Much angst has greeted the Government's announcement that prescription charges are to increase from $3 to $5 next year to fund reinvestment in the health sector. Opposition parties have warned that lower-income groups, the elderly and the chronically ill will be hit hard. The Mana Party leader, Hone Harawira, has gone so far as to claim it "will lead to children dying". Such concern is vastly overstated. This is, after all, the first increase in prescription costs in 20 years, and could be justified merely on the basis of inflation. Nonetheless, it is also fair to say that it could have been targeted more effectively.

For many people, the rise in cost will be easily manageable. They need prescriptions relatively rarely, and their families' requirements will get nowhere near the 20 items of medicine a year, after which prescriptions for the rest of that year are free. Such people would not have been unduly perturbed if the increase had been more than $2. Indeed, it would have made more sense for the Government to charge a larger sum for each prescription but to lower the trigger point for free prescriptions.

This would effectively remove any potential for hardship. Those on low incomes with large families would receive free items of medicine earlier than is now the case. The elderly and the chronically ill who, typically, need prescriptions more than most, would be similarly advantaged. And the right formula would allow the Government to still achieve an expected saving of $20 million in the first year and $40 million in subsequent years.

The case for a higher charge and a lower threshold becomes even stronger when standard prescriptions charges in comparable countries are considered. In England, it is the equivalent of $15.50. In Finland, there is an annual limit of about $1100 a patient, after which there is a flat fee of $2.50 for each item of medicine. Across the Tasman, the standard prescription costs $45 but this is reduced to $7.45 for people on low incomes, beneficiaries, the elderly and high users.


The Australian approach doubtless holds some appeal to many of the Government's critics. But even the most generous charge remains higher than the $5 to be charged from next January. Additionally, the administrative costs inherent in the Australian system would drain some of the savings projected by the Government, which it plans to spend on an increased number of elective operations and scans and more specialist cancer nurses.

Opposition politicians would, in fact, do better to turn their attention to other factors that are driving up people's medical costs. One is the steep charge that many GPs' practices apply to the likes of simple repeat prescriptions. In too many cases, this cannot be justified by any reasonable yardstick. Another is the over-prescription of drugs. Some medicines prescribed by doctors appear to serve little purpose other than to send patients away happy. If nothing else, the increased charge should give them reason to pause when they are prescribing for people who are clearly struggling financially.

At its worst, the increased prescription charge will cost a family an extra $40 a year. That sum hardly tallies with the dire consequences predicted by some Opposition politicians. Even so, the move is predicated on the universality that so marred the previous Government's early childhood and welfare payments. A more astute targeted approach would have served those with substantial medication requirements better and left little room for criticism. Unfortunately, the Government has missed that opportunity.