Big gain from small change

In a Budget pitched as an exercise in low expectations, the dropping of a small prescription charge was a stand-out. The fact it was merely a $5 saving appeared to signal this was not even a bread and butter Budget, but a breadcrumbs Budget, as Newshub’s witty political reporters put it.

Yet that overlooks both the symbolic and the real impact of dropping the $5 charge. It’s seen as a barrier to health. Finance Minister Grant Robertson explained that in the 2021-22 year, ‘‘more than 135,000 adults did not collect their prescription because of cost’’.

A paper published by BMC Health Services Research explored the relative outcomes of charging patients compared to making prescriptions free. Using two groups as samples, it found those whose prescriptions were free had ‘‘a 30% reduction in the odds of being admitted to hospital during the study year compared to those in the control group’’. More dramatically, there was a ‘‘57% reduction in the odds of a mental health admission’’.

The report concluded dropping the small co-payment had a significant effect on patients’ risk of being admitted to hospital. ‘‘Given the small amount of revenue gathered from the charges, and the comparatively large costs of hospitalisations, the results suggest that these charges are likely to increase the overall cost of healthcare, as well as exacerbate ethnic inequalities.’’

In other words, it did not just alleviate the pressures on those forced to find $5 to pick up a prescription, but it would save the health system money down the track. Free prescriptions would work as a preventive measure and if those conclusions are right, it would seem to be an incredibly obvious health policy. It is basic stitch-intime thinking.

Yet there is a complicating element. Some big-box pharmacy chains have dropped the $5 prescription charge as part of competitive pricing strategies that are squeezing smaller, owneroperated pharmacies out of the market. But the chains are not always accessible to people without transport.

Robertson’s point about more than 135,000 adults who did not pick up their prescriptions was raised in a position paper released in March by the Independent Community Pharmacy Group (ICPG), which acts on behalf of struggling mom-andpop pharmacies. If the survival of smaller, locally-owned businesses that have direct connections with their communities is a side-effect of the Government’s policy change, then it is surely a positive one.

The ICPG report found the flipside of people skipping prescriptions is that ‘‘sometimes people go without good food, heating and/or clean clothes in order to access their medicines, or they take less than the prescribed dose to make the prescription last longer’’. This relates to the symbolic value of dropping the fee. There will be readers who were shocked to learn so many people live so close to the bread line that $5 is an impossible sum.

Scrapping the fee undoubtedly makes for good politics. It is a minor but effective measure that, like halving public transport costs for those under 25, will make a clear difference to household spending.

Indeed, it acted as a trap for the Opposition, who were unsure how to respond. National’s finance spokesperson, Nicola Willis, quickly said a government her party led would put the fee back on, which seemed bizarre and cold-hearted. Her leader, Christopher Luxon, clarified a day later that if people like him could afford the fee, then they should pay it.

While that seemed more reasonable, it left Luxon open to obvious arguments about whether the wealthy should therefore pay the full, unsubsidised cost of medicine on the grounds that they can afford that too, or should even pay a wealth tax.

Their confusing responses only reinforced the point that there is no serious way of arguing against such a simple but effective health policy.