TPPs and all that again...

My previous post (June 18) has been echoed several times since, not by (known) reference by other commenters but by actual events. Readers might like to return and refresh their memories, but essentially I spoke of three factors –
. The US approach to “Free Trade” agreements;
. The role of Minister Tim Groser;
. The desire of US negotiators to make NZ’s Pharmac a key obstacle to achieving a FTA between NZ and US.

I have been slowly catching up with events since early June. Hey!! I is getting older and the enthusiasm and energy resources are very limited; most at this stage directed toward photography rather than current events. Then there was a very enjoyable week that recharged most of the batteries – the ones with remaining functional cells anyway… Hoosoever!

It started – in part – with this article in Granny Herald on June 15

And in reference to United States concerns over the state drug-buying agency Pharmac, which the US sees as anti-competitive, Mr Groser said the New Zealand was not about to negotiate away its public health system.
He said Pharmac was not perfect "and we are always open to suggestions of change, but we are not about to adopt a health system, via a trade negotiation, that allocates resources according to capacity to pay."

Come forward to 4 July and the wording has already started to morph –

Trade Minister Tim Groser has heaped praise on the Government's drug-buying agency, Pharmac, but still refuses to rule out possible changes to the agency as part of future free trade deals.
…
Green Party co-leader Russel Norman said the free trade agreement between Australia and the US had crippled Australia's Pharmaceutical Benefit Scheme, its equivalent of Pharmac.
"They didn't abolish it or its fundamentals ... but they made changes to the way it operates."
The overall effect, he said, was higher costs that were either passed on to consumers or picked up by the Government.

The question is not “What was the effect?”, but “Why was it changed?” The answer has to be that the Aus government decided it was more important to have an FTA with the US and to disregard any cost that might be incurred as a consequence of the changes. Rather than just take Russel Norman’s word for it, a quick hunt around the SMH turns up this op-ed piece from last March –

Last year the Rudd government proudly announced it had cut a new and tougher deal with the drug companies, represented by Medicines Australia, which would save the taxpayer $1.9 billion over five years.

…
…a health economist at the University of Sydney, associate professor Philip Clarke, and his colleague Edmund Fitzgerald, argue the deal still leaves our off-patent and generic drug prices much higher than they are in most developed countries. They quote the example of statins, the cholesterol-lowering drugs, where the patents of the various types have expired or soon will. Statins account for about 16 per cent of the total cost of the pharmaceutical benefits scheme.
They surveyed the wholesale price of Simvastatin 40mg in 10 developed countries and found our price was the highest: 50 per cent more than the next highest country and more than four times greater than the average price.
The lowest price was in New Zealand, which stages competitive tenders between the drug companies. Its price is just a fraction of our wholesale price of $1 a tablet. And even in the US, chains such as Kmart Pharmacy sell that statin for $15 for 90 tablets.
Clarke and Fitzgerald estimate that, compared with prices in England and Canada, the Rudd government's deal with the industry lobby will cost taxpayers and consumers $1.7 billion more over its five-year term. And that's just for the statin group of drugs.

It bears repeating; given the results that Pharmac are achieving why should NZ “fix” something that is working? That question is especially a propos when the drug barons are pushing the US on the other side of the table.
And, from that too, comes the biggest of all –
Will Groser, and eventually the Jonkey himself, be able to put political reality before ideology?

Experience tells me not. The poodle, sorry Jonkey had his tummy well and truly scritched last week in his visit to the Oval Room. Now watch him return home and find all of the things that are "wrong" with Pharmac.

What is "Right" in politics?

There is a strange flavour to NZ politics, and it is one which could cause considerable confusion to those from outside looking in and it certainly makes (in the ol probligo’s case at the very least) looking outward over the border difficult as well.

Using the American categorisation as a guide, one would get the impression that the right wing – the far right of the Republicans as example – would be pushing for less government and greater freedoms both personal and market.

If I bring that to NZ and look at what is going on at present – remembering that NZ is only 4 months out from a general election – it is something of a shock to find the youngest (ignore the grey hairs and balding pate) and brightest of the far right from ACT promoting consumer protection legislation.

The incredulity rises when some of the content of that proposed law comes to light in the news –

Mr Boscawen today said he would introduce a Consumer Law Reform Bill to Parliament before the middle of the year, which he hoped would be passed before the year's end.
The bill, the result of a recently completed review of consumer law, will amend and consolidate several pieces of legislation, one of which - the Sale of Goods Act - is more than a century old.
Consumer protections contained in four acts which are to be repealed will be incorporated into the Fair Trading Act along with some enhancements, Mr Boscawen said.
"The Bill will also strengthen the enforcement powers of Government agencies, allowing faster and more effective action to remove unsafe products from the market."
Under the changes, unsafe good notices and compulsory recalls may be issued "where reasonably foreseeable use of misuse of a product will may or cause injury".
An example of the type of goods being targeted is laser pointers - which police reported have been used in 108 "attacks" on planes, ships and cars over a two-year period.

