Access to elective surgery in New Zealand:considering equity and the private andpublic mix

Sarah Derrett1*, Tui H. Bevin2, Peter Herbison3 and Charlotte Paul3

1Injury Prevention Research Unit, Department of Preventive and Social Medicine,Dunedin School of Medicine, University of Otago, New Zealand2Ophthalmology Section, Dunedin School of Medicine, University of Otago, New Zealand3Department of Preventive and Social Medicine, Dunedin School of Medicine,University of Otago, New Zealand

SUMMARY

New Zealand has a two-tier health system with elective surgery provided by both publiclyfunded state hospitals and by private hospitals. Issues of equity should be considered acrosssuch systems—where the better off can access surgery in private hospitals regardless ofrelative clinical need. This study evaluated equity of provision of surgery after the introductionof a prioritization system to manage access. Data for people receiving publicly funded electivejoint replacement, prostatectomy or cataract surgery between 2000 and 2005 were obtained, aswell as most recent data for people receiving privately funded surgery (2001 and 2002).Denominators were derived from the 2001 census for the population of District Health Boardregions. NZDep2001, a small-area deprivation index, was used to identify people in poorestdeciles. Despite the introduction of a prioritization system aimed at increased equity andfairness, the provision of elective surgery remains inequitable geographically. High privateprovision was not associated with better access to publicly funded surgery. Moreover, theargument that private provision for the well off reduces the burden on the public systemallowing better access for the poor was not supported. Consequences of two-tier healthsystems, as in New Zealand, needmore investigation and public discussion. Copyright# 2009John Wiley & Sons, Ltd.

key words: equity; socioeconomic; geographical; elective surgery; access

INTRODUCTION

In New Zealand, there is a two-tier health system with elective surgery provided by

both state hospitals and private hospitals (Flood et al., 2002). New Zealanders can

receive publicly funded surgery at state (public) hospitals if they are determined to

have need sufficient to meet prioritization thresholds governing access to surgery.

Alternatively, people with sufficient resources can privately purchase their elective

surgery at non-state private hospitals or clinics by out-of-pocket payment or through

international journal of health planning and management

Int J Health Plann Mgmt 2009; 24: 147–160.

Published online 25 March 2009 in Wiley InterScience

(www.interscience.wiley.com) DOI: 10.1002/hpm.978

*Correspondence to: S. Derrett, IPRU,Department of Preventive and SocialMedicine,Dunedin School ofMedicine,UniversityofOtago,POBox913,Dunedin,NewZealand. E-mail: sarah.derrett@ipru.otago.ac.nz

Copyright # 2009 John Wiley & Sons, Ltd.

private medical insurance (Ministry of Health, 2006). Provision of surgery at private

hospitals tends to have shorter waiting times, and is not determined by the

prioritization thresholds present in the public system. It is commonly believed that

increased availability of privately funded services relieves demand placed on

publicly funded services, thereby freeing up capacity to treat a greater number of

people in need (Duckett, 2005; Canadian Health Services Research Foundation,

2003). Commentators in various countries have long been concerned to explore

empirically issues of equity of access to treatment in such parallel health systems—

where the better off can pay regardless of their relative clinical need (Fougere, 1974;

Blumberg, 2006; Barnett and Lauer, 2003; McLeod et al., 2004; van Doorslaer et al.,

2006).

Research has been undertaken in New Zealand and elsewhere considering overall

and specialty-wide hospital admissions in relation to socioeconomic and geographical

equity (Barnett and Lauer, 2003; Walker et al., 2006; Raymont, 2002; Pearce et al.,

2006; Ministry of Health, 2007). Yet to our knowledge, no one has published

information about the relationship between the public and private provision of specific

elective surgical procedures. This is important in light of New Zealand’s aim for an

equitable health system. Internationally, the management of elective surgery has

focused onmethods for prioritising access to treatment, fairness and waiting times. In

NewZealand, specific concerns were raised about variation between surgeons in their

implicit priority decisions about indications for publicly funded surgery, and patients

not having fair and equitable access to care (Fraser et al., 1993; Hadorn and Holmes,

1997). To help address such concerns a scoring, prioritization and booking systemwas

introduced to explicitly manage referral, assessment and access to publicly funded

elective surgery in the mid 1990s. The new systemwas intended to: develop a fair and

consistent means of defining priority, ensure patients with the greatest need and

potential to benefit received treatment first and provide nationally consistent access to

surgery (National Advisory Committee on Core Health and Disability Support

Services, 1995; Shipley, 1996; Feek, 2000; Anonymous, 2000).

