Can you afford good health?

February 2007

Can you afford good health? Doctors' fees are not a problem for me, with a decent income all to myself, but how would a family on a less substantial income ever survive? I know of discounts by way of Family Support and Community Services, but I still can't see how the poor can afford decent healthcare. Can anyone shed any light on how this works, or are the poor just shafted once again?

Nato commented:

Perhaps a family on a less substantial income would spend less money on stuff they don't need? When you earn lots of money, you buy lots of stuff, and forget that a lot of what you get isn't really needed. It's all about hedonistic adaptation. So perhaps it seems like they'd have difficulty, but that's because you're used to your current income level?

I wonder if someone has done a study on this - I imagine not being able to recieve medical would be the target of a lot research. If we had numbers, we could see that either (a) familys usually afford medical care, in which case we can ask why medical care seems so expensive to us, or (b) that a lot of people miss out, in which case we can begin to ask what should be done to try and fix it (especially as we have a fairly left wing government, which subsidises public health).

Matt commented:

Maybe… that said, healthcare cost me $150 in two days. Would a family have that much expendable income available at that little notice?

Michael commented:

Mental healthcare?

Nato commented:

Well, I do know that the government subsidizes doctors for patients they have on their books. I think children get more funding, as do the elderly. So perhaps whatever it was would have been cheaper if you were poor?

But yeah. What's to be done about it?

stan_ commented:

  1. stop spending taxpayer money on drugs, alcohol and cigarettes
  2. get put on the government waiting list and possibly die in the process due to the government's anti-competitive policy against the private sector which cloggs up the public health system

Matt commented:

Stan, this has been said before, but the USA makes a pretty damn good case against privatised health care.

stan_ commented:

no it doesn't because although there are problems in their health system comparably it is one of the best in the world and it's much better than our third world system where some people fail to see how corrupt it is (billions of increase in government spending each year with pathetic improvements) and how many people are dying far in excess of the "poor not being able to afford it in the US" (which is not true anyway because they have a government assistance scheme there where you're only unable to afford healthcare out of ignorance of it, and they have a lot of charities), plus if you want to look at a good example of a privatised health system look to a country that did it right, like Singapore. and plus, it's not so much about making our system like the US', but not being anti-privatised health, for fuller details visit http://www.act.org.nz/policy_health.aspx

stan_ commented:

hey Matt i just checked out Labour's policy, if you look at http://labour.org.nz/policy/health/index.html you'll see that all their policies involve increased spending, and they claim services have improved but ignore a lot of the controversies that have happened since they came into power in 1999, increased spending definitely isn't the solution because it's economically unsensible. if you want to understand why government spending is bad for the economy (and as a result, bad for people in general) as a whole you can check out this lecture Rodney gave last year at Canterbury - you'll have to put up with pokes at Labour but the overall message is important http://media.libsyn.com/media/ucecon/rodneyehyde320240.mp4

Matt commented:

Stan, you'd be far more convincing if you had a source other than the most extreme-right political party in NZ. You seem to treat ACT's propaganda as gospel.

stan_ commented:

what the heck, that is such an ignorant thing to say. it's like telling Christians to have some other source other than the most oldest book the Bible. i take the source from them 'cos they're the only party in Parliament that takes economics into account when deciding on policy

Matt commented:

Ah, yes.

Brehaut commented:

Certainly smells like rational arguments, this must be the internet!

Amy commented:

Hey Matt,

In terms of healthcare in South Auckland (where we tend to see third world diseases) we have free healthcare to a certain extent. There are g.p clinics set up for those who cannot afford, so that they pay what they can. As for families; under six year olds are free wherever you go and certain clinics offer significantly reduced prices for under sixteens if you have a community services card. And in poorer areas if you make a certain g.p your primary healthcare practitioner then g.p visits only cost you $15 and as was earlier mentioned, g.p visits are subsidised for the elderly.

Also, you can present yourself for free to E.D yes there may be a six hour waiting time but you will still get treated including x-rays, CT scans, MRI's, bloods etc for free. . Now I'm not sure what the g.p's are like down in the south, but there are definitely alternatives.

I'm not saying at all that we have the perfect healthcare system, working in it myself I am well aware of the flaws, each week we see children who are ill because of abuse, neglect or poverty. And I am suspiciously on the fence in the public vs private debate, but it is good to note that we are doing somethings right and technically the poor should never be shafted due to healthcare.

However, the question is whether they have the information to access this, and if they supposedly do how come rheumatic fever is eradicated in every other first world country bar ours when all it would take is simple antibiotics to treat strep throat? And how come we are still seeing children die of dehydration...?

stan_ commented:

Phil Rennie from The Centre for Independent Studies has today published a paper called "New Zealand's Spending Binge".

