Spending on health may not be enough

Is the Government spending enough money on Health? Most people say Government should allocate more money to Health but few are prepared to suggest just how much more Government should be spending and in what areas.
In the Executive Summary of their report to Government tabled with Cabinet on Tuesday, the Health Management Review Team (Debbie Sorensen and Dr Aumea Herman) found that the increased expectations of patients and families regarding the standard and level of care provided continues to rise as the population becomes more knowledgeable about health issues and is exposed to health service provision in New Zealand and Australia.
One of the Review Team’s briefs was to make recommendations on preferred mechanisms for planning, funding and managing the Ministry.
The team found that the most significant challenge is the ability of Government to provide a robust, sustainable health system that is affordable for Government and the community.
According to the team, the current spending on health as a percentage of GDP is 3.8%. International benchmarks indicate it is desirable to spend between 6-10% as a minimum.
BUDGET
In the 2006/2007 Budget, the total appropriation for the Health Ministry was $9,409,870. Health ranked fourth on the list of big spenders after Outer Islands -$11.6 million, Education -$ 10.4 million and Internal Affairs - $10.2 million.
Back to the question, is this enough? Well it seems we don’t really know because we lack proper financial systems.
The Review Team said the budgeting process requires urgent attention. Core financial information such as trends in spending and strategies to ensure efficiencies should form the basis of budget discussions including realignment with the Health Strategy.
Currently, the system is not able to produce what would be expected as core baseline financial information such as cost per bed and cost per patient. The team said the population remains relatively static therefore an expectation of increasing hospital costs cannot be maintained.
According to the team, a Health Financing Project would enable Government and the Ministry to feel confident that the costs in the system are identified, the health spend was appropriate relative to Government revenue and that a sustainable financial system is in place. (Recommendation 4.4 under Financial and Management reporting mechanisms).
The team also says a funding allocation methodology is required that ensures adequate funding to the outer islands. (Recommendation 4.6).
The Review team also recognised the financial input of Donor organisations and community fundraising activities.
Under the 2006/2007 budget, aid contributions in the health area by donors saw the European Union making the largest contribution with $803,560 followed by WHO (World health Organisation) with $679,669.
One area of concern relates to lifestyle diseases. Although the team did not comment on what increase in spending if any, may be likely, it recognised the impact these diseases would have on the health system.
According to the team, diseases of lifestyle continue to be the most serious challenge to the health and well being of people, including obesity, diabetes, cardiac disease and respiratory disease. The increasing rates of cancers and the ability to intervene early and provide curative care is a major challenge to the health system.

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