Prescription charges editorials

May 16th, 2012 at 3:00 pm by David Farrar

Two on the increase from $3 to $5. First the Dom Post:

With the Government promising a “zero budget”  next week the choice for him was simple: ask people to  pay slightly more for prescription medicines or tell patients needing cancer treatment and elective surgery to wait longer. He has chosen to ask families to pay up to $40 more a year for medicine. Few, apart from those who like to pretend the Government has a limitless supply of money, will disagree with that choice.

The increase, which takes effect next January, will push the price of a single item up from $3 to $5. For a family the maximum payable in a single year will increase from $60 to $100.

That is 11c a day per family maximum.

Prescriptions for children under the age of six will remain  free and families that cannot afford to pay the increase will be able to obtain assistance from Work and Income NZ and primary health organisations.

The reality is this is a very minor changes, that reduces the drugs bill to the taxpayer by just 4%.

In Australia the average fee is A$35.40 (NZ$45), although  those on low incomes pay a lesser fee. In England the average charge is NZ$16 and in Finland, Labour’s utopia,  Mr Ryall says individuals have to fork out  $1107 each before the cost of prescription medicines is limited to about NZ$2.50.

So we have a cap 10% that of Finland.

The NZ Herald:

Much angst has greeted the Government’s announcement that are to increase from $3 to $5 next year to fund reinvestment in the health sector. Opposition parties have warned that lower-income groups, the elderly and the chronically ill will be hit hard. The Mana Party leader, Hone Harawira, has gone so far as to claim it “will lead to children dying”. Such concern is vastly overstated. This is, after all, the first increase in prescription costs in 20 years, and could be justified merely on the basis of inflation.

Vastly overstated? More like insanely hysterical. And the charge was originally $15, reduced to $3 in 2004, so at $5 is still just one third what it once was.

For many people, the rise in cost will be easily manageable. They need prescriptions relatively rarely, and their families’ requirements will get nowhere near the 20 items of medicine a year, after which prescriptions for the rest of that year are free. Such people would not have been unduly perturbed if the increase had been more than $2. Indeed, it would have made more sense for the Government to charge a larger sum for each prescription but to lower the trigger point for free prescriptions.

Not a bad idea.

At its worst, the increased prescription charge will cost a family an extra $40 a year. That sum hardly tallies with the dire consequences predicted by some Opposition politicians. Even so, the move is predicated on the universality that so marred the previous Government’s early childhood and welfare payments. A more astute targeted approach would have served those with substantial medication requirements better and left little room for criticism. Unfortunately, the Government has missed that opportunity.

Subsidies should generally be targeted at those in need, not made universal as this is economically inefficient.

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4 Responses to “Prescription charges editorials”

  1. Pete George (23,168 comments) says:

    Indeed, it would have made more sense for the Government to charge a larger sum for each prescription but to lower the trigger point for free prescriptions.

    I’ve been suggesting this too. $10 for a prescription is still cheap for me, I’d be happy to pay that and let more kids get free prescriptions – but I’d also like to see some effort to make sure kids aren’t prescibed drugs too often, I’ve seen some kids that always seem to be on something. Is panadol syrup given on prescription? I’ve seen it used virtually as a dietary essential.

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  2. Rick Rowling (823 comments) says:

    Dear whiny lefty.

    The rich prick taxpayers will now be paying $40 of the $45 cost of your prescriptions, instead of the $42 they pay for you now.

    Selfish, selfish rich pricks.

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  3. Anthony (785 comments) says:

    I couldn’t believe that Labour in 2004 reduced the prescription amount to $3, which is less than most people will pay to buy a softdrink from the dairy!

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  4. Martin Gibson (229 comments) says:

    Agree with the above comments. I don’t care to suckle my own money from the state teat; I’d rather they took less of it to start with.
    A UK-based economist friend of mine wrote an excellent column about the NHS recently along similar lines:
    http://www.cityam.com/forum/heretic-s-view-the-national-health-service

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