Infratil has embarked on a major expansion of private medical scanning clinics around the country (file picture). Photo: 123RF
A major infrastructure company says it is in a good position to help out over public health workforce shortages, while still rewarding investors.
Infratil has embarked on a major expansion of private medical scanning clinics around the country, including introducing high-tech PET scanning machines in Dunedin, Auckland, Whangārei and Tauranga.
This contrasts with Dunedin public hospital, recently forced to ditch plans for the first public PET scanner as part of reining in a in rebuild costs.
Infratil said it had had "game-changing" conversations with Te Whatu Ora.
"They are seeking a true partnership," Terry McLaughlin, head of Infratil's RHCNZ, the country's largest medical imaging company said.
"What does that mean?
"They want assurances around access for patients. They want assurance around, or more guarantees around, longer-term pricing arrangements.
"That's fantastic for us," he told an investor briefing.
RHCNZ is forecasting revenues of $305 million this year, up 26 percent since 2020, and is on track to do almost a million scans, the briefing said.
It is opening or upgrading facilities in Hamilton, Timaru, Whanganui, Palmerston North, Napier and a new flagship branch in Remuera, Auckland.
The group was "positioned to become key partner with Te Whatu Ora", the briefing notes said.
At the same time, "we can achieve above-market growth expectations", it said, adding: "Capacity constraints in public health system creates opportunity, private clinics broadly accepted as valuable and necessary."
McLaughlin said they had been talking with Te Whatu Ora about the company's capabilities.
"In this partnership discussion ... they want to take a sensible approach to capacity in both public and private," he said.
"That was so reassuring to me, that finally we're getting some sensible conversation starting to happen around how you can ... work with private. So, a lot of opportunity."
Infratil also owns the major Australian scanning group Qscan.
McLaughlin said one driver was that Australia had "a lot more generous" public funding, including of PET scans for cancer.
"We know that whatever government will be under inordinate pressure to kind of level up those health outcomes between Australia and New Zealand, so we think this is going to be a really good thing."
Doctor shortages
Te Whatu Ora wanted a partnership in recruiting staff, McLaughlin said.
The private industry draws from the same pool of radiologists, who are mostly public-trained, similar to most doctors.
Sector sources have told RNZ that pay offers have been rising recently as more private radiology clinics opened and competition ramped up.
But McLaughlin told investors because most of their radiologists worked across both sectors, they could help relieve the pressure.
"We've got a very strong focus on getting doctors right for med school to come into radiology, to come into the RHCNZ group and really, now, a laser-like focus on securing that pipeline," he said.
"We don't have critical staff shortages. We are good at what we do.
"And we believe we can share some of that with the system."
The investor briefing noted the bonus of "diversified funding sources" of radiology, including from public hospitals and the Accident Compensation Corporation (ACC).
A public-private partnership could lead to changes in other parts of the health system, McLaughlin forecast.
Te Whatu Ora wanted ACC funding more integrated, for example, he said.
ACC funds about 40 percent of private scans, but is moving to change the funding model to tackle a blowout in costs.
Te Whatu Ora response
Te Whatu Ora said RHCNZ had acquired a number of pre-existing radiology contracts through the acquisition and merger process.
"To our knowledge RHCNZ has met with a group of senior staff to outline what (sic) their desire for a closer working partnership with Te Whatu Ora," its director of service strategy, planning and purchasing Rachael Haggerty said in a statement late on Wednesday.
This introductory meeting canvassed the normal range of issues her agency would discuss with any provider.
"Te Whatu Ora did not 'seek assurance', rather they canvassed the issues that would be relevant to develop the working relationship between a contracted provider including patient access, workforce development and the structure of contracts.
"Te Whatu Ora has made no commitments to RCHNZ."
Further meetings would be expected to discuss existing contracts, Haggerty said.