Obituary: Peter Smith

By ARNOLD PICKMERE

Health insurance executive. Died aged 66.

Peter Anderson Smith was the chief executive and a board member of the country's largest private health insurer, the Southern Cross Healthcare group, for more than 25 years.

In this position he had a significant influence over a major change in health care in New Zealand during the years when it became apparent that the state could no longer afford to offer free health services for all.

Smith joined Southern Cross in 1970 when it had only 50,000 members and "about half a dozen girls in the office and a few guys out on the road".

By 1988 it had passed the one million mark. Smith told the Herald then he did not regard himself as the author of this big leap. But he did see it coming.

He came to Southern Cross from a background in the Post Office. He left Takapuna Grammar with School Certificate to be a postman, then went "inside", ultimately to Post Office headquarters in Wellington. He rose to a relatively senior position while still in his 20s.

But after doing a BA degree part-time at Victoria University, he came north for some "real education" to a management position with the Auckland Savings Bank. He soon realised that, as at the Post Office, he was (in those days) hovering under a safe institutional umbrella and opted for a change.

He knew nothing about medical insurance "but I sat down and analysed the whole question of health insurance and private medical treatment very carefully".

"I felt it was ready to take off for a whole lot of reasons, including the state of government finances and the position of the public health system," he told the then Sunday Star.

"When I took over ... I certainly grasped that there was no way a New Zealand Government could meet the entire demands of the population for healthcare services."

And he argued that had not been done anywhere else in the world either, because of the insatiable demand for health services.

When the big leap came he was ready for it. Although the organisation had been going for nine years when he joined, Southern Cross had achieved only a low penetration of the market. In the early years it appealed mainly to the self-employed and others who might then have been viewed as elitist.

Smith's first important step was to sell medical insurance to commercial firms, selling "bulk" membership schemes with certain concessions.

Then came the stage where many employers subsidised some or all of their employees' contributions. By 1982 about 70 per cent of Southern Cross members belonged to such bulk schemes, including 94 of the top 100 companies then listed on the stock exchange.

Another hallmark of his time was Southern Cross becoming involved in running private hospitals, which he viewed as a logical development.

The call for Southern Cross' services increased, he believed, because of people's desire for family members to get hospital treatment when they needed it. There was doubt that the public health sector could deliver.

People wanted to be admitted to to the hospital of their choice immediately and have their own surgeon.

Medical insurance also gained in popularity as the cost of visiting a doctor increased.

Peter Smith, born in the Auckland suburb of Onehunga, was brought up in a staunch socialist household which believed the Government should pay for the healthcare of the nation. But as a married man with four children, he believed medical insurance was not in competition with Government services but that both were key partners in the country's health programme.

In the years since his retirement in 1995, health costs have continued to rise, the result of a growing population, people living longer and the introduction of more expensive treatments.

Such factors now cause problems not just for the public health service but also for health insurers such as Southern Cross.

They are trends which would have hardly surprised Peter Smith.

Among his other interests, Smith was a director of the International Federation of Health Funds and its president from 1984 to 1986. He was awarded an MBE in 1988.

He is survived by his wife Daphne and his four children.