5. Hon TONY RYALL (National—Bay of Plenty) Link to this
to the Minister of Health
Does he have confidence in the quality of spending in the Ministry of Health; if so, why?
Hon PETE HODGSON (Minister of Health) Link to this
Generally speaking, I do. However, I have no doubt that pockets of poor quality spending still exist somewhere in the system.
Will the Minister explain why, despite Helen Clark’s pledge to cut a swathe through the health bureaucracy, the payroll of the Ministry of Health has rocketed by over 55 percent in the last 6 years?
I remind the member of two facts. The first is that the amount spent on the Ministry of Health in this country today is 1.82 percent of the total health budget. That means that about 98.18 percent of the health budget passes straight through the ministry and out into the sector. The second fact is that during the 1990s we had four regional health authorities, then one Transitional Health Authority, then one Health Funding Authority. That was big bureaucracy, and it has all gone.
Lesley SoperHow does value for money in the New Zealand health system compare with that of other Western nations?
That is a very good question, a very important question, and the answer is that we compare very well. If we look at value for money in the New Zealand health system and compare it with that of the rest of the Western World, we see that we are way ahead of the pack. One or two countries are better than us, and Japan comes to mind, but we are better than nearly all of them. What is more, if we compare ourselves with the United States of America—and the National Party would have our health system head towards that of the USA—we find that, per capita, the USA expends almost exactly three times what we do on health, but New Zealanders live a little longer than Americans do.
How is it cutting a swathe through the health bureaucracy, as was promised by Helen Clark, that over the past 6 years the Ministry of Health has employed an extra 250 staff—a 24 percent increase—but the payroll has gone up by 55 percent?
The member just does not get it. The swathe that was cut through the bureaucracy of the health system was the taking out of the entire Health Funding Authority—the entire Health Funding Authority. Now we have all of the functions of the ministry—all of the policy functions, all of the regulatory functions, all of the payroll functions, all of the information technology systems, and much more than that—done for less than 2 percent of the health budget. I do not know another country that does better than that. I would like the member to point out one that can do as much as our Ministry of Health does on as little money as it gets.
Should not the Minister admit that he is being completely disingenuous, because all the changes that he has talked about have happened already, in the last 6 years; and why does he keep adding more very expensive bureaucrats to the Ministry of Health, which Helen Clark described as bureaucratic and top-heavy, and where the number of staff earning over $100,000 a year has more than doubled in the last 6 years?
Let me disturb the member with this further, uncomfortable fact: not only is the proportion of health expenditure used by the Ministry of Health less than 2 percent—it is actually 1.82 percent—but it used to be higher. Only last year it was about 1.85 percent, and earlier than that it was higher than that. And it is proposed that it will drop further. In fact, there are 10 health targets for our health system, and target No. 10 is that we reduce expenditure on the Ministry of Health even further, to 1.65 percent. The member has decided to pick on precisely the wrong aspect of health expenditure in this country; we run a very cost-effective ministry.
Why has the Minister not followed Helen Clark’s diagnosis of the Ministry of Health: “Never have so many people been employed to do so little.”, with the situation now being that if bird flu strikes, there will be a public hospital bed for every bureaucrat in the health system?
I am going to say it one more time: the Prime Minister said that a big swathe of bureaucracy needed to be taken out of the health system, and it was: it was called the Health Funding Authority, previously known as the Transitional Health Authority, which was previously known as four regional health authorities. But, whatever they were called, those bureaucracies now do not exist. We have ourselves one ministry and 21 district health boards, and that is that.
How is it cutting a swathe through the health bureaucracy, which the Prime Minister promised, that the Ministry of Health in the last 6 years has employed 250 staff—a 24 percent increase—but the payroll has gone up by 55 percent?