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Aging Population Needs Public-Private Cooperation


6 April 2006

Health Funds Association says Ageing Population Makes Public and Private Health Sector Cooperation Imperative

The Health Funds Association of New Zealand Inc. (HFANZ) today called for the public and private health sectors to work together to ensure that New Zealand’s health system is capable of meeting the needs of New Zealanders, now and in future given the demands the sector faces from our ageing population.

Claire Austin, executive director of the HFANZ, the association representing New Zealand health insurers says, “The government’s approach to retirement savings recognises and encourages the role of the private sector complementing the public pension to ensure New Zealanders are able to meet their economic needs in old age. However, it has not embraced this same approach for healthcare.”

“Older people are high users of health and disability services and New Zealand’s population, in common with that of the majority of developed countries, is ageing. By 2020, 22 per cent of New Zealand’s population will be aged 65 and over, and by 2050 this is expected to grow to over 25 per cent.”

In 2000, Statistics New Zealand stated that, “The main concerns are the sustainability of tax-payer funded superannuation, and the increased health services for older people. ” (1) The HFANZ says that having acknowledged a demographic outlook that requires a marked increase in spending on superannuation; there is a reluctance to work together to product a sustainable funding in health.

“This is not consistent; common sense requires any ideological bias to be put aside and pragmatic solutions sought,” Ms Austin says.

“The reality is that the public and private sectors are closely intertwined, in primary, secondary, tertiary and aged care. It is an interdependent system where the private sector provides care through pharmacies, general practice, physiotherapy, rest homes and surgical hospitals. Significant parts of the public health system are already underpinned by private investment. The private health sector is not a just cosmetic service that operates on the margins of the public health system. It provides necessary care that can have a substantial impact upon an individual’s health, well-being and functioning.

“It is therefore unrealistic to separate the two sectors. Actions within public and private sectors each influence the other. Changing markets, the growth of claims and cost of technologies, managing risk and workforce pressures, have heightened appreciation of the interdependence of the different sectors.”

For health care to be effective, even more so in old age, it has to be timely. Timeliness of response is critical to ensure the best health outcomes and, sadly for New Zealand, time is running out.

Ms Austin says, “There is growing public concern about the capacity of the public health system to respond to need in a timely and effective way despite the commitment of individuals and organisations in the health sector.

“We have a health system that is straining at the seams and is consuming ever more funding, from both the government and private purse, yet not delivering more or even better health outcomes. Elective surgery patients are ‘managed’ in a system that in reality doesn’t guarantee treatment. Waiting times are amorphous – waiting lists to get on waiting lists. People are left until their conditions become grave before they are treated. Others discover they have been ‘discharged’, yet haven’t been treated at all. This undeniably impacts upon the individual’s quality of life and has an impact that should not be underestimated upon our society and the economy.”

Ms Austin points to a growing trend amongst countries traditionally committed to universalist, public health systems such as Sweden, Germany, Canada and the UK to increasingly turn to private sector partners to improve public outcomes.

“New Zealand too needs look at how it can work towards sustainable health financing model for the future, just as it has with superannuation. Rather than trying to conceal the flaws in the health system, we should take a good hard look at all of it. It’s imperative that we openly examine what’s working, what’s not, how the public and private health sector interfaces, and ways in which we can work together more effectively for better outcomes for every New Zealander.”

In 2003 the Minister of Finance, Hon Dr Michael Cullen said “There is little to be gained from staking out positions. We need to rather work out principles, address the hard issues of how to manage limited resources and find ways forward. ” (2)

“We agree and believe that it is now time to get on with it and make it happen; the cost of not doing so will see our health system continuing to consume ever more funding, from taxpayers and the private purse, yet not delivering the results New Zealanders expect or deserve,” Ms Austin says.


1 Department of Statistics (2000) Population Ageing in New Zealand.
2 Hon Michael Cullen, Minister of Finance. 6 November 2003.
Address to Salaried Medical Specialists. Wellington, New Zealand.

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