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Wait times for surgeries have long been a contentious issue. In part four of a five-part series, Natalie Akoorie examines whether money is a driving factor in long wait lists.

The conflict of interest faced by doctors working in the public and private health sectors is New Zealand's "dirty little secret", according to a former Labour MP for Waikato.

"It really does need to be exposed," Sue Moroney says. "It's kind of like the dirty little secret of the health system that's been going on for decades."

When Moroney was in her early 20s she needed her tonsils removed.


"I remember the specialist who I saw said, 'Yep, those need to come out. They're poisoning your system. They're toxic. They're rotten. You need to get rid of them'."

According to Moroney the specialist told her she would need to wait six months in the public health system for the surgery.

Or he could take them out the next day in his private practice.

"I said, 'Oh, how do you know it will take six months on a waiting list in the public system?' and he said, 'Oh, you know, that's just how it goes'. And he started bagging the public health system.

"I said, 'No, no, I'll stick with public'. Two weeks later I was having my tonsils out on the public health system."

Moroney believed such conversations were happening regularly.

"The person giving them the advice and assessment of how long they're going to have to wait is conflicted in the exercise and they regularly inflate it in my experience.

"Maybe some day someone will get brave enough to go, right, we're actually going to confront this issue. But it would be a very brave health minister who did that and I don't know how that would roll."

Retention and remuneration

Specialists who work in dual practice face a perverse incentive in that they benefit financially from lengthy public sector waiting times," a 2007 report to then-Health Minister Pete Hodgson said.

"They also have access to public patients who may then be seen in the specialist's private practice for a higher rate of remuneration."

There are 9929 specialist doctors registered for work in New Zealand. Of those who completed a Medical Council workforce survey in 2017, 43 per cent reported working in dual practice.

The base salary for a specialist in the public sector from April 1 this year was $161,304, rising to $240,000 over 15 steps.

There are also attractive non-salaried benefits of roughly an extra 30 per cent in the public sector that, as contractors, doctors cannot access in private.

These include 6 per cent KiwiSaver contributions, Continuing Medical Education leave and related expenses of up to $16,000 per year, annual leave, sick leave, sabbaticals, reimbursement of expenses including the cost of an annual practising certificate and indemnity insurance, and a percentage of protected non-patient time.

These benefits still apply to doctors who also work in private, on a pro-rata basis.

Income rates in the private sector, where specialists are remunerated based on the rates for various procedures, are often up to four times as much with extreme earnings in private put at between $1 million and $1.5m per year.

In 2002 it cost $469,000 to train a surgeon in New Zealand, with the bulk of the fees paid by taxpayers.

If that doctor relocated overseas for better experience or remuneration options, the taxpayer loses out, raising the question of whether bonding to the public health system should be investigated.

The Association of Salaried Medical Specialists executive director, Ian Powell, said he had not seen evidence that dual practice contributed to long wait times.

Powell, who has been head of the union for senior doctors for 30 years, said the fact someone worked privately in their own time was of no great consequence for the public system.

Senior doctors' union executive director Ian Powell says a conflict of interest has to be material and he does not believe the health system could function without private practice. Photo / Supplied
Senior doctors' union executive director Ian Powell says a conflict of interest has to be material and he does not believe the health system could function without private practice. Photo / Supplied

"When I first came into this job I thought that would be a real problem and I would struggle with it but as I've come to know it more, I've realised it's not what I thought.

"I think there's a lot of stereotypes flying around. Conflict of interest has to be material."

Powell said that in a practical sense he believed the health system could not function without private practice.

"We haven't got the workforce capacity. We have severe workforce shortages and workforce is the driver of effective change.

"The only concern is the total hours worked are not too much that they impact on [a doctor's] state of mind and health, working for the public hospital."

Because New Zealand was a small country at the bottom of the world it had huge attraction and retention issues in health workers.

"To keep a number of surgeons in the country, because they will have better options overseas, the private practice helps because it's more competitive with what their options are overseas.

"It's not the intent but it helps stabilise the workforce."

However, he did agree that remuneration and conditions at district health boards should be sufficient to attract specialists to work full-time in public, because it brought greater flexibility of staffing.

The National Party's spokesman for health, MP Michael Woodhouse, said it was not a question of "public versus private".

Woodhouse, a former New Zealand Private Hospitals Surgical Association president and chief executive of private Mercy Hospital in Dunedin, said rather than competing against each other the two parts of the sector were symbiotic.

National Party MP Michael Woodhouse says it is not a question of
National Party MP Michael Woodhouse says it is not a question of "public versus private" but instead the two parts of the sector are symbiotic. Photo / Mark Mitchell

"Metropolitan areas [outside the main cities] with base hospitals that rely on a specialist workforce struggle to attract and retain that specialist workforce.

"And one area that's an important component of that attraction and retention is the ability of those specialists to augment their public hospital salaries with a private income as well.

"It creates the opportunity to attract into places like New Plymouth and Palmerston North and Timaru ... sometimes world-class specialist services that they simply would not be able to get without the opportunity to participate as a private practitioner as well."

Woodhouse said he had heard stories of doctors manipulating waiting lists but he had seen no evidence of it and believed it was simply specialists presenting all options.

"I think it isn't inappropriate for a specialist to say, 'Look, do you have private insurance?'

"I don't believe, if it's done appropriately and ethically, there is any difficulty with that. That's not queue-jumping necessarily because I have faith in the clinician's ability to assess clinical need."

Middlemore Hospital head of general surgery Dr Andrew Connolly agreed private practice was needed to bolster the workforce.

"One of the challenges for us as a country is around the retention of specialists in the public health system ... because it's not just about money," Connolly said.

"In fact most people who work in the public sector do so knowing it's probably costing them money.

"But they do so because they like the camaraderie. They like teaching the younger guys and we often do some quite complex stuff that you wouldn't necessarily want to be solely responsible for in private."

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