Study shows removing $5 prescription co-payment generates around $18 of savings in hospital costs for every $1 lost in co-payments revenues; Labour looked at removing it in 2019/20, but did nothing
I’m glad it’s been looked at more holistically much like there should be universal lunches in schools. It’s usually the women of the families covering everyone’s needs, children, elderly, whilst on lower or no wages, and many men abdicate these obligations or literally fight to avoid their obligations under the PRA 1976, Child Support Act 1992 and Family Proceedings Act etc preferring their personal interests. Then offloading these support for unpaid and reproductive labour and their obligations onto women alone, children or taxpayers if they possibly can get away with it. Most do. So these types of policies will improve things for the most vulnerable, women, elderly and children as well as improving the cost of health outcomes. Until the equity issues are worked on to ensure support is arranged via Justice, IRD, Courts , legal aid these ambulance at the bottom of the cliff policies are needed to improve health and food security issues in NZ Aotearoa. Obviously doing two or more jobs is not sustainable for women.
Chemist Warehouse & Countdown must love this – as it has supported their takeover of the NZ market. I know a few local pharmacies have closed down as a result of them.
Obviously being private profit-driven enterprises, Chemist Warehouse and Countdown must see a net positive from their loss-leading offer. The inequality here is the access to these 'free' options. As with most of these personal cost-saving options, it's usually those with the flexibility and access who can take up these offers with the least cost. Travelling out of your way to access such a saving will likely cost you more in time / fuel etc than the potential savings which keeps it in the too hard / too costly basket.
This sort of high-level government decision making sits right up there with why we don't fund things like ambulances and dental. /sigh
Do we need to sack Treasury and start again? It feels like the NZ economy is full of penny wise, pound foolish decisions. Externalities are uncosted all over the place. Discount rates are too high in cost benefit analyses. Corporates not paying their share (like taking Covid wage subsidies and not repaying them when they made record profits). We need government to take a long view. Imagine if we embedded Te Ao Maori to the point where we considered every decision with a 500 year view. Aotearoa would be transformed. Dairy would shrink to the fraction required for our glass of milk and piece of cheese (not milk powder to coat potato chips), Tiwai point smelter would close, junk food would be heavily taxed, all homes would be warm and insulated and we wouldn't build houses on bloody flood plains, people would be invested in rather than allowing people to languish in poverty and desperation. If the Labour Party who puports to care about this stuff can't bring itself to make major changes when it has a majority in Parliament, I don't know what's going to create change. The past two terms have been a wasted opportunity because no one was thinking big. Don't scare Ford Ranger man. Forgetting that he's never going to vote for them anyway! I'd love you to open this one up, Bernard, sunlight being the best disinfectant...
This is a really important analysis - thanks! The 'prevention' portion of the public health toolkit is consistently and thoroughly under-invested in despite having a positive ROI in the long term. Underinvesting in the prevention of ill-health is a sure way to keep pressure piling into the medical treatment model (eg. hospitals). This all makes no sense especially when Treasury operates on a wellbeing framework. Long term, systems-based vision required. And the courage to act on the key drivers within the system (like this one and many other examples public health researchers regularly call for action on) in the knowledge that improved wellbeing may not show until after your re-election cycle
Feb 7, 2023·edited Feb 7, 2023Liked by Bernard Hickey
Not to mention the $20-30 most GPs charge for a "repeat script" that is required every 3 months, even for long-term medications (eg insulin). In Australia, a prescription is good for 12 months, similar to the US. To have to do this every 3 months is a huge waste of time and resources, and really does get expensive if multiple family members needs scripts, as mine does. I definitely get my family's scripts filled at Chemist Warehouse (~8 scripts total) and am happy to also pick up some shampoo and sunscreen.
Parents should be responsible for housing, feeding and clothing their children. If they cannot then they should stop making more of them.
The state is responsible for primary and secondary schooling, and health including dental and contraception. With no school fees, GP or prescription charges or other top-ups.
In the interim there may need to be some crossover such as school lunches, or school uniforms that are an extra layer (sorry about the pun) of clothing expected of the parents.
Excellent analysis of both stripes of government’s bone headed retention of such a inequitable part charge. Why purse the dissolution of the DHB’s and leave this nonsense in place, same applies to free dental care for adults $760 million to avoid the poor pulling out their own teeth with pliers.
With friends like The Treasury providing high level policy advice, and Ministers apparently too diffident to exercise their responsibilities, who needs enemies?
The mechanism by which removing the $5 fee improved health outcomes is surely that people getting the free medicines were more likely to collect or take them. The cash benefit topped out at $100, which is pretty trivial. It's the price effect, not income effect, that matters here.
In that case, why didn't the study authors report directly on medicine use by the intervention and control group?
They had access to that data. They used it to ensure the baseline characteristics of the control and intervention groups were similar (bottom rows of Table 1 in their study).
It seems curious that they wouldn't report on the obvious intermediate outcome between policy intervention and health outcome.
Given the under-powered sample, it could be that these dramatic numbers for admissions and hospital nights are just an artefact of random chance or biases in the characteristics of control vs intervention groups.
"Chemist Warehouse and Countdown have done more to reduce the stress on our health system than Treasury or politicians of both parties."
Both flavours of government should have a long hard look at themselves and what they're doing.
