Category: Politics & Policy

A meme got Granny wondering where our health dollars are actually going.

It started, as these things so often do these days, with a meme.

This one was asking why the Government was giving hundreds of millions of dollars to private healthcare while our public hospitals and health system were struggling.

Well, that sounded alarming.

It also turned out not to be quite true.

I couldn’t find good evidence for the particular $300 million claim being passed around, and there are enough questionable political claims circulating already without Granny adding another one to the pile.

But the meme had done something useful.

It made me ask a different question.

Just how much public money is going into private healthcare — and what are we actually buying with it?

And that turned out to be much more interesting.

If my knees hurt, fix my knees!

Let’s start with the obvious.

This isn’t entirely hypothetical for Granny. I’m waiting for two knee replacements myself, although there are a few hurdles to get over before anyone lets me near an operating table.

When that day eventually comes, if there is an operating theatre available at a private hospital down the road, I’m unlikely to demand to see the hospital’s ownership structure before climbing onto the table.

Fix the knees.

That is essentially the Government’s argument too.

In early 2025, the Government announced a $50 million “Elective Boost”, initially aimed at delivering an extra 10,579 procedures by the end of June.

It worked rather better than expected.

By the end of June, 16,005 additional procedures had been completed — around 51 percent more than the original target.

That matters.

People who had been waiting for treatment got treatment.

And waiting-time figures have subsequently improved. By the March 2026 quarter, 64.9 percent of patients were receiving elective treatment within four months, compared with 57.3 percent a year earlier.

We’re still some distance from the Government’s 95 percent target, but improvement is improvement.

So Granny isn’t going to sit here and claim outsourcing surgery to private hospitals doesn’t work.

Clearly, it can.

But here’s where I started scratching my head.

Where did the extra doctors come from?

A private hospital might have an empty operating theatre.

Wonderful.

But an operating theatre without a surgeon, anaesthetist, nurses, radiographers, technicians and all the other people needed to make the thing actually function is basically a very expensive room with excellent lighting.

And New Zealand does not have a large spare health workforce sitting around waiting for someone to ring.

In fact, quite the opposite.

Our public and private health systems draw from substantially the same pool of health professionals.

Health Minister Simeon Brown has acknowledged this himself, saying health workers already “bridge both the public and private hospitals”.

Which makes me wonder:

When taxpayers buy an operation from a private hospital, are we creating extra healthcare capacity — or are we sometimes moving the existing capacity from one column to another?

That’s not quite the same thing.

There is nothing inherently wrong with doctors working privately. Many specialists have worked across both systems for years.

But if our public hospitals are short of specialists and nurses while taxpayers simultaneously fund private providers to expand, surely it is reasonable to ask where the people staffing that expansion will come from.

The Association of Salaried Medical Specialists has reported that between June 2022 and June 2024, specialist employment in public hospitals grew by about 4 percent, while specialist employment in private and other settings grew by about 9.6 percent.

That doesn’t prove outsourcing caused the difference.

But it certainly makes the question worth asking.

And Health NZ’s own advice has warned of the risk of outsourcing drawing staff and expertise from the public system — potentially affecting not only planned care, but the acute services those same specialists help provide.

So I’m not the only one scratching my head.

Because this isn’t just about clearing a backlog anymore

This is the bit that really caught Granny’s attention.

I had assumed we were buying spare private capacity to help clear the enormous backlog in public healthcare.

Fair enough.

Except that isn’t quite where the policy is heading.

The Government has directed Health New Zealand towards much longer agreements with private healthcare providers — around ten years.

The argument is that longer contracts give private hospitals certainty. Instead of Health NZ buying operations here and there when waiting lists get out of control, private providers know they will have work coming and can invest in theatres, equipment and staff.

Again, there is logic in that.

But ten years isn’t really a temporary solution anymore, is it?

Health NZ has been working towards longer-term relationships with private providers, and Simeon Brown has been quite open about where he would like this to go.

