New retirement survey seriously underestimates health costs

16 August 2012

New retirement survey seriously underestimates health costs, says Southern Cross CEO

Southern Cross Healthcare Group CEO Ian McPherson said the New Zealand Retirement Expenditure Guidelines, released today by Westpac/Massey University, paint a vastly unrealistic picture of the true cost of Kiwi’s healthcare in retirement.

“We fully support this project and its aim to help New Zealanders adequately save for retirement. However, if tomorrow’s retirees were to budget based on current levels outlined in the report, this would have serious implications for the Government, DHBs, and individuals long-term.”

“Our public health system is already stretched to capacity by people using emergency rooms as GP clinics. Basic healthcare is not a ‘nice to have’ like a restaurant meal - good primary healthcare is vital to stopping much more serious health problems developing.”

“Even expenditure outlined in the report’s “Choices” budget for health does not come close to covering the multiple healthcare costs individuals face today – let alone the future.

“The report infers that New Zealanders expect to receive elective services for free through the public system – when the reality is over half of all elective surgeries are currently undertaken in private through insurance of self-funding.”

What the report also doesn’t recognise is the significant changes that will happen in healthcare funding and provision as the population ages and the number of tax payers shrink.

Perhaps no one wants to admit it, but the reality is that our country is likely on an unsustainable spending path with public health funding. It will be very difficult for the taxpayer to continue providing public elective services to the level it is today.”

“New Zealanders will need to take more personal responsibility for their healthcare needs, and I strongly believe the level required will be higher than the level outlined in this report. We need to start making adequate provision, otherwise we will all be taking a huge gamble with our future quality of life.”

McPherson said elective surgery could be expensive. A cardiac bypass in private could cost around $38,000 - $60,000, and a hip replacement $18,000 - $28,000.

“As a not for profit organisation, we are looking to help with solutions. We are already taking a number of steps to help mitigate the rapid cost increases in healthcare. We’ll also be talking with Government about ways to assist all New Zealanders to provide for health costs in retirement, whether through health insurance, health-specific savings or other mechanisms.”

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