'Dr Privatisation' will now see your sick child.

Corporations care about profits, not patients. When Simeon says 'I'd like to see as much elective service provided by the private sector as possible', we should be very worried.

[I said when I had the time I’d write a piece on Simeon Brown’s announcement that he will be privatising NZ’s health system as much as he can get away with. Here it is. If you find any of it valuable, send it to even just one friend.]

Simeon Brown, the Minister of Health, has publicly said his goal is to privatise as many elective health services as possible. He’s part of this current government’s plan to sell New Zealand off to private interests, who will then rent it back to us. At great expense to us, and great profit to them.

He said it openly. And if you’ve worked in other healthcare systems, in private and public healthcare, you can see what’s coming.

This is a wordy post, I’m sorry. But I need to start at the beginning.

What’s an elective service?

It’s everything that’s not acute or an emergency. It usually doesn’t include GP services, but does include all the other healthcare you plan and schedule: like a hip replacement, cataract surgery, or a colonoscopy. It also includes specialist appointments and diagnostics: cancer treatment, cardiology, or CTs/MRIs. It doesn’t include ED care, ICU, or emergency surgery. Elective services covers much of the planned or scheduled healthcare you get. It’s a lot.

What’s healthcare privatisation? The words that come our of a Privatisation Advocate’s mouth always sound great: efficient, high-quality, and cost-effective.

In practice though, it’s a race-to-the-bottom. The most effective way to shunt taxpayer money to the owners of corporations.

Is it really that bad? Well if you are rich, it can be good enough (although even for the rich, there’s a tendency to do what’s profitable, rather than what’s best for the patient). But for the non-rich, it’s become a way for governments to divert money from essential public services into private corporate owner’s hands.

If you have a dollar for healthcare in a public system, that dollar mainly gets used to pay for your public hospital infrastructure, and to pay the salaries of your public workers, mainly nurses and doctors, to provide medical services to you. In private, some of that dollar, (actually a lot of that dollar) must pay for profits.

Instead of healthcare, some percentage of that public taxpayer health dollar must be diverted to make rich men (yes, its mostly men) even richer.

Let’s look at one very specific example that can teach us about the whole scam that the current government has pushed NZ headlong into.

In my hometown, our public hospital is aged and decrepit. Undersized and underresourced. It is half the size of what the burgeoning population needs. The new hospital, when it is actually built and opened (the current govt tells us it will be another 6 years), will be far too small for the needs of the population today, let alone in 6 years. By design.

The radiology department has two very well-used (a nice way of saying worn-out) CT scanners and an MRI. Waits for an MRI slot can take literally months.

Politicians will say there isn’t the money to hire radiologists to read the scans (they’re horrendously understaffed), or technicians to operate the machine, nor money to buy another MRI and staff it.

[Times are tough, we’re in austerity, and that means there is only billions for tax cuts for property investors and tobacco companies.]

In Kaitaia, there’s desperate need for a CT scanner (and staff to operate it). But there’s no money.

[Which really means the money has been spent elsewhere, on higher priorities, like $200 million in tax benefits for Philip Morris tobacco company].

Sound dire. But wait. The situation’s not dire for everyone. Private imaging corporations are killin’ it. Making mad profits. How?

In our town, and likely yours too, there are private corporations that suck at the government teat. And the current government has made sure they get the biggest teat while public services get starved. [$3 billion in cuts with more planned, a gutting of 25% of IT workers and 50% of public health roles, and a real Health NZ budget that is 4.3% smaller than last year’s budget depsite inflation and huge population growth.

Enter the fattest piglet: Infratil. They’re not just got the biggest government teat, they’re eating the smaller piglets.

Infratil is a multinational corporation with tentacles everywhere. And one of those places is Whangarei. Infratil owns a majority of RHCNZ, a private imaging group that owns a bunch of radiologists and imaging centres in NZ. They just opened a new imaging centre in town. It has all the imaging devices you could wish for. How can it afford the things the public hospital can only dream of: radiologists, CT scans, MRIs, sonographers, all the bell-and-whistles?

Plain and simple, taxpayer money is being diverted from the hospitals to the private corporations.

Finally, we get to Simeon’s recent announcement that as many elective services as possible would be outsourced to private corporations.

They’re already doing it, of course, it’s just going to get a lot worse. A dollar that would have gone to your public hospital, will now be going instead to an imaging centre owned by Infratil, or a private hospital owned by a different mega-corporation. With the bastards of private equity behind many of them. The same private equity companies that have been well-demonstrated to cause degraded healthcare in other countries, like the US, that have gone down the privatisation route.

But it’s not just a few dollars heading out of the public purse, it’s a torrent.

In the case of one single private medical imaging corporation, they’re seeing 10% growth and $340.6 million dollars in revenue. Much of it in government contracts, which are set to skyrocket under this current government. And that’s just one company, RHCNZ, owned by one corporation, Infratil. Multiply that across the entire healthcare sector, and you realise that the biggest welfare scam in New Zealand is private corporations sucking profits out of the public system.

