Budget 2025 delivers limited new funding for data and digital health

NEWS - eHealthNews.nz editor Rebecca McBeth 

New health funding includes:

• $447 million for increased access for primary care, including 24/7 digital primary care
• ‘Significant boost’ for mental health telehealth services 
• $7 million for Pharmac digital investment

An increase of more than seven percent in health funding includes very little new money for data and digital health initiatives, despite the government targeting 10 percent of medical appointments being done via digital channels by June 2026.

Health is getting an overall increase of $1.37 billion over the next year, bringing total health spending in 2025/26 to $32.7 billion.

Budget 2024 returned more than $330 million earmarked for data and digital health initiatives at Health New Zealand | Te Whatu Ora over the following four to five years, saying funding would be returned pending “investment-ready business cases for future investment”.

Health NZ is working on a Digital Investment Plan, but delivery of this has been delayed until ‘later in the year’ so while the Budget includes more than $1 billion to uplift physical infrastructure, it fails to address the necessary digital infrastructure.

Despite this, under the Health Capital Envelope spending it says performance in this area will be assessed by three reporting requirements and the first of these is the ‘proportion of medical appointments completed through digital channels’.

Health NZ had already reported a goal of 10 percent for the previous year, but Budget documents say the organisation achieved eight percent in 2024/25, with at least 10 percent expected for the next financial year.

New funding set aside in Budget 2022 for ‘data and digital foundations and innovation for Health New Zealand’ is being reduced from $25 million spent over the past financial year to just over $5 million annually over the next four years until mid-2029.

A large part of the increase in Vote Health funding is $447 million over the next four years is to support increased access to primary care, including providing “24/7 access to digital primary care for online medical consultations”.

eHealthNews previously reported that $164.6 million has been set aside for the service, which had its soft launch with eight providers this month and includes greater subsidies for some patients, such as young people and community services card holders. 

The Minister of Health had also already announced $164 million over four years to increase access to urgent and after-hours care.WellSouth chief executive Andrew Swanson-Dobbs says while the Primary Health Network welcomes the investment in key areas, it is not enough to address historical under-funding, pay parity and workforce pressures.

"We are still waiting to hear about the proposed new telehealth service. Telehealth is an important tool, but it is not a panacea. It should not undermine current general practice or increase clinical risk to patients, and in our communities, particularly rurally, we need clinical staff on site," he says.

Some new money is also going into support for a new multi-agency response to mental health distress calls.

Minister for mental health Matt Doocey says this will involve 10 new co-response teams and a “significant boost to the capacity of mental health telehealth services”.  

Budget documents identify $2.2 million over the next financial year for this response.

Another $7 million in funding is also being provided for Pharmac to improve its data and digital infrastructure to enable more effective engagement with suppliers, stakeholders and patients. 

Michael Johnson, Pharmac’s director strategy, policy and performance, says "we are currently working with the Board to plan how we will use this funding, and we willl share more information with stakeholders and the public as it is available".

The Budget says increases in spending on hospital and specialist services include more than $13 million for the “rising funding profile for the implementation of Stage 1 of the Southern Digital Transformation programme to deliver digital infrastructure for the new Dunedin Hospital outpatient building”.

Actual drawdown for the Southern Digital Transformation Programme was $1.76 million  in operating costs over the past year, with $14.8 million expected to be drawn down over each of the next four years. 

The Southern programme also spent $15.5 million in capital over the past year with nothing budgeted for current years.

Increases were partially offset by a decrease of $20 million, which included funding for the ‘data and digital priorities of establishing the National Data Platform’, and a ‘Pacific health data and intelligence function”.

Time limited funding for the remediation of payroll systems at Health NZ has also now ended.

Chief executive of the Digital Health Association Ryl Jensen says the industry body believes Budget 2025 is a missed opportunity for digital health.

“It offers small steps but falls short of delivering the bold, strategic investment needed to modernise New Zealand’s health system and unlock the full potential of digital innovation," she says,

Health Minister Simeon Brown says, “this additional investment of 7.4 per cent in total funding represents an increase of 6.2 per cent per capita, which will make a real difference to people’s lives – ensuring timely, high-quality care for patients while supporting our frontline workforce who deliver that care every day”.

Image: Minister of Finance Nicola Willis speaking to media about Budget 2025

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