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Health boss takes up new role

ROB STOCK
Last updated 17:56 06/12/2013

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Dr Ian McPherson, the chief executive of Southern Cross, the country's largest health insurer, will leave his job in June next year to become president of the International Federation of Health Plans.

McPherson has led the Southern Cross Group for 12 years, a period in which health insurance premiums across all health insurers have increased significantly.

With rising healthcare costs and and increasing claims, premiums have risen far faster than inflation.

To keep costs down Southern Cross is building a network of "affiliated providers", surgeons, hospitals and other medical service providers who agree to treat policyholders for agreed prices.

The rise in premiums in the past decade has led to a drop in the number of people with health insurance, with many others downgrading to less costly plans with lower levels of cover.

McPherson has been the vice-president of the international federation for the past four years.

He will take over from George Halvorson, chairman of giant United States health insurer Kaiser Permanente, who has been an adviser to President Barack Obama on the health reforms in the US.

New Zealand stood out among the international federation's members for having no tax breaks on health insurance premiums, McPherson said.

But all countries were "grappling with the affordability issue" of health.

Though the federation is based in London, McPherson will continue to live in New Zealand, and will continue to lobby for policy change here.

He has been involved in lobbying Government to remove some of the disincentives to having health insurance, including fringe-benefit tax on premiums for employees.

Private spending on healthcare needed to increase to take the pressure off the public system, he said.

Only about 20 per cent of health spending in New Zealand was private, which was unsustainable with an ageing population, McPherson said.

"That's low by international standards and you will find that is going to change."

One option could include allowing KiwiSaver to be used as a means of saving money that could be released to pay for health treatment, he said.

McPherson will retain a part-time link with Southern Cross until June 2015, working with the board on health sector and strategic matters.

Southern Cross chairman Graeme Hawkins said this would allow for a smooth transition.

An international search for a replacement would begin next year, he said.

The International Federation of Health Plans was founded in 1968 and is considered the industry's leading global network, with more than 100 member companies from 25 countries.

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Hawkins said: "Ian's appointment is a testament to the experience, knowledge and respect that both he and Southern Cross bring to the health insurance sector internationally."

Meanwhile, next year the board will begin consultation on lifting directors' pay, which has not been increased since 1997.

- Fairfax Media

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