Vote Health is the main source of funding for New Zealand’s health and disability system, while ACC is the other major source of public funding.
The funding provided through Vote Health directly supports the day-to-day operation of strong and equitable public health and disability services delivered by the skilled workforce in our communities, hospitals and other care settings.
Budget 2023 marks year two of the multi-year funding approach, with $1.3 billion set aside to address future cost pressures. This allows for better planning and more consistent health services.
$5 prescription co-payment removed
Budget 2023 has provided $707 million over four years to remove the $5 prescription co-payment (note - there is an impact from Vote Social Development due to changes in the level of Temporary Additional Support and Disability Allowance paid and the net cost of this initiative is $619 million).
An estimated three million people will no longer have to worry about the cost of collecting their medication. Removing this financial barrier to prescription medicines will help ensure New Zealanders are able to get the medicines they need when they need them to improve their health and wellbeing. This will also help reduce the pressure on hospitals and other services.
This applies to $5 co-payments for prescriptions by approved providers and not specialists or dentists where a $15 co-payment applies. It is expected the initiative will go live from 1 July 2023. Te Whatu Ora will lead the implementation.
- As part of the North Island Weather Events package, $35 million in funding is dedicated to a number of health initiatives. We know from other disasters that mental health and wellbeing impacts emerge over time. This package includes $10 million to provide additional psychosocial support, including $3.75 million for the expansion of the Mana Ake programme into Hawke’s Bay and Tairāwhiti. It also provides $6.1 million to cover community, primary and residential care, including workforce relief for locum GP, pharmacy and nursing staff, an increase funding for air ambulance for an additional six months and improved access to online GP, community health, mental health and addiction, and registered nurse consultations
- There is also $8.9 million in funding for air and road transport enabling planned care, outreach and other hospital services for isolated communities, alternative provision of acute healthcare and urgent repairs to hospital facilities.
- There is $1.7 million for transport and power for leasing suitable vehicles to provide for patient access, and generators and diesel so services can continue to be provided while repairs are undertaken.
- Finally, $8.3 million is being provided for the targeted Hauora Māori disaster response. This is for urgent services that support whānau wellbeing and the community. It will be utilised for direct and flexible funding for Iwi and Māori health partners, and the Māori psychosocial response.
Prioritised spending for 2023/24
The Government is focused on three key health priorities – winter, workforce and waitlists, as well as the health reforms and equity. Existing funding for the coming financial year has now been allocated by Te Whatu Ora to align with the Government’s priorities.
For more information: Health | Beehive.govt.nz
Budget 2022 has provided a total of $14.9 billion in new funding for Vote Health over the four next years, with up to $13.4 billion in new operating funding and up to $1.5 billion in capital investment.
Budget 2022 is the first budget to take a multi-year approach toward funding the health system. This provides the new health entities with certainty about the funding available for the next two years. The public health system will move to a three-year funding cycle from Budget 2024 onward, which will align with the first three-year New Zealand Health Plan due in 2024.
A key focus of the Budget 2022 package for Vote Health is on ensuring the new health entities are established on a sustainable footing so they can start to deliver the health system shifts envisaged by the health and disability system reforms.
The new health entities will be responsible for delivering most of the initiatives supported by Budget 2022. The Ministry of Health’s primary focus from 1 July 2022 will be on providing stewardship and kaitiakitanga over the health and disability system.
Establishing the new health entities and addressing cost pressures
Budget 2022 provides the new health entities with $1.8 billion in 2022/23 and an additional $1.3 billion in 2023/24 to address historic and future cost pressures.
This addresses the DHB’s final deficits for 2021/22 and enables the new health entities to increase investment across the system in response to a growing and ageing population, inflation, wage and price pressures, and changes in health technologies and clinical practice.
The funding is part of a total cost pressures allocation of up to $11.1 billion over four years, which includes new operational funding of $5.1 billion and ‘contingency’ funding of up to $6.0 billion.
A contingency is funding that is set aside for a specific initiative that requires further work before the funding can be drawn down. Ministerial approval will be sought in coming months once budget and service plans have been developed for the new entities and the Ministry has developed a new operating model and change management programme.
Budget 2022 also provides up to $91.883 million to ensure the Ministry has the capability and capacity needed for its enhanced kaitiakitanga role in the new health system. This will strengthen the Ministry’s ability to provide high quality strategic health policy advice; carry out analysis, research and evaluation to inform policy and operational decisions; effectively monitor entity and system performance; ensure integration of health infrastructure; and embed the voice of communities into the operation of the system.
