Source: BusinessNZ
BusinessNZ is calling on all political parties to commit to a smarter approach to health spending, warning that New Zealand cannot meet the challenges of an ageing population simply by pouring more money into hospitals while underinvesting in medicines, prevention, workforce planning and rehabilitation.
Launching Health Priorities 2026, BusinessNZ says New Zealand’s health system must be viewed not only as a social service, but as a key driver of economic productivity, workforce participation, and long-term fiscal sustainability.
The document is informed by members of the BusinessNZ Health Forum; its members reach across the health system, including medicines and vaccines, medical technology and devices, testing and diagnostics, private surgical hospitals, rehabilitation, aged care and community services.
It follows BusinessNZ’s Election Priorities report released last week and sets out a detailed programme of reforms aimed at improving health outcomes while helping more New Zealanders remain active in the workforce for longer.
BusinessNZ Chief Executive Katherine Rich said good health policy was inseparable from good economic policy.
“Health spending should not be viewed simply as a cost. When people stay healthy, they are able to work, care for their families, participate in their communities, and contribute to economic growth.”
“The challenge facing New Zealand is not only how much we spend on health, but whether we are spending in the right places to achieve the greatest return for patients, taxpayers and the wider economy.”
BusinessNZ says demographic change makes reform increasingly urgent. The number of New Zealanders aged 65 and over is projected to grow by around 55 percent over the next 25 years, while those aged 75 and over are expected to increase by around 75 percent. At the same time, workforce shortages are expected to intensify, making it essential that more people remain healthy and economically active for longer.
A key focus of the report is medicines funding.
It notes New Zealand allocates just 4.9 percent of public health expenditure to pharmaceuticals compared with 13.3 percent across comparable OECD countries, leaving many New Zealand patients waiting longer for medicines considered standard treatment in other developed countries.
The report builds on findings from the BERL analysis released on Monday, which concluded that increased investment in modern medicines would produce a net fiscal benefit for the Crown by supporting workforce participation, productivity and tax revenue while reducing pressure elsewhere in the health system. The BERL findings reflect growing consensus that medicines should be viewed as an investment rather than simply a cost.
BusinessNZ is calling for a substantial multi-year increase in Pharmac funding, alongside a long-term strategy to rebalance health spending toward medicines, prevention and early intervention.
The Health Priorities report is also urging governments to make greater use of private sector capacity to tackle growing elective surgery demand.
With demand for cataract surgery and hip and knee replacements expected to rise significantly as the population ages, BusinessNZ says public and private providers should be viewed as partners rather than competitors. It is calling for longer-term contracting arrangements that provide certainty for investment in additional surgical capacity and allow the private sector to shoulder more routine elective procedures, freeing public hospitals to focus on acute and complex care.
The report highlights medical technology as another underutilised tool for improving health outcomes and productivity.
BusinessNZ wants better procurement practices, faster adoption of innovative technologies, and a stronger focus on using hospitals as test beds for new health innovations that could ultimately be exported internationally. It also supports continued progress on the Medical Products Bill, warning against policy delays that could leave New Zealand further behind other countries in accessing medical advances and AI-enabled technologies.
Rehabilitation services are prominently featured in the report.
BusinessNZ argues faster access to rehabilitation following injury or surgery is one of the most effective ways of improving quality of life and reducing costs. It points to previous research identifying delays in rehabilitation services that have prolonged worker absence, increased suffering, and reduced productivity across the economy. The organisation is calling for a wider review of rehabilitation provision and a stronger focus on getting people back to health and work sooner.
The report also calls for:
- Better workforce planning, including more training capacity and improved recognition of overseas qualifications.
- Long-term government support and funding certainty for charitable and community health organisations that help reduce demand on hospitals and primary care services.
- More regular refreshment of medical technology procurement panels to encourage competition and innovation.
- A government strategy to make New Zealand a more attractive destination for clinical trials, bringing patients earlier access to new medicines and technologies while creating economic opportunities.
Katherine Rich said the central message of the report was straightforward.
“New Zealanders deserve access to the treatments that will give them healthier lives and better outcomes. At the same time, taxpayers deserve confidence that every health dollar is being invested where it delivers the greatest benefit.”
“An ageing population means health expenditure will inevitably increase, but we can contain costs and improve outcomes if we spend smarter. That means focusing more strongly on prevention, medicines, rehabilitation, technology, workforce capability and innovation, rather than relying solely on ever-expanding hospital services.”
“Health policy and economic policy are increasingly one and the same. If we want a healthier, more productive and more prosperous New Zealand, we need to start treating health investment as an investment in our future prosperity.”
The BusinessNZ Network including BusinessNZ, EMA, Business Central and Business South, represents and provides services to thousands of businesses, small and large, throughout New Zealand.