Major healthcare provider Evolution Healthcare eyes growth, as Government ups outsourcing

Evolution Healthcare's Wakefield Hospital in Newtown, Wellington. Photo / Evolution Healthcare

One of New Zealand’s major private healthcare providers is continuing to increase its footprint, as it works more closely with government.

Evolution Healthcare operates six hospitals, four day surgeries, a maternity hospital and various other healthcare facilities across the country.

Speaking to the Herald, its chief executive, Simon Keating, said Health New Zealand was open to co-ordinating more closely with the company, so it had more certainty over the flow of work it would get from the public system.

This was enabling Evolution to more effectively invest for growth, both in terms of infrastructure and workforce.

Keating said talks were even under way over the public and private sectors doing joint recruitment campaigns offshore.

“We need more doctors in-country, and the reality is that they will work in both public and private. So how do we plan that out from day dot?” Keating said.

He recognised Health New Zealand had always outsourced to the private sector.

“The problem has been, it’s stop, start, stop, start …

“If you had 1000 cases for a year, you might do 400 in the first quarter and then you don’t hear anything back from Health New Zealand. And then you have to do 600 in the last quarter.”

Keating said work was under way to ensure the contracts Evolution entered into with Health New Zealand had longer terms, of two or three years, for example.

Much of the work Evolution does is elective surgery - cataracts, hip replacements, ear procedures, tonsillectomies, knee replacements and hernia repairs.

Keating said these were simpler procedures than the array the public sector dealt with. The private sector’s value proposition was that it was able to do things efficiently, at scale.

Earlier this year, Health Minister Simeon Brown announced that Health New Zealand would be increasing its elective procedures by partnering with private hospitals to make use of their operating theatre capacity.

“This work will see more than 10,579 additional procedures carried out between now and the middle of the year,” Brown said in April.

“This is key to achieving the Government’s health target of 95% of patients to wait less than four months for elective treatment.”

Keating praised Brown’s focus on achieving measurable outcomes.

He said the provision of cancer treatment was also on Evolution’s radar.

He wanted to change the perception that the private sector just “took the cream”, or the low-cost jobs from the health system.

“We think there’s a real opportunity [to get into cancer care]. It’s not so much commercial, but it’s about standing up a service that is potentially not being delivered as well as what it probably can.

“That’s not through any fault of Health New Zealand or [the] Cancer Control Agency. They just don’t have the resources, the infrastructure.”

Keating believed it was too blunt to say the state “outsourced” work to the private sector. He said the relationship was a “partnership”.

“Outsourcing indicates a failure of system, and I just don’t think that’s right ... I don’t think the health system could work any harder.”

However, his observation was that more people were taking out private health insurance, partially thanks to corporates offering cover to their staff.

While Evolution is expanding, he believed the majority of its patients would continue to be funded by private health insurers.

Keating acknowledged there was always a risk the Government under-invested in the health sector, leaning too heavily on the private sector.

That’s why he wanted to continue to see more strategic long-term planning and coordination.

He believed bipartisanship between politicians was also a key piece to the puzzle.

Jenée Tibshraeny is the Herald‘s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.