Measures of provision of publicly funded surgery are reported by the New Zealand

health information service (NZHIS). These include the number of procedures,

volume of activity at specialist level (e.g. urology) and standardized (for age, sex and

social deprivation) discharge ratios for each of the 21 District Health Board (DHB)

regions. While these measures are informative, they have limitations in terms of

evaluating whether all New Zealanders really do have fair and equitable access to

elective surgery—either geographically or socioeconomically. Moreover, despite

increases in funding for elective surgery, it is not clear whether access has improved.

The aim of this study was to evaluate the equity of provision of elective surgery in

New Zealand since the establishment of the booking system. We examined four

commonly provided surgical procedures (total hip joint replacement and total knee

joint replacement combined—total joint replacement (TJR), prostatectomy and

cataract surgery) to: (1) identify changes in the rates of elective surgery for these

procedures over a 5 year period; (2) examine geographical variation in the provision

of publicly funded elective surgery; (3) explore the contribution of publicly and

privately funded elective surgery to equity and (4) explore access to elective surgery

provision according to socioeconomic status.

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

148 S. DERRETT ET AL.

METHODS

All data (unidentifiable) for people receiving publicly funded elective TJR,

prostatectomy and/or cataract surgery in New Zealand between 1 July 2000 and

30 June 2005 were provided from the National Minimum Data Set by NZHIS. Data

were also provided for people who received privately funded elective surgery

between 1 January 2000 and 31 December 2002; this being the most recent data set

available for private surgery.

Data included ICD-10 procedure codes for the specified surgeries, month and year

of surgery, admission codes, age at discharge, sex, New Zealand residency,

socioeconomic status according to NZDep2001 (a small-area deprivation index

based on nine variables related to material and social deprivation including income,

employment and transportation from the 2001 New Zealand Census; ordinal scale

with 1 being least deprived decile and 10 most deprived) (Salmond and Crampton,

2002), place of residence according to DHB region and classification of surgery

funding (private or public). Eligible ICD-10-AM (National Centre for Classification

in Health, 2002) procedure codes were advised by NZHIS in accordance with

Ministry of Health definitions for the four surgery groups requested (Table 1).

Data from people having ‘acute’ or ‘arranged’ surgery (within seven days of the

decision to operate), people funded by the Accident Compensation Corporation (a

no-fault compensation insurance scheme for injury not funded by general taxation),

non-New Zealand residents and people of no stated sex, ethnicity or place of

residence with an associated DHB were excluded from the analysis in both the

publicly and privately funded surgery groups. Privately funded cataract surgery

reports were not analysed because private hospitals and clinics are not required to

report surgery discharges to NZHIS when patients have been in their care for less

than 3 h (New Zealand Health Information Service, 2003). Different practices

between public and private hospitals in this regard would invalidate comparisons.

Denominators were derived from census data for 2001 for the normally resident

population of each DHB region. Data were entered into SPSS (version 12) and

STATA (version 9) for analysis. Direct age-standardisation (in 5-year age groups)

was carried out using the standardization routine in STATA and using the 2001 New

Zealand census population as the standard. NZDep2001 was used to select people in

three deciles (8, 9 and 10—poorest deciles) to determine the numerator and

denominator to calculate their age-standardized rates of surgery. To examine the

relationship between publicly funded rates in these deciles and privately funded

surgery a correlation coefficient between the rates was calculated both before and

after removing data points that appeared to be obvious outliers.

