Health funding smoke and mirrors

The slanging match between Health Minister Shane Reti and the previous holder of this position Ayesha Verrall at the Health Committee in Parliament’s Scrutiny Week was not enlightening.

Watchers of the spectacle might have wanted a cup of tea and a lie down afterwards, or even some Milo and toast, if that is still allowed.

It was a confusing exchange over the financial position of Health New Zealand. As RNZ reporting explained, in July when commissioner Prof Lester Levy was appointed the predicted deficit for the financial year to June 2025 was $1.4 billion, although this was challenged at the time. This was later predicted to be $1.76b in October but now has been revised to $1.1b.

Health Minister Dr Shane Reti. Photo: RNZ
Health Minister Dr Shane Reti. Photo: RNZ
The annual report for last year shows to the end of June, the deficit was $722 million rather than the originally planned $54m surplus.

Dr Verrall says the government has been manufacturing a crisis and cooking the books to justify cuts while Dr Reti says she is a crisis denier who left his government with a shambles to sort out.

Health New Zealand Te Whatu Ora is now saying it will take longer to get back within its budget, implementing its cost reduction plan over three years to get it back in the black by the end of the 2026-27 financial year.

Chief executive Margie Apa says by making cost reductions over a longer time, change can occur without compromising focus on the delivery of health, mental health and addictions targets.

Presumably, the government is fine with this, which makes it hard to understand what the scaremongering over this year’s projected deficit at the time of Prof Levy’s appointment was all about.

In his session before the committee Prof Levy insisted there were no service cuts, something greeted with laughter by Opposition MPs.

A line was being drawn between reducing staff and a cut, he said. Organisations needed to "right size". He referred to over-recruitment, particularly in management and administration.

There has also been reference to the impact to the bottom line on a rapid increase in nursing numbers. Despite the extra nurses, safe staffing, according to the Care Capacity Demand Management (CCDM) Programme which is designed to work out in real time what levels of staffing are needed, remains an area of contention, as nurses made clear during their strike this week.

All the argy-bargy over the big numbers will matter little to people languishing on surgery waiting lists with painful and limiting conditions, hanging out for new cancer treatments, waiting weeks to see a general practitioner, or working in stretched healthcare services in dilapidated buildings.

Nor will people in the South have been reassured by Dr Reti’s ducking and diving over questions to do with the Dunedin hospital rebuild.

He did not give a straight answer to Taieri MP Ingrid Leary’s questions about the possibility of selling off the new outpatient building and the involvement of public private partnerships in the hospital rebuild. Rather than make a commitment such proposals would not happen, he kept repeating he had seen no documents or evidence on these issues to date.

A positive move

It was refreshing this week to hear positive views about Health NZ’s review of rural unplanned urgent care to provide more equitable access.

The Primary Response in Medical Emergencies (PRIME) service’s national chairman Mark Eager said he was usually pessimistic about bureaucracy, but he praised the way the review had been carried out and he was expecting there to be some massive changes proposed in the final review document.

Up until now, under the PRIME service, rural general practices have been able to provide around the clock response for emergencies, but the law and the funding model allowed only those registered as ACC providers to attend callouts.

This has meant that even if they had paramedics on their staff, practices could not send those workers to emergencies such as car crashes or other accidents, leaving already over-burdened general practitioners or nurses to respond to such calls day or night.

That is expected to change later this month, allowing for paramedic cover. We hope the full review, due in February, will live up to Mr Eager’s expectations.