Key Points:

Auckland company Medtral is promoting New Zealand as a destination for "medical tourists" from affluent countries who want "cheap" operations and other medical procedures.

A key shareholder in the company, gynaecologist Edward Watson - who has been a consultant for pharmaceutical firms including Pfizer and Pharmacia - told the Washington Post the burgeoning business in conducting drug trials in New Zealand showed the potential for relatively cheap non-urgent surgery.

Auckland's Ascot and Mercy hospitals are shareholders in the business, and Watson said other private hospitals are interested in joining his scheme. One indirect benefit may be a better chance of attracting back some New Zealand surgeons working overseas.

The newspaper reported a knee replacement, with additional expenses for aftercare, would be about $42,700 in the United States, compared with about $24,000 at a top-tier hospital in Mexico and about $30,000 in Auckland.

Coronary bypass surgery would be $82,000 in the United States, $29,400 in Mexico's top tier and $45,400 in New Zealand.

The New Zealand costs included hotel, airfares for two, and case co-ordination by a registered nurse.

Watson is targeting an estimated 75 million uninsured and under-insured Americans, as well as health insurers eager to keep their costs down.

"They are interested in working with us," he told the newspaper. So far, 29 Americans and one Canadian have registered with Medtral, he said.

The newspaper reported that New Zealand had fine private hospitals that, unlike their public counterparts, were not full to overflowing; English-speaking hospital staff and a culture that felt familiar to many Americans.

Watson said the market was targeted more on procedures than on people wanting to holiday, but Air New Zealand was arranging travel packages for patients.