In those six short paras we find government protection of the consumer, increased powers of enforcement for government agencies, and government limitation of the products that NZ consumers are allowed to purchase.

One of the current batch of Ministers (ad-Ministers?) for whom the ol probligo can easily express a fair measure of respect is the Minister for Trade Tim Groser. He is a List MP (the ones everyone wants to be rid of…) and in my book is certainly worth his salt as Minister. He is very much hands-on in the Trans Pacific Partnership (TPP) negotiations, that belated and largely benighted attempt by the US to re-establish its influence and contact with our part of the world. As such it also gives a marvellous cameo of the political differences between lion and mouse. (Remember “The Mouse That Roared” anyone?)

Trade Minister Tim Groser took a swipe at the protected United States dairy industry last night saying it was time they stopped "looking in the rear vision mirror."

He said the US "must have a trade policy that is more than purely defensive."
Mr Groser made his comments in a speech in Wellington on the Trans Pacific Partnership agreement being negotiated at present among nine countries including the United States.

He also said New Zealand would ditch the TPP if there was any "sniff" that it was turning into an anti-China vehicle.

He had said so recently at a think-tank in Washington, and so had his Australian counterpart Craig Emerson.

To have the minor players making their stance very clear in this way must be anathema to the likes of Kurt Campbell and Janet Napolitano, both of whom found reasons for being late to the opening of the current round back in February.

Mr Groser said the TPP negotiations would not be completed by the time President Barack Obama hosted Apec in Honolulu in November but "solid progress" would be made.

The degree of progress would depend on what happened in Washington on the US' existing trade agenda, specifically whether Congress approved the free trade agreements already negotiated with Korea, Panama, and Colombia.

"The political oil" to facilitate their passing were the payments known as Trade Adjustment Assistance to affected sectors.

"No TAA, no deal.."

Americans reading this might recognise the “political oil” as euphemism for their term “pork”; but I confess that to be a stray shot.

The point here is coming back to a phrase that I heard some years back as a justification for any and most of the less digestible actions taken by the US on the international scene – “in America’s interests”.

The TPP is where “American interests” meets the real world of a strong-willed and somewhat sceptical southwest Pacific. There is no question that NZ and Aus stand together in the TPP negotiations and I doubt very much that stance would be altered in any way if either government were to change.

It should be well known to readers that Australia (as a “reward” for its services in Iraq and Afghanistan) already has a FTA with the US. NZ already has a FTA with China on which the ink has barely dried. The Australian FTA I have discussed in the past, expressing reservations on the long-term benefit ever compensating for the short term advantages taken by the US. That Australia is taking the opportunity of the TPP to voice opinions that run contrary to those of their partner in the FTA speaks some volumes about the medium to long term benefit of their (previously much-vaunted) FTA. And that too is where the ol probligo pulls up. It is (or has been in the past) a matter of FTA dogma that the agreement will run to the favour of the stronger party; and accepted wisdom says that is the US.

What the US is finding in trying to negotiate their TPP (and it was the idea of the US, not the Pacific) is that the minnows have grown some fairly sharp teeth. The composition and structure of those teeth has come from the influence over a long period of years from the US itself, and its various international allies (children?) such as World Bank, IMF, and OECD. A goodly dose of true capitalism in the mix has been of immense benefit as well, no question or debate.

A very primary example, one that is to the forefront in this country is a statement made in the past week or three to the effect that the US did not recognise the validity of centralised pharmaceutical purchasing organisations; that these organisations are considered anti-competitive; and their existence could represent a barrier to progress in negotiations. The diplomatic wording is very careful and somewhat guarded but there can be no doubt that some very heavy barons in the background are pulling one or three strings in the US administration. Essentially the only candidate that fits the statements is NZ’s government operated Pharmac. This is the organisation that handles licensing of medicines for use in NZ, and negotiates the purchase of those drugs for the whole of the public health system.

The criticism centres upon a “lack of transparency” and equally on the inability of the drug companies “to make submissions” to Pharmac – the “closed shop” accusation. Like so many of these things, there is another side to the impression. “Lack of transparency” implies a level of secrecy, something that a losing tenderer would want to penetrate to find out the prices being accepted for specific or even classes of product.

