Newsroom has reported<\/a>, specialist organisations and patient advocates have warned that the proposal risks making certain concurrent operations unable to be claimed, leading to poorer outcomes for patients.<\/p>\nBut Southern Cross rejects this, and tells the commission: \u201cAt its core, the application is an attempt by a concentrated group of highly paid specialists to avoid competitive price discipline and preserve prices that already sit significantly above competitive levels.\u201d<\/p>\n
This point is disputed by the New Zealand Gynaecology Association, with its president Dr Lakshmi Ravikanti telling Newsroom the insurer\u2019s characterisation is \u201cboth inaccurate and a disappointing distraction\u201d.<\/p>\n
\u201cTo be clear, the fundamental concern is that Southern Cross is limiting the care its female customers are able to access,\u201d Ravikanti says.<\/p>\n
\u201cThe new coding system \u2013 developed without meaningful clinical input and based primarily on flawed historical invoicing data \u2013 contains gaps that will directly affect patient outcomes.\u201d<\/p>\n
Southern Cross\u2019s customers make up 60 percent of New Zealand\u2019s health insurance market by numbers and 70 percent by value, making it the largest funder of healthcare that isn\u2019t ACC or Health New Zealand.<\/p>\n
Those Crown entities have their own reservations about the gynaecological association\u2019s application.<\/p>\n
Cost escalation<\/p>\n
Southern Cross says it has experienced \u201csustained and unprecedented\u201d claims cost escalation in recent years. In the 2025 financial year it paid a record 3.8 million claims, up 16 percent on 2024.<\/p>\n
This resulted in a $56.9m deficit from its health insurance operations, following a $99.1m deficit the year before.<\/p>\n
Alongside increased use of health insurance, it also chalks the escalation up to \u201crapid and uneven growth in specialist and surgical costs\u201d and says the impacts are already flowing through to higher premiums.<\/p>\n
\u201cIf left unaddressed, this trajectory will continue to undermine health insurance affordability, drive ongoing insurance losses, erode capital resilience, and increase prudential regulatory scrutiny \u2013 ultimately posing a risk to the long-term sustainability of SCHI and the private health insurance sector.\u201d<\/p>\n
Examples of cost increases under the current model were redacted in its submission, but the insurer says gynaecology fees have increased significantly faster than inflation, and are significantly higher than international benchmarks and efficient or competitive levels.<\/p>\n
It says this reinforces its concern that gynaecology surgery prices aren\u2019t being constrained by effective competitive pressures.<\/p>\n
\u201cThe proposed transition of gynaecology surgery into the AP programme is a continuation of SCHI\u2019s well-established framework. It represents a legitimate response to unsustainable cost growth, with projected savings that would help maintain affordability and preserve access for members to these important healthcare services.\u201d<\/p>\n
It says higher healthcare costs would be \u201cthe immediate and inevitable effect\u201d if the collective negotiations were approved.<\/p>\n
\u201cAllowing more than 90 percent of private gynaecology surgeons to coordinate on pricing \u2013 or to engage in a collective boycott \u2013 would remove competitive constraints, undermine SCHI\u2019s ability to introduce competitive price discipline through its Affiliate Provider programme, and create sustained upward pressure on gynaecology surgery prices.\u201d<\/p>\n
It says increased costs would flow directly to New Zealand consumers through higher insurance premiums or reduced coverage.<\/p>\n
\u201cGynaecology surgery cost escalation is not an abstract insurer issue; it flows directly to members through premium increases, affordability pressure, reduced policy cover and\/or increasing strain on the sustainability of private health insurance.\u201d<\/p>\n
It says that in turn, this would also increase pressure on the public health system.<\/p>\n
\u201cThe detriments of the competitor coordination would be borne across a broad population of New Zealanders, while any financial gains would accrue to a small group of highly paid specialists.\u201d<\/p>\n
Ravikanti says Southern Cross has a misunderstanding of what is being provided, \u201cThe demand on services, the complexity of disease, and the clinical needs of patients drive cost. <\/p>\n
\u201cThe suggestion that pricing should be anchored to the cheapest available historical claims data reflects a fundamental misunderstanding of what is actually being provided.\u201d<\/p>\n
She says international experience shows that when insurance companies design coverage based on cost minimisation rather than clinical need, patients are harmed.<\/p>\n
Clinical input<\/p>\n
New Zealand Gynaecology Association says it isn\u2019t seeking to prevent Southern Cross from implementing its proposal, rather to ensure any decision is based on fully informed decision-making with proper clinical and market input.<\/p>\n
Ravikanti says she understands the financial pressure Southern Cross is facing, but has serious issues with its proposal.<\/p>\n
\u201cThe new system excludes codes for pelvic floor disorders and gynaecological cancers. It prevents clinicians from combining procedures in a single operation, forcing some women into multiple surgeries with compounded anaesthetic risk and prolonged recovery. Robotic surgery access \u2013 a well-established technique in comparable health systems internationally \u2013 is severely restricted, limiting women\u2019s access to advanced surgical options that offer better outcomes and faster recovery times. <\/p>\n
