Bad news predicted for health spending

The senior doctors' union fears DHBs may have to adopt 'shock therapy measures, with the victims being the patients'. Photo / Dean Purcell

The public health sector is bracing itself for a Budget that may not cover all its rising costs.

Union and Opposition figures have been predicting doom in Vote Health since district health boards began receiving indications last year of how much they will be given from July 1.

Health Minister Tony Ryall was yesterday keeping a lid on Budget secrets, but Labour health spokeswoman Ruth Dyson maintains DHBs will be on survival rations: $330 million of new money, compared with $540 million in the last Budget.

She expects this will only extend what Labour considers widespread cuts to health services. These include the telephone reviews of home help for the elderly and, through the minister's deficit-reduction programme, the downgrading of elderly in-patient services in Horowhenua.

But Mr Ryall said New Zealanders' frontline health services had increased under National.

Vote Health this financial year amounts to $12.9 billion, including $355 million for capital works, of which three-quarters goes directly to DHBs.

The increase for this year was $750 million - half of all new Government spending in the 2009/10 Budget.

Council of Trade Unions economist Bill Rosenberg calculates that an increase of $559 million is needed in Thursday's Budget for the public health system to deliver the same level of services, given the increase in population, the ageing of the population and the increasing costs of labour and health materials.

Excluding capital items, the operating expenditure would need to increase by $555 million just "to stand still", Mr Rosenberg said.

He suggested health was unlikely to get this much, which would be more than half of the $1.1 billion of new state spending.

He said it was well above the 40 per cent of new spending - $440 million - "which is assumed as the allocation for Health" in Treasury forecasts.

"It [a $555 million increase] would leave little room for funding improvements in health or other public services. If it is not funded, New Zealanders will face some combination of deterioration of services, inability to access new treatments and more or increased user charges."

Mr Ryall yesterday reiterated his theme. Money is tight. There will be an increase. It will be smaller than this year's.

"We're not going to be able to maintain the significant proportion that we got last year."

He would not say how much of the "re-prioritised" Government funding would go on health, or how much comes from health.

The only Budget pre-announcement in health is of $24 million over four years for a bowel cancer screening pilot programme, to start late next year, although the announcement in March of $7 million more this year for disability support equipment and modifications also came with $20 million over the following two years.

It also came with a tightening of access criteria and a commitment to more user charges.

Senior doctors' union executive director Ian Powell said it was expected the health increase would be half of this year's and this risked forcing DHBs to adopt "shock therapy measures, with the victims being the patients".

Mr Ryall said the home-help reviews had led to reductions for many people but others had been given an increased service.

"No one will be left unsafe or unable to manage on their own as a result of the changes." He said Labour had left $155 million of "unfunded" DHB services - deficits - which the Government was reducing in a slow and considered way.