Striking nurses once more brought the issue of funding for healthcare into sharp focus. Photo / George Heard
Striking nurses once more brought the issue of funding for healthcare into sharp focus. Photo / George Heard
OPINION
The recent nurses' strike has brought strong, often acrimonious debate over healthcare expenditure, heated accusations of underfunding and, not unexpectedly, questioning of the public healthcare model. Some perspective is required.
New Zealand's healthcare expenditure at 9.5 per cent of GDP exceeds the OECD average of 8.9 per cent ofGDP. Finland, for example, spends just 7 per cent of GDP on healthcare but achieves vastly superior health outcomes compared to New Zealand.
Comparisons between nations based on healthcare expenditures as a percentage of GDP can be highly misleading.
America's overall healthcare expenditure at 18 per cent of GDP is the world's highest. While America's privatised, profit-driven model is the neoliberal healthcare system of choice, its outcomes are the worst in the developed world. By far.
There is absolutely no health equity in the American system. Privatisation enables the 1 per cent to access the world's best healthcare while middle-class patients risk losing everything to pay exorbitant medical bills, now America's largest cause of bankruptcies. And the rest? In the neoliberal worldview, the 60 million Americans or undeserving poor who simply cannot afford even the most basic healthcare, well, they have only themselves to blame.
A 2014 Bloomberg survey of healthcare efficiency which derived its rankings by measuring average life expectancy against public spending on healthcare ranked America 44th.
Why does Finland, for example, with the same population as New Zealand but spending just 7 per cent of GDP on healthcare achieve vastly superior outcomes?
Popular young Social Democratic Finnish prime minister, Sanna Marin, took office eight months ago. Photo / Olivier Hoslet, Pool via AP
The answer, in short, is Finland's far superior economic performance and its vastly different socio-cultural context.
Because Finland's economy is much larger than New Zealand's, it spends far more in real terms on healthcare than we do.
Compare nations A and B, for example. Both have the same population of five million and spend 10 per cent of GDP on healthcare. Nation A has a $200 billion economy and B, a $500 billion economy. In real terms, A spends $20 billion on healthcare and B, $50 billion. B's resources are obviously far greater. Let A represent New Zealand, a low- income, agricultural export nation and B a high-income, highly egalitarian Nordic nation. All of B's citizens enjoy the best of everything, including world-class healthcare.
Finland's socio-cultural setting, like Singapore's and all the other Nordic nations, is vastly different from New Zealand's.
The striking feature of all the tiny, high-income nations is their very high levels of social cohesion and trust, both in their governments and among their citizens.
A cohesive society is one with resilient social relationships, positive emotional connectedness between its members and the community and, above all, a pronounced focus on the common good.
A recent study out of Germany confirmed the most important factors in social cohesion are firstly, high national wealth (i.e. high per capita income), secondly, low inequality and thirdly, modern information technology.
New Zealand fails the first two. We only pass on the third requisite, the provision of modern information technology.
There has been no national wealth creation in New Zealand since 1984. Low economic growth and strong population growth explain our low, unchanged per capita income. And inequality has increased exponentially. Hence, depleted social cohesion.
The highly adverse effects of inequality and strained financial resources interact and, in combination, are enormously detrimental to public health. And those effects are well documented.
New Zealand has an undisciplined and increasingly dysfunctional multicultural population, a wide swath of which leads sedentary, unhealthy lifestyles. Hence pervasive - and avoidable - health problems, notably obesity and diabetes, which impose enormous strain on our already over-stretched healthcare system.
By contrast, in Singapore and throughout the Nordic countries, national service is compulsory for all youth. Beyond reinforcing social cohesion and connectedness between citizens and community, every youth must exceed rigorous physical fitness or combat readiness standards. Hence the positive, spillover health effects - a form of preventive medicine- are diffused across the entire population.
NZ Prime Minister Jacinda Ardern speaks with members of an honour guard during a welcome ceremony at the presidential palace in Singapore in 2019. Photo / Derek Cheng, File
The second question is why governments of any stripe find our constrained situation acceptable. The argument is that we need real investment to deliver the kind of quality public healthcare New Zealanders value and deserve.
But what is desirable is not always affordable. Governments, like individuals, must cut their cloth according to their means. Since 1984, our means have been greatly reduced.
New Zealand does not enjoy rich-nation status. We have taken a very different path from Singapore and the Nordic nations, all of which can afford the world's best healthcare systems. We simply cannot.
It is high time we changed direction.
• John Gascoigne is a Cambridge-based economic commentator.
