New Zealand spends just 4.9% of its health budget on medicines, compared with 12.2% in Australia and an OECD average of 13.3%. Australia funds 142 modern medicines that New Zealand does not, with 38% of those being cancer medicines.
But spending less on medicines does not mean those costs disappear. We often pay elsewhere through avoidable hospital admissions, procedures, specialist care and more intensive treatment. Families pay too, through private prescriptions, travel, lost income and time away from work or school. Often spending more on an effective medicine is simply a better place to spend the money.
Therefore the real question should be answered through a proper cost-benefit analysis, not simply by looking at the price of the medicine in isolation. That analysis must include the cost of avoidable hospital admissions, procedures and specialist care, as well as the wider economic and social costs when people cannot work, children miss school or families drain their savings to access treatment privately. Once those costs are properly accounted for, funding a more effective medicine may not only deliver better outcomes for patients but represent better value for the health system and the country.
Now that Pharmac has gone through a much-needed reset, it should absolutely be expected to negotiate hard and make disciplined, evidence-based decisions. But there is ultimately a limit to what better management and purchasing efficiency can achieve. If we want New Zealanders to have access to more modern medicines, we also have to allocate more money to medicines.
That is why the strength of Act’s proposal is not simply another funding injection. It builds on work the Government started early in its term, first securing Pharmac’s existing medicines budget and then investing a further $604 million over four years to fund and widen access to new medicines, including cancer treatments. Act’s proposal takes the next step by establishing a longer-term pathway: progressively increasing medicines expenditure until New Zealand reaches Australian parity by 2033.
There are legitimate questions about the details. Seven years is a very long time if you are sick today, and any commitment extending that far depends on sustained political support. But the underlying diagnosis is difficult to argue with: New Zealand has underinvested in medicines.
Which is why I think Labour should reconsider its proposal for three free GP visits each year for every New Zealander. I understand the headline appeal. It is simple, easy to communicate and politically attractive. But as health policy, I think it risks being bad for patients, clinicians and the system because it will undoubtedly increase demand without addressing the underlying constraints.
Free GP visits will not create more GP appointments, says Cecilia Robinson. Photo / 123rf
In general practice, the constraint is not simply price. It is whether a clinician is actually available. Making millions more consultations free does not create millions more consultations. If demand rises without increasing clinician supply, the result is longer waits, greater workforce pressure and more competition for the same finite number of appointments.
Increasing capacity therefore has to be part of the response. At Tend, we already use all of the approaches Labour is proposing – and more – including technology and AI, virtual care, smarter triage and different workforce models.
Those interventions work, but much of the capacity they create has gone into making clinical work more sustainable rather than simply adding more appointments. The GPs across our network tell us that it means getting home for dinner, stopping for lunch and not spending weekends catching up on paperwork. That is not wasted capacity. It is part of retaining the workforce we already have.
If cost is stopping someone from accessing care, we should absolutely address it. But that means targeting support towards people for whom cost is a genuine barrier, not universally subsidising those who can already afford care. So please, don’t use scarce health funding to pay for my GP visits. Put it where it can make a greater difference, including improving access to medicines.
That may sound like an odd argument coming from me. Three free GP visits for every New Zealander would no doubt benefit primary care businesses, including ours. But I do not believe it would ultimately deliver the best outcomes for our people or our health system.
Every health dollar has an opportunity cost. The question is where the next dollar makes the greatest difference to New Zealanders’ health. Three free GP visits sound good, but are universal subsidies really the best use of hundreds of millions of dollars when patients still cannot access clinically valuable medicines and parts of primary care are struggling to meet existing demand? I don’t think they are.
Some of the Government’s recent changes show what good health reform can look like: identify the real barrier, remove unnecessary steps and allow patients to receive care in the simplest safe setting.
We should apply exactly the same discipline to where we spend our health dollar. Act has put a credible mechanism on the table. National, Labour and others should challenge the detail, improve it and make sure it is sustainable.
But the objective should become bipartisan. Because the best health policy is not the policy that gives everyone the most things. It is the policy that removes the barriers that matter most and directs scarce resources to where they can make the greatest difference to people’s lives.
And we should be willing to challenge policies that do the opposite. Three free GP visits for every New Zealander may be an appealing election promise, but good health policy should be designed around the needs of patients and the constraints of the system, not around what is easiest to put on a billboard.
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