Is the private health system complimentary or detrimental?

Written by Tom Varghese

Equity and workforce shortages are important concerns under New Zealand's current health system. Adding to the conversation, is the question around whether the private health system is complementary or detrimental to the public system. A 2005 Ministry of Health report pointed out barriers to reducing inequalities arising from the conflict of interests in dual practice (specialists practicing in the public as well as the private health system). High deprivation deciles and lower income groups are affected more than those with the ability to pay out of pocket.
Dual practice is also quoted as leading to reduced time available for specialists to treat patients or to train junior doctors in the public system when they are working in private practice.

Around 60% of district health board specialists are employed full-time. Approximately 43% also work privately in their own time. A recently published study reported that private health patients are costing New Zealand's public system up to $11.5 million a year. The study used 2013/2014 data from the MoH and examined the frequency of public hospital admissions for acute follow-up care within 7 days of a patient receiving privately funded health care. The authors found that 2% (approximately 1800 patients) of private inpatient events had a subsequent admission to a public hospital.
There is a risk that increasing use of the private sector may put more pressure on stretched public hospitals, crowding out those less able to afford private care and, in effect, increasing existing inequities in access and outcomes of care. The most common reason for patients seeking public health care after a private healthcare treatment was after elective procedures such as hip and knee replacement. There is of course the potential to improve visibility over the drivers of readmission.

That said, private healthcare would struggle to sustain itself in NZ without a well-functioning public health system. The public system provides intensive care and emergency medicine, allowing private healthcare to pick and choose urgent patients presenting lower complexity. Private hospital providers also have an important role in the health care system. They provide extra capacity to the public system and provide around 100,000 privately funded hospital discharges each year.

So, is private healthcare a threat to public healthcare in NZ? Probably not. The greater cause for concern is that New Zealand’s need for health services is projected to increase at a higher rate than the projected growth of the specialist workforce during the next 10 years. A report by ASMS quantifies the specialist shortage in NZ to be 1000 specialists to adequately meet the country’s growing health needs. Rather than competing with each other, the public and private systems need to work together, in a complementary manner, retaining good talent and reducing waitlists for much needed treatment.