RESULTS

There were 74 836 elective procedures included in the study. The average age of

people for TJR was 68 (standard deviation (sd) 11), for cataract it was 73 (sd 13) and

for prostate it was 71 (sd 9). Table 2 presents age-standardized rates for surgery over

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

ELECTIVE SURGERY: PRIVATE AND PUBLIC MIX 149

Table

1.ICD-10-A

Mblocks,descriptionsofeligible

blocksandproceduresexcluded

forthethreeelectivesurgerygroups

Electivesurgerygroups

Block

Descriptionof

eligible

blocks

Procedures

excluded

from

each

block

Totaljointreplacement

(knee

&hip

combined)

1518

Arthroplastyoftheknee

Hem

iarthroplastyofknee

1519

Arthroplastyofthe

knee

withbone

graftto

femurortibia

Totalreplacement

arthroscopyofpatellofemoral

jointofknee

Arthroscopic

reconstruction

ofcruciateligam

ent

withrepairofmeniscus

Reconstructionof

cruciateligam

entwith

repairofmeniscus

Reconstructionofknee

involvingtransfer

of

fibula

ortibia

1523

Revisionoftotalarthroplasty

ofknee

withbone

graftto

femurortibia

—

1524

Other

revisionprocedures

onknee

Revisionarthrodesis

ofknee

Revisionpatellofemoral

stabilizationofknee

Revisionofreconstructive

surgeryofknee

1489

Arthroplastyofhip

Hem

iarthroplastyoffemur

Excisionarthoplastyofhip

(Continues)

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

150 S. DERRETT ET AL.

Table

1.(Continued)

Electivesurgerygroups

Block

Descriptionof

eligible

blocks

Procedures

excluded

from

each

block

Partial

arthroplastyofhip

1492

Revisionarthroplastyofhip

Revisionofpartial

arthroplastyofhip

with

anatomic

specificallograft

toacetabulum

Revisionoftotalarthroplasty

ofhip

withanatomic

specific

allograftto

femur

Prostatectomy

1162

Destructionofprostatic

tissue

Controlofpostoperative

haemorrhageofprostate

1165

Transurethralprostatectomy

—1166

Other

closedprostatectomy

Cryoablation

Microwavethermotherapy

Highintensity

focusedultrasound

Other

closedprostatectomy

1167

Open

prostatectomy

Radical

prostatectomy

Radical

prostatectomy

withbladder

neckreconstruction

&/orpelvic

lymphadenectomy

1168

Other

excisionprocedureson

prostateorseminal

vesicle

Excisionofseminal

vesicle

Cataract

195

Intracapsularcrystalline

lensextraction

—

196

Extracapsularcrystalline

lensextractionbyaspirationalone

—

(Continues)

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

ELECTIVE SURGERY: PRIVATE AND PUBLIC MIX 151

Table

1.(Continued)

Electivesurgerygroups

Block

Descriptionof

eligible

blocks

Procedures

excluded

from

each

block

197

Extracapsularcrystallinelens

extractionbyphacoem

ulsification

—

198

Extracapsularcrystalline

lensextractionbymechanical

phacofragmentation

—

199

Other

extracapsular

crystallinelensextraction

—

200

Other

extractionofcrystallinelens

—201

Rem

oval

ofaftercataract

—202

Other

application,insertion

orremoval

proceduresonlens

—

Table

2.Age-standardized

ratesofpubliclyfunded

surgery(per

10000New

Zealandresidents)over

5years(July

2000–June2005)forelectivetotaljoint

replacement,prostatectomyandcataract

surgery

Publicly-funded

electivesurgery

July–Dec

2000

2001

2002

2003

2004

Jan–June2005

TJR

(n)

2612

5092

4665

4702

6060

3512

Standardised

rate

(95%

CI)

14.0

(13.5,14.5)

13.6

(13.3,14.0)

12.5

(12.1,12.8)

12.6

(12.2,12.9)

16.2

(15.8,16.6)

18.8

(18.2,19.4)

Prostate(n)

1102

1975

1916

1944

1935

1002

Standardised

rate

(95%

CI)

12.1

(11.4,12.8)

10.8

(10.4,11.3)

10.5

(10.0,11.0)

10.7

(10.2,11.1)

10.6

(10.1,11.1)

11.0

(10.3,11.7)

Cataract(n)

3879

8004

7589

7111

7752

3984

Standardised

rate

(95%

CI)

20.8

(20.1,21.4)

21.4

(21.0,21.9)

20.3

(19.9,20.8)

19.0

(18.6,19.5)

20.7

(20.3,21.2)

21.3

(20.7,22.0)

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

152 S. DERRETT ET AL.

the 5 year study period. The publicly funded rate for TJR increased between 2003

and 2004, otherwise rates did not increase over the 5 years.

