Ryall Tony: Questions for Oral Answer — Questions to Ministers 
Ryall Tony: Questions for Oral Answer — Questions to Ministers 
[Volume:630;Page:2408] 
9.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: How is the rate of inflation in hospital costs measured and what reports has he received on the hospital price index over the past 12 months? 
Hon PETE HODGSON (Minister of Health) 
: 
 It is calculated by studying the changing costs of a basket of health services across seven public hospitals and the index has increased by 5.1 percent in the 12 months to December 2005. 
Hon Tony Ryall 
: What funding increase will district health boards receive this financial year to meet these increased costs and the expected salary demands of other health professionals seeking relativity with the nurses’ pay jolt; or will we continue to have district health board after district health board come to Parliament and admit that under this Government patients have to be sicker and sicker to get an operation? 
Hon PETE HODGSON 
: District health boards receive money from the Government through a variety of channels. A thing called a forward funding track comes in at a little under 3 percent. There is a demographic adjustment and an adjustment for specific services such as health of older people. In recent times district health boards have been directly compensated for most of the increase in nurses’ pay. The member will be aware that this Government decided nurses should be paid what they deserve and all but 2 percent I think of that was met by a special injection from the Government. 
Ann Hartley 
: What reports has he received on the cost of delivering health services in New Zealand compared with other OECD nations? 
Hon PETE HODGSON 
: I have received a report showing that New Zealand spends around a third of the amount of money per person on health that is spent in the United States. Interestingly the same report shows that on average New Zealanders live longer than Americans. I am sure National will want to consider this information as it continues to advocate the Americanisation of our public health system. 
Hon Tony Ryall 
: How will district health boards meet salary demands and hospital inflation of 5 percent and maintain services when the Government is proposing a forecast funding track increase in this year’s Budget of only 2.93 percent? 
Hon PETE HODGSON 
: I tried to answer that member’s question in an earlier answer. I will try again. District health boards receive funding from Government through a variety of channels. One is through the future funding track which comes in at a little under 3 percent. Another one is through demographics. Another one— 
Hon Tony Ryall 
: How much? 
Hon PETE HODGSON 
: It depends on the district health board I say to the member. An amount of money is paid out for the health of older people services. Direct money is paid to compensate all but 2 percent of the increase that is payable to nurses and on it goes. I am not saying for the moment that district health boards are overpaid. District health boards will have to move into a more and more cost-effective space. But I must say that the district health boards of this country are a whole lot better than Crown health enterprises or whatever those things were called under that member’s Government. 
Dr Jackie Blue 
: What assurances has the Minister sought when noting that laboratory services are included in the hospital price index about the process being undertaken by the Wellington district health boards which are currently considering tenders for laboratory services there and its potential effect on the index? 
Hon PETE HODGSON 
: I have received a number of reports around a number of laboratory tendering processes that have been undertaken by a number of district health boards. All of those seek to improve or to further improve the cost-effectiveness of our health system. I look forward to that member’s warm endorsement of that move. 
Hon Tony Ryall 
: Can the Minister confirm that the Government has told district health boards that it will increase demographic funding in this year’s Budget by 1.48 percent and will he also confirm that the Government has formally told district health boards that this money will be used to eliminate deficits rather than increase services? 
Hon PETE HODGSON 
: The Government certainly does not tolerate the idea of deficits and it is pleased to report that district health boards are moving progressively to eliminate deficits and that a number of district health boards are now posting services—they are to be congratulated. The demographic money that the member refers to is actually used to transit towards a population-based funding formula over the next several years.