Media release from Gareth Morgan Investments

Rather than spending more money on doctors, we first need to make better use of the ones we have, argues economist Gareth Morgan.

Morgan's comments come on the heels of a new OECD survey which put New Zealand at the bottom on a survey of 28 nations for doctor/patient ratios having just 0.8 senior doctors per 1000 patients.

"This should come as no surprise," argues Morgan "because our national incomes are nearly bottom of the heap too".

"New Zealand spends as much on healthcare as we can afford, and we can't keep increasing spending as we have in the past. The basic issue is that we keep expecting a champagne health service on a beer budget".

Morgan believes there is also some evidence of higher than average productivity in the NZ health sector which would imply a lower doctor/patient ratio as a result of that efficiency.

"Ultimately, if we want to materially improve the outcomes from our health service we have to boost our national income. Without this we will have to keep relying on making our health service more efficient and effective."
"We have doctors working in small provincial hospitals who are twiddling their thumbs. The public needs to understand that we can't afford to have a hospital on every street corner any more. Our doctors need to be put to the greatest possible use and part of the answer is having fewer, bigger, more efficient hospitals."

Morgan co-authored a book on the New Zealand health system entitled Health Cheque, with former Treasury analyst Geoff Simmons. Health Cheque found that small provincial hospitals are more expensive, undertake fewer procedures and can't offer comprehensive care.

"Serious patients end up being transferred to larger regional hospitals regardless, and doctors don't want to work in these hospitals as they prefer the chance to improve their skills by working in larger teams. As a result provincial hospitals end up being staffed by expensive temporary locum staff, many of whom are foreign trained."