16 March 2005

Health Bureacracy Costs Set To Mushroom

The folly of creating yet another layer of bureaucracy in the health system with inadequate research into downstream costs is now becoming obvious, says New Zealand First health spokesperson, Barbara Stewart.

“The Government’s lack of financial accountability in health spending has been illustrated yet again by the revelation that the Ministry of Health will make $3 million more available in 2005-2006 for small PHOs with financial difficulties because their administrative costs are up to four times more than current ministry funding.

“PHOs are paid management fees to fund their boards and administration and business overheads. The fees are $9.46 for the first 20,000 people enrolled and then $4.60 each for 20,000-75,000 but, according to a report commissioned by the Ministry, most small PHOs have found their funding to be inadequate,” said Mrs Stewart.

“This should make every taxpayer’s blood run cold – it is almost certainly the forerunner of more bailouts.

“The Minister’s usual ploy of blaming the district health boards for every financial disaster in the health system will not work on this occasion – the PHOs were created on her watch and the buck stops with her,” said Mrs Stewart.

ENDS

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