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Pay Settlement Signals Sea Change In Funding

17 December 2004

Pay Settlement Signals Sea Change In Health Funding

News that the NZ Nurses’ Organisation has agreed a deal for rises of up to 30% in nurse wages signals a significant shift in the health funding landscape in New Zealand according to the New Zealand Private Hospitals Association (NZPHA).

Association Vice President and Surgical Representative Michael Woodhouse believes the impact on the private surgical sector will be significant. “The details of the settlement have yet to be fully examined but there is no question that the cost infrastructure of private surgical hospitals will materially increase” he said. “Private hospitals are in the same market for nursing recruitment, and the increases will inevitably be reflected in private hospital nursing staff settlements. Many private hospitals have already agreed significant increases to reflect the prevailing market” said Mr Woodhouse.

Nurse costs represent approximately 50% of all private hospital costs and these costs will need to be worn ultimately by health funders according to the NZPHA. The NZPHA believes that providers have been very responsible in their attempts to control healthcare costs in the last decade, and today represents not so much a failure of those efforts but recognition that cost constraint is no longer possible.

“Major health funders such as Southern Cross and ACC need to recognise that private hospitals will incur significant extra costs in the next three years and it is inevitable that these costs will be passed on to them” said Mr Woodhouse. “Many services are now provided under fixed prices which will need to be increased, and health funders need to be on notice that maintaining the excellent quality of care provided by New Zealand private hospitals will come at greater cost”.

ENDS

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