Capital funding for health infrastructure
Budget 2022 provides $1.307 billion over four years in capital funding for health infrastructure, which will support both the delivery of new infrastructure projects and preparatory work on other projects. This will enable a credible pipeline of investment-ready proposals to be supported over the coming years.
Key projects supported by Budget 2022 funding include the completion of the first stage of redevelopment for Whangārei hospital, design and enabling works for the redevelopment of Nelson Hospital, and the delivery of a new 80-bed adult acute inpatient mental health unit at Hillmorton.
Budget 2022 provides an additional $191 million over two years for the Combined Pharmaceutical Budget, which is used for purchasing medicines, vaccines, medical devices and other treatments for the public health system.
Pharmac will invest the additional funding to secure additional medicines, with a focus on better cancer treatments, to ensure as many New Zealanders as possible benefit from the funding increase.
Data and digital infrastructure and capability
Budget 2022 includes significant investment in health data and digital infrastructure and capability.
A contingency of up to $320 million over four years has been provided to continue building the data and digital infrastructure and capability needed to improve health system performance and enable the reforms. Investments supported by this funding will:
- improve system resilience and reduce workforce frustration by addressing issues resulting from DHB technology infrastructure and systems that are out-of-support and no longer fit-for-purpose
- improve data and analytics capability across the health system so that equity issues can be targeted more effectively and to drive the development of new models of care
- improve information sharing between providers to facilitate greater collaboration and coordination of care
- empower New Zealanders to better manage their own health and wellbeing by providing more digital options for accessing care and information.
A contingency of up to $155.3 million over the next four years ($225.2 million over 10 years) has been provided to put in place the digital infrastructure needed to support the new Dunedin hospital. It will also deliver digital solutions across the wider Southern health system including the Southland and Lakes District hospitals, and rural trust hospitals where appropriate.
Investment through this initiative will contribute to a wide range of digital capabilities including care delivery, care administration and operations, support services, enterprise functions, engagement channels, interoperability, data insights and foundational technology infrastructure.
Budget 2022 also provides $125.315 million over four years to retain and expand selected population health and disease management digital capability and infrastructure that was developed in response to the COVID-19 pandemic. This will ensure we continue to be prepared for any future pandemics and will provide a basis for transforming the delivery of future public health programmes which could include, for example, measles, rheumatic fever, screening and child wellbeing programmes.
Further contingency funding of up to $10.800 million over three years has been provided to put in place a common data and digital platform for the delivery of core Public Health Unit functions so that the new National Public Health Service can operate as a single, cohesive national service.
New ways of working
Further to the funding outlined above to establish the new health system entities and address cost pressures, a number of Budget 2022 initiatives provide funding to enable the shifts sought through the health and disability system reforms.
Budget 2022 provides $168 million over four years to the Māori Health Authority’s (MHA) direct commissioning budget so it can purchase Māori population health and prevention-based services to complement the locality rollout. This adds to funding provided through Budget 2021 for delivering hauora Māori services, as well as the Māori provider contracts that the MHA will pick up from the Ministry of Health.
The new funding will support a range of initiatives to improve primary and community care for Māori and enable a Māori-led approach to population health and prevention that targets the wider determinants of health and wellbeing. It will also enable the MHA to implement early intervention activities and programmes over the next four years and to develop mātauranga Māori solutions.
While primarily targeted at Māori populations, the diverse and innovative models of care supported by the MHA will be open to all New Zealanders where available in their local communities – extending the current reach of the health system, expanding choice of services and adapting the way care is delivered.
Budget 2022 also provides $20.090 million over four years to secure additional workforce capacity for Iwi-Māori Partnership Boards (IMPBs) so they can deliver their statutory functions effectively and achieve their objectives. The funding will ensure IMPBs have dedicated support for whānau and hāpori Māori engagement, and the policy and data analysis capacity needed to understand and respond to the health needs, aspirations and priorities of local Māori communities.
A further $30 million over four years has been provided through Budget 2022 for the Māori Provider Development Scheme, together with $49.9 million for the Pacific Provider Development Fund. This will secure the advanced primary and community care capability developed by Māori and Pacific providers during the COVID-19 response and enable them to adapt and transition their models of care to into the new health system and the new locality approach.