Tables 3 and 4 show 2001-02 rates of publicly funded surgery and privately funded

surgery for TJR and prostatectomy respectively, according to the DHB region of

residence. Tables 3 and 4 also present the ratio of public to private provision for each

DHB. This was to investigate whether regions with lower public provision had higher

private provision (demonstrated by a lower ratio). DHBs were ordered according to the

rate of public provision (lowest to highest). Cataract surgery rates are not presented for

each of the DHB regions because privately funded rates were not reliably available.

However, the rate of publicly funded cataract surgery, for 2001 and 2002 combined,

ranged between a low of 14.6 cataract operations per 10 000 people residing in the

Canterbury DHB region to a high of 35.7 per 10 000 in Northland DHB.

In general, the DHB regions with the lowest public provision had the highest private

provision (demonstrated by a lower public/private ratio), for both TJR and

prostatectomy (Tables 3 and 4). There were exceptions: Mid-Central had a relatively

low provision of public prostatectomy and also a low provision of private

prostatectomy. A correlation between the rate of public provision and the ratio of

public to private for TJR weighted by the inverse of the variance of the estimate of the

rate was not significant if using data from all 21 DHBs (r¼ 0.38, p¼ 0.09). However, if

the 2 DHBs with a ratio above 15 were removed (Hawkes Bay and Whanganui) the

correlation was moderate and statistically significant (r¼ 0.74, p¼ 0.0003). Similarly,

the correlationwas not significant for prostatectomy (r¼ 0.29, p¼ 0.2), unless the DHB

with a ratio above 60 (Hawkes Bay) was removed, and the correlation was again

moderate and significant r¼ 0.74, p¼ 0.0002). Tables 3 and 4 also show the age-

standardized rates of people in the poorest three decile groups (NZDep2001 groups 8, 9

and 10) receiving publicly funded surgery in each of the DHB regions. Rates range

between 8.1/10 000 in Auckland and 39.5/10 000 on the West Coast for TJR; and

between 6.6/10 000 in Lakes District and 50.0/10 000 in Southland for prostatectomy.

Cataract surgery rates are not included, as they may not be reliably reported for the

private sector. However, for NZDep2001 groups 8, 9 and 10 there were 16.9 publicly

funded cataract operations per 10 000 people residing in the Southland DHB region to

50.0 per 10 000 in Northland DHB—a three-fold variation.

Figure 1 (a) and (b) illustrate the relationships between private surgery rates and

publicly funded surgery rates for the lowest three NZDep2001 groups (8, 9 and 10).

For TJR, access to publicly-funded surgery for the most deprived three

socioeconomic deciles was poorest in areas with high rates of privately funded

surgery (r¼�0.50, p¼ 0.021). For prostatectomy no trend was apparent in either

direction (r¼ 0.02, p¼ 0.938).

DISCUSSION AND CONCLUSIONS

There was no change in the provision of publicly funded surgery for 2000–2005,

except for TJR which increased significantly in between 2003 and 2004. This was in

a time when New Zealand’s public health expenditure was increasing (Ministry of

Health, 2008). There were wide geographical differences in provision of publicly

funded surgery and, in general, regions with lower rates of publicly funded surgery

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

ELECTIVE SURGERY: PRIVATE AND PUBLIC MIX 153

Table

3.Age-standardized

ratesoftotaljointreplacementsurgeryfor2001-02accordingto

DHBofdomicile,

ordered

accordingto

therate

ofpublic

provision,andshowingtheproportionofpeople

residingin

themost

deprived

areasreceivingpubliclyfunded

surgery

DistrictHealth

Boardarea

ofresidence

Agestandardized

rate

per

10000people

(95%

CI)

Ratio:

(public:private)

Agestandardized

rate

ofpublic

surgeryper

10,000

people

inNZDep2001

groups8,9,10(95%

CI)

Publicsurgery

Privatesurgery

Auckland

6.0

(5.4,6.6)

6.2

(5.6,6.8)

1.0

8.1

(6.8,9.4)

Waitemata

8.3

(7.6,8.9)

6.3

(5.8,6.9)

1.3

8.5

(6.9,10.0)

Counties

Manukau

8.7

(8.0,9.5)

4.2

(3.7,4.7)

2.1

12.1

(10.6,13.6)

Canterbury

10.9

(10.2,11.5)

11.4

(10.7,12.1)

1.0

12.4

(10.7,14.0)

South

Canterbury

12.5

(10.7,14.3)

