Financial outlook

Press, 31 August 1977, Page 7

Financial outlook

Wellington Reporter. The net cost to the Government of financing health services in New Zealand during 1976-77 was $689. IM, compared with 5605.6 M in 1975-76. according to the Health Department’s annual report.

Grants to hospital boards comprised by far the biggest item, $458.8 M. while total medical and pharmaceutical services (including benefits) were $136.1M.

The basic operating grant to public hospitals was 5333.8 M and to psychiatric hospitals $61.6M, both below the $341,4M and 562.9 M, respectively, originally voted for 1976-77.

Grants made to hospital boards represented 66 per cent of total expenditure, compared with about 54 per cent in the early 19605. The report said that this showed the empasis there had been in recent years on hospitals tn relation to other serv-

During the last 10 years the proportion of the gross domestic product spent by the Government on health services had increased by about 20 per cent, and there was an increasing awareness that

this rate of growth could not be sustained indefinitely. Curative health services, particularly hospital inpatient services, were absorbing an increasing proportion of the funds available and the indicators of improvements in the health of the population were, for many reasons, no longer showing results in keeping with increases in expenditure. The Government had decided that corrective action had to be taken by giving more emphasis to prevention and education, and by taking health services as much as possible out into the community. To achieve this objective. the report said, it would be necessary to direct a greater proportion of available finance away from curative and hospital inpatient services towards preventive services in the community.

It would be hard to make rapid progress, since decisions made in the past and forces largely outside the control of the department and hospital boards would nave a strong bearing on the direction in which finance would be absorbed during the next few years.

Major factors would be:— A high level of commitment to complete and staff hospital buildings, which had been planned to cater for modern methods of treatment, or to service expanded populations and new communities, or replace condemned or antiquated structures, The commitment to provide facilities and support services to train increasing outputs of doctors from the expanded medical schools, The rapidly rising costs of providing and maintaining sophisticated equipment on a scale which would ensure the attainment of high standards in medical practice, and the continued attraction and retention of sufficient numbers of knowledgeable and skilled specialists. An inertia rising from insufficient attention being given in the past to the education and orientation of medical and other health professionals towards the delivery of community care services.