Budget 2022 also provides $20 million over four years to implement a diabetes prevention and treatment programme for targeted Pacific communities in South Auckland. This will include a mix of primary, community, and tertiary care interventions to help families manage and treat diabetes based on Pacific models of care.
Diabetes is one of the major contributors to a significant and growing gap in life expectancy between Pacific and non-Māori, non-Pacific peoples. This Budget initiative is designed to help arrest this trajectory and act as an early proving ground for Pacific specific interventions for long term conditions like diabetes. The programme will also benefit Māori whanau because they often live in communities with a high proportion of Pacific peoples and access services through Pacific providers.
Budget 2022 also provides contingency funding of up to $61.242 million over four years to support the establishment of the Public Health Agency (PHA) within the Ministry of Health and the National Public Health Service (NPHS) within Health New Zealand as part of the new health system operating model.
This funding will enable the PHA to build additional capacity and capability so it can effectively carry out its responsibilities under the new health system, which include leading population and public health policy, strategy, regulation, intelligence, surveillance, and monitoring. It will also enable the NPHS to carry out its new and strengthened national leadership and coordination role for public health operations that were previously distributed across 12 public health units.
Budget 2022 provides $102 million over three years to establish integrated and Comprehensive Primary Care Teams (CPCTs) within locality networks, and a further $32.418 million over two years for the network integration, change management and back-office support needed to bring together the providers and services within a locality.
This funding will allow traditional primary care services (GPs and registered nurses) to be combined with and complemented by physiotherapists, practice-based pharmacists, care coordinators, and registered social workers/kaiāwhina.
Expanding the range of disciplines within primary care facilities will deliver more effective care for patients with highly complex needs and improve their health outcomes. The exact make-up of each team will be determined by locality commissioners in partnership with existing primary care services.
Budget 2022 provides $76 million over four years (and a further contingency of up to $31 million) for the workforce training and development needed to underpin critical reform initiatives and support the delivery of services through locality networks. This includes funding to grow and develop the hauora Māori and Pacific workforces, and to provide training for CPCT workforces that may not have previously worked in primary and community healthcare settings.
Budget 2022 also provides $86 million over four years for an adjustment to the primary care funding formula so that general practices that serve high needs populations can develop more responsive models of care and implement them on a sustainable basis. Funding will enable improvements to the availability and convenience of appointments, more accessible location of services, extended opening hours, and expanded workforce teams. This will improve health outcomes and health equity for the high needs populations served by these practices.
In addition, Budget 2022 provides $8.830 million over four years for the development of a consumer and whānau voice framework that will allow the health system to continuously ensure consumers and whānau contribute to the design, delivery, and evaluation of health services. The funding will be invested to put in place the infrastructure required to support the health system to engage a more diverse range of consumers, communities, and whanau in a meaningful and consistent way, focusing on populations whose voices are not traditionally heard, such as Māori, Pacific peoples and people with disabilities.
Road and air ambulances
Budget 2022 provides $166.060 million over four years to support essential emergency road ambulance services for urban and rural communities so all New Zealanders have continued access to effective emergency road ambulance and communication services.
This funding responds to growth in demand by allowing 48 ambulances and 13 cars to be added to New Zealand’s road ambulance fleet and up to 248 additional full-time staff to be recruited over two years, including 22 staff for the Communications Centres. This will expand service coverage and improve response times for emergency ambulance services in the places people require them.
Budget 2022 also provides $90.712 million over four years to ensure that emergency air ambulance services with on-board clinical capability continue to be available to all New Zealanders as demand continues to increase. The funding will also enable the replacement of some aging aircraft with modern, fit-for-purpose helicopters and the purchase of at least one new helicopter supported by additional crew.
Mental health and wellbeing
Budget 2022 provides $100 million over four years to trial new models of specialist mental health and addiction services and increase availability for people with specific needs in targeted areas across the country. The package includes:
- $27.5 million for community-based crisis services that will deliver a variety of intensive supports such as residential and home-based crisis respite, community crisis teams, co-response teams, and peer-led services in the community and as part of care teams.
- $18.7 million to enhance existing specialist child and adolescent mental health and addiction services so that around 1,300 young people can be supported by more clinical, peer support and cultural support staff
- $10 million for workforce development to build the capability and capacity of the specialist services workforce.