7.8

(6.3,9.3)

1.6

12.5

(8.5,16.6)

Bay

ofPlenty

13.8

(12.7,14.9)

7.8

(6.9,8.6)

1.8

16.2

(14.2,18.2)

Taranaki

14.6

(13.1,16.2)

7.6

(6.5,8.7)

1.9

12.5

(10.1,15.0)

Waikato

14.7

(13.8,15.7)

4.0

(3.5,4.5)

3.7

19.5

(17.7,21.2)

Mid-Central

14.8

(13.5,16.1)

3.0

(2.5,3.6)

4.9

15.5

(13.3,17.6)

Hutt

14.8

(13.3,16.3)

4.1

(3.3,5.0)

3.6

19.0

(15.6,22.2)

Capital

andCoast

14.9

(13.8,16.1)

7.8

(7.0,8.7)

1.9

18.1

(15.2,21.1)

Lakes

District

15.1

(13.3,16.9)

6.4

(5.3,7.6)

2.4

22.6

(19.2,26.0)

Haw

kes

Bay

15.1

(13.8,16.5)

0.9

(0.5,1.2)

16.8

22.4

(19.6,25.2)

Southland

15.3

(13.6,16.9)

9.7

(8.4,11.0)

1.6

18.7

(15.0,22.3)

Northland

16.5

(15.1,17.9)

3.9

(3.3,4.6)

4.2

22.4

(20.0,24.7)

NelsonMarlborough

18.0

(16.5,19.5)

6.0

(5.1,6.9)

3.0

12.3

(9.2,15.4)

Otago

18.3

(17.0,19.6)

7.8

(6.9,8.7)

2.3

13.3

(10.9,15.8)

Whanganui

18.8

(16.6,21.0)

0.4

(0.1,0.7)

47.0

24.5

(20.8,28.2)

Tairawhiti

19.7

(16.7,22.6)

5.3

(3.8,6.9)

3.7

22.6

(18.5,26.8)

Wairarapa

23.2

(20.1,26.3)

8.1

(6.3,9.9)

2.9

18.6

(13.1,24.1)

WestCoast

27.8

(23.9,31.8)

2.5

(1.3,3.6)

11.1

39.5

(32.6,46.5)

National

rates

13.1

(12.8,13.3)

6.3

(6.1,6.4)

2.1

16.1

(15.6,16.6)

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

154 S. DERRETT ET AL.

Table

4.Age-standardized

ratesofprostatectomyfor2001-02accordingto

DHB

ofdomicile,

ordered

accordingto

therate

ofpublicprovision,and

showingtheproportionofpeople

residingin

themost

deprived

areasreceivingpubliclyfunded

surgery

DistrictHealthBoard

area

ofresidence

�Agestandardized

rate

per

10000people

(95%

confidence

interval)

Ratio

(public:private)

Agestandardized

rate

ofpublicsurgery

per

10,000people

inNZDep2001groups

8,9,10(95%

CI)

Publicsurgery

Privatesurgery

Lakes

District

4.5

(3.1,5.9)

4.3

(3.0,5.7)

1.0

6.6

(4.0,9.3)

Capital

andCoast

7.0

(5.8,8.1)

7.3

(6.1,8.4)

1.0

10.0

(6.8,13.2)

Counties

Manukau

8.4

(7.3,9.4)

8.9

(7.8,9.9)

0.9

11.9

(9.8,14.0)

Mid-Central

8.8

(7.3,10.2)

1.6

(1.0,2.2)

5.5

8.7

(6.5,11.0)

Auckland

9.0

(7.9,10.1)

9.8

(8.7,10.9)

0.9

11.2

(9.1,13.4)

Taranaki

9.6

(7.8,11.3)

2.5

(1.6,3.4)

3.8

8.9

(6.0,11.8)

Hutt

9.8

(8.0,11.6)

5.5

(4.2,6.9)

1.8

13.5

(9.4,17.6)

Canterbury

10.3

(9.3,11.2)

5.5

(4.8,6.2)

1.9

12.1

(9.7,14.4)

Waitemata

10.5

(9.5,11.5)

9.4

(8.4,10.3)

1.1

11.9

(9.2,14.6)

Tairawhiti

11.3

(8.1,14.5)

3.2

(1.5,4.9)

3.5

13.0

(8.5,17.5)

