per cent rise in health insurance premiums nationwide. Again, that is a significant expense, given that about 1.4 million New Zealanders have health insurance.
Other unfortunate consequences have been foreseen. One is that the added cost could drive some people away from private health and back into the public system. This would further clog public hospitals and add to elective surgery waiting lists. This threat may be overstated, but any movement in that direction would contribute to an outcome that would hinder, rather than help, health board finances. Perhaps more plausible is the possibility that pressure would be applied to specialists to refer patients back to their GPs to have tests ordered. Some entreaties to abuse the process from uninsured and financially stretched patients may be difficult to resist. Either way, the practice would increase the amount of paperwork required in the billing of each person.
All this might be understandable if a large percentage of laboratory tests were through private specialists or the cost savings to health boards were sizeable. But Auckland board papers put the testing figure attributable to the specialists at only 8 per cent, and those patients would pay just $5.6 million a year for their own tests. Such a sum may be significant for a smaller health board or those in financial difficulties, as is the case with several in the South Island. But Auckland's three health boards fit neither of these categories. Most particularly, all seem to be over the worst of their financial woes.
As such, it is difficult go see why they have bothered to raise the idea. The Medical Association opposes it, and wants a national policy. People who would be caught in its net are bound to be angry. Quite reasonably, they would see it as unfair and unnecessary. So should the health boards.