Thomas Coughlan: Is the health budget really failing Māori?

Health Minister Andrew Little has delivered an enormous health budget - but will it deliver for Māori. Photo / NZ Herald

OPINION

Since the Budget was announced last week, the Government's critics have applied the blowtorch to what appears to be a paltry sum allocated to Māori health services.

Rawiri Waititi, co-leader of Te Pāti Māori said it had "taken 182 years for Māori to get just 2 per cent of the health budget".

"By that logic, we will need to wait 1840 more years to get 20 per cent of health investment, and by then Jesus Christ will have returned."

This allegation is centred around the fact the new Māori Health Authority will get only $45 million a year for commissioning Māori health services, and $163m a year for its overall operations (about 0.7 per cent of vote health).

This criticism is a far cry from the allegation that's usually levelled at the Government's Māori health agenda, which is that it involves an uncomfortable level of co-governance that gives the Māori Health Authority a near veto over the entire health system.

Both of these things can't be true at the same time.

Some funding for the Māori Health Authority goes to the commissioning of Māori health services, but the authority will also design national level health plans. The new system will also publish locality plans, created with the input of iwi-Māori partnership boards. This means that while services commissioned by the authority get a small amount from the Budget, the authority's input into the system as a whole means that tens of billions of dollars of health spending will be co-planned by Māori.

Budget 2022 gives 0.7 per cent of the overall health budget, or $163m, to the Māori Health Authority. About $33m of this is for commissioning Māori health services, rising to $44m next fiscal year.

These commissioned services are described in the Budget as "a blended Te Ao Māori population health and prevention programme targeting the wider determinants influencing Māori health and wellbeing" and "specific interventions for whānau Māori at different life stages to supplement and improve current primary and community service models, and "a programme to identify, uplift and develop mātauranga Māori services, programmes and resources across the health system".

An aspect of the health reforms that has confounded many is the way they deal with Māori health involves both devolution and co-governance. This confusion likely arises from the fact the initial Heather Simpson review of the health system was split on whether the Māori Health Authority should have the ability to commission dedicated services for Māori. Labour eventually decided to back commissioning, giving the Māori Health Authority extensive powers to run its own health services.

What was often lost in debate about the Budget, is that while some Māori health services will be run by the authority, the lion's share of health will continue to be run out of hospitals, GP clinics, and specialist providers as it is now. It's worth remembering the Government is not planning a separatist health system, with different hospitals for Māori and non-Māori. Māori and non-Māori will continue to mostly use the same services as they do now. We will visit the same GPs, see the same specialists and go to the hospitals. What is changing is who gets a say in how those services are run.

The health inequities these reforms are trying to fix won't be resolved just by the small number of directly commissioned services from the Māori Health Authority. A significant part of the reforms is increasing the level of Māori input into the health system overall.

The new health system will look much like the current transport system, which tries to balance the priorities of the minister of the day with the imperatives of a powerful central agency, and the desires of smaller local authorities.

Under the reforms, the Minister of Health will set out a Government Policy Statement (GPS) on Health. This will detail what the Government of the day wants out of the health system. Health NZ (the central organisation replacing DHBs) and the Māori Health Authority will then jointly respond to the GPS with a national Health Plan, which will detail where money gets spent and how. Those plans then get signed off by the minister and become the blueprint for how the health system runs.

Health NZ will also allow localised iwi-Māori partnership boards to co-design local health plans, which tailor specifically to the health needs of a particular area. These have been funded by the health budget.

Health NZ's budget is enormous.

Budget 2022 sets its funding for the 2022/23 fiscal year at $11.7b (49 per cent of the overall health budget) for hospital and specialist services. These hospital and specialist services will be co-designed by the Māori Health Authority through the national level health plans.

A further $7.96b in Budget 2022 (a third of the Budget) is set aside for "Health New Zealand and the Māori Health Authority" to deliver primary, community and population health services" - essentially the coal face of the health service.

So while it's fair to say a relatively small amount of funding has been set aside for commissioning Māori health services by the Māori Health Authority directly, it's also true that the authority will co-plan how almost $20b in funding (about 6 per cent of New Zealand's GDP) will get spent.

The amount of money spent on commissioning health services is forecast to increase to $22b in the next two years, and likely even further beyond that.

Debbie Ngarewa-Packer, co-leader of Te Pāti Māori, used her Budget speech to slam the fact the Māori Health Authority only won 0.7 per cent of the overall health budget despite Māori making up 17 per cent of the population. But that argument only works if the Māori Health Authority were set up to be a separate fully funded health system, which it is not. It acts alongside and on top of the national health system.

When looked at that way, the Māori Health Authority actually has oversight and co-design powers over at least 82 per cent of the total health system.

What is worth looking at is whether more spending should go towards commissioning Māori-specific services by the authority. It's often said that boosting frontline health spending saves the health system from expensive hospital care later on.

The Government has said one of the reasons for the slow start to spending on commissioning health services is the Māori health sector lacks the capacity to deliver services over and above this.

There's some reason to believe this is true. While we have a good idea of the level of need, the Government has little idea of the capacity of agencies to deliver these services.

Currently, the Government purchases $135m of Whanau Ora services from non-government commissioning agencies. The Māori Health Authority would increase the amount of services commissioned from providers by about a third of this amount, although the services would likely be procured from different providers.

Overall, the amount of money spent on commissioning health services has increased dramatically under this Government - and not just because of additional funding to manage the pressures of Covid-19.

In 2017, just $13.6b was spent purchasing health services, and $1.1b was spent purchasing disability support services (the two main non-ACC lines of health spending).

By 2024, the Government will be spending $22.8b purchasing health services and $2b purchasing disability support services.

Former Health Minister David Clark made a strong case for abandoning National's health targets when the current Government took office, arguing they measured "activity" rather than "outcomes". This created a perverse incentive for the health system to divert resources to hit certain targets at the expense of looking at the wider health system.

As the Government grows the health system at a speed it has not experienced in recent years, it's worth asking about the ways it will measure its success. Any politician will tell you the health system is a black hole of unmet need - there's no limit to the funding the system might require.

But making sure that money is spent well, and finds the people most in need, is a very different question.