South

Canterbury

11.3

(8.8,13.7)

2.7

(1.4,3.9)

4.2

10.9

(5.7,16.1)

Waikato

11.9

(10.7,13.1)

3.0

(2.4,3.6)

4.0

11.9

(9.8,14.0)

Wairarapa

12.4

(9.2,15.6)

3.2

(1.6,4.9)

3.9

9.9

(4.0,15.7)

Haw

kes

Bay

12.8

(11.0,14.6)

0.2

(0.0,0.4)

64.0

18.3

(14.6,21.9)

Whanganui

12.8

(10.2,15.4)

2.2

(1.1,3.3)

5.8

19.3

(14.5,24.1)

Northland

13.4

(11.6,15.2)

3.9

(2.9,4.9)

3.4

18.0

(15.1,21.0)

Otago

14.3

(12.6,15.9)

7.0

(5.8,8.2)

2.0

12.8

(9.3,16.3)

NelsonMarlborough

17.1

(15.0,19.2)

3.8

(2.8,4.8)

4.5

12.7

(8.3,17.2)

WestCoast

20.7

(16.0,25.5)

3.6

(1.6,5.5)

5.8

23.8

(16.3,31.3)

Southland

29.4

(26.2,32.7)

6.2

(4.7,7.6)

4.7

50.0

(41.5,58.4)

National

rates

10.7

(10.3,11.0)

5.6

(5.4,5.9)

1.9

13.6

(12.9,14.4)

� PeopleresidingintheBay

ofPlenty

DHBarea

havenotbeenincluded

inthistablebecause

ofanecdotalevidence

from

NZHIS

thatthereweredifficulties

indatacollectionforprostatectomyatthistimeperiodforthisDHBarea.Thereported

publiclyandprivatelyfunded

rateswere1.1(0.7,1.6)and4.7(3.7,

5.6),respectively.

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

ELECTIVE SURGERY: PRIVATE AND PUBLIC MIX 155

had higher rates of privately funded surgery. Moreover, high private provision was

not associated with better access to publicly funded surgery. The commonly held

assumption that increased provision of privately funded services improves access to

publicly funded services for the poorest was not supported.

Figure 1. Rates of publicly funded surgery (per 10 000 people) for NZDep2001 deciles 8, 9and 10 according to the rate of private surgery in 2001/2002 for (a) TJR and (b) prostatectomyby DHB region.

Copyright # 2009 John Wiley & Sons, Ltd. Int J Health Plann Mgmt 2009; 24: 147–160.

DOI: 10.1002/hpm

156 S. DERRETT ET AL.

There are certain limitations to the study. The latest private surgical operation data

available from NZHIS are for 2002, nevertheless there is no reason to expect the

relationships to differ in later years for prostate surgery, as publicly funded operation

rates have not increased. In 2004, publicly funded rates still ranged between 7.2 per

10 000 (Capital and Coast DHB) and 22.8 (West Coast DHB). For TJR, the provision

of public surgery increased, but the ordering of DHBs according to rate of public

provision remained similar in 2004: rates ranged between 9.8 per 10 000 (Auckland

DHB) and 29.2 (West Coast DHB). For cataract surgery the rate of publicly funded

surgery for 2004 still ranged between 13.3 per 10 000 (Canterbury DHB) and 32.5

(Whanganui DHB). The small size of some DHB regions means that random

fluctuations are likely. Partly to account for this, obvious outliers were removed when

calculating correlation coefficients. The method used to stratify by socioeconomic

status (NZDep2001) uses data on the area of residence and is subject to potential

misclassification, though the NZDep has been shown to be strongly related to

mortality rates (Salmond and Crampton, 2000). Further, we have assumed that there

is a constant need across DHB regions, after adjusting for age. This may not be

justified if there are underlying differences among regions, such as by socioeconomic

status or ethnicity, which affect need. However, when we stratified by socioeconomic

status, regional differences in rates of publicly funded surgery persisted.

In New Zealand people with highest need and ability to benefit are prioritized for

quicker access to publicly funded surgery. Nevertheless in the late 1990s in Otago, a

DHB providing slightly above the mean rate of public surgery for all three

conditions, patients were denied access to elective TJR, prostatectomy and cataract

surgery despite moderate or severe condition-related quality of life problems (Derrett

et al., 2002). Hence rates of publicly funded surgery leave considerable unmet need

in New Zealand, even in better served areas.

