Budget 2020 Health Summary

Today's Budget 2020 announcements by the Minister of Finance commits nearly an additional $4 billion to Vote Health

Already signaled by the Ministers of Finance and Health ahead of today's full budget announcement, New Zealand's District Health Boards (DHBs) have received an additional boost of approximately $975 million per year for the next 4 years.

In fact, the full budget release by the Minister of Finance at 2pm today contains total operating funding of nearly $5.65 billion over the forecast period from 2019/2020 to 2023/24 (average of $1.1 billion per year). Furthermore, capital expenditure over the next 10 years has been increased by $755 million.

Along with the additional funding to DHBs other services in the health and disability system to receive increased allocations spread over the next four years includes Primary Care ($95.6 million), Ministry of Health ($82 million - $10 million for 2019/20 & $18 million/year to 2023/24), Pharmac ($190 million), Maternity Services ($70.5 million), Disability Support Services ($839 million), Well Child Tamariki Ora ($71 million).

These are the areas receiving large amounts of additional funding and there are a number of other services that have received lesser amounts.

Below are the overviews for each of the main areas of additional funding and a full summary of all these services can be found here.

Overall, the total Vote Health budget for the 2020/21 period will exceed $20 billion (without providing for deficits that may or may not be brought under control during this period). This is an increase of $5 billion on the 2015/16 period (average of $1 billion per year).

Digital Health Investment
An initial review of the Budget 2020 Vote Health Appropriations for 2020/21 shows there are no specific new areas of funding applied to digital health initiatives or investment. As usual, the expenditure in this area across the health and disability system is absorbed across each of the DHBs and the Ministry of Health total appropriations.
This makes it extremely difficult to identify the levels of investment being applied across the sector, let alone what amounts are being targeted towards new initiatives.
However, on the basis of previous estimates the total health IT expenditure across the DHBs is somewhere in the vicinity of 2.5% or $350-$400 million for the 2020/21 year (based on total of $15.274 to DHBs, 75.4% of total Vote Health). As previously reported this is a shortfall of 2.3% on the global average of 4.8% of health IT expenditure, or $300-$350 million.
The important part that digital technology plays in the delivery of health and disability services has been in particular evidence during the COVID-19 pandemic.
There is no doubt that its importance will continue to grow over the next 5 years and this needs to be recognised by increased investment to create full tech enablement of a world class health system for all New Zealanders.
Given even the current (under-invested) amount of expenditure there needs to be a specific appropriation line for digital health technology investment.
Only then will it be possible to clearly measure and manage this significant enabler of the health and disability system whilst creating a pathway of increased investment to advance digital technology towards full enablement and future-proof New Zealand's healthcare services.

Main Areas of Additional Funding

District Health Boards - Additional Support ($3.9 billion)

This initiative improves, promotes and protects the health of New Zealanders by providing funding to maintain DHB services, such as hospital care, mental health support, primary health care and support for older people. This funding will enable DHBs to continue providing health services for New Zealand's growing and changing population in the face of price and wage inflation.

District Health Boards - Capital Investment ($755 million)

This initiative provides a pool of funding that will be used for priority capital projects within the health sector. The funding will support the delivery of safe and appropriate healthcare by providing facilities, infrastructure and technology that can appropriately meet current and future demand.

Enhancing the Ministry of Health's Capacity and Capability to Lead and Support the Health and Disability System ($82 million)

This initiative provides funding to support the Ministry of Health to have the right resources (tools, systems and people) to fulfill its roles and responsibilities as kaitiaki and steward of the health and disability system.

Primary Care - Maintaining Access to Primary Health Services for New Zealanders ($95.6 million)

This initiative provides funding for the estimated growth in the number of people enrolled in Primary Health Organisations, including increased growth in targeted primary care programmes that provide affordable access for low-income New Zealanders (for example, Zero Fees for Under 14s and the Very Low Cost Access scheme). This will contribute to addressing inequitable access to primary care by retaining reduced patient co-payments for high-needs populations.

Supporting Disabled New Zealanders to Live Good Lives ($839 million)

This initiative will maintain services for people with long-term physical, intellectual and/or sensory impairment who require ongoing support, by funding price and volume pressures in response to increased demand on Disability Support Services (DSS). These services help disabled people live with the same dignity expected to be available to all New Zealanders.

Well Child Tamariki Ora - Maintaining Universal Health Service for Children and their Families From Birth to Five Years ($71 million)

This initiative provides funding to meet price and volume pressures facing providers of the Well Child Tamariki Ora (WCTO) programme, including Plunket, District Health Boards and B4 School Check providers. This will support providers to deliver sustainable and equitable services to improve child wellbeing.



Posted by

Scott Arrol

Chief Executive Officer

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