Monday, January 25, 2010

Health spending - the rationing can only increase

It would be possible to embark on a similar exercise using NZ statistics but let's just rely on the work the Australian Treasury has already done. According to the Age;

FEDERAL Government spending per person on health will rise in real terms from $2290 today to $7210 in 2050, with state governments at risk of being overwhelmed by rising costs, Prime Minister Kevin Rudd has said.

Treasury projects that, on present trends, the total health spending of all states will exceed all of their tax revenues, excluding the GST, by 2045-46, and possibly earlier in some states.

Our government spending is currently $2876 per person. This cannot be compared directly because in Australia the states spend individually on top of the federal government. But it is the projected increase that is important.

In the mix are new technology, price inflation and, most importantly, the ageing population. If a much bigger chunk of the population is 'old' the average spend increases. This is progressively happening against a backdrop of recession or the lag from it.

I understand that our DHBs have been told that they are only getting a little over 1 percent of increased funding this year. It is already very tight. And it's going to get much tighter.

So it is no surprise that the government is going to fight the Human Right's ruling regarding payment for the care of disabled adult children by their parents or that some DHBs are looking for other sources of revenue.

Just as an aside looking at the health spending projections there is no allowance for an increase ($13.4 billion in 2010 to ...$13.4 billion in 2015). On the other hand social security and welfare spending equivalent figures are $21.1 billion to 24.6. Why the big difference? Yes some of the welfare increase is Super but that means the country is forecasting for old-age pensions but not the healthcare needs of the pensioners. That's a worry. I would prefer to see budget limitations being put on Work and Income. When is that going to happen?


wino said...

"Our government spending is currently $2876 per person" I suppose that includes all the pen pushers and the ads to tell you to move it... I actually had a quick add up a week or two ago on how much my health care cost last year. It was relatively easy because I have been on a tablet form chemo that comes complete with a full price on my label (and it is an old drug so really dirt cheap), had to guess at the cost of blood tests and what it would cost to see an oncologist privately but think I was reasonably close... it was less than $2876!

wino said...

But I agree with you the health budget shouldn't be constrained when other things could be cut!