Foreigners responsible for $68.5m of debt written off by New Zealand District Health Boards

Foreigners have received almost $204.4 million worth of hospital treatment in New Zealand in the past five years, leaving the taxpayer to foot the bill for a third of that.

Data provided by 19 of the country’s 20 district health boards revealed more than $68.5m worth of treatment provided to non-New Zealand residents was written-off as bad debt between July 2015 and June 2020, excluding GST.

It is a sum the health minister has labelled as the “cost of being a compassionate country”.

Non-residents are not eligible for publicly funded care but hospitals will provide any emergency or urgent care required and bill the patient afterwards. Injuries caused by accidents are paid for by ACC regardless.

Since 2015, the cost of treatment provided to foreign patients had steadily risen from more than $34.2m a year to more than $46.4m in the 2019/20 year, excluding GST.

The amount written-off by DHBs rose from almost $11.8m to more than $18m a year.

Auckland DHB spent the most treating non-residents – more than $62.2m over the five years – and wrote off $15.6m of that.

An Auckland DHB spokeswoman said it spent the most because it was one of the country’s largest district health boards.

“We are also located in the same city as New Zealand’s busiest international airport and passenger ports. Additionally, Auckland DHB offers a number of highly specialised regional and national services,” a spokeswoman said.

Counties Manukau DHB wrote off the largest amount during the period, at $26.2m, with the second largest total spend of $47.9m.

Waitematā was a close third, with the value of non-resident treatment totalling almost $22m. It wrote off $10.1m worth of treatment.

Waitematā DHB also reported the single biggest bill racked up by one foreign patient during that period at $888,167 (excluding GST) for “life-preserving treatment over an extended period of time, including acute episodes requiring hospitalisation”.

Canterbury, Capital and Coast and Waikato district health boards also spent and wrote off millions in treatment for foreigners.

South Canterbury DHB was the only one which did not write off any costs, saying itrecouped the full balance of the $461,734 spent on treating foreign patients during the period.

West Coast District Health Board did not provide data in time for this story.

The DHBs all said letters and phone calls, both local and international, were used to follow up unpaid invoices but outstanding payments were eventually referred to debt collectors and written-off as bad debt.

Health Minister Andrew Little said it was “the cost of being a compassionate country” and was a “relatively modest one at that”.

“We’ve all seen stories about the plight of New Zealanders who fall ill in countries that have less compassionate health services than us. I’d like to think we’re better than that.”

Little said New Zealanders shouldn’t worry that the cost would affect health services available to them because there was a process by which the Ministry of Health compensated DHBs for treatment costs they had to write off.

“Nevertheless, my expectation is that DHBs pursue every reasonable opportunity to recover money owed to them following treatment of ineligible patients,” he said.

A Ministry of Health spokesman said it was important anyone needing emergency care could get it, which inevitably led to bad debt as some patients could not afford to pay while others could not be traced.

He said the costs of treatment increased every year so, even if the number of ineligible patients treated remained the same, costs incurred by DHBs would still rise.

It was also likely the number of ineligible patients who were in New Zealand was going up, so the number seeking treatment would also be increasing, he said.

For the 2020/21 year, $5.5m in Government funding was allocated to support Auckland DHBs with bad debt related to ineligible patients and was split between Auckland and Counties Manukau.

Immigration adviser and former immigration minister Tuariki Delamere said it was an issue of morality, but believed there were ways to reduce the debt.

“We have the position that if it’s a life and death situation we will treat you regardless and get paid later. Unfortunately there are people who are never going to pay it back,” he said.

“Those people who have that unsatisfactory standard of health shouldn’t be allowed in in the first place but then you can’t predict when someone’s going to have an incident.”

He believed pregnancies would be a large contributor to the figures as the care required was only publicly funded for residents, citizens or those whose partner was eligible.

Delamere said the Government could consider measures such as ensuring that anyone entering the country on a work or student visa could provide evidence of full health insurance or refusing to issue new visas to anyone who had an outstanding debt.

Otago Business School dean and pro-vice-chancellor Professor Robin Gauld said it was a lot of money.

He said, based on total healthcare costs per capita of about $4000, the debt written off each year could pay for medical care for about 3750 people – almost the entire population of Whangamatā.

He said that the best way to reduce the amount being written off was to ensure every person visiting the country had medical insurance.

Health commentator and former executive director of the Association of Salaried Medical Specialists, Ian Powell, also agreed that looking into compulsory health insurance for tourists was a good idea.

However, he believed non-residents working in New Zealand should be entitled to the same care as residents since they were paying taxes here.

He also said New Zealand should work to forge no-charge reciprocal healthcare agreements with other countries, especially the Pacific Islands.

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