The “closed shop” is a well resourced and independent scientific and medical analysis system, empowered by the government to freely choose the source oand types of medications being used in this country. Locking out the salesmen (which seems to be at the heart of the outrage) not only maintains that independence from direct and indirect influence (called “corruption” in some quarters), it also allows for the hopefully objective appraisal of needs against supply cost. That in itself is a whole topic worthy of future thought.

The incongruity of the US objections is that Pharmac is very closely modelled on an American predecessor - MedicAid.

On the economics of the caring society...

This past week saw the release of the government's Budget Policy Statement; this is the first step toward the Budget for 2011 and sets out "where we are at present" and "things the government wants to do". That the statement carried "bad news" is not an understatement. A deficit was forecast for the current year. The bad news is that it is in fact considerably more then forecast, and greatly more than the previous years' actual deficit. Brian Gaynor has a summary here which gives a reasonable run-down of the salient points.

Finance Minister Bill English announced on Tuesday that the Crown's operating deficit before gains and losses (obegal) is now forecast to be $11.1 billion, or 5.5 per cent of gross domestic product, for the June 2011 year. This compares with the previous deficit forecast of $8.6 billion or 4.2 per cent of GDP.

The 5.5 per cent of GDP deficit compares with a similar deficit of 6.1 per cent for the 30 OECD countries but a number of points are worth noting:

New Zealand's projected deficit is not too far off the four "pigs", which are forecast to have the following budget deficits to GDP next year: Portugal 5.0 per cent, Ireland 9.5 per cent, Spain 6.3 per cent and Greece 7.6 per cent.

As he points out, things have not been that bad...

New Zealand had a great record throughout most of the 1990s and 2000s with 15 consecutive budget surpluses between 1993 and last year. Norway was the only OECD nation to have a better performance over the same period.

But as the saying goes, all good things must (will) come to an end. And so it is.

Gaynor lists the causes of "the end" thus -

The Crown's fiscal position has deteriorated since 2008 because of a number of initiatives including KiwiSaver, Working for Families, the indexation of benefit and this year's income tax cuts.

There have also been a number of one-off items, including the Canterbury earthquake and the leaky homes scheme, while tax revenue growth has slowed because of the weaker economy.

There are essentially two elements that give rise to the deterioration of NZ's financial position over the next 40 years. They parallel the difficulties being experienced in the PIGS economies; the increasing cost of age pensions and health care. There is a common factor in the two; the "aging population". Gaynor again -

The Treasury's long-term Crown revenue and expenditure figures are based on a number of assumptions, the most important of which are population demographics. Its main assumptions are:

The total number of individuals aged 65 and over will rise from 549,900 this year to 1.3483 million in 2050. As a percentage of the population, this age group will increase from 12.6 per cent to 24.5 per cent over the same period.

The number of individuals aged 90 and over will go from just 22,400 this year to 155,100 in 2050. This age group is expected to represent 2.8 per cent of the country's population in 2050 compared with 0.5 per cent at present.

Yep, include the ol' probligo in that demographic for sure.

The first expenditure line, which is New Zealand Superannuation, demonstrates the dramatic impact of the ageing population on Crown finances. NZ Superannuation is projected to cost $71.1 billion in 2050 compared with just $8.3 billion last year.

Most retirees claim that they are entitled to full Government superannuation because they paid taxes throughout their working lives but the big question is whether the country can afford this.

There will have to be a dramatic increase in the country's economic performance, and the Crown's taxation revenue, if the current superannuation scheme is to be maintained for all those aged 65 and over.

The next major expenditure item is health, which is projected to blow out from just $13.1 billion last year to a massive $95.1 billion in 2050.

...

The basic problem is that total government expenditure on superannuation and health is projected to escalate from just $21.4 billion last year to $166.2 billion in 2050, yet the working age population - those in the 25 to 64 age group - will only increase from 2.268 million to a projected 2.612 million over the same period.

In other words, each working person will have to pay annual tax of $63,600 in 2050 just to pay for superannuation and health, compared with tax of only $9400 this year to pay for the same two items.

And that is where I drop out of the demographic. It is not as if this is a "new" problem. It was foreseen when I first started work; it was the number one reason why I started contributing to personal superannuation savings almost immediately. But let's leave that debate there because there are some very sore points within.

It is at that point that dear old Garth George chips in. Now, to explain, George is one of those media commentators who would fit very nicely with the lifestyle and attitudes of the likes of TF Stern. Not that I expect TF will pass this way, let alone comment. Unlike TF, George is a sad, angry, and probably (I am guessing) lonely old codger.

Garth George picks up on that last (quite true) comment from Gaynor and uses it to beat his anti-abortion drum.

