First published in ITIJ 88, May 2008
A country well-placed to thrive in the provision of healthcare and assistance services, New Zealand has a lot more to offer than meets the eye. Mary-Jo McDonald reveals New Zealand's hidden treasures
New Zealand has long been a popular tourist destination for visitors from all around the globe. Despite it being roughly the same size as the UK, the population is just 4.2 million, making it is one of the least crowded countries in the world. This, together with its breathtaking landscapes, lush forests, amazing wildlife and temperate climate, has made it an attractive tourism magnet. Outbound tourism is also strong, and the assistance industry is resultantly maturing into a well formed entity, with services to rival those of any other nation with a developed assistance market.
At the same time, the country’s healthcare industry includes a world-class medical offering, and has sufficient experience in dealing with tourists and expatriates to be able to function effectively within the global assistance marketplace. It has learnt the lessons required to operate fairly and efficiently within this arena and has a lot to offer both local adventurers, as well as the wider global assistance industry. Let’s see what all the fuss is about …
For a tourist or expatriate, the New Zealand health system is a re-assuring one. With 40 public hospitals, all of an international standard and spread throughout the North and South Islands, help in the event of an accident or emergency is never too far away. The public hospitals are divided into different level providers and there exists a formal internal referral
system, by air or road, whereby secondary care provider hospitals on-refer to the tertiary level ones. Despite this, the focus in the public health system is on acute care, and there
are long waiting lists (estimated at 80,000) for treatments that are not considered immediately life threatening. As a result, many New Zealanders now opt for private health insurance
– allowing them the choice of either the public or private hospital system in New Zealand (and almost immediate care).
There is widespread availability of private care, and again this is regionalised. In the main centres this extends to tertiary care, but the focus of the private sector is on elective procedures, with the exception of Auckland, where certain tertiary acute procedures are available, mostly cardiac in nature. There is very tight national regulation of the private hospitals, and this is of an international standard. Fees are largely regulated through a ‘fee schedule’ payable by our largest private insurer.
Visitors from Australia or the United Kingdom receive free access as part of a reciprocal health agreement (RHA) to public hospital services, pharmaceutical or maternity service (if treatment is urgently needed). All that is required to secure these services is the user’s current passport. However, routine antenatal services are not covered, and neither is private healthcare treatment or potentially expensive repatriation – so travel insurance or IPMI is still highly recommended. People who are not New Zealand residents, or covered under the RHA, will be charged for their healthcare. Nobody should be refused emergency care because they cannot pay, however but they may be sent a bill later.
Treatment after an accidentally incurred injury (including medical misadventure and sexual assault) is free or heavily subsidised for all people whether or not they are New Zealand residents or covered under the RHA. This is paid for by the New Zealand government, and is administered by the Accident Compensation Corporation (ACC). ACC does not cover illness and often does not cover mental trauma – it only covers injuries that happen in New Zealand and treatment that is received here. In New Zealand, you cannot sue anyone for compensatory damages if you are injured – which is why ACC helps to pay for the cost of your care. Once a problem requires follow up or an elective consultation or surgery, this care is funded through the private sector.
Help is at hand
The New Zealand assistance industry was established in the early 90s, with First Assistance and International SOS setting up operations in the country’s largest city, Auckland. Today, these companies remain the key players in the New Zealand market; however there is increasing input from the Australian market as some New Zealand
travel insurance products are now being targeted and underwritten by Australian insurers.
Because the industry in New Zealand is fairly small, it is almost impossible to employ someone with existing assistance experience. Fortunately, New Zealanders are keen travellers and because it is a truly multi-cultural country, it isn’t difficult to access individuals who have good global knowledge and often a second or third language under their belt. New Zealanders’ love of adventurous travel also means the worldwide assistance networks are continually being re-assessed as clients travel to more and more remote regions.
There is widespread availability of private care, and again this is regionalised
The ‘hit rate’ for inbound tourists actually needing the services of a local assistance company has traditionally been relatively low. Therefore, even though local assistance companies
may work for a broad range of well known international assistance companies, case activity in New Zealand is far outweighed by case activity for outbound tourists (or expatriates off shore). As a first-world country with a reliable infrastructure and international expertise, tourists in trouble will often find it relatively simple to pay and claim, or their hospital may be happy to deal directly with their insurer for payment of larger inpatient costs. Having said that, New Zealand hospitals, like those elsewhere, have been ‘burnt’ by international insurers, and at times will not accept a payment guarantee from an off-shore insurer. Local assistance companies, however, can provide on-theground support for the patient (including translation services), smooth payment processes, and often can negotiate a discount (nothing as impressive as the US cost containment industry – but it all helps!) that
may be a struggle for an offshore party. As a result, the case load from international assistance companies and insurers is steadily increasing – as the value of a local expert is required more and more.
