Health Funding Realities

Health Minister Bill English said today the Government was protecting and expanding the public health system by increasing what it spends per person on health this year and for the next two years.

"I welcome the current debate on health spending. There is no magic number that would be the right amount for the government to spend on health," Mr English said.

"This is of course a political issue that New Zealanders as a whole need to grapple with, to determine the level of services we, as a society, expect to be publicly funded.

"What we are doing at present is consistently adding to the previous year's expenditure. This year, that means the Government has increased health funding in total but at the same time we have some large amounts of that funding already ear-marked," he said.

"For example we have sharply increased mental health funding over the last three years from $275 million to $425 million and we've made GP visits for under six year old children free and that will cost about $70 million per year in health funding.

"We've committed to improved support and health care for people with disabilities and the elderly and that will cost in excess of $1.2 billion this financial year.

"We're removing income and asset testing in public hospitals and asset testing for private hospitals which will cost $45 million. We've removed hospital part charges and must pick up the tab for about $7 million for that," he said.

"The simple reality is the more we spend in these areas and on medicines and drugs, the less we have for hospitals.

"This total health funding that we now have to work with in health was personally negotiated by Mr Kirton, as part of the Coalition process," Mr English said.

"Per capita health spending in real terms in 1988/89 was $1367 and in 1997/98 it is $1434. The projections over the next two years are for $1478 and $1534 per capita," he said.

"In 1988/89, total health expenditure in real terms was $4.535 billion; in 1996/97, the figure was $4.942 billion; in 1997/98, the figure is $5.261 billion and for the next two years up to the millennium the Government is budgeting for annual spending of $5.475 billion and $5.735 billion.

"Total CHE operating costs were $2.64 billion in 1993/94 and $3.03 billion in 96/97. This is an increase of $396 million or 15 percent," Mr English said.