Prescription fees: some parties just don’t get it

Minister of Foreign Affairs and MP for Otago W. E. Cooper (right) who officially opened the Patearoa Rural Water Scheme in May 1983, with some of the key people connected with the scheme. They are (from left): consulting engineer Mr I. R. Pairman; district commissioner of works Mr R. O. Bullen; Maniototo County chairman Mr C. D. Bleach; and consulting engineer, Mr D. W. Jack.

THEY just don’t get it.

Finance Minister Grant

Robertson, presenting the 2023 Budget, announced that the $5 per item prescription fee (PF) levied on prescriptions for everyone over 13 (with an annual limit) will be abolished. Civis was delighted, having written about the evils (that word is used advisedly) it causes.

The most obvious problem with PFs is their cashflow effect on the poor, who may have to choose between filling prescriptions (often for several items, so several fees, per person, let alone for more than one) or feeding the family: in 202122 more than 135,000 adults didn’t collect their prescriptions because of cost. That can mean more severe, because untreated, illness — perhaps even deaths.

An Otago University study published in January quantified the extra hospital care caused by PFs for patients with certain high health needs. Of every 100 trial patients liable for PFs, 8 more went to hospital, and 118 extra days were spent in hospital, compared to those whose PFs were paid by the trial.

For those 100 patients, abolishing the PF would have cost the government $10,000 in lost revenue over the study period, but saved it $177,000 just in hospital costs, not to mention relieving pressure on hospital beds, and the personal income (and tax) and productivity lost.

Another evil caused by PFs is the ability of corporate big box ‘‘discount pharmacies’’ to undercut community pharmacies by absorbing the PF cost as a loss leader. Community pharmacies provide more complex services than the ‘‘discount pharmacies’’ and are essential to the communities they serve, but, lacking big box economies of scale, many have been forced out of business, leaving their communities bereft.

Deputy National Party leader Nicola Willis immediately said National would reinstate PFs if elected, describing their abolition as ‘‘nice to have [but] should not be the priority’’. Focusing just on the financial implications of PFs, her response suggests that she, and the party, either hadn’t bothered to look at the evidence, or simply can’t count.

Since then party leader Christopher Luxon has ‘‘clarified’’ the party’s stance on PFs, arguing, with Act, that it should be removed for those holding Community Service Cards, and Super Gold Cards, but ‘‘I think if I can pay, I should pay. I think it’s really unfair, it’s money that’s wasted on being spent on someone like me, for example, who can afford to pay for my prescriptions myself.’’ That’s illogical. Gold Cards aren’t means tested, and it’s naive to think all those in need have Community Service Cards.

Mr Robertson’s response to National’s ‘‘clarification’’ was ‘‘we don’t means test health like that’’. He’s wrong there, but, unfortunately, most politicians and administrators tend to see health as just hospitals and drugs (most District Health Boards were ‘‘hospital boards in drag’’). Try seeing a doctor or nurse practitioner in primary care for free if you’re over 13. His principle is right, though (and primary care funding should be increased substantially to reflect that).

National’s intention to reinstate some PFs is illogical in other ways. In 2013, when a Nationalled government increased PFs from $3 to $5, it said it did so ‘‘to fund reinvestment in the health sector in lean economic times’’, effectively admitting that PFs are a tax. Taxing people because they’re sick fits the ‘‘illness is criminal’’ philosophy of the imaginary society of Samuel Butler’s Erewhon, but should be anathema in real life.

Ms Willis said National wants tax relief for New Zealanders. So why does National object to this particular tax relief, and intend to reimpose it on their iconic ‘‘hardworking New Zealanders’’? It just doesn’t make sense.

But perhaps one shouldn’t expect sense from a party which wants tax cuts which would benefit the rich most, and indulges, like its fellow traveller Act, in magical thinking, by claiming that New Zealand can have adequate public services without adequate taxation to fund them.

They really don’t get it, do they?