However, when it comes to the argument that the major problem with national super is the population increase in the number of people aged 65 and older, I want to vomit.

I wonder if it occurs to any of these doomsayers - invariably comfortably well-off folk in middle age and younger - that between April 24, 1974, and the end of last year, more than 409,000 potential New Zealanders have been slaughtered in the womb by state-paid abortionists - at the cost of tens of millions of taxpayer dollars.

I do not need to quote any further from his tirade.

I wonder if it has occurred to George that if those 409,000 "potential New Zealanders" were alive in 20 years time (when the last of them might have been starting work) there would likely be 200,000 more in the unemployment lines; 60,000 on permanent benefits as permanently hospitalised adults, or enjoying the free board and lodging of HMTK (I doubt that ER will be still going in 30 years...); the rest having departed for greener pastures in Australia and further afield.

To make matters worse, he completely ignores the fact that adding 400,000 to the total population used for the Treasury numbers (quoted by Gaynor) reduces the taxation load from $63K to $55K. That assumes that all of those 400,000 people will be in full employment; an unlikely prospect.

As I said, Garth George is a sad, angry old man. He is also well past his use-by date.

On matters of health

For some while my left hand has had an itch to grab a (virtual) pen and write a long diatribe on the wrongs of the American health system. I actually got to collection of statistics from sources such as Congressional Budget Organisation, planning the direction that I would take.

But I am not going to do this for the simple reason that it is pointless. No one "system" is any better than another. And if America wants to continue its massive strides toward social extinction why the F*** should I care?

The epiphany came from a single page comparative I read in a National Geographic (of all places) last weekend. It comprised a short three paras, with a planomic showing health expenditure (total, not government funded alone) per head of population on one side with a line linking to average age expectancy at birth on the other.

I was looking at this and quickily found NZ (as I do) but for the life of me nowhere could I see the US! NZ was about 2/3s of the way down the page. Canada was above that, Britain further up again at about half way. No US. Then I found a red line that ended at about age 70, nearly opposite NZ on the spending side. It ran from there back up to the top printing margin on the left; US - $7,415 per head of population; printed in red which is why I did not see it immediately being very slightly red/green colour-blind.

What was not at all clear was whether this $7,415 php was the cost of providing medical services alone, or the "tax plus premiums" cost I had been seeking. From the data I have already dug out, I suspect it is the former. The true cost (tax and premiums paid to insurers) could well be higher again.

What I have learned through the exercise is that the American health system is all inclusive; it would cover dental (partially subsidised by the taxpayer in NZ), glasses (not subsidised), accident (covered separately from separate "tax") as well as basic health services (I pay the first $30 of every visit to the doctor).

So I can turn my back on the American health topic for good. America you are welcome to your unique (it is too, the only rich nation that does not provide universal health coverage) system.

TF, when you reach 65, will you be going on to Medicaid? Or will you continue working to pay your health insurance?

On matters of health - and great fortune...

I make little secret of the fact that, at age 13, I became epileptic. I had what I know as "Juvenile onset gran mal". I also know that I am one of the very lucky ones who "grow out of it".

There are many others who are greatly less fortunate.

I saw the headline link at (what used to be)Jack Grant's Random Fate blog.

My chest was to his back. My right leg was thrown over his right hip. At first he made a smacking noise with his lips, as if a cow was chewing his cud beside me. I thought I heard him ask for something. I might have just been falling to sleep myself. But this mouth thing caught my attention. My arms tightened around him. He started to shake. I thought, "Is he having another one?"

"I'm right here with you baby." I held him even tighter. He'd told me to hold him tight if this ever happened when we were together.

Read the whole article. It is sensitively and well written.

I want to pick up on the end of it.

He's had epilepsy for over fifteen years. He lost his license and his job fifteen years ago. Medicare says he's not "disabled enough." He has no insurance because after rent he has three hundred dollars per month on which he keeps himself alive. He goes to the free clinic every three months to wait in line for four hours to see his doctor and get his meds.

This is how a man who was Varsity all three years, MVP'd often, who then drove heavy machinery fifteen years for a city he loved, fell through the cracks. He's not disabled enough to receive any help from our government. This is the land of the free and the brave? I don't think so.

Those who fight and bellow at the perceived injustices of social health programmes might like to explain how their ideas would provide this man with the health services he requires.

Oh and so that you know, my health insurance carries a 5% loading for my juvenile epilepsy. I was able to get my driving license at 22, after 3 years clear of fitting and not being on (some fairly scary) drugs including phenobarbitone (barbiturate). I am lucky indeed.

Where to next?

