When I first arrived in New Zealand in 2005 and began working as a public hospital specialist physician, friends and family back in the US would ask me how the New Zealand healthcare system stacked up against the American, generally regarded as the most expensive, wasteful and inequitable in the world.
I would answer then, hand-on-heart, that while you couldn’t get the latest high-tech (but often) unproven treatments here in New Zealand, you could count on timely, high high-quality, and equitable care no matter who you were or how much money you made.
I can no longer defend that claim. For a multitude of reasons, many people now struggle to access even the most basic healthcare or wait unacceptably long for it.
Meanwhile, as though in a parallel universe, the private healthcare industry is humming along. According to IBIS World, industry revenue has grown by an annualised rate of 9.4% over the past five years, reaching an estimated $2.6 billion in 2024, largely fuelled by rising premiums, allowing those who can afford insurance to leapfrog over those languishing on public wait lists.
Doctors are human. They will often go where the money is.
For an alternative viewpoint: Opinion - private hospitals ease the health burden, they’re not adversaries
And to listen to their marketing spin, insurance companies are doing it all for the benefit of the public system by “relieving pressure”, freeing up hospital beds, allowing the public system to focus its limited resources on those who need care fast.
Whilst that claim may have been true in the past when a few people may have got their hips or knees replaced in private, it is now clear that essential care which should be available to everyone – such as timely cardiology, cancer, or neurological assessments and treatment – are increasingly available only to those who can pay.
But if a patient gets really sick while in the private system, they’re shipped straight back to the public system to make things right. In a 2021 article in the journal Health Policy, Erin Penno and colleagues from the University of Otago estimated that the cost of public hospital admissions as a follow-up to private care to be $11.5 million.
The reality is that New Zealand has a limited pool of doctors and every consult or procedure performed in private means less availability to offer the same service in public.
And since doctors get paid (a lot) for every service they provide in private as opposed to earning a fixed salary in public, many doctors are opting to spend more time in the private system.
What does all this mean? It means that wait lists in public get longer and longer because many specialists are preferentially spending their limited time in the more lucrative and more well-staffed private sector.
So what do hospitals then have to do? In order to meet wait-time standards, they have to outsource work to those very same doctors in private clinics or theatres.
Doctors are human. They will often go where the money is. Whilst working in emergency rooms or on medical wards of public hospitals I have personally witnessed many occasions where specialist doctors have “cherry-picked” insured patients (choosing the healthiest and lowest risk patients) and offered to see them in their private rooms to ensure faster service.
And here’s where that little voice inside my head starts up again. I am starting to believe that politicians, who are generally neither blind nor stupid, know that all this is going on.
They know that an unregulated private health system is helping to decimate the public one. Healthcare has become mind-numbingly complex and expensive.
To redesign and implement a new one will take far longer than the usual political cycle. So why not let the public system implode, ensuring that all those who can afford to do so will purchase insurance? Then, the public system will only need to look after the unfortunates who can’t afford anything better.
Meanwhile, as a smoke screen, these same politicians will claim that equity matters to them, while turning blind eyes to the public-private divide, one of the most potent drivers of inequity, since only about 15-20% of Māori and Pasifika people currently enjoy private health benefits. All the while, healthcare workers already run off their feet are sent to cultural sensitivity training to address their implicit cultural biases.
Maybe governments are indeed engaging in what Whakatāne Mayor Victor Luca recently called “privatisation by stealth”.
But I believe New Zealanders still value fairness and equity. We need a transparent, comprehensive and independent review of the interplay between the public and private health sectors.
Maybe a wildly inequitable, two-tiered system is all New Zealand can afford. Many of us don’t believe it is.
But either way, the governments should come clean and let us in on their plans.
