How private hospitals plan to cut backlogs

Elective surgery waits: How private hospitals plan to cut backlogs

Kate MacNamara NZ Herald  28 Jan, 2026

Healthcare is a metaphor; it tells us what kind of society we are: caring, callous, equal, stratified, rich, poor. Or we think it does. And among the many descriptors we use to give this amorphous system of hospitals, clinics, laboratories, businesses and professional people meaning, few are as unfavourably freighted as two-tier. It’s Chris Roberts’ job to change that.

Roberts is the recently appointed chief executive of the New Zealand Private Surgical Hospitals Association (NZPSHA), and he was hired to give voice to the businesses of this segment of the health system, which are much discussed in the noisy public debates around healthcare but are frequently silent.

Roberts has had a varied career. Early on, he was an editor at RNZ, and Kiwis may know him from his work, particularly through the pandemic, as CEO of Tourism Industry Aotearoa.

For at least a couple of decades, private hospitals have been performing outsourced elective surgery for the public system.

These procedures run the gamut from orthopaedic and gynaecological to dental and cardiothoracic. Moreover, government-run ACC (largely levy-funded) has long been a mainstay customer of the private hospitals for planned surgeries.

But by 2023, waits in the public system had ballooned. The following year, the coalition Government spotlit the issue and announced, among five main health targets, that 95% of patients should wait less than four months for elective surgery (also called scheduled surgery).

That objective is set for 2030 with milestones along the way; at last tally, a little over 60% of patients met the measure. The next milestone target is that by June, 70% of patients should be treated in that timeframe.

As the Government’s aim to make more extensive use of private hospitals for publicly funded surgeries became clearer, critics chimed in.

So when the private hospitals association came to replace their retiring executive director about the same time, they sought a replacement who had experience working across a member organisation like their own, and, crucially, someone with media experience as well, who could speak up in the lively and sometimes fractious healthcare debate.

“It’s fair to say that we’ve kept a pretty low profile. But there are a lot of myths about private healthcare and I guess you could say we decided to be a more active participant in discussions, and hiring Chris was a big part of that,” NZPSH chair Blair Roxborough told the Herald.

A record volume of outsourced surgeries

Health Minister Simeon Brown has told Health NZ (HNZ), the Crown’s behemoth healthcare provider, to outsource the volume of elective surgeries necessary to meet targets and to lock in private sector delivery with long-term contracts; he’s asked for the first five-year contracts by early next year, and contracts of up to 10 years thereafter.

This may prove a stretch. In the past, Roberts says, outsourced patients from HNZ and its predecessor District Health Boards were discounted in private hospitals’ future planning, “because volumes were so inconsistent, not just year to year but month by month”.

Roberts says the big change over the past year is that panel agreements have become common: “Hospitals apply and are approved to be on a panel of providers for one of the four HNZ health districts, for an agreed list of services, different types of surgery, orthopaedic, gynaecological … and whatever else is listed.”

Once members are approved suppliers (through panel agreements), the work typically flows under six-month to 12-month agreements.

He’s not aware of any members with firm agreements that run longer than one year, and he described Health NZ’s current level of contracting from the private hospitals as “a big step up”.

The agency aims to outsource more than 39,000 elective surgeries in the current financial year and that would be a record; 31,000 were outsourced by HNZ last year and that too was a record.

“In terms of stretching out contract lengths, we’re nowhere near being there yet; no one is expecting a cast-iron guarantee of work fixed for a decade,” he said.

“It’s more likely we get to three years, plus three years, plus three years, something like that, with reviews built in to account for changes in cost and volume ... those arrangements are probably not progressing as quickly as everyone would like because there’s so much attention on the here and now and the target for this year.”

A zero-sum game?

Many of the criticisms levelled at expanding private health delivery hinge on the argument of a zero-sum game: to feed private hospitals is to starve their public counterparts.

Unionised doctors, the Association of Salaried Medical Specialists, are concerned that as private health services expand, so must their staff. This, they say, in a world that is very short of health workers, will lead to “poaching” the public sector workforce.