\u201cNone of these gaps have anything to do with specialist income. They are gaps in patient care.\u201d<\/p>\n
Such concerns are shared by Endometriosis New Zealand, a charity that advocates and raises awareness around the condition.<\/p>\n
It isn\u2019t taking a position on the application or any commercial arrangements between surgeons and insurers\/hospitals, but says whatever the outcome, it mustn\u2019t create incentives that disadvantage patients with complex disease.<\/p>\n
Endometriosis New Zealand chief executive Tanya Cooke in some cases the full complexity of a patient\u2019s condition only becomes clear during surgery.<\/p>\n
\u201cEndometriosis New Zealand is concerned about any model that could create incentives to avoid complex surgical cases, split procedures that could safely and appropriately be carried out together, reduce access to experienced endometriosis surgeons, or limit patient choice.\u201d<\/p>\n
The gynaecology association says the insurer has used its market dominance to redesign gynaecological procedure coding without genuine clinical consultation, using Commerce Act concerns to avoid talking to the association.<\/p>\n
But Southern Cross\u2019s submission rejects the notion that it hasn\u2019t adequately consulted clinicians, saying it has had conversations with gynaecology surgeons and the practice\u2019s peak body, making changes accordingly.<\/p>\n
Southern Cross Health Insurance is the country\u2019s third largest provider of healthcare funding. Numbers one and two also have reservations.<\/p>\n
Crown\u2019s take<\/p>\n
ACC doesn\u2019t support collective negotiation, telling the commission the proposed arrangements create credible risks to competition and commissioning effectiveness, with the claimed benefits of collective negotiation able to be achieved through other means.<\/p>\n
The Crown entity says its interest extends beyond private gynaecology services, with issues around collective negotiation by competing providers relevant to a range of specialist service markets in which clinical providers can materially influence ACC scheme performance.<\/p>\n
Like Southern Cross, ACC is shifting towards more structured commissioning in the private system and is concerned with the precedent that could be set by this decision.<\/p>\n
\u201cAuthorisation would signal that collective negotiation between competing providers may be acceptable in specialist service markets with similar structural conditions, such as orthopaedics, anaesthetics, radiology, surgical and medical specialties, and other healthcare provider groups.<\/p>\n
\u201cThese markets often involve concentrated provider groups, strong professional bodies, and limited substitutability, making coordinated negotiation feasible and attractive.\u201d<\/p>\n
Health New Zealand didn\u2019t outright say it was opposed to the negotiations, but says it has a concern over how collective bargaining on price may have broader implications for market dynamic and cost structures across the health sector.<\/p>\n
It says collective bargaining on pricing by a significant proportion of specialists could influence prevailing market rates for specialist services and establish reference points or expectations that extend beyond the immediate scope of insured patients.<\/p>\n
\u201cAny upward or standardising effect on specialist remuneration is likely to be reflected in the cost structures of private hospitals, and will influence pricing negotiations with all purchasers, including Health NZ and ACC.<\/p>\n
\u201cOver time, this may reduce price variability across providers and constrain price-based competition, with implications for Health NZ\u2019s procurement of services.\u201d<\/p>\n
Nib is the country\u2019s second largest private health insurer, behind Southern Cross itself.<\/p>\n
Submitting against the merger, it says it is concerned that, if granted, it would result in New Zealanders paying more for healthcare.<\/p>\n
\u201cThe application raises complex issues and has a potentially wide-ranging impact. For example, appropriate fee levels for a specialist\u2019s services, appropriate clinical outcomes for patients, and access to healthcare are all difficult questions and often involve competing considerations.\u201d<\/p>\n
It says healthcare costs are increasing, with gynaecology costs increasing at a faster rate. The exact details were redacted.<\/p>\n
\u201cFrom nib\u2019s perspective, whatever might be agreed as the result of the NZGA\u2019s collective action is likely to become a floor for the remainder of the private healthcare market, whether funded by other health insurance companies or self-funded by patients.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A bid to collectively negotiate gynaecology contracts is about preserving prices \u201csignificantly above competitive levels\u201d, not protecting women\u2019s…\n","protected":false},"author":2,"featured_media":520301,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[138,134,1184,527,111,43,7439,139,69],"class_list":["post-520300","post","type-post","status-publish","format-standard","has-post-thumbnail","category-healthcare","tag-business","tag-health","tag-health-science","tag-healthcare","tag-new-zealand","tag-news","tag-newsroom-pro","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/520300","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=520300"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/520300\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/520301"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=520300"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=520300"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=520300"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}