26 May 2016

New health spend addresses symptoms but not core problems

While the Minister of Health has done well to negotiate a $400 million budget increase to the healthcare sector in Budget 2016, the new spend only addresses symptoms and is not tackling core problems, according to Deloitte.

Deloitte partner Thorsten Engel says the additional funding may be enough to maintain the supply of quality healthcare services and address population growth and ageing for now but is unsustainable long term.

“Over half of the new money is to be spent increasing the numbers of doctors and nurses. But we are simply throwing more workforce at the problem instead of tackling system inefficiencies and imbalances in the sector,” says Mr Engel.

Mr Engel says we are overly reliant on hospital care in New Zealand and compounding this challenge is the fact that our hospitals aren’t very efficient compared to other countries.

“Our hospitals lack a digital blueprint, run old computer systems and are highly reliant on manual and labour intensive processes,” he says.

“Ensuring that funding is made available to make the necessary transformative changes is crucial to ensuring the successful delivery of the National Health Strategy. We need to start addressing the fundamental inefficiencies hardcoded into our health system.”

“Some World Health Organisation researchers estimate that our healthcare system could potentially deliver the same outcomes for 20-25% less cost on a like-for-like basis. Now would that not be a prize worth aiming for with our Budget initiatives?” concludes Mr Engel.

Deloitte’s team of experts look at today’s budget announcement, particularly how it relates to the long-term success of New Zealand. For our full Budget 2016 commentary and analysis go to www.deloitte.com/nz/2016budget.

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