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Uncertainty contributes to private sector growth

May 7, 2008

Hospital strikes, uncertainty contribute to private sector growth

The number of New Zealanders covered by health insurance rose by 18,800 to a record 1.388 million in the year to the end of March, according to statistics released today by the Health Funds Association of New Zealand (HFANZ).

The increase of 1.4 percent on the year to March 31, 2007 equated to about 50 people a day taking out health insurance policies, HFANZ executive director Roger Styles said.

He said he believed disruption and uncertainty in the public sector was likely to have contributed to the recent upsurge in health insurance.

“Strikes by doctors have forced surgery cancellations. Last year saw thousands dumped from waiting lists. People increasingly realise they cannot count on the public sector to provide surgery in a timely fashion,” he said.

“The private sector already funds 60 percent of elective surgery, with this share likely to continue to grow as the public sector cannot keep up with current demand, let alone projected growth in demand for elective surgery.”

Data had shown the number of elective operations performed in public hospitals over the last seven years had remained largely static, and Mr Styles said the strikes were likely to mean that number remained so while the private sector gained steadily.

Mr Styles pointed out that elective surgery did not mean unnecessary surgery.
“Elective surgery is anything that can wait over seven days – it can still be for serious conditions such as cancer and heart disease,” he said.

“The ongoing disruption in the system contrasts with the certainty and timeliness of private elective surgery, which is no doubt a major factor in the strong growth of the health insurance sector,” Mr Styles said.

Health insurance claims paid in the March quarter amounted to $149 million, taking the total for the year to March 31, 2008 to $631 million, an increase of $48 million or 8.3 percent on the previous 12 months. Mr Styles said the increase was attributable to growth in the numbers of people insured, an increase in the number of claims an insured individual is making, and the increasing costs of treatment.

“Because most of these claims relate to elective surgical procedures, there is a significant benefit to the public sector in terms of reduced demand for elective procedures and freeing up of public health resources,” Mr Styles said.

Significant growth was noted in the number of people aged under four, between 20 and 29, and 60-69 taking out health insurance policies, which Mr Styles said was down to an ageing population retaining their insurance, plus higher recent birth rates.


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