Labour’s lies on health spending

For some years now Labour have lied and lied and said that National has cut health spending by $1.7 billion. The media run this as a statement of fact often, despite it having no basis in truth.

The most generous interpretation you can make is that Labour is saying that they have calculated the level of funding they think Vote Health needs, and that it is $1.7 billion more. But that is very different to saying it is a cut.

If you are on a $60,000 a year salary and ask for $70,000 but only get $64,000 then you can’t say your salary has been cut by $6,000.

Now let’s look at what at what Vote Health has done between 2008 and Budget 2017.

• Nominal Vote Health – increased by $4.85 billion a year from $11.92 billion to $16.77 billion – a 40.7% increase
• Real Vote Health – increased by $3.00 billion a year from $13.77 billion to $16.77 billion – a 21.8% increase
• Real Vote Health per capita – increased by $341 a year from $3,233 to $3,574 – a 10.5% increase

You can claim it is not enough. You can claim more is needed. You can claim growing elderly population needs more funding. But you cannot claim it has been cut. That is a lie.

As it happens a fixation on spending, rather than outcomes is at the heart of what is wrong with Labour.  Here’s three examples:

1. Say you spend an extra $2 billion a year on Vote Health. You can use it to increase the number of doctors and nurses by 30% or you can use it to give all existing doctors and nurses a 30% pay rise. The former would see a huge increase in patients being treated and the latter would see some really happy medical staff (which has benefits). But the difference in outcomes in huge.
2. Say you save $50 million on cleaning contracts through a nationwide contract. You spend $25 million on extra operations. By focusing just on spending this looks bad, as spending has decreased by $25 million even though outputs have increased
3. Pharmac gets a great deal in drug negotiations and gets more cancer drugs for a lower price. There is no increase in spending, but a significant increase in drug availability for patients

We’ve seen some highly beneficial outcomes for relatively small amounts of money. Independent research has found the maximum six hour waiting time target for 95% of ED patients has saved several thousand lives. Yes there was some money dedicated to this (which is sensible – tie money to outcomes) but the outcomes were phenomenal compared to the monetary investment. It was mainly better systems that contributed.

So remember everytime Labour lie and say health funding has been cut, it has not – it has increased 41% nominally, 22% real and 11% real per capita.