Kaitiaki Hauora Response to the Westpac NZ Report on Private Healthcare
By Louisa Wall
Chair Tuwharetoa IMPB and Executive Member of Kaitiaki Hauora
The Westpac NZ report - Healthcare in New Zealand, the changing role of the private sector, acknowledges the significant pressures facing Aotearoa New Zealand’s health system. Workforce shortages, ageing infrastructure and rising demand are real challenges. The report also correctly notes that public funding has too often been directed at maintaining existing services rather than repairing decades of underinvestment. Kaitiaki Hauora agrees that substantial increases in public investment are required. Funding must go well beyond simple population growth adjustments and cost pressures if the system is to meet current and future health needs.
However, the report presents an overly optimistic, rose-tinted view of the role of the private sector. The suggestion that outsourcing and expanded public-private partnerships will lower costs or improve access is not supported by current evidence. Private healthcare costs are rising faster than inflation. Health insurance premiums continue to increase. These trends indicate that private provision does not offer a cost containment solution for the wider health system. In addition, public funding would have to pay for the private providers’ profits.
Claims that private provision is inherently more efficient are also not consistently supported by experience in Aotearoa New Zealand. There have been strong examples within the public system where publicly run services have delivered high volumes of care efficiently and at lower cost than comparable private provision. One example was the Manukau Surgical Centre operated by the former Counties Manukau District Health Board, which delivered large volumes of elective surgery through a publicly run model designed to maximise efficiency and patient throughput.
Workforce shortages are also unlikely to be resolved through market expansion alone. New Zealand’s health workforce is trained almost entirely within the public system. Sustainable workforce supply requires coordinated national investment in education, training, retention and fair employment conditions. Without this, expanding private provision simply shifts scarce staff between sectors rather than increasing overall capacity. Expanding the public sector workforce remains essential if system capacity is to grow.
The report’s portrayal of private providers as inherently more flexible and efficient also skates over the fact that they often perform the most straightforward medical procedures, leaving the public system to manage the most complex and costly care. It also fails to address the broader drivers of health demand. Addressing the social and commercial determinants of ill health would improve the overall value of health spending by reducing preventable disease and freeing up resources to invest in high-value treatments such as new cancer medicines and advanced care.
The report also fails to address the fundamental question of affordability. Private healthcare operates on the ability to pay. As reliance on private provision grows, access becomes increasingly stratified. This risks deepening existing inequities in health outcomes, particularly for Māori and Pasifika communities who already experience significant barriers to timely care. Maintaining the current trajectory, even with increased reliance on private provision, risks entrenching a costly status quo while worsening inequities across the system.
Some of the data presented in the report is useful. However, the international comparisons and predictions about system efficiency should be treated with caution. Recent research published by ASMS shows that the last few years of New Zealand data used by the OECD for its international comparisons cannot be relied on. In addition, health systems are shaped by social context, public funding structures and constitutional commitments. In Aotearoa New Zealand, Te Tiriti o Waitangi establishes clear obligations to ensure equitable health outcomes for Māori.
Kaitiaki Hauora maintains that the most reliable path forward is a strong, well resourced public health system that honours Te Tiriti and guarantees universal access to care. Private providers may play a complementary role where appropriate. They cannot and should not replace the responsibility of the state to provide equitable, culturally safe healthcare for all people in Aotearoa New Zealand.