New initiatives set to boost NZ’s private health insurance participation.

New Zealanders are putting their health and financial security at risk by not taking responsibility for their health, according to insurance giant nib.

CEO Rob Hennin says his company is making several moves designed to make it easier and cheaper for Kiwis to purchase and maintain health insurance - and to ease disturbing figures which reveal how they are exposed when it comes to health care.

In spite of 20,000 new people taking out health insurance in the past year (the biggest increase for many years), only 30 per cent of New Zealanders (1.36 million) have health cover - low by international standards and almost half that of Australia (where 56 per cent have cover).

Meanwhile, waiting lists and times for public surgeries/treatments are increasing. Last year, the Health Funds Association of NZ said 110,000 people were on a waiting list while 170,000 had not even made it to a waiting list in spite of being told they needed elective surgery. Wait times were up to an average of 304 days (80 days longer than in 2013).


Hennin says part of the problem is New Zealanders' historical attitude to health care, with many still believing the government would and should look after citizens.

"The government has looked after Kiwis pretty well," he says, "and that attitude is part of our social and political background; it's part of who we are.

"But it also reveals a little bit of a lack of understanding that we as a nation need to take more responsibility for our own health."

Keeping Kiwis healthy currently accounts for about 22 per cent of Government spending or about 7 per cent of GDP; government estimates suggest this will grow to 11 per cent of GDP by 2060. Yet of the $22 billion spent on health each year, only about 5 per cent is covered by private health insurance.

"It's not that the government health system should not do good things for Kiwis," says Hennin. "It's really about Kiwis taking responsibility for their own health outcomes and making sure that the country can afford what they are asking it to do."

An ageing population was more likely to require medical intervention as health issues arose and modern medical technology was increasing at such a rate, most people's expectations of health care had also increased.

"You'd have to say the current system is ultimately not sustainable and, if the country can't afford it, then we need a responsibility strategy."

One solution was to adopt something closer to the Australian system where tax incentives benefitted private health insurance policyholders in a "carrot and stick" approach.


"We've done a lot of work over the last year or two so we can have a more informed discussion with government and the industry," says Hennin, "and that has included looking at alternatives. Adopting something closer to the Australian system is one possibility; a tax regime which encourages private health insurance is another. A third idea is a Kiwi Health version of Kiwisaver so people put aside dedicated savings to help safeguard their future health.

"There are advantages and disadvantages to all those options; there is no one perfect model - discussion continues."

Meanwhile nib is planning initiatives to drive greater participation in private health insurance - like the First Choice network and Whitecoat; Hennin describes the latter as "the Trip Advisor of health insurance".

Whitecoat - active only in Australia at present but to be launched in New Zealand soon - is an online healthcare provider where the public can find, choose, book and review providers based on their service experience.

"It gives you information on a wide range of medical providers, customers review those providers and rate them - that's why I say it is like Trip Advisor, but in health. It provides greater transparency and convenience for customers to make healthcare choices," Hennin says.

Helping customers make more informed choices and ultimately reduce costs is also part of the driving force behind First Choice - a new network of providers available to New Zealanders from about September.

Based on exhaustive research, the network will feature medical professionals who provide customers with services and treatment 100 per cent covered by nib (up to the individual policyholder's benefit limit).

"We've done a lot of work to determine a set price range, based on the average cost of procedures," says Hennin. "At present about 90 per cent of all New Zealand medical professionals charge within this range though there are some who charge more - though with no evidence of improved clinical effectiveness."

First Choice will be a platform designed to put patients in touch with medical professionals within the surety of that price range - enabling nib to better manage claims costs and keep premiums affordable.

"It doesn't mean people can't elect to go to a preferred professional who charges more, if they so choose; but they may have to pay the excess themselves," says Hennin.

"In the end, keeping premiums affordable benefits everybody - customers, patients, professionals, the government and the economy."