National is good on the economy and Labour is good on health and education. These are the convictions of New Zealand swing voters. They stand like ancient monoliths towering over the political landscape, immune to the ravages of time and the actual performance of either party in government.
Labour’s Michael Cullen was the most capable economic manager to hold the finance portfolio in several generations, while many of his party’s innovations across the education sector have inflicted considerable damage at considerable cost, but the public does not care.
The core brands of the major parties seem nigh-on indestructible, but National’s current unpopularity can largely be attributed to a steady decline in public confidence on economic issues, alongside near terminal ratings for its performance in health.
The government feels a little bruised by this assessment and retorts: Labour crashed the economy! Andrew Little reorganised the health sector in the middle of the pandemic and botched the job!
But voters are also sick unto death of inept governments blaming everything on their predecessors, and it has long been apparent that National’s first year in power drifted by without any coherent plan to address the crises in either sphere.
The task of new Health Minister Simeon Brown is to restore the public’s trust in his portfolio, or – more realistically – return it to only moderate distrust.
Brown is oddly similar to Labour leader Chris Hipkins, who also inherited the health portfolio from an underperforming predecessor.
Both have an unusual combination of affable, boyish exteriors that conceal ruthless political capabilities. Both are seen as a safe pair of hands, able to handle the pressures of high office without assaulting their staff or otherwise publicly disgracing themselves. They’re activist ministers, able to drive organisational change through dysfunctional bureaucracies.
Attack strategy
Brown’s primary strategy has been to go on the attack. A number of high-profile managers in the health sector stepped down shortly after his appointment, and his pointed comments in interviews about needing “the right people in the right positions” suggests these resignations were not entirely voluntary.
A Deloitte report released last month determined Health New Zealand was trying to manage its $28 billion budget via a single Excel spreadsheet, giving it little control over expenditure and resources and contributing to its gigantic deficit, suggesting at least some of those departures are no bad thing.
Brown has also picked fights with the public sector unions, whose members are losing jobs as the government cuts back the health bureaucracy, and with his own National Public Health Service for what he portrays as its tendency to behave more like Extinction Rebellion activists than neutral public servants.
Organisationally, he’s adopting a “patient-centred” approach. This is another dig at the unions: National believes Labour ran the health system on their behalf rather than the patients’. But it’s also a euphemism for more outsourcing to the private sector.
Brown has predicted, probably correctly, that most patients will be indifferent to who delivers their care so long as it happens quickly and the state pays for it.
Private hospitals are certainly nicer, more efficient and better run than public ones – and they are somehow built without decade-long delays and multibillion-dollar cost blowouts – but that’s because they’re delivering their services under the steely gaze of the insurance companies that pay for most of it. Once they’re hooked up to the firehose of taxpayer money this is likely to change for the worse. Outsourcing to the private sector can only be a very temporary solution: it doesn’t solve the political, fiscal or economic challenges facing the public health system.
Escalating costs
Most of us like and trust our doctors – those clever, caring people who generously dispense the antibiotics, sleeping pills, contraceptives, antidepressants and painkillers that solve most of life’s little problems.
We regard fast, high-quality medical care as a fundamental right. But from an economic viewpoint, the gains from the $30b a year (and rising quickly) we spend delivering that care are surprisingly modest in terms of shifting population-level outcomes such as life expectancy and infant and overall mortality.
Between 2017 and 2020, New Zealand lifted health spending from 9% to 10% of GDP; it’s currently just over 11%. Health budgets all over the world went up during Covid and stayed up afterwards – and the returns from that additional expenditure are not readily apparent in the data.
Our clever and caring doctors are expensive to train and there’s global demand for their skills. Their scarcity creates impassable bottlenecks throughout the entire health system – as well as making the doctors themselves (by far the highest-earning profession on graduation) very rich.
The real gains in delivering better health outcomes come from public health initiatives: vaccines, anti-smoking measures, maternal and child health schemes, screening programmes and early detection, road safety, improving diet and exercise across the population and insulating homes.
This is the direction Labour would like to head in when its back in government, preventing all that diabetes, cancer and heart disease, reducing the cost burden and suffering of chronic illness.
Double trouble
The trick is that successive governments would need to simultaneously fund that work and the current system, while waiting years – decades, even – for the long-term gains from those initiatives to pay off.
It’s not clear how either National’s private delivery model or Labour’s prevention strategy can remain affordable without either tax increases or spending cuts in other areas.
Russian author Anton Chekhov – also a medical doctor – once said, “When a lot of remedies are suggested for a disease, that means it cannot be cured.”
