Budget 2022: Health gets $13.2b boost to address inequities, sector reforms

Under new government rules, three-quarters of people working in the public sector - including...
Another $76m over the next four years will be spent to boost the primary healthcare workforce by the thousands. Photo: Getty Images
Health key points
• $13.2 billion over four years including $11.1b to cover cost pressures and $2.1b on new services.
• $1.8b in new spending in the coming year to address historic cost pressures, including DHB deficits.
• $188 million for the Māori Health Authority to commission services and develop iwi partnerships.
• $102m over the next three years to provide better, earlier GP and community care and to ease pressure on hospitals.

The health sector is being given $13.2 billion over the next four years including more than $1.8b in new spending in the coming year to address historical cost pressures, boost the workforce and guide in the health reforms.

This includes $188 million for the Māori Health Authority to commission services, and $102m over the next three years to provide better, earlier GP and community care and to ease pressure on hospitals.

Another $76m over the next four years will be spent to boost the primary healthcare workforce by the thousands.

A transitional package for the new Health NZ, replacing the country's network of 20 DHBs, and the Māori Health Authority over the next four years includes $11.1b to address cost pressures and $2.1b on new services, which Finance Minister Grant Robertson called a "record" spend for the sector.

Health Minister Andrew Little said a $1.8b boost this Budget, and $1.3b locked in the following year, would go towards ensuring the new health entities "have a clean start".
That funding would cover DHB deficits, demographic changes and moving towards a nationwide health system.

Little said providing multi-year funding certainty was designed to change up the old system, that saw the 20 DHBs run deficits in 12 of 13 years since 2008, racking up deficits of more than $3.5b.

This had seen them "eat into" money that should have been spent on maintaining and upgrading hospitals, he said. A $550m deficit was forecast for this year alone.

From 2024, health budgets would move to a three-year cycle, he said.

This was in line with the first three-year health plan, due in 2024.

There was also $2.1b to be spent over the next four years on a range of different services, which included a $166m boost to ambulance services.

Other funding included $202m to mental health, $191m - across two years - for Pharmac, and $1.3b for capital upgrades (including priority services and hospitals).

The Budget also gives a $102m boost over three years for community healthcare to identify and treat issues earlier to prevent small issues from becoming big problems that could require hospital stays.

"This investment will grow primary healthcare teams around the country and allow GPs to work more seamlessly with services like physiotherapists, pharmacists and social workers to offer greater care, earlier, and closer to home," Little said.

GPs in high-needs areas are also being backed with $86m of new funding over four years so they can offer more care through improved opening hours and more appointments.

The Māori Health Authority's direct commissioning budget has been allocated $33m in the coming year and another $45m the year after. The authority would get $168m in total over four years towards delivering hauora Māori services.

This included $68m for a blended te ao Māori population health and prevention programme, $26m for specific interventions for Māori whānau at different life stages, and $74m towards a programme to identify, uplift and develop mātauranga Māori.

A further $20.1m over four years will go to developing Iwi-Māori Partnership Board represented across the new healthcare system.

"For Māori, this means reforming our health system so the health needs of Māori are met consistently," Associate Health Minister (Māori) Peeni Henare said.

"What Māori have always wanted is a health system that takes care of them and that meets their needs in a way that makes them feel comfortable, but that is not what our health system has delivered to date.

"Māori deserve to live longer and healthier lives, and that is why this Government is reforming our healthcare system, and why we established a new Māori Health Authority as part of the reform.

"Māori die at twice the rate as non-Māori from cardiovascular disease, Māori tamariki have a mortality rate one-and-a-half times the rate found in non-Māori children, Māori are more likely to be diagnosed and die from cancer, and Māori die on average seven years earlier than non-Māori."

Over the next four years $76m is allocated to developing the health workforce. This includes $37m to develop over 2500 nurses, physios, pharmacists and opticians.

Another $39m will cover the Māori health workforce development.

Funding will also go towards technological changes needed in shifting to a nationwide health system.

Budget 2022 also invests $166.1m over four years for ambulance services.

"We're ensuring that our road ambulances can continue to deliver when New Zealanders need them most," Little said.

Budget 2022 is planned to add 48 ambulances and 13 other vehicles to New Zealand's road ambulance fleet and allow up to 248 more paramedics and frontline staff to be recruited to support road ambulance services.

This includes 22 staff for the communications centre which responds to 111 calls.

"Ambulances respond to more than half a million incidents every year and they have been under significant pressure throughout the Covid-19 pandemic," Little said.

"This extra funding will ensure we continue to have a safe, effective and sustainable emergency ambulance service, delivering good health outcomes for New Zealanders."

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