Reforms helped create IT systems that are envied by other countries.
To understand the success of international IT company HealthLink, cast your mind back to 1992, when the government decided to fundamentally reorganise the entire health system.
"The plan was that by moving to a much more accountable care model and pushing as much as possible out of the hospital gates and delegating it to primary care, it would create a good result," remembers HealthLink chief executive Tom Bowden.
"That's all fine in theory but the nice thing about hospitals and the old way of doing things is ... communication may be poor but it still happens."
What was needed was a safe and reliable system of communication between GPs and the entire health system: pathology tests, specialists' letters, immunisation letters, claims to government or ACC, discharge summaries.
Authorities created an electronic database, a national patient identifier, linking all information to patients by a number.
New Zealand was an innovator in this field; its citizens the guinea pigs but, says Bowden, it created "an eco-system" of 40 New Zealand companies providing IT communication between health agencies, GPs and patients.
Today, New Zealand is the world leader and acknowledged as such by the US-based Commonwealth Fund, for example. HealthLink alone processes about 65 million items of clinical information each year.
"We didn't realise we were world leaders until about 2006," Bowden says, with a genuine tone of affable surprise.
"It was us and Denmark and we've got pretty chummy with the people in Denmark. We've done a technology swap and are implementing a Danish pathology test ordering system and we're helping them with online referrals."
Online hospital referrals are the new frontier and are about to deployed in Auckland, cutting down on human error involved in fax or mail referrals.
Doing it online - which requires broadband capability - allows the hospital or specialist to dictate what information a GP supplies, rather than the doctor providing what he or she thinks is necessary. Bowden explains: "This whole new online system will be huge; the whole paradigm changes."
Compared to New Zealand, far fewer US, Canadian and even Australian GPs have automated computer systems in place: "You need a good level of computerisation at every endpoint and you need a constant lifting and upgrading - this is not a game of big bang implementation; it's steady, cautious improvement," he says.
This means the speed at which New Zealand gets people out of hospital is faster, more GPs report good information flow than anywhere else and even though doctors in Australia get paid 25 per cent more, the measure of satisfaction in practicing medicine is far higher in New Zealand.
'New Zealand is far ahead of Australia," comments Bowden.
"The actual intensity of communication here is orders of magnitude greater: An average New Zealand general practice in an average month will communicate with 58 other parties electronically."
About 70 per cent of Australian GPs use HealthLink services, logging 2000 calls a month to its centre in Auckland. The company is presently deploying a similar service in British Columbia, Canada, which means moving to a 24-hour help desk service.
At present, Bowden intends to still run it from Auckland.
"New Zealand really is," he says, "the laboratory for OECD countries."
HealthLink is a private company, originally established by Telecom (where Bowden started) and Orion Health. Telecom decided it wasn't a good fit and management bought out the telco's stake and now the ownership structure is roughly 50/50.
It has been growing turnover steadily by about 15 per cent a year to about $10 million. Opportunities to grow it faster are abundant but "we're running a service business involving complex new technology" affecting the life quality of every citizen.
"We don't take it lightly," says Bowden. "We've been approached by countries [to provide services] and we just had to say no because it wasn't viable. We're interested in steady sustainable growth rather than tearaway growth."
When market forces are allowed full rein - and Bowden agrees the competitive tender involving pathology services in Auckland is a good example - it can create serious problems.
In his line of work, there is a more collaborative approach to growth, as evidenced by the "chummy" relationship with the Danes, which is not to say that cut-throat practices are entirely absent.
Australia and Canada are now following New Zealand's lead in pushing provision of health services towards primary care and "we see that, having being doing this for many years, as such a logical thing to do".
Healthcare IT is New Zealand's largest single software export category, now worth "at least $100 million. If we can carry on, particularly with this new online system, then it's a huge opportunity [to grow] good, high-value export revenue. The scale could be very large."