Key Points:

New Zealand's biggest health insurer has reported record growth, which it attributes to growing nervousness about access to publicly funded elective surgery.

Southern Cross membership grew by 17,356 in the year to June 30.

"We have been writing [policies for] an average of 1000 new members every month for the six months to December 2007 and now have 831,256 New Zealanders with Southern Cross policies," said chief executive Ian McPherson.

In 2002 it had 810,000 members.

Dr McPherson said the public health system did well in acute and primary health care, but it could not always meet elective-surgery expectations.

"As a result, increasing numbers of people are ensuring they have the option of turning to us if they need elective surgery or have an unexpected illness that needs treatment."

He said the rising demand for elective surgery in private hospitals mirrored the membership growth of Southern Cross.

The Health Funds Association, representing health insurers, said more than half of elective surgery in 2006/07 - 148,200 patients - was performed in private hospitals.

Executive director Roger Styles said this increase was related to the increasing proportion of private health insurance that was specifically for elective surgery. This had risen to 70 per cent of health insurance cover, up from 63 per cent eight years ago.

He said the trends reported in the association's statistics helped to ease pressure on an increasingly overcrowded public health system.

"This is because our analysis indicates that over the next 20 years, the number of people needing elective surgery is likely to double to around 500,000 a year. This is largely due to the ageing of the population."

But a significant share of the elective surgery in private hospitals is paid for by district health boards.

Those funded by the Accident Compensation Corporation were a fifth of elective surgeries in private hospitals.

Some 2880 patients had publicly funded elective operations in a private hospital in 2006/07, the Government told Parliament last year, compared with 1178 in 2005/06.

The biggest increases were in eye treatment and orthopaedics.

Private Surgical Hospitals Association president Michael Woodhouse said thousands of privately funded patients were not included in the association's figures.

This was because they were treated at clinics which were not members of his organisation.