New Zealand is well placed to support the Northern Hemisphere insurance and assistance market if they wish to have a structure in place which ‘follows the sun’. The cultures and languages are similar enough, and New Zealand’s telecommunications infrastructure is advanced enough, that outsourcing all or part of an assistance service to a New Zealand company is an attractive option for many. Unfortunately, the New Zealand insurance market has not proved particularly willing to embrace the concept of outsourcing its claims management to a Third Party Administrator (TPA) and therefore this is a much smaller part of the local assistance market than it is for assistance companies in more mature markets.
TPA clients tend to be international insurers – rather than those on our own doorstep. In some ways, this slows down the assistance process, but we see this changing over time as insurers realise that they are not relinquishing control by moving to this model – but are improving efficiency and client satisfaction.
The insurance market in New Zealand has merged and morphed considerably over the past 10 to 15 years, and is now dominated by a few key players. Travel insurance market share statistics are not in the public domain, however the main providers of general insurance in New Zealand are IAG NZ Ltd (largest), Vero (2nd largest), AMI, Tower Insurance, and Lumley Insurance. There is also a strong presence from ACE, AIG, Allianz, Ansvar, Farmers Mutual Group and the Medical Insurance Society – with other international insurers making
forays into the New Zealand market. The travel insurance market primarily belongs to AIG, Allianz, Downunder Insurance, IAG NZ Ltd, SouthernCross Travel Insurance, Tower Insurance and Vero (including CoverMore).
For the year ending November 2007, there were 1.971 million overseas trips undertaken by New Zealanders (with major destinations being Australia, Asia, Fiji, UK and the US). This was an increase of almost six per cent on the previous year – with the long-term prospects for tourism remaining excellent. Whilst the exact number of travellers who choose to
take out travel insurance is unknown – it is unlikely that even 25 per cent of travellers purchase a policy. Travellers to Australia often gamble on the Reciprocal Health Agreement – not realising how exposed they truly are. The New Zealand government is thus promoting the need for insurance and risk awareness via their ‘SafeTravel’ website, and an associated
Visitors from Australia or the United Kingdom receive free access as part of a reciprocal health agreement (RHA) to public hospital services
Whilst most insurance used to be purchased via a travel agent, insurers are increasingly driving customers to purchase directly via the Internet, offering substantial discounts for buying direct. Unlike in the United Kingdom, for example, the range and choice of policies available is relatively limited, and premiums still appear to be higher than the UK market (a two-week policy from New Zealand to Spain will start at around $150NZD, with an annual policy which excludes the US starting at around $700NZD) (NZD1 = approx GBP 0.40; EUR 0.50; USD 0.80). This is driven in part by the distance travelled (and therefore the potential for expensive repatriation costs), the potential medical costs (no European Health Insurance Card), the destinations (the Pacific Islands have poor medical facilities, and therefore the likelihood of an evacuation is increased) and the length of the visits. Claim rates and loss ratios in New Zealand then, perhaps not unsurprisingly, appear to be higher than are evidenced in the UK travel market. Free travel insurance is also available on many credit card schemes, although often with less cover than a standard travel policy, and greater restrictions on pre-existing conditions. Travel insurance in New Zealand is generally medically underwritten at the point of sale, which provides the insurer and the traveller with the opportunity to clearly define what will and will not be covered before commencing their trip. Insurers in the country also offer products to inbound travellers, yet despite the fact New Zealand received some 2,467 million arrivals in the year ended November 2007 this is not a big market.
All the way home
Whilst New Zealand is an excellent destination for evacuations out of the Pacific Islands, the air ambulance market in and out of New Zealand is fairly low in volume – with activity being less than one per week. There are two air ambulance providers in New Zealand – South Pacific air ambulance and Southern Cross Air Ambulance. Both provide the staff, equipment and expertise for air ambulance missions within New Zealand and to overseas destinations.
