Tough calls loom on health services, Treasury warns

ture, and taxation to pay for those choices,” she said.

The speech used data from Treasury’s 2021 He Tirohanga Mokopuna report on the long-term fiscal position. The speeches were delivered to the NZ Economic Forum and Transparency International.

That analysis had been hopeful the former Government’s health reforms would bring about savings by reducing duplication and rolling out better, more cost-effective care. Treasury is keen to see a greater use of primary and community care, which keep people out of hospitals, where it is more expensive to treat them.

In 2021, Treasury said it was keen to see more centralisation of some services, using a Pharmac-style model to drive down cost and reduce duplication. It also wanted to see workforce changes that pushed some services out into the community, where people could receive better care before they got to hospital.

Treasury also said housing reforms could reduce health costs by reducing conditions Kiwis contract from substandard accommodation.

Reti told the Herald last week he was keen to publish the first Health GPS before this year’s Budget (the document must be published before the end of June). The former Government had been working on the GPS and Reti has inherited that work.

He said planning for the document was “excellent”.

“We’ve been working on it for weeks and weeks and we’re well advanced on it.”

The GPS will act almost like a threeyear health budget, allowing the minister to direct the somewhat independent health system, led by Health NZ-Te Whatu Ora. Health NZ puts together the New Zealand Health

Plan, which is a more conventional, costed document that responds to the direction set by the minister in the GPS.

Forecast core health spending is about $27b this year, rising to more than $30b by the end of the GPS period.

Documents released to the Herald under the Official Information Act warned health funding was already under pressure, with issues like lower immunisation rates among children, and more complex demand for health services, technology changes and needs of an ageing population.

Reti would not “pre-empt” the document, but said it would “very clearly identify priorities we have”.

He said some parts of what Labour was looking at before the election “had merit because the truth is the truth, why would you want to change that”?

Kiwis may have to accept fewer publicly funded health services as rising costs lead to a higher tax burden.