At some point in the past few days I heard a radio interview with an expert on genetics. Amongst the interesting things covered in the course of the interview was the thought that Homo Sapiens as a species is an evolutionary dead-end.

Amongst the prim-misses he put forward for the delusion was the idea that H-S has evolved to the point of becoming technology-dependant. To support this, he put forward the idea that anyone trying to survive on a totally raw diet (no restrictions on content or quantity) would die within two months from starvation. Why? For the simple reason that we have lost the means of producing natural enzymes essential for the digestion of totally raw food, and also lost the symbiotic bacteria ditto.

An interesting thought. Where are we going as a species? Do we help the long-term survival of the species through our increasing reliance on technology, and especially medical advances. I have made the comment quite a few times now that 100 years ago I would have been lucky to have seen out my 40's.

In another recent discussion it was stated that the commonly accepted age of retirement of 65 years actually comes from a scientific paper of the mid-1800's based on the fact that by then 50% of all people have in fact died. Now, we have advanced to the point where mean life expectancy (50% die before reaching it) is something like 78.

Staying with the "evolutionary dead-end" for the moment, a recent death here in Auckland pointed to another aspect of the same. The Coroner this past week heard evidence into the death of a restaurant patient who had died of an allergic reaction to either peanuts or shellfish. Sad for him and for the family, I acknowledge, given the circumstances. It raised again the question in my mind (following the radio interview I started with) about the continuing viability of the species. There are any number of human deficiencies (including heart defects of the kind I suffer(ed) from) which in times past would not have been continued in the total population other than as the occasional mutation. Thinking back, allergies were almost unheard of in my childhood, there were people who "died suddenly" of "heart failure" usually, who might well have been affected by peanut allergy or bee-sting allergy or similar. Now, (if you add them all together; allergies, coeliac, auto-immune diseases like arthritis) there is an increasing proportion of the total population who survive long enough to pass on their defective genes when in time past they would not have survived long past puberty at best.

The third thought that impinges comes from my sister's efforts to eliminate "curly calf" and Neuropathic Hydrocephalus from her herd. Again, and this leads into the question of "line breeding", is the "purity of line" more important than the long-term genetic stability of a species.

So, where do we go next as a species? Should we be looking to restricting medicine and medical treatments to those who can maintain a healthy gene stock? Are we (as a species and reportedly the descendants of as few as 2000 individuals) so badly line-bred that we can not guarantee long-term survival? Evolution (as a product of adaptation) seems well gone into the past. In all likelihood, given the opening prim-misses, we can no longer adapt. We are nailed solidly to our cross of technology.

On the state of health - 1

There was an interesting comment over at TF's place stating (and I can't for the moment think of a reasonable response to it) that the Federal government "has no place in providing health services". As should be well known to readers here, that is certainly not the case in NZ. Mind you, the commenter did continue to say that it was a State responsibility, and that perhaps is the reason why I am at a bit of a loss about it.

There is one very direct parallel between NZ and the US though, and it centres on the role of the private system and medical insurance providers.

To that end there was a very interesting and somewhat blood-chilling little article in SST this week...

RISING HEALTHCARE costs have reached crisis point, pushing families to give up their health insurance and fall back onto the straining state system, says Ian McPherson, chief executive of Southern Cross Medical Care Society.

The not-for-profit insurer saw claims rise by $61 million in the year to June and McPherson said factors behind the claims blowout included the amount private surgeons earned and costly new medical technologies with little or no proven clinical benefit.

For the time being, my salary package includes medical insurance through Southern Cross at a cost of something like $35 per week. That looks like increasing by a bit in the near future.

"How much will people be able to continue to pay and not object?" McPherson asked.

"We have seen a significant downgrading from policies that are far more general to policies covering the extreme emergencies. It is difficult for people to downgrade any more. There is a significant number sitting on the bottom rung and about to jump off into the public system again."

Exactly.

Rising costs for Southern Cross could also feed the already rapid rise in the state's healthcare bill. Consultant Paul Winton, author of a report in August – Health, New Zealand's untreated addiction – said current trends suggested healthcare costs could grow from 20% of core government spending to 40% in 15 years.

McPherson said Southern Cross had begun engaging with GPs on the premium-affordability crisis, and the subtext is clear – the insurer wants to see GPs direct patients away from the more expensive private surgeons.

"We are not going to tell GPs who to refer their patients to," McPherson said, but "we would like GPs to be mindful about the cost rather than referring out of habit. Giving them an incentive to help manage our budgets is something we are exploring with them now."

Southern Cross has been developing a network of affiliated providers, but McPherson said as yet it would be a step too far to require their use in the same way a car insurer would require a claimant to go to an approved panelbeater.