Differences in publicly funded surgery rates across New Zealand were larger than

found in England (25–30%) (Dixon et al., 2006). The wide variation in surgery rates

across NewZealand could partly be because of the small population base in someDHB

regions. Yet even for comparisons of the more populous DHB regions: Auckland,

Waikato, Capital and Coast, and Canterbury, major differences remain—for TJR a 2.5

fold difference, prostate (1.7), and cataracts (1.6). We found that, for the larger DHB

regions, the variation in provision of surgery was reduced somewhat by taking into

account the private provision (TJR, 1.9; prostate 1.3). This is in accord with earlier

findings in New Zealand examining specialty-wide rates of access (Raymont, 2002).

Why are public surgery rates low where private surgery rates are high? One possible

explanation is that there is a conflict of interest for surgeons working in both the public

and private sectors, such that it is in their interests to limit provision of services in the

public sector (Spigelman, 2003; Yates, 1995; Coney, 1995). In this regard, a Commerce

Commission investigation identified a conflict between commercial interests and

medical ideals in the provision of cataract surgery in Southland in 1996 (The Commerce

Commission v The Ophthalmological Society of New Zealand incorporated as first

defendant and others, 2004). It is conceivable that similar conflicts could exist in other

areas and specialties in New Zealand (Hayman, 2005). The prioritization and booking

system for surgery should have reduced this problem in the public sector because there

are now explicit criteria determining eligibility for publicly funded services. If the

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DOI: 10.1002/hpm

ELECTIVE SURGERY: PRIVATE AND PUBLIC MIX 157

systemwas working as it should, major variations in public provision would not exist. A

second possible explanation is that there has been historically poor public provision in

some regions (e.g. Auckland) and that private services have grown to fill the gap.

Conversely, in regions with historically good private provision, there may have been

fewer stimuli for development of the public sector.

Whatever the reasons, the situation is inequitable. People living on meagre

incomes and with identified need should be able to receive surgery in the public

system. Though data reported to NZHIS do not allow identification of the source of

funding for privately funded surgery, it can be estimated that in 2005, 24% of the

New Zealand resident population in aged 65 years and over have some form of

medical insurance (Health Funds Association of New Zealand, 2006; Statistics New

Zealand, 2006). However, medical insurance is limited in its scope; people with

chronic illnesses are generally denied cover for surgery for those conditions. New

Zealand’s largest insurer is reported to have 40–50% of applicants for cover being

subject to exclusions (Blumberg, 2006). Furthermore, people on low incomes are

much less likely to have medical insurance (Blumberg, 2006; Hopkins and

Cumming, 2001), and are therefore more likely to have to pay out-of-pocket, or by

borrowing money, than those in higher socioeconomic groups.

Thewider implication of this research is that an unregulated private sector does not

appear to have a positive effect on the equity of elective surgery provision—either

geographically or for the most socioeconomically deprived. The argument that

private provision for the well off reduces the burden on the public system and allows

better access for the poor is not supported. If it were true, high private provision

should be associated with better access to public surgery for the socioeconomically

deprived, but this was not the case.

It should not be surprising that private provision takes away from public provision,

because there is a limited supply of doctors and nurses (Duckett, 2005; Flood et al.,

2005; Ferrinho et al., 2004). The availability of doctors across countries is the most

significant factor in waiting times (Siciliani and Hurst, 2003). Moreover capacity is

not simply transferred to the private sector. There is no comparable prioritization

system for access to private surgery in New Zealand, and insurance companies

respond to ‘wants’ rather than to relative needs (Bloomfield, 2003). Thus in the

private sector people with lower priority will receive surgery—using up capacity not

available to more needy people who can afford only the public system. Moreover, the

political will to reform the system is hampered by ‘exit’ to the private sector of those

who might otherwise complain (Fougere, 1974). The consequences of this particular

type of public/private mix need more investigation and public discussion.

ACKNOWLEDGEMENTS

We are most grateful to Dr Antony Raymont (Health Services Research Centre,

Victoria University of Wellington) for his helpful comments on an earlier version of

this paper. We also acknowledge the New Zealand Health Information Service

(NZHIS) as a source of much information used in the analysis.

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DOI: 10.1002/hpm

158 S. DERRETT ET AL.

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