I’m glad it’s been looked at more holistically much like there should be universal lunches in schools. It’s usually the women of the families covering everyone’s needs, children, elderly, whilst on lower or no wages, and many men abdicate these obligations or literally fight to avoid their obligations under the PRA 1976, Child Support Act 1992 and Family Proceedings Act etc preferring their personal interests. Then offloading these support for unpaid and reproductive labour and their obligations onto women alone, children or taxpayers if they possibly can get away with it. Most do. So these types of policies will improve things for the most vulnerable, women, elderly and children as well as improving the cost of health outcomes. Until the equity issues are worked on to ensure support is arranged via Justice, IRD, Courts , legal aid these ambulance at the bottom of the cliff policies are needed to improve health and food security issues in NZ Aotearoa. Obviously doing two or more jobs is not sustainable for women.
Chemist Warehouse & Countdown must love this – as it has supported their takeover of the NZ market. I know a few local pharmacies have closed down as a result of them.
Obviously being private profit-driven enterprises, Chemist Warehouse and Countdown must see a net positive from their loss-leading offer. The inequality here is the access to these 'free' options. As with most of these personal cost-saving options, it's usually those with the flexibility and access who can take up these offers with the least cost. Travelling out of your way to access such a saving will likely cost you more in time / fuel etc than the potential savings which keeps it in the too hard / too costly basket.
This sort of high-level government decision making sits right up there with why we don't fund things like ambulances and dental. /sigh
Do we need to sack Treasury and start again? It feels like the NZ economy is full of penny wise, pound foolish decisions. Externalities are uncosted all over the place. Discount rates are too high in cost benefit analyses. Corporates not paying their share (like taking Covid wage subsidies and not repaying them when they made record profits). We need government to take a long view. Imagine if we embedded Te Ao Maori to the point where we considered every decision with a 500 year view. Aotearoa would be transformed. Dairy would shrink to the fraction required for our glass of milk and piece of cheese (not milk powder to coat potato chips), Tiwai point smelter would close, junk food would be heavily taxed, all homes would be warm and insulated and we wouldn't build houses on bloody flood plains, people would be invested in rather than allowing people to languish in poverty and desperation. If the Labour Party who puports to care about this stuff can't bring itself to make major changes when it has a majority in Parliament, I don't know what's going to create change. The past two terms have been a wasted opportunity because no one was thinking big. Don't scare Ford Ranger man. Forgetting that he's never going to vote for them anyway! I'd love you to open this one up, Bernard, sunlight being the best disinfectant...
I feel like this summarises the NZ approach to everything not just prescriptions, infrastructure, mental health and climate
This is a really important analysis - thanks! The 'prevention' portion of the public health toolkit is consistently and thoroughly under-invested in despite having a positive ROI in the long term. Underinvesting in the prevention of ill-health is a sure way to keep pressure piling into the medical treatment model (eg. hospitals). This all makes no sense especially when Treasury operates on a wellbeing framework. Long term, systems-based vision required. And the courage to act on the key drivers within the system (like this one and many other examples public health researchers regularly call for action on) in the knowledge that improved wellbeing may not show until after your re-election cycle
I wonder if Ayesha Verrall has read the Otago University report. do Labour cabinet ministers read your posts?
This is shameful.
The evils of Thatcherism reach far and long....
Add the current approach to covid: removing free GP visits and more, as Marc Daalder reports on Newsroom
https://www.newsroom.co.nz/covid-19-health-funding-quietly-halved
-Sharon
Not to mention the $20-30 most GPs charge for a "repeat script" that is required every 3 months, even for long-term medications (eg insulin). In Australia, a prescription is good for 12 months, similar to the US. To have to do this every 3 months is a huge waste of time and resources, and really does get expensive if multiple family members needs scripts, as mine does. I definitely get my family's scripts filled at Chemist Warehouse (~8 scripts total) and am happy to also pick up some shampoo and sunscreen.
Great analysis. The charge makes no sense if look at 'whole pie'. So often only look at small slice.
The social contract needs to be re-written.
Parents should be responsible for housing, feeding and clothing their children. If they cannot then they should stop making more of them.
The state is responsible for primary and secondary schooling, and health including dental and contraception. With no school fees, GP or prescription charges or other top-ups.
In the interim there may need to be some crossover such as school lunches, or school uniforms that are an extra layer (sorry about the pun) of clothing expected of the parents.
Excellent analysis of both stripes of government’s bone headed retention of such a inequitable part charge. Why purse the dissolution of the DHB’s and leave this nonsense in place, same applies to free dental care for adults $760 million to avoid the poor pulling out their own teeth with pliers.
Great analysis. Thanks again Bernard.
With friends like The Treasury providing high level policy advice, and Ministers apparently too diffident to exercise their responsibilities, who needs enemies?
The mechanism by which removing the $5 fee improved health outcomes is surely that people getting the free medicines were more likely to collect or take them. The cash benefit topped out at $100, which is pretty trivial. It's the price effect, not income effect, that matters here.
In that case, why didn't the study authors report directly on medicine use by the intervention and control group?
They had access to that data. They used it to ensure the baseline characteristics of the control and intervention groups were similar (bottom rows of Table 1 in their study).
It seems curious that they wouldn't report on the obvious intermediate outcome between policy intervention and health outcome.
Given the under-powered sample, it could be that these dramatic numbers for admissions and hospital nights are just an artefact of random chance or biases in the characteristics of control vs intervention groups.