Now there is little wrong with the Southern Cross response to the problem so far as I am concerned.

The truth of the matter is though that McPherson's prognosis in the opening paras is only too true. Even given the present premium levels there is little chance that I will be able to afford the present cover into my retirement. There is no question that I will become increasingly reliant upon the public health service. Not that I have any problem with that, as it has certainly been "good value" for me.

McPherson said there were instances where it appeared that profit motive and not clinical outcomes were driving that price upwards.

He cited the example of robot-assisted prostatectomy surgery which costs $30,000 compared to the $15,000-$20,000 of conventional surgery, without evidence of faster recovery or better clinical outcomes.

Southern Cross's reaction in this case was to pay only a "contribution" to the cost of the robot-assisted surgery.

Why were surgeons using it? "Because it is fun. Because it is interesting. Because you can get a margin on your investment."

Hmmm, sounds a bit like "boys toys" no?

Let's set the parameters here.

First, medicine is about curing diseases, mending injuries, and providing palliative care for the dying.

Second, it is a very highly skilled and for most a stressful occupation. (I am basing that on the comments made to me by the three medical doctors in the club I belong to). People who fit those parameters in any field deserve to earn more than those of us who cruise below the radar doing little more than subsist. There is also, as any capitalist will tell you, the need and justification for recovering a return on capital invested; let's face it, I will tell you that as an accountant.

Terry Moore, president of the Private Surgical Hospitals Association, said: "We are conscious of the increases in costs which ultimately, if left unchecked will mean fewer people will be able to afford to go private themselves."

Moore said uncontestable clinical proof of new technologies could take years to emerge, but acknowledged they were stoking cost escalation along with wages and surgeons' fees.

McPherson also hit out at fees in his annual report to members last month. "We hear the argument that [surgeons] are part of a globalised workforce; we point out that if their prices increase to reflect overseas rates, fewer New Zealanders will be able to afford private surgical services."

Boscawen [right wing MP] is of similar mind, arguing that the globalised workforce is more of a westernised workforce, because the wages earned by quality doctors from India, for example, where cataract surgery is cheap, are having no effect on the fees charged by private surgeons here.

Moore countered: "Surgeons are generally independent practitioners and contractors so they pretty much set their own fees in a competitive market, but I don't think the fees have gone up much more than the medical inflation rate. They have become more efficient so they are probably earning more, but probably working harder for it and doing more procedures."

He said rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one.

All true, well I have difficulty disagreeing with most of it so it must be. No confirmation bias here!

But there are some interesting contradictions. For example, the hospitals (Moore, above) are trying to argue that "economies of scale" ideas do not apply; "rising premium costs for health insurers were also driven by the sheer number of procedures being done, not just the cost of each one." I would have thought that (as my wife found out when she had cataracts removed from one eye) being able to "mass produce/production line" operations would lead to some savings. If it costs the insurer $4M to provide 1100 cataract operations then does increasing the number by 20% mean a 50% increase in cost? It does if "industry" is currently running at or above capacity.

There is a secondary impact too, coming out of the combination of developing technology (and that is everything including drugs and personal skills) together with societal expectations. The best indicator I can give for this effect I wrote on some while back (2006?? Sheesh!) is the example of herceptin - a treatment drug for a specific kind of breast cancer. That example ended up as a $3 million programme to treat roughly 20 women per year or about $150,000 each.

No one can blame those women for wanting (or deserving) the best possible treatment, and outcome. Exactly the same justification existed in the 1970's when open heart surgery was being developed by the likes of Barratt-Boyes and the other researchers in US, Europe and South Africa. Today, that surgery is routine. Auckland Hospital does two or three operations per day at a cost each of (I was told) about $75,000.

[To be continued...]

State of Health - 2

Returning to Southern Cross, the pressures of increasing demand for new treatments and higher technology solutions are having impact. It is leading to the prospect of large increases in premiums. In many cases the premiums are already too high to be affordable - note SC's own comments on people not renewing, or down-grading, current cover.

Further, these impacts are being felt in the public health system as well. The herceptin debacle was eventually funded (in the first year) out of Auntie Helen's Charity Fund (otherwise known as "The Prime Minister's Discretionary Fund") but I do not doubt that it is now an established part of Vote Health.

If we look behind the political rhetoric and wailing and gnashing of teeth there is a very fundamental problem with the provision of health services. Essentially, no one wants to die. I can't blame people for feeling that way. After all, we have the ability today to ensure the survival of some 1% of all live births who when I was born would have been "sad but inevitable consequences" of premature birth. I would be one of the last to try and suggest that we should turn our backs on that ability. We have the ability to turn around the lives and health of reprobates like the ol' probligo with what is now a relatively routine opration, complex but routine. On pure observation, there must be some 1,000 people a year whose lives are improved immeasurably if not saved as a result. Those having pacemakers fitted come into a further 1000 a year. That is just one hospital.

