O'Sullivan: Health's future looking sick

By FRAN O'SULLLIVAN

The furore over the Auckland District Health Board's $72 million financial blowout has brought one factor into sharp focus, and no, it's not the controversy over whether the Starship children's hospital should retain its name.

Board chairman Wayne Brown wanted to make a point when he suggested that children and their parents might get the message on primary healthcare if the Starship was known as the sick children's hospital.

The Auckland public reacted, though it will blow over. But he has begun the public debate on the choices that must be made if public health is to live within its means.

The Government's health policies, laid out in the New Zealand Health Strategy, foreshadow a fundamental switch to placing a greater emphasis on the maintenance of health rather than picking up the pieces afterwards.

Directors of the country's district health boards, which collectively run a deficit of more than $200 million, are under no illusions about their roles. The strategy makes it clear that the boards must live within their budgets.

The document says, "Choices have to be made in health".

"Even if the Government decides to spend more on health services, there will still be a need to choose between competing demands to ensure that money is used to best effect.

"It will never be possible for the Government to do everything for everybody."

When the Labour/Alliance coalition took power, it scrapped the Health Funding Agency and the Government-appointed boards that were required to post profits.

The Ministry of Health combines policy and funding capabilities. The district boards, which have a mixture of elected and Government appointed directors, are required to assess the health needs for their areas and prioritise them in line with the national strategy.

A funding agreement is then reached with the minister.

Auckland already has a three year funding deal.

This will buy the Auckland board time as its executives grapple with reducing its deficit - which some estimates say could go as high as $90 million - and also try to get the "super hospital" project completed and cut management numbers.

The Health Strategy paints a compelling picture of high youth suicide rates, chronic abuse, fundamental inequalities in health, particularly for Maori and Pacific Islanders.

When Auckland District chief executive Graeme Edmond said last week that it all pointed to New Zealanders having to settle for a good "second world" public health system, rather than a high-tech First World one, he received a tap on the wrist from Health Minister Annette King.

But unless New Zealand starts increasing the size of its economic pie, his warning will become reality.

For a Government elected on a social justice platform that would be unpalatable.

The Government must put some passion and action behind its growth rhetoric, or our ability to afford quality healthcare will slip.

There are only so many ways the cake can be divided.

Business concerns have mounted since the Government failed to capitalise on the Knowledge Wave initiatives outlined in a series of reports two weeks ago.

The LEK Consulting report outlining a strategy for a New Zealand Talent Initiative is a case in point.

LEK plays up New Zealand's superb environment, excellent education, access to good healthcare and cradle-to-grave welfare for the less fortunate.

But it warns that the sustainability of many things New Zealanders take for granted is in question.

"While we aspire to better education, higher standards of healthcare and more generous systems, we are having difficulty paying for what we have already."

It says New Zealand is not generating enough national income to be able to continue paying for its current requirements, let alone its future needs and aspirations,

The figures are compelling. The number of people over 65 years of age will increase by 338,000 to 748,000 - a 75 per cent rise - over the next 20 years, placing greater demands on healthcare spending.

The working-age population between 15 and 65 is forecast to increase by 406,000 to 2,896,000 - a 16 per cent rise - over the same period.

The narrow revenue base - income tax from individuals provides 42 per cent of the Government's revenue - will come under further pressure.

In New Zealand, 250,000 people who earn more than $60,000 a year provide 40 per cent of the personal tax revenue.

On top of this, skilled New Zealanders are still leaving the country.

The standard social democrat response might be to put up taxes, or create a special health tax. This has been mooted and officially denied.

But with GDP per capita extremely low (see graph), there is a real need for a focus on growth.

As Rick Christie's Science and Advisory Council put it, Prime Ministerial leadership is imperative.

Strong leadership will help bring New Zealanders together and stimulate the changes needed to revitalise our economy.

nzherald.co.nz/hospitals