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Wait times for surgeries have long been a contentious issue. In part two of this week-long series Natalie Akoorie outlines how the conflict of interest faced by doctors working in the public and private sector may contribute and a unique situation in South Auckland.

The conflict of interest

Specialists who work in public and private practice face a perverse incentive in that they benefit financially from lengthy public-sector waiting times, according to a 2007 report prepared for then Health Minister Pete Hodgson on the co-location of a private hospital on the grounds of Middlemore Hospital in South Auckland.

"In discussion with the Ministry of Health there is clearly a strongly held view that there is abuse of referral behaviour by groups of clinicians who are controlling referral patterns to the benefit of their private practices," states the report, released under the Official Information Act (OIA).

In other words, specialists who may control patient waiting times could exploit them to benefit their private practice, bumping up their remuneration considerably in the process.

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In 2012 and 2013 the conflict of interest was the subject of a complaint by a health professional to the Ministry of Health, Ombudsman and Serious Fraud Office.

All rejected the notion of a "white-collar crime" or market power, but in one response the ministry's district health board (DHB) performance director, Michael Hundleby, said the issue was a complex one "in which private benefits need to be balanced with public".

"The sector has acknowledged and sought to address it for some years."

The national Multi-Employer Collective Agreement [MECA] for senior medical officers has clauses that specify rights of private practice.

Hundleby said while senior doctors were not required to advise DHBs of their private practice they should not knowingly allow private commitments to adversely affect their performance and contractual obligations to their employer.

Kay Billman installed a stairlift in her home while she waited 18 months for spinal surgery. Read more of her story in part 5 of the public versus private series. Photo / Alan Gibson
Kay Billman installed a stairlift in her home while she waited 18 months for spinal surgery. Read more of her story in part 5 of the public versus private series. Photo / Alan Gibson

The conflict came to the fore in June 2004 when the Ophthalmological Society of New Zealand was fined $100,000 and two ophthalmologists a total of $30,000 for contravening the anti-competitive provisions of the Commerce Act.

Justice Warwick Gendall at the High Court in Wellington also ordered all the ophthalmologists involved to pay $467,000 toward the legal costs of the Commerce Commission, which took the prosecution.

The eye doctors were found to have deliberately tried to thwart Australian ophthalmologists from carrying out routine cataract surgery in Southland in 1997 to reduce long waits.

They acted to defend a colleague, who worked for both Southland Health and in private practice, because if the waiting lists were cut his private practice would be devastated and his income drastically reduced.

The doctor offered to complete the operations by the end of June that year instead of January and he was supported by the society which argued that the additional surgery sought by Southland Health "if appropriately planned, could have been dealt with more satisfactorily over a longer term by New Zealand ophthalmologists".

"The question here is 'satisfactorily for whom?' and the answer appears to be for the surgeon, rather than for the patients waiting for surgery," says a 2005 ministry report on the public-private interface prepared for then-Health Minister Dame Annette King and released to the Herald under the OIA.

Gendall summed up the case: "What occurred was a concerted action by members of a profession, and its professional body, to assist a colleague avoid legitimate competition to protect what he, and his profession, regarded as his exclusive domain."

In another case in 2009, a senior doctor was caught double-dipping and neglecting public patients over four years after he was paid as a full-time employee at Waikato DHB while working two days a week in private practice.

The doctor was forced to repay $143,000 after his behaviour was discovered by a member of the public whose daughter had to wait two days to be discharged by the doctor from Waikato Hospital.

Dunedin Hospital doctor Mike Hunter believes the public should demand better management of dual specialists because of the conflict of interest they face. Photo / ODT
Dunedin Hospital doctor Mike Hunter believes the public should demand better management of dual specialists because of the conflict of interest they face. Photo / ODT

Dunedin Hospital consultant surgeon and intensivist Dr Mike Hunter believed the public should demand better management of the conflict of interest.

"I don't think they've ever dealt with this issue adequately. The conflict of interest is real and it wouldn't be allowed in most other areas of endeavour, where the people who are competing in private and stand to make substantial profit are in a position of control of the delivery of public services.

"That's a fundamentally wrong arrangement in my view and it's swept under the carpet all the time.

"People think that doctors will always behave honourably and they couldn't possibly do anything to further their own interests at the expense of patients but they're human beings and you know that's completely untrue."

Hunter, who doesn't work in private practice, said he was "quite sure" some dual-practice doctors manipulated the system.

"Sometimes it's hardly conscious. A lot of specialists become frustrated in the public system because there's so many bottlenecks and they feel so disengaged from those managing the system that they think it's a lot more rewarding professionally as well as financially to just focus on what [they] do in private."

Hunter believed the solution was to re-engage specialists.

"We need them to be committed. We need them to be involved in system and quality improvement. We need them to be engaged with and feel they have influence over the way hospitals are run and at the moment that's, by and large, not the case."

At Middlemore Hospital a group of specialists - three general surgeons and two orthopaedic surgeons - are remunerated at a higher rate in exchange for working only in the public system.

Middlemore Hospital head of general surgery Dr Andrew Connolly has never seen evidence of specialists feeding public patients into their private practice to boost their income. Photo / Supplied
Middlemore Hospital head of general surgery Dr Andrew Connolly has never seen evidence of specialists feeding public patients into their private practice to boost their income. Photo / Supplied

One of those doctors, head of general surgery Dr Andrew Connolly, said the situation was effective.

"Our colleagues who do partly private say to me that they reckon having the full-timers in our department has really solidified and is the glue that keeps things together so we think this mixture of part-time and full-time is a really good one."

The situation, not dissimilar to the first option in the 2005 report to King (offering specialists in particular locations and specialties a contract to work exclusively in the public sector, possibly starting with a pilot), was established two decades ago by former Counties Manukau DHB chief executive David Clarke.

Connolly was one of those doctors who had never worked in private practice under the arrangement and said the move was prompted by the growth of South Auckland and the need for more full-time specialists.

On the conflict of interest, Connolly said he did not see evidence of surgeons deliberately trying to feed their private practice.

"It just doesn't happen. There's so much work to do they just don't need to, plus it's obviously ethically unacceptable."

A former Medical Council chairman for five years until February, Connolly said no complaints of that nature were raised in his time.

"I can't put my hand on my heart and say there aren't people who have behaved less than honourably but I just can't see examples of it because there's no need to."

He did not believe dual practice contributed to long wait times.

"I've actually got surgeons who are bored because we haven't got enough operating rooms.

"I've got colleagues in my department who could do more elective operating if we had more theatres available for them to operate in."

The series

Part 1: Waiting times
Part 2: The conflict of interest
Part 3: Complementary, competition and the cost
Part 4: Retention and remuneration
Part 5: Overseas and the alternatives