The problem of the cost is one that has actually been with us for a lot longer than we might want to admit. It is not limited to NZ either.

If I return to the commenter whose thoughts started all of this off, I wish him and TF and everyone fighting the good cause against Obama the very best of luck. Why? Because the choice is very simple.

Generally, private insurance and health providers are by their very nature required to make a return on their investment if not an additional return for those whose money made the investments in the first place. The argument in favour of public provision is based (in theory) on universal cover and no profit.

Irrespective of how you add those two quite different proposals there are common impacts upon how much has to be paid for them. I have covered those already.

The truth is that there is a limit between cost, availability, technology and outcome; a "mathematical" limit as well as economic and "social".

The ultimate and universal outcome for all is death. The "social" end of the limit wants that outcome minimised as far as possible and delayed for as long as possible given that it is a certainty for all (at least at present). There is much that can be argued about the causes and nature of a person's death. I do not think that this is the place for that debate other than to suggest that its inevitability has to be recognised.

The ultimate technology would have to be (effectively) eternal life. There was comment made last night on tv that in the Middle Ages the average life span was 30 years. A man of 40 would be considered elderly. A man of 60 years almost unheard of. Needless to say, aging diseases such as cancer, alzheimers, coronary heart disease were unheard of and unrecognised. In the 1800's in Europe and America, the average lifespan might have increased to 55. In the past 15 years the average lifespan for men in NZ has increased from 71 to 82; the life expectancy of a newborn is something like 62, but once past the age of 15 it increases to 85. It is expected that the number of people reaching 100 years in 60 years time will be double that of the present day. In very large part that increase in life expectancy is the result of improving technology.

The ultimate in availability is universal. It is here that most of the heat and darkness arises. "Why should I pay..." is fundamental to both sides; with the sentence ending "...for anyone else" on one side and "...more than the true cost" on the other leading to "...more than I can afford" again on the other side of the lake. What must be decided by society, not by the medical profession or the government, is who should be able to access medical services. The "rich" will always be able to afford to buy; "rich" because that is a matter of perspective as much as it is of fact (compared to half of NZ I am a "rich" man yet as I said at the beginning paying for personal medical insurance is almost out of reach).

The decision on public health services needs to come back to the fundamentals I began with - curing diseases, mending injuries, and providing palliative care for the dying.

The debate must centre on the immediate cost of treatment against the benefit to society of the likely outcome. Is that a simple judgement? Not in my book! What is certain is that it is a necessary debate. Nor can the availability of health services be limited to those with the ability to pay. There has to be a universality in health services. The scope of that universality has to be unlimited. That means that the universal care will necessarily provide services which are below the available technology and ability.

Not an attractive thought.

Well laid plans of ...

For some years now (perhaps as many as 20!!) SWMBO and the ol' probligo have promised themselves the opportunity to attend the World of Wearable Arts originally when it was held in Nelson but the desire has remained to this day.

Now, with the stars aligned as close as we could get them to 12/69 comes the opportunity. We booked about 8 months back. No problems at that time with getting tickets to the event, nor accomodation; fly down, and we train back.

To explain.

My father was "mad on trains". The reason for the quotes will be a mystery to all except those who have read "Anthony and Antimaccasser" and The Potentate of Raspberry Jam. Anyhoos. We had everything booked and then we get a message from TranzRail saying that our train will arrive in Auckland an hour late. This is 7 months before the trip and they already know it will be an hour late? But then the explanation. There will be an extra two engine changes. The first in Feilding, to replace the enormous Diesel with a far more interesting steam 'J' (Pacific Class for the spotters) and then again at Taihape to remove said very interesting engine and replace it with a more mundane electric. So that single event was enough to transmogrify a pleasant jaunt to an event which I have looked forward to for years into a double-header of pleasure and memories.

In the meantime, good ol' BE is at the tail of Granny Herald once more with his analysis that it is not a broadsheet but far more tabloid in nature. He points out as evidence the teasers and whatnot at the top of Page 1. Brian, me old mate, shurely it is the content, the writing, that is of far greater import than whether Pamela Anderson is pictured on Page 3? If you had applied some effort to the critique of "mass media news" - which term I think covers the intent rather than the means of broadcast - as published by Herald, Dom Post and the others rather than the very simplistic "It looks like The Sun" your point would have been far better made.

