Dr Michael Bassett

Dr Michael Bassett

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26/12/01 Health Care
12/12/01 Margaret Wilson

Health Care

26/12/2001
So the Coalition government thinks that another $2.4 billion spread across health will fix things? And the National Opposition says there should be more? Well, silly people are born every minute. If only our politicians would read international health care trends. Start with Tony Blair. He promised the moon in 1997 and upended the cash register over health. The British Government's share of GDP has risen more than 2% since Labour came to power, most of it going to health. More is promised. But commentators agree that the extra money has achieved little, and won't until incentives are changed. Waiting lists actually grew during Blair's first term. It won't be surprising to discover the same thing here. Why? Because our health system, like Britain's, is a bottomless pit. Most of the incentives for citizens to act responsibly point in the wrong direction. It's the same in all countries where governments try to maintain "free" services.


The reasons for this are complex. Foremost is that all people would like to have their lives lengthened at someone else's expense. When the largely "free" system was introduced in 1938, it provided security for many. Over time, however, it encouraged people to think the taxpayer could afford anything. Medicine cabinets soon bulged with unused "free" drugs. The pharmaceutical bill skyrocketed. Health ministers Arnold Nordmeyer, then Don McKay in the 1960s, toyed with introducing a flat charge. There were screams of outrage, many from professionals who by then were ripping off the "free" system. As Minister of Health, I finally introduced a flat charge in February 1985, and it was extended by Helen Clark four years later. Some acted as though the end of the world was nigh. But given special-need exemptions, virtually no one suffered. The drug bill was brought under control.


There's a lesson in this. Until there is a part charge for all health services at the point where they are used, costs inevitably will race ahead of our economic growth rate. And in the long term that reduces the Government's capacity to pay. Other priority spending areas like education miss out. Already the education budget has fallen behind health, and at the present rate the gap will widen. Moreover, it will be the middle classes rather than the needy that will continue disproportionately to use health's "free" services. It's not Otara or Porirua which get the most benefit from Winston Peters' "free to under six" doctors' visits, but Remuera and Khandallah where mums four-wheel drive their kids to surgeries at the first sniffle. They kid themselves they're paying for it through their taxes.


The health system was originally designed to assist the needy, not the greedy. Politicians expected restraint. But everywhere in the world where a "free" health service has been introduced, costs have raced ahead of budget, with the middle classes driving the van. Canada, Sweden, Australia and Germany have all been forced over the last decade to introduce part or flat charges to bring their health juggernauts under control. New Zealand needs a few more charges, and wider use of the means-tested community services card to ensure the needy don't miss out. There is no good reason why patients should get "free" access to diagnostic services after paying to see the GP. Not surprisingly, the diagnostic service providers farmed this privilege unmercifully for much of the 1990s, bleeding more and more tests and ever-larger payments from the taxpayer while officials struggled to staunch the flow.


The biggest item in health expenditure is salaries. They devour 70% of hospital costs which, in turn, consume more than 50% of the health budget. We love our doctors and nurses. And don't they play on it! They always expect management to heed their wishes. Last week in Auckland 100 senior doctors vigorously waved the shroud because management didn't see things their way. Constantly health professionals seek to ratchet up wage demands by more than the community average. In 1974 dental nurses flew into Wellington in full regalia to lobby parliamentarians for higher wages. They won. For twelve months before the big wage round of 1985-86 nurses paraded about wearing red badges "Nurses are Worth More". Than what, wasn't explained. Before long, junior doctors were at it too, securing a settlement that was way ahead of other young private sector professionals with comparable work loads. It is always Labour governments that get the blow torch applied to them; they make the most promises in opposition.


Unreal expectations of the health service, silly incentives, some wide boys who are creaming the system, and a bit of industrial blackmail here and there lie near the heart of health's problems. Ministers target extra money to reduce waiting lists and improve access. But by the time the ticket is clipped along the way, there is seldom any public benefit. If people had to pay an affordable amount for each health service, they might appreciate its cost. They would be more careful over waste, and they just might look afresh at staff claims for higher wages. 13% was what the Christchurch nurses struck for recently. Radiation therapists are talking of double that. If they get it, and the increases flow into other areas bleating unrealistically about a world market, it's a fair bet there will be little left of Annette King's extra funding. And I haven't even mentioned the hundreds of millions wasted in re-erecting useless health boards for which there was no demand.


Historian and author Michael Bassett was Minister of Health 1984-7. Since then he has studied overseas health care trends.