Editorial: Patients pay big price for system flaws

This day next week the Government will produce another Budget and, as governments always do, it will heartily congratulate itself for every additional dollar it has found for any public programme. The language of Budget announcements is loaded with the assumption that every dollar spent is a public gain and that monetary allocations are the measure of a party's social conscience. So it is timely to receive a Treasury report on the results of last year's increase in health spending. It has discovered that despite a 6 per cent rise in funding in the 2003-04 Budget, district health boards actually performed fewer elective operations in the first half of the financial year than they did in the same period the previous year. The finding is confirmed on the Ministry of Health's website which takes the survey forward to March 1. In those eight months, district health boards produced about 2000 fewer elective operations than they did previously.

Elective (non-urgent) treatment is not, of course, the core business of public hospitals, which are set up to meet urgent needs. Their elective schedule is often disrupted by the demands of sudden urgent cases and it might be, as the Association of Salaried Medical Specialists suggests, that this financial year has seen more than the usual demand for urgent surgery. But it would have to be a marked increase indeed to absorb an additional 6 per cent in overall funding.

That is a large financial increase in anybody's language, as the Government was boasting when it led us to believe the money would reduce waiting times for non-urgent surgery. The reason the money has not produced more surgery probably has more to do with the work of professional bodies such as the Association of Salaried Medical Specialists. The Treasury report suspects rises in clinical and personnel costs. Health services are forever improving their equipment and techniques, always at greater expense.

But talk to any medical professional working part of the time in a public hospital and you are liable to hear tales of gross inefficiency and waste. The anecdotes have hardly changed since they prompted a partial reform of public hospitals in the 1990s. Hospitals were set up as companies and required to show a return on public investment, but political considerations would not allow the collapse or closure of those that failed and soon all were running up deficits with no fear of normal commercial disciplines.

Partial reforms are often worse than none, and the Crown health enterprises were a case in point. They brought added management and contracting costs for no reduction in waiting lists and few other appreciable gains in service. Now the system has been restored to centralised state command through partially elected district boards that have little independence. And once again, it is a system that can absorb additional public funds with nothing to show in return.

There is only one way to ensure that taxpayers actually get the additional services they have paid for, and that is to buy the services, wherever possible, from the private sector. When a privately insured patient needs an operation, a surgeon and hospital are contracted to provide it, and they are paid when the service has been received as requested. It is high time the Government operated the same way. When buying additional elective surgery on behalf of the public, the Health Ministry should contract with private hospitals to provide it, and pay them as they provide it. It is crazy to continue pouring more money into state hospitals for elective surgery and wondering why there are no more operations to show for it.

The only interest the system serves is that of its employees who would be under more pressure in a private system to contain costs and deliver what has been promised. And since state employees are likely to vote Labour the system probably services the party's interest too. But patients waiting for elective surgery in the public sector are paying the price in prolonged pain.