As it stands, Herald along with a very large number of "reputable" news media has become lost in the cost-cutting editors room where news stories are judged by cost rather than worthiness or content. You can find the same stories for free, by-lined PA and Reuters, even MSN and Fox can feature, spread over a very wide range of publishers. To get anything different, the Independent sometimes puts its own people on a story, Guardian likewise, but one has really to go to the likes of Aljazheera to get anything like a "different perspective".

That said, the picture of Auntie Helen, and more recently Jonkey, holding a mobile press conference whilst in transit to the House is truly a neat caricature of the relationship between news media and politics in this country. I doubt that it differs in others. In fact we might even be lucky to have reporters in the House, instead of a daily meal of government political party announcements and pre-recorded releases.

Come to think of it, TV1 and TV3 do little more at present than provide a free service in place of what would otherwise be paid for by the government.

As for knowledgeable analysis of that "news"? I dispair.

Until I turn on Maori TV that is.

Who watched The Aunties last night? They ran through the services provided to a woman with breast cancer and gave her a bit of jolly-up at the same time. All told 30 minutes of excellent tv; informative, critical when necessary, go with the flow presentation, co-operative and not antagonistic. Great stuff!!

What really is wrong with NZ's health system?

If you thought that what I wrote about the US health system was "strong", then take a quick browse through Tracey Barnett's effort in last Saturday's Herald. (probligo health warning; this op-ed might endanger the health of well-meaning Americans). One of the milder cuts -

I love America. It's the only country in the world where citizens pack an AR15 to go a'courting their President. When an economy is stressed, the truly wacked fringes always manage to find centrestage.

I went back to visit family last month, and there was Old Glory, limping along with the biggest single tax revenue drop since the Great Depression, like Paris Hilton with maxed-out credit cards and nothing to wear.

Alongside, and regrettably not on the net, was a small table setting out the current health spends for eight nations as a percentage of GDP. A fair measure as it closely relates to average personal income and is devoid of currency considerations. So, from memory, NZ ranked about 4th on that list with 9.6% just behind Australia and Waaayyyy behind the US at something like 16%. Now that is truly, when you consider the size of the US defence budget and the fact that two concurrent wars is costing little more than twice that proportion, truly frightening thing to consider.

The point was made though, that at the present rate of increase health spending in NZ will reach 22% of GDP by the year 2020 and that is even more frightening.

John Armstrong applied his well-muscled left arm to what the government is currently trying to do.

Was there political interference? Or did the high-powered taskforce charged with reviewing the public health system tailor the final version of its report in full awareness of the acute political sensitivity over the health portfolio?

Or did the group's members simply change their minds at the last minute and drop some of the more contentious things they had been planning to recommend?
...
That is because draft copies of the report leave little doubt that something or someone persuaded the review group, which was chaired by former Treasury boss Murray Horn, to water down or remove some of its more controversial suggestions before the final version was presented to the minister.

Even in its final form, the report has a fair degree of political risk attached to it.

The review group's reform recipe would gut the Ministry of Health and set up a National Health Board which would be responsible for allocating funding of health services with the intention of improving access to services and hospital productivity.

The recommendations bear a marked resemblance to National's hugely unpopular health reforms of the early 1990s which were designed to get more efficiency into the delivery of health services by forcing hospitals to compete with one another.

...and so on.

There is a fairly large matter here in the middle though which has far more to do with medicine and only a secondary look in at money.

I think, with some certainty, that the Bible refers to "man's allotted span" of "three-score years and ten". Now the ol' probligo isn't making any promises to pull the plug at his 71st birthday bash.

One does have to wonder at the western, Judeo-Christian, desire for eternal life in this world in preference to the next.

It is late, I am tired and cranky.

Is it any wonder that health budgets are inflated though, when faced with this kind of problem (once again from Saturday's Herald) -

The flood of alcohol-related hospital admissions during weekends is compromising the ability of hospital staff to tend to general admissions, doctors say.

The situation has prompted doctors to call for a rise in the age at which people can buy alcohol, The Press reported.

Wellington emergency department specialist Paul Quigley said large numbers of young people were coming in with alcohol-related injuries.

"This stuff is all preventable and it's very frustrating when you have people with heart pains or serious respiratory problems having to wait because staff are dealing with teenagers who have broken their wrist or been in a fight because they are drunk," he said.

One emergency department said patient numbers could double on Thursday, Friday and Saturday nights.

The bulk of admissions by people under 30 at weekends was directly related to alcohol, Dr Quigley said.

There was little remorse, and often those admitted appeared pleased with themselves.

Leave them in the gutter. What say you?