A dozen academics and specialists led by Dr Philip Bagshaw, general surgeon and co-founder of the Canterbury Charity Hospital, argue that the transfer of a large amount of public money and resources to private healthcare will mean that the public sector will go down, as the private sector goes up.

And Labour’s health spokesperson and former Health Minister, Ayesha Verrall, is concerned that the Government hasn’t revealed how much the outsourcing programme had cost taxpayers.

The Herald put related questions on cost to HNZ, but it will only consider answering them under the Official Information Act, and has not yet responded.

Training is another concern – particularly, that specialist training, which takes place overwhelmingly in the public system, will decline as more surgeries move to the private providers.

Roberts accepts that training is a problem, “a recognised challenge” as he calls it.

But he says there are pilot efforts underway to broaden training to include the private hospitals. And while the work must be led and undertaken by surgeons themselves, he says the hospitals are willing to see it increase.

On other concerns, he often prefers to add context. He doesn’t dispute that surgeons typically earn more money working privately than they do in the public sector. But if New Zealand shuts off that opportunity, he says, it would prove very hard to recruit these specialised doctors and retain them here: “Our regions and New Zealand as a whole is not going to attract surgeons if they don’t have access to private opportunities.”

He also says there’s no evidence that surgeons are abandoning the public sector entirely – a typical split is 70% public work, 30% private: “There are a few who go private only, but they’re the exception … and don’t forget that surgeons in this country have always had the choice to work privately.

“Our members emphasise that, where they have spare capacity, they have theatre time available, they have nurses and other support staff and a surgeon available, using that capacity for publicly funded work is about making the most efficient use of the available resources.”

Long-term contracting, he says, will help the private hospitals plan ahead: “It just doesn’t work for our members to be working flat out [on public system waitlists] and then when the numbers come right in terms of wait times us being told, ah, you can stop now, we’ll take a three-month or a six-month break and then when things get bad again we’ll come back to you. That’s pretty much how it’s been in the past, and that’s not in anybody’s interests.”

Sector expanding

Roberts took up his new post in May and has been up and down the country in the intervening months, visiting member hospitals and getting up to speed on the sector.

Even before the Government’s talk of new long-term contracts, private hospital and clinic operators were expanding heavily.

“There’s been a pretty significant burst of activity in the last few years,” Roberts says, adding that it’s unrelated to outsourced HNZ work.

The mainstay of these hospitals is insurance work. Last year, the Financial Services Council reported that nearly 40% of New Zealanders have some form of health insurance (a rise of 5% from the previous year).

As the average age of the insured population rises, so too does the number, cost and complexity of the claims.

ACC work is also a mainstay of the private hospitals. Recent Canadian data shows that average per-person healthcare spending for those over the age of 65 is more than four times that of those under 65. It should surprise nobody that ageing populations are fuelling healthcare growth.

Among the private players, Wellington’s Wakefield Hospital recently completed a $185 million redevelopment (owned by Australian private equity and Singapore interests).

Allevia Health Group has completed a $190m redevelopment of the Allevia Hospital Epsom, previously the Mercy Hospital; it’s controlled by individual investors Keith Smith, Brian Mayo-Smith and private equity firm Waterman Capital.

And earlier in the year, the $100m Kaweka Hospital was completed in Hastings; Westside Healthcare owns the land and building (in turn owned by local parties including the Tumu Group) and Kaweka Health Ltd owns the hospital operation. Its largest shareholder is The Eye Institute.

Southern Cross Healthcare, owned by a charitable trust, is the single largest private healthcare provider in New Zealand, and is the heavyweight player among Roberts’ member entities.

“All members have upgraded or extended facilities, extra operating theatres, extra wards and those that haven’t yet have plans to do so,” Roberts says.

And proposals and rumours of new private hospitals keep coming; there are firm new plans for Tauranga, Wellington, Dunedin and Wanaka.

“They can see demand continuing to grow.”