Cheap overseas surgery ruled out - Southern Cross boss

Sending New Zealanders to India or Asia for major surgical procedures has been ruled out by the boss of New Zealand's biggest health insurer.

But Ian McPherson, Southern Cross chief executive, called for cost control here so the society would never need to take that drastic step.

"Wonderful facilities in Singapore, Thailand and those places. I hope that New Zealand finds a way of controlling its costs before that happens," he said in a video about the business now just published on The Herald's website.

In 2011, the huge business with more than 800,000 members looked sending patients overseas for cheap surgery and procedures but rejected it because most members shunned the notion, even though cost savings were high.

Southern Cross investigations found India best because expensive procedures were cheapest there but Singapore, Malaysia and Thailand offered big cost savings for specialist work.

The society is under rising pressure from its steadily ageing membership to cut costs and three years ago, investor advocate Bruce Sheppard won a battle to have it examine ways to hold the elderly's punitive premiums down. Nothing was changed as a result of that investigation.

A team formed to report to the board about overseas medical options found savings were only available in $20,000-plus procedures and only 15 per cent of members surveyed would consider overseas treatment for such major surgery.

Dr McPherson said in the video that overall costs were not driven down that much by sending members overseas.

"The economics of that aren't great when you look at that and that's why we decided not to promote it. No problem with the quality of the the operations but by the time you look at taking a relative, looking at the time for recuperation, take account of sometimes things go wrong - people need readmitting - the economics really don't stack up for doing it right now," he said.

He hopes that remains the case.

"If we're clever enough in New Zealand, we'll keep the costs down so it doesn't have to happen," he said in the video, revealing how one major spinal operation cost around $100,000.

The biggest surgical procedure Southern Cross has paid for is understood to have been around $150,000 and involved a complex throat surgery procedure.