New Zealand's healthcare system is at a critical point, with increasing pressures on both the private and public sector, but overall the outlook for the private healthcare sector is positive, according to a new report from Westpac NZ.
The Healthcare in New Zealand report looks at what the future might hold for the private healthcare sector. It indicates New Zealand currently spends about 10% of GDP on healthcare - 7% public and 3% private - which is broadly in line with other OECD countries.
However, Westpac NZ industry economist Paul Clark says while New Zealand's healthcare system compares favourably with its peers in terms of spend and outcomes, it's under growing pressure, with an ageing population and wider social challenges pushing demand ever further beyond capacity. The end result is longer waiting times and widening health inequalities, particularly for Māori and Pasifika.
Addressing this is challenging. Public health, tasked with providing universal care, is already constrained. The private sector, arguably nimbler, has extra capacity that can help.
"Private providers already deliver a broad range of services, from GP care and diagnostics to elective surgeries and rehabilitation," Mr Clark says.
Partnering allows for the unlocking of delivery capacity across the healthcare system, allowing public health to deliver more acute and life‑saving care, while shifting less complex but fast turnaround elective procedures to the private sector. Over time, we think this could lead to lead to greater specialisation of health facilities in New Zealand.
"The opportunities for greater collaboration between the private sector and public health don't stop there. We see scope for greater private involvement in areas such as infrastructure development in underserved communities, the upgrading of IT systems and the adoption of digital technologies."
"While private health faces its own challenges, mostly relating to the increasing costs of service provision, we think the outlook for the sector is positive. Much though will depend on its ability to collaborate and partner with its public counterpart," Mr Clark says.
The report makes several recommendations for the health system, including:
· Maintain a resilient mixed public-private health system that can deliver strong sustainable health outcomes.
· Increase specialisation and scale across services to raise throughput, contain medical inflation, and support more consistent quality and clinical outcomes.
· Use public-private partnerships to improve efficiency, lower costs, and expand timely access to diagnostics, rehabilitation, and elective care through more predictable service arrangements.
· Encourage private investment to accelerate the development of health infrastructure, particularly in underserved areas, modern clinical facilities, and integrated digital and data systems.
· Strengthen the long-term role of Māori and Pasifika providers to improve access, cultural responsiveness and equity, particularly in under-served communities.
"Many of the recommendations are already under way to varying degrees, but strengthening both the pace and depth of collaboration would mean improved outcomes sooner," Mr Clark says.
Reuben Tucker, Westpac NZ Managing Director Institutional & Business Banking, says Westpac is keen to support investment in the health sector.
"Safeguarding the future of our needs-based health system is something that's a priority for all New Zealanders," Mr Tucker says.
"We believe both the public and private sectors have important roles to play and as one of the country's biggest banks, we believe we can play a role by supporting further investment in health services and infrastructure. It's our hope that strong partnerships and collaboration will help to deliver better health outcomes for all."