Budget 2022 also provides $89.340 million over four years to continue providing mental wellbeing support to primary and intermediate school-aged students through the Mana Ake initiative, and to expand delivery to Northland, Counties Manukau, Bay of Plenty, Lakes and the West Coast.
Mana Ake provides support to schools, families and whānau when children aged 5-12 are experiencing issues that affect their mental wellbeing. The investment through Budget 2022 will benefit approximately 195,000 primary and intermediate aged children by giving them the skills and support to deal with issues that include grief, loss, parental separation, and bullying. Mana Ake also provides advice, guidance and workshops for parents, whānau and teachers.
In addition, Budget 2022 provides $12.250 million over four years for the continuation of the Piki pilot, which provides free integrated primary mental health and addiction support for young people aged 18–25 years in the Greater Wellington area.
Piki enables young people to access mental wellbeing supports earlier to address mild to moderate mental health needs and to promote positive mental wellbeing, which helps reduce mental distress and improve mental health and learning outcomes in the short to medium-term, and is expected to reduce the demand for specialist mental health services in the long-term.
Other health initiatives
Budget 2022 also provides:
- $193.145 million over four years to fund the Labour Cost Index wage increase for support workers from 1 July 2021 that was provided for in the Support Workers (Pay Equity) Settlements Act 2017
- $72 million over four years to ensure that people with long-term physical, intellectual and/or sensory impairment who receive disability support funded by Health New Zealand have the option to pay a family member to provide this support
- $31 million to address cost pressures on disability support services in 2021/22 due to inflation and increases in demand for services (these services are transferring to the new Ministry for Disabled People and are funded through Vote Social Development from 2022/23)
- a contingency of up to $36.141 million over three years from 2023/24 to improve equity within the National Bowel Screening Programme by lowering the age of screening to 50 for all Māori and Pacific peoples
- $32.476 million over four years to continue the successful Alcohol and Other Drugs Treatment Courts initiative in Waikato, Auckland and Waitakere on a permanent basis
- $5 million over four years to establish a tobacco products regulator and support implementation of the Smokefree Aotearoa 2025 Action Plan, plus a contingency of up to $28 million to support the regulator to carry out its functions and to ensure compliance with Smokefree regulations
- a contingency of up to $18 million over four years for a strategic work programme to prevent, detect, treat and eliminate the transmission of HIV and ensure people living with HIV live healthy lives free from stigma
- $12.548 million over four years to extend School Based Health Services, which will improve health equity for high need students and help prevent the development of more serious mental and physical health conditions among youth
- $12 million over four years to deliver post-diagnostic support trials for all newly diagnosed cases of dementia and to enable innovative respite care, in support of the Dementia Mate Wareware Action Plan
- $11 million over four years to implement priority actions within the Increasing Deceased Organ Donation and Transplantation national strategy to provide a foundation for increasing the number of eligible recipients receiving donated organs
- $8.112 million over four years to ensure all victims of non-fatal strangulation are able to receive appropriate specialist health services as part of the multi-agency response to family violence and sexual violence, which is designed to ensure the immediate safety of victims and children, and to work with perpetrators to prevent further violence
- $6.996 million over three years from 2023/24 for the operation of 20 portable retinal cameras in areas that do not currently have them, to ensure equitable access to retinopathy screening for premature babies and help prevent one of the leading causes of blindness in New Zealand
- $6.150 million over three years from 2023/24 to continue the current Well Child Tamarki Ora (WCTO) enhanced support pilots in Lakes, Counties Manukau and Tairāwhiti that provide intensive, relationship-based, wrap around support to young parents and their whānau, a contingency of up to $28.2 million over four years to strengthen the programme and reduce inequities
- $2.516 million over four years to support health practitioners to provide best practice health care to intersex children and young people, and to empower intersex children and young people and their whānau to make informed decisions about medical interventions, which will better protect the rights of intersex children and young people and prevent unnecessary medical interventions from occurring
- $2.182 million over four years to support primary and community health providers to deliver gender-affirming services, updated national guidelines for gender-affirming health care, a lead referral pathway for gender-affirming services and supports, and training and workforce development resources to improve workforce responsiveness to transgender patients
- $0.658 million over four years to enable the Ministry to contribute to cross-agency participation in the Government’s end-to-end response to organised crime
- $0.200 million in 2022/23 to allow the Ministry to continue to actively contribute and participate with the Royal Commission of Inquiry into Historical Abuse in State Care and Faith-Based Institutions as it works through the process of completing its public hearings.