23 May 2025

Annual health funding likely to lag behind rising costs - doctor

3:38 pm on 23 May 2025
BUDGET DAY 2025

GPs also warn patient fees may need to rise this year to cover costs. Photo: RNZ

Wellington toddler Sophie-Grace has cystic fibrosis, which means she is regularly admitted to hospital with lung infections.

Her dad Ben Butler-Hogg said the family had been hoping Budget 2025 would include a further cash injection for Pharmac, to allow it to increase access to the drug Trikafta for two to five-year-olds, like her.

But it was not to be.

"The medication that we get today will remove burden from our infrastructure," Butler-Hogg said.

"The sooner we can intervene with our children, the better quality of life they've got.

"I want my daughter to get to adulthood without needing a transplant."

The drug-buying agency did get a funding boost of $604 million over four years following last year's Budget, but that has been largely already committed.

Meanwhile, GPs warn patient fees may need to rise this year to cover costs.

GenPro chair Angus Chambers, a Christchurch GP, says practices are going broke and being forced to hike fees and cut services.

Dr Angus Chambers. Photo: Supplied

Dr Angus Chambers, from the General Practice Owners Association, said Health NZ had already indicated its annual funding hike for doctors was likely to lag behind rising costs.

"Unless there's a surprise in this annual uplift at capitation, we're pretty worried that we will see a substantial upward pressure in patient fees, of that 10 percent mark."

Overall, primary and community care had a boost of about $600m, with most initiatives already announced.

Most of it was paid for out of the $420m set aside for pay equity claims - wiped out by a sudden law change earlier this month.

General Practice New Zealand chief executive Maura Thompson said axing the claim for primary care nurses would make it even tougher to recruit and retain staff.

"The celebration of savings comes at the expense of fair pay for women. So the pay equity claim for primary care nurses being terminated is a huge disappointment, and will have a real impact, unfortunately."

The Association of Salaried Medical Specialists represents senior hospital doctors and dentists who are locked in a pay dispute with Health NZ.

Its policy and research director Harriet Wild said the positive benefit of funding increases in areas like urgent care and cancer medicine were not enough to solve the staffing crisis.

"It's a departure lounge Budget because we are facing a recruitment and retention crisis across the board.

"Everyone will continue to leave, whether that's specialists, trainee doctors, nurses, workers across the health sector, either heading into private, or heading straight overseas."

Health Minister Simeon Brown said the government's record investment over three budgets was already delivering results - in terms of more elective surgeries, GP appointments and other critical healthcare services.

She said Budget 2025 provided a $7 billion increase to operating funding over the forecast period [four years].

"This includes the $1.37 billion per annum increase to Health New Zealand's baseline - bringing total health spending in 2025/26 to $32.7 billion."

Meanwhile, Labour's health spokesperson Dr Ayesha Verrall said the increase in the health budget this year would be swallowed up by the existing shortfall in funding, which meant services would be going backwards.

"The problem with the health budget is that it's all eaten up by Health NZ's deficit.

"The government increased health funding by $1.3b, Health NZ is carrying a $1.1b deficit.

"That means New Zealanders will have to wait longer for care and have less access to care than they usually expect."

The $1b for capital investment in health was "much less" than the Labour-led government had committed to build new hospitals, she said.

For instance, Nelson was getting "half the hospital" that it would have under Labour, which was originally set to have 255 beds.

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