His long-term aim, he said in 2025, is for as much planned care as possible to be delivered in partnership with the private sector, leaving public hospitals more focused on acute care.

Now that deserves a proper public conversation.

Because we’re no longer simply talking about using an empty private operating theatre to get Granny’s dodgy knees fixed.

We’re talking about how New Zealand’s health system should be structured.

So which system are we building?

This is the question I keep coming back to.

Imagine we guarantee private hospitals a substantial stream of taxpayer-funded operations for ten years.

That certainty allows them to invest.

They can build theatres.

Buy equipment.

Recruit specialists and nurses.

Expand their businesses.

Nothing particularly sinister about that. It’s exactly what you’d expect them to do.

But meanwhile, what are we doing to the public hospitals?

If we invest sufficiently in them too, perhaps the two systems can complement each other beautifully.

But if public hospitals remain short of staff, struggle to fill vacancies and have ageing infrastructure, while private capacity expands using people drawn from the same limited workforce, something rather different may happen.

We could gradually create the very dependency that makes outsourcing necessary.

And once private providers have become essential to delivering publicly funded healthcare, getting that capacity back into the public system would not be quick, simple or cheap.

That is why I’d like someone to show us more than next year’s waiting-list numbers.

I’d like to see the long division.

What does each dollar leave behind?

Suppose the Government spends $100 million buying operations from private hospitals.

We get operations.

Excellent.

But suppose some or all of that money was instead used to increase capacity in public hospitals.

Would we get operations and more permanent staff?

Better theatre utilisation?

Equipment?

Training positions?

Greater capacity for the next decade?

Perhaps not.

Perhaps building that public capacity would take too long, cost considerably more, or simply be impossible with the workforce we currently have.

And somebody waiting in pain today can’t be expected to admire the magnificent public health system we might have built five years from now.

That’s precisely why this isn’t a simple public-good/private-bad argument.

I would just quite like to know whether anyone has seriously compared the two options over ten or twenty years.

Not merely:

Which option gets the most operations done before the next quarterly report?

But:

Which option leaves New Zealand with the strongest health system afterwards?

Even the surgeons are asking questions

The Royal Australasian College of Surgeons isn’t arguing that private hospitals should never treat public patients.

It recognises why outsourcing is happening.

But it has raised concerns about continuity of care and something most of us probably wouldn’t think about at all — training the next generation of surgeons.

Trainee surgeons need ordinary operations.

If increasing numbers of straightforward planned procedures move out of public hospitals, some of the very cases trainees learn from move with them.

The College successfully pushed for surgical training to be included in private-sector outsourcing contracts, so registrars can retain access to the range of cases they need.

Good.

But the fact that this needed addressing tells us something.

Moving an operation doesn’t just move an operation.

There are ripples.

Granny still wants her knees fixed

None of this means we should stop using private hospitals tomorrow.

That would be daft.

There are New Zealanders waiting in pain now, and if unused private capacity can safely get them treated sooner, use it.

The Government deserves credit where its elective programme has increased the number of people receiving treatment.

But this is no longer looking like a short-term exercise.

Private outsourcing is becoming a regular part of planned care. Longer-term contracts are being established, and the Government has made clear that it wants greater partnership with the private sector.

So perhaps we’ve reached the point where we need to stop talking about this merely as a waiting-list initiative.

We’re making choices about what New Zealand’s future health system will look like.

And I’d like us to make those choices deliberately.

If taxpayers are going to spend billions of dollars on healthcare — and of course we are — then surely the question isn’t simply whether the hospital doing Granny’s knee replacements is publicly or privately owned.

The question is what happens to that public dollar after Granny hobbles home.

Did it simply buy an operation?

Or did it help build the health system that will still be there when her grandchildren need one?

That’s the question that seems worth asking.

Even if the meme that started the whole thing got the numbers wrong.

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