The Healthcare sector, a relatively new area for Infratil, is growing within the portfolio. RHCNZ Medical Imaging in New Zealand delivered a strong financial result with scan volumes up 3.7% to over 1 million and revenue up 10.4% to $340.6 million.

“One of RHCNZ’s key strategic priorities is to be the first choice for referrers and patients in New Zealand, while enhancing medical imaging access to all New Zealanders. RHCNZ’s commitment to this strategy was enhanced during the year as a result of ongoing geographic expansion - with new clinics opening in Papamoa and Whangarei, and with expansions to existing services in Invercargill and Paraparaumu,” Mr. Boyes said.

But surely they’re providing a service? Yes, they do provide imaging scans. But they only use 80 cents of every dollar for that. The other 20 cents of every dollar goes into a private pocket. Yes, that’s right, a full 20% of every health dollar Simeon sends their way, will go to their corporate profit.

They also pull human resources away from private. As public healthcare is starved of funding and erodes, the doctors and nurses will go where the work, and the pay, is. Staff that were hard to recruit, like radiologists, have become even harder to keep as a result of privatisation. It’s a general hollowing out of the public hospitals, to the benefit of the private corporations.

If you are a coporate owner or shareholder (or a politician eternally indebted to them), you are coming out ahead. If you are a NZ citizen paying taxes (in a low-wage economy with significant inflation) you are getting shafted. 20% of your tax dollar is getting diverted into pockets, rather than into providing the scans and healthcare you need. Your hospitals are getting hollowed out. 30% or worse specialist staffing shortages are becoming commonplace. Whole hospitals are not being shut down, they’re being starved to death. (Hello Dargaville Hospital and all those other intermittently doctorless hospitals…a thing we’ve never heard of before in NZ, which is now becoming routine: dangerous medical understaffing that at first was occasional, just an unstaffed night shift here and there, but which has now sadly become the norm in some communities).

‘We need to run healthcare like a business,” say the peopel who would defraud us through healthcare privatisation.

Professional salesmen like Lester Levy will never admit it, but a princely share of your tax money won’t ever go to providing you with healthcare services: it’ll be stripped away as profits. In the example we’re looking at, a single dollar kept in public system would have gone 20% further than in private. Spent on patients, not profits.

Now, when you consider that private healthcare skims only the easiest cases [as an ED doctor I can refer a runner’s painful knee to the surgeons at a private orthopedic corporation for a profitable and easy arthroscopy, but cannot send that business a patient with a diabetic foot infection—there’s no quick and easy profit in that, and the system is organised from the top down for profit-maximisation, not patient need] , you begin to understand why private healthcare isn’t operating on a level playing field. The field is tilted in favour of the profiteers.

The third leg in the triple tyrrany of privatisation after cream-skimming, and profit-extraction, is staff exploitation. It’s no secret that this current government is weaking worker’s rights as fast as possible. It’s good for short-term business profits and it makes privatisation easier.

What private healthcare has masterered is not the provision of healthcare, but the maximisation of profits and the minimisation of costs.

The way you maximise profits is to take the easiest, most profitable cases off the public sector (leaving them with the worst, most complicated cases). The way you minimise costs is to hire fewer staff, work them harder, exploit them more, and whenever you can get away with it, hire less qualified staff.

This isn’t just conjecture, it’s reality. Not just in NZ but internationally. And there are studies to back it up: you get worse care and deadlier outcome in a fully-privatised system than a public system.

Once again: Private healthcare delivers worse outcomes than not-for-profit (‘non-profit’) healthcare, which in turn delivers worse health outcomes than public healthcare.

By ‘worse’, I mean in terms of financial costs vs outcomes that matter to patients, like survival or lower complication rates. But if you’re Luxon, Simeon, Reti, or Levy, there’s a different aspect to the calculation: ‘better’ then means “more profitable” to the businesses and corporations that support political campaigns and hire politicians when they leave the Beehive to become lobbyists and tobacco company executives.

I’'ll end it there with a reading assignment—stuff to read if you want to be depressed at the privatisation of New Zealand, one essential public service at a time:

• RHCNZ Medical Imaging Group consists of Pacific Radiology, Auckland Radiology, and Bay Radiology, the RHCNZ Medical Imaging Group is New Zealand's largest diagnostic imaging provider. The combined group operates over 70 clinics nationwide, with 31 clinics in the South Island and 39 in the North Island. Infratil owns 50.3% of RHCNZ Medical Imaging Group.

• https://infratil.com/news/infratil-full-year-results-for-the-year-ended-31-march-2024/

• https://www.beehive.govt.nz/release/health-minister-outlines-5-key-health-priorities

• “Clearing the elective surgery backlog by partnering with the private sector to deliver more planned care.” -Simeon Brown

• Must Read: https://www.rnz.co.nz/news/national/473734/bullish-investors-pour-1b-into-new-radiology-services-in-a-year

• Kickbacks? Nah, it’s just business. https://www.rnz.co.nz/news/national/509528/u-turn-in-key-private-health-provider-s-take-on-shareholder-models

-Dr Gary Payinda