A post-Budget analysis of Vote Health funding has confirmed that health spending as a proportion of the economy continues to fall well short of what is needed.

Jointly conducted by the Council of Trade Unions and the Association of Salaried Medical Specialists, it estimates Vote Health has lost $1.6 billion spending power in the past decade.

It comes as a newly released Ministry of Health financial report puts projected District Health Board deficits at $508 million this year.

ASMS Executive Director Ian Powell says the analysis provides a much-needed audit of health funding in a time of crisis in health.

“All but one DHB, South Canterbury, is now in deficit, yet Health Minister David Clark continues to imply the fault lies with our cash-strapped and stressed DHBs by saying he doesn’t think deficits are inevitable.

“Deficits are inevitable due to the structural underfunding in health that is causing distress and leading to high rates of burnout among senior doctors.

“Dr Clark’s other tactic is to blame National’s nine years of underfunding for the DHBs’ plight, but while true, it’s no longer credible for the Government to run that argument while not rectifying the problem.”

Key findings of the analysis include:

• Compared with last year, health in 2019/20 is an estimated $134 million behind what is needed just to stand still.
• DHBs received an estimated $139 million less than needed for anticipated increased costs and demographic changes during the year.
• The accumulated funding shortfall over the last decade in annual spending power is estimated to be $1.6 billion (between 2009/10 and 2019/20). In the next Budget the Government will need to find over $2.5 billion extra for 2020/21 in order to restore the value of funding to the 2009/10 levels.
• The Health budget is forecast to remain static as a proportion of the economy, or Gross Domestic Product (GDP), compared with last year.
• National Mental Health Services received $73 million additional funding compared to the 2018 Budget, but DHB ring-fenced funding for specialist mental health services received $55 million less than what it needed to cover cost increases, pay settlements and population growth.

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