South Pacific Air Ambulance utilises a Westwind II jet out of Auckland, which has a Spectrum loading and stretcher system. Alliances with other air ambulance providers in Australia, Singapore, Guam, the US and Europe may be called upon for long-haul flights (particularly if time is of the essence, and to allow rest for the crew).
Due to the fairly low frequency of air ambulance missions, there have been no successful attempts so far to maintain a dedicated fixed-wing air ambulance craft in New Zealand that is capable of international transfer. Therefore, when looking at any air ambulance mission, planes out of both New Zealand and Australia are considered reasonable options, with timeframes and costs being the deciding factor. Most air ambulance flights are either from the Pacific Islands to New Zealand/Australia, or are to the US and Europe. A number of these are for people without travel insurance and at a minimum cost of $45,000 (Pacific Islands to New Zealand/Australia) this is a huge financial burden for the families involved. Costs to the US and Europe will easily move in to the hundreds of thousands.
Air New Zealand (our national carrier) is an excellent option for commercial repatriation out of New Zealand. First Assistance’s medical team’s strong relationship with them allows them to clear MEDAs and oxygen in as little as 24 hours (although standard turnaround times are stated to be five days). By allowing a local company to book the flights from New Zealand, a better airfare is likely to be obtained than that which can be arranged from the patient’s country of destination.
Air New Zealand has a passenger hoist for disabled passengers as well as an ambulift for stretchers (with catering vehicles used as a back up if an ambulift is not available). It can provide oxygen either via cylinder (which takes longer for clearance) or via an oxygen concentrator if the latter is appropriate and available. If the oxygen concentrator is a viable option, this can vastly reduce the turnaround time for a medical repatriation.
Stretcher repatriations are only available for international flights, as Air New Zealand has made it a policy decision not to carry internal stretchers. There is an availability of fixed-wing air ambulances (mostly dual purpose, i.e. commercial hire and air ambulance capable) that are licensed to carry passengers internally, and all internal stretcher transfers are managed through this system, or via ambulance ground transfer.
As with most airlines, restrictions on medical equipment became the norm post 9/11. Repatriation doctors carry a clearance letter with them, and are often allowed to hold on to their
sharps in flight. However, this cannot be banked on, and given the recent attempted hijacking of a small plane on a domestic flight in New Zealand, security measures may become more strictly enforced. In planning a repatriation, it pays to try to avoid any airlines that go via the United States due to the security processes within that country, and also due to the potential costs if medical care is required upon landing. Emirates is a popular airline for New Zealand travellers, however the long flight from Sydney to Dubai can make this a less suitable option for a medical repatriation. Singapore Airlines is another major airline operating out of New Zealand, however they no longer clear MEDAs from within New Zealand (they are cleared out of India). This has slowed the process down, and must be taken into consideration when planning a repatriation. Qantas can clear a MEDA within 48 hours; however clearing and providing oxygen can take up to five days.
The assistance industry in New Zealand faces the same challenges as everywhere else – with ongoing pressures on price (but increasing expectations of service) being the norm. Like other markets, in New Zealand we continue to push technology to improve efficiency, cost control, and service delivery; however at the end of the day, it is, and will continue
to be a very human industry.
New Zealanders' love of adventurous travel also means the worldwide assistance networks are continually being re-assessed
New Zealand’s assistance industry is characterised by a couple of key players, though the prospect of increased competition is likely. Local companies like First Assistance that are non-affiliated assistance providers, will continue to build international networks and alliances with other assistance companies, including having local representation in key areas to support international growth. The high standard and reasonable cost of healthcare in New Zealand make this country an attractive option from an insurance perspective, as well as a
logical destination for evacuations from the Pacific region, and an increasing target for the international medical tourism market. A key challenge for the New Zealand health sector is attracting and retaining healthcare professionals – as international salaries and benefits can outweigh the lifestyle and rewards available in New Zealand.
The country as a destination continues to grow in popularity, and consistently ranks as one of the top visitor destinations in numerous prestigious global travel awards. The value for international assistance companies is in tapping into the local expertise of a New Zealand assistance company to better serve clients visiting down under. While New Zealand’s
geographical isolation means it is removed from the major hub of the assistance industry in Europe, it has also enabled the country to develop its own unique flavour and approach to the assistance market.