The Poor Fitness of New Zealand's Health System

With Michael Moore’s new documentary ‘Sicko’ being released not long ago, I must say, it is of great disappointment to hear it discussed and defended. We need to identify Moore’s dribble for the propaganda it is. Sadly, his idea’s are consistent with those of many New Zealanders inside parliament and out.The practicalities of providing a public health system for 300 million Americans are, well, non-existent. New Zealand remains a case in point as to why we need a much higher private sector involvement in the health system.

I particularly like the point made by Rodney Hide in his new book, with regard to his travels in Eastern Europe in the late '70s. Discussing a meal he had enjoyed with some local citizens:

"The food was pretty shocking but in their eyes it was a meal fit for a king. After I had eaten, Anna asked me if I would like an apple and I said that sounded good. She brought me the apple on a plate so proudly. It was a small, half rotten thing and I was shocked that I was expected to eat it. In New Zealand, we would throw such an apple out. But Claude and Anna were looking so pleased with themselves that I had no option but to eat it... I know exactly what happens if the state takes over the production, transportation and provision of food: big queues, shortages and rotten apples! I'm always amazed that we run our health system like the Romanians ran their food production and distribution, and then wonder why it doesn't work." (p. 97)

I looked at that paragraph and thought bloody hell, he's right. Every year the government says they'll put more into health to fix the problems with it, and they do, and every year the waiting lists get longer. And you start to think, when the public health system takes up 40% of the govt. budget as it does - 17% of our entire GDP - maybe lack of funding isn't the problem. We’re not operating our health service as a market system, and not surprisingly the result is that the state owns a poor quality monopoly.

People say 'but at least everyone has access' - but they don't! You have to wait months sometimes years to get the most simple of things done! Many people die before they get treatment. People say, 'but if we had private hospitals they might cut corners on quality to make extra profit'. But what quality do you get in the public system!?!? And how many people have you heard complain about the service if they've been to a private hospital?!

The truth is, it’s all about competition – in a private system if a firm fails to deliver the goods, you take your business elsewhere and they don’t make a profit, the result is that only firms who deliver can stay in the market. In a monopoly however, and the state provision of health is just a publicly owned monopoly, you don’t have the choice, and the staff make the same no matter how they treat you. Only a market system can respond to the health needs of New Zealanders.

We don't even have to fully de-centralize our health system to make it more effective, even just sending the public into private hospitals and picking up the tab would make a huge difference. It would have to be gradually changed for infrastructural reasons of course, but entirely possible over the space on 10-20 years. It wouldn't even cost as much to do. The average cost per minute to the taxpayer of a public hospital operation is $42. Forty-two dollars! In the private system it's less than twenty-five. That figure could increase by 30% and yet still we'd have a better service at a lower price. But still no traction from Government, only ACT has this as their policy. And this is the so-called rich man's party!

Milton Friedman's ideas really ring true here; That when I spend my money on me, I want good quality for a good price, when I spend my money on someone else I want a good price but care little for the quality and vice versa, and when I spend someone else’s money on someone else, I care neither for the price nor the quality.