It's a relatively short paper at 16 pages. Some key points are:

  • Core government spending has increased by $20 billion since 2000, or 32% in real (inflation adjusted) terms

  • If one had not increased spending by this amount, one could have almost abolished income tax and funded the 2000 level expenditure from GST and a low corporate tax rate

  • The government has little information on how effective this extra spending has been and the available social indicators we have show negligible improvements since 2000 in life expectancy, infant mortality, hospital outputs, literacy, violent crime, suicide and poverty.

  • Much of the spending is middle class welfare churned back to those who pay it. Therefore much public spending today is not ‘new' spending; it is displacing spending that would have happened anyway, by individuals themselves. It follows that more public spending will not necessarily increase public welfare, and may even reduce it.

  • Many people could afford to purchase their own social services if taxes were lower. This would allow for more competition, innovation and personal responsibility, and would reduce unnecessary bureaucracy.

  • Australia provides an interesting comparison to New Zealand, because they have a smaller government with more reliance upon private health, education and superannuation. They also outperform New Zealand on most social indicators.

Looking just at health spending up 49% in real term, we have since 2000:

  • a slow down in the rate of life expectancy increase
  • a slow down in the rate of infant mortality decrease
  • a reduction in elective surgery operations from 107,366 in 2000 to 105,437 in 2006
  • no change in hospital readmission rates (a key indicator of quality of care)
  • no change in hospital mortality rates
  • a decline in patient satisfaction with DHB services

A comparison is made with Australia.

Australia has a smaller government than New Zealand; their government spends 34% of GDP compared to New Zealand's 40%.54 It is also a much richer country with better social outcomes.

Incomes are a third higher across the Tasman, and the Australians also outperform us on a range of social indicators, including life expectancy, infant mortality, income inequality and suicide rates.

Australia doesn't necessarily have less social spending; the difference is that private provision is more prevalent, and actively encouraged by the Federal Government. In health for example, 33% of Australian spending comes from the private sector compared to 23% in New Zealand. In education, the corresponding figures are 26% for Australia and 17% for New Zealand.

Rennie concludes by saying:

Too often politicians take the view that all government spending is inherently ‘good'. There is not enough scrutiny of public spending, of its benefits and of the alternatives available to policymakers. Too often this reflects an ideological commitment to the role of the state, rather than a dispassionate look at what the state can realistically achieve. There needs to be a wider debate on what the proper role of government is and what services should be realistically provided by people themselves. We need to consider what governments can do as well as what they should do.

Nato commented:

Well, if an independent center published those sorts of things in a paper, it must be truthful, unbiased, and the conclusions must be valid!

No need to look at what responses people give to the paper, no need to wait for critical analysis of the paper, no need to look at things the author might have missed. If it's in a paper, it's 100% true, no reservations.

stan_ commented:

your response to it was all blow and no substance, attacking it merely on the fact that it was a publication by an independent centre. besides the last point about patients' opinions on DHBs, go ahead and rebut any of the points he makes regarding our health system - read the full paper yourself at http://www.cis.org.nz/IssueAnalysis/ia83/ia83.pdf

Nato commented:


I'm not a political scientist, and I don't have oodles of time (nor motivation) to write a decent response to his paper. In fact, I don't actually care to argue over the issue.

I was merely pointing out that you have fallen into the trap made by many reporters - you have assumed that one paper is a good way to represent the findings of a field. On the contrary, the findings of one paper represent the opinions and arguments of one author. If we want to work out what is really going on, we need to consider arguments from a variety of authors, and conpare their arguments. You can't just pick a paper, read it's conclusions, and then take that as gospel, simply because it would be relatively easy to find a paper that argues the opposite.

stan_ commented:

these figures are economic facts, not opinions. it's like getting an accountant to check your company statements - it's not about points of views and arguments, it's just what's plainly there in black and white, you're just too prejudiced against people pointing out problems in the government's running of the health system to understand

Matt commented:

Phil Rennie has ‘worked as a Researcher and Press Secretary for National MPs in the New Zealand Parliament.' That makes him somewhat less than a wholly truthful, reliable and unbiased reporter of the facts.

And Stan, what you're failing to realise is that it is about opinions; that's why there are dissenting ideas as to the best economic model, and why we even have a left-wing government. If right-wing was so absolutely correct and perfect as you claim, noone would vote anything different.

Nato commented:

Stan, the figures are statistics, they are not economic facts. Ever heard the saying 'lies, damned lies and statistics?'. In the current example, there are a couple of issues to deal with:

Firstly, there are infinite different measures we could use to assess a countries health system. It's very easy to pick and choose the ones that say what you want to. (You're also picking time periods)

Secondly, it's all correlational research. Working from correlations mean it's very hard to infer causation. Causation is then is a matter of interpretation, rather than fact.

Lastly, as I've said before, it would be very easy to dig up a paper that has statistics backing up the opposite point.