Option: Reduce projected rate of growth in public healthcare spending
Our "Resume Historic Cost Growth" scenario projects spending on public healthcare to increase from 6.8% of GDP in 2010 to more like 10.8% in 2060.
Fiscal implications
Figure 5 shows how much difference public healthcare spending growing only half as much, reaching 9% of GDP in 2060 rather than 10.8%, would make to the long-term fiscal position.
Broader living standards implications
Adopting a lower public healthcare spending growth track might involve trade-offs in terms of equity and - potentially - our social infrastructure.
These trade-offs arise because it may be hard to reduce the growth in public healthcare spending significantly in a way that doesn't increase the gap between what is medically possible and what is publicly funded, meaning that those who have the means to purchase some treatments (either outright or through insurance) will do so. Other people may not be able to access those treatments.
Whether a lower public healthcare growth track is desirable ultimately depends on what New Zealanders want from the health system relative to other government services.
- Figure 5 Three government spending paths - the impact of lower growth in healthcare spending
