Christchurch theatres point the way

ROB STOCK
Last updated 07:19 07/10/2012

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The fast-tracking of two new private operating theatres for Christchurch by Southern Cross Hospitals may be the project that ends the state's reluctance to provide long-term contracts to private hospital businesses.

That's the hope of the New Zealand Private Surgical Hospitals Association, which has been lobbying the Government to build what it calls a more 'balanced' healthcare system where more healthcare is provided by private businesses and not-for-profits.

Association president Terry Moore, who is also the chief executive of Southern Cross's hospital group, hopes the two theatres will provide a case-study that proves the cost-effectiveness of long-term contracting by district health boards to private hospitals for new capacity.

Moore said New Zealand was unusual in the OECD for the low proportion of health spend that goes through private hospitals and other private healthcare providers.

The average for the OECD is 28 per cent. In New Zealand, Moore said, the number had fallen below 20 per cent.

'We just do not believe that that is sustainable going forwards. If you roll it out to 2050, all the Treasury economic forecasting is for low economic growth,' said Moore.

He says that faced with the need to spend every dollar wisely, the state should be looking to build new facilities for itself only where it needs to, and where the numbers add up, and should enable private hospital operators to do it, as with the two new Southern Cross theatres in Christchurch, which will be used by DHB surgeons, with nurses, technicians and theatre 'consumables' provided by the private hospital.

Depending on the location, there is immediate private hospital capacity available. Moore estimated the private hospitals around New Zealand could handle as much as 20 per cent more activity.

That's no small amount given that around half of all elective surgeries are done in private facilities already.

Despite the rapid growth in spending on healthcare, the private hospital market was at best flat, said Moore. 'The private health insurance numbers have declined a small amount, which is a concern for everyone. As the economic times get tougher, will that decline further?"

The lobbying is making some progress. The Government has sent the signal to DHBs that private options are to be explored, but when it comes to building facilities, the emphasis is still on the state owning them, with private money an option for funding them.

'The predominant model is for the DHBs to build their own capacity. That's their preferred model,' Moore said. But he says that with long-term contracts in place, private providers would be more cost effective.

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'The record private healthcare spending that has occurred in the last five to 10 years has been great for New Zealanders in terms of more elective surgeries and low cancer waiting times,' Moore said.

But Treasury forecasts indicate spending on health could blow out to around 11 per cent of GDP by 2050 as the population ages.

What does Moore believe that means?

Well, sadly for a populace already being told it will have to save to fund more of its retirement as the population ages, Moore said people would have to save to fund more of the costs of their healthcare.

'The Government should be encouraging greater use of private care through health insurance, savings and just encouraging greater personal responsibility,' Moore said. 'If the economic growth is not there, something has to give, which is either some form of rationing or degrees of 'co- payment'.'

Moore said it is time to reconsider providing tax breaks on health insurance premiums for the elderly, though that remains off the table for the foreseeable future.

- Sunday Star Times

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