Moonlighting in Medicine – How Private Health Exploits the Public System
- Gary Moller
- Aug 11
- 5 min read
(First published 7th July 2025, Updated August 2025)
I want to extend my thanks to the Dr who’s had the courage and integrity to expose this scandal — the one that’s at the heart of why our overburdened punblic health system is failing so many of us and becoming ever more stratified between the haves and the have-nots.
"Your moonlighting article is brilliant. I have often wondered at the unfairness of this situation myself, and your explanation sums it up perfectly. E.g. The public system sent me to a private surgeon for a colonoscopy to cut their waiting list! And another time an eye specialist who was recommended by my doctor was also the same doctor who worked in the public hospital. " Linda
A Personal Glimpse into the 'Too-Hot' Potato
In 1988, I took part in a short-lived focus group. The Minister started the group, but a market research firm hired by Helen Clark's office organised it. This was done to keep her one step away from being involved in a very hot political issue. The sensitive topic being explored was that of doctors working in both systems, public and private. In the private sector, we call this "moonlighting". I agreed with the Minister because it let us talk about the problem of medical specialists having conflicting interests. However, the focus group fizzled out almost immediately and went nowhere, proving just how toxic the subject really was.
Disclosure: As a matter of principle, I have never had a private health insurance policy
The Two-Step Extraction Process
Here’s how the symbiotic siphon works:
A patient consults a specialist in a public hospital. Tests, scans, and consultations — paid for by every taxpayer — are all done under the public umbrella.
The specialist declares surgery is necessary but offers a sobering wait time: "Fifteen months." You wince as the pain mounts.
Then the question arrives: "Do you have health insurance? If so, we can schedule a private operation later this month."
And just like that, high-value, quick-turnaround procedures — hips, knees, cataracts — are cherry-picked out of the public queue. Meanwhile, complex or low-profit cases — and poor people — linger in the public system, with scant resources and endless waits.
When Private Profits Become Public Liabilities
If complications arise during a private procedure, the patient is often transferred — sometimes rushed — back into the public system for emergency care. Who picks up that bill? The same taxpayer whose coffers funded the initial tests. The private sector profits; the public sector bears the risk.
The Private Sector's Growth Imperative
Private operators thrive on volume. More volume means more beds filled, more surgeries performed and bigger profits. That drives:
Building more private hospitals
Marketing to attract insured patients
Pressuring for higher patient turnover
All of which creates an ever-greater incentive to push patients off long public waiting lists and into private cover.
The Bagshaws are in agreement:
Here's an article that support these concerns:
What Is Medical Moonlighting?
Moonlighting occurs when doctors — and in particular, hospital specialists — take on paid work outside their primary public role, typically in private clinics or hospitals. In this context:
They diagnose and treat patients in a public setting, using taxpayer-funded facilities and staff.
They identify low-risk - high-value patients with medical insurance policies.
Then they switch over to private practice, charging higher fees and often using the very same skills honed in the public system.
This dual practice creates a clear conflict of interest. Specialists end up with a financial incentive to create or maintain long public waiting lists — so that insured patients will jump to private care, bringing more revenue into their private pockets.
Of course, none of this is intentional by any individual doctor: It is just the way it is and the way it will always be!
Cracking Down On Medical Moonlighting — The Obvious Solution
Most responsible organisations enforce a simple rule: you do not work for your main employer's competitors in your spare time. You might pump petrol, or deliver meals on your days off, but you don't perform surgery for a private hospital while on the public payroll.
So why not apply that same principle here? Surgeons and specialists should choose one lane:
Public or private—never both.
Banning moonlighting would remove the conflict of interest at its root. Specialists wouldn't feel the pull to funnel insured patients out of the public queue, because they would have no private practice to benefit from.
Why Nothing Changes Without Public Demand
Until the public demands this simple enforcement, no health minister will dare to tackle the issue. It’s a political third rail. But we must speak out. We must insist that our health system serves all, not just the affluent few. Only then will we see a truly fair system — one that respects the public purse and ensures care is based on need, not on one's insurance policy.
The private health system, of course, would suffer catastrophic drops in patients if moonlighting were banned — and premiums would shoot through the roof. The political lobbying machines, fuelled by party donations from insurers and private hospitals, would kick into over-drive. In fact, they probably are already.
Private insurers thrive on escalating costs — just look at the United States for inspiration. Here in New Zealand, we began adopting an American-style model around 1981, when the doors opened to greater private provision alongside the public system. As costs rise — Thanks to more MRIs, expensive scans, and specialist consultations — premiums must rise too. Insurers can bump up premiums so long as the public system is controlled to sustain lengthy, intolerable waiting lists.
The maths is simple: if an insurer's profit margin is 20 per cent, then on a $50 premium they pocket $10 — on a $100 premium, they pocket $20. That extra $10 profit on each customer doesn't just cover inflation — it lines their pockets. As waiting lists persist, premiums climb, and insurers win every time.
The Vicious Cycle
Long public waiting lists drive patients toward private coverage.
Higher utilisation of private services drives up insurer costs.
Insurers raise premiums to protect profit margins.
Long waiting lists remain entrenched to maintain demand for private cover.
Why Nothing Happens — Instead We Get More Of the Same
Taking on the medical system over issues like moonlighting is political suicide. Imagine enraging the doctors' lobby so badly that specialists strike, hospitals grind to a halt, and the media paints the minister as "the one who killed Granny and the newborns." No politician wants to be remembered as the person who starved public wards of staff, closed operating theatres or let babies go unprotected — all because they dared to challenge the medical establishment. As long as that fear of "killing Granny" hangs over their heads, ministers will back away from anything that might provoke a mass walk-out by doctors.
Time for Radical Reform
Our public health system is facing collapse. Nothing will improve until there is radical reform — beginning, obviously, with a crack-down on moonlighting. Without that, the stratification between those who can afford insurance and those who cannot will only deepen, and fairness in health care will remain nothing more than an aspiration.
It will remain a cost-plus system, and we don't want that - throwing more good money after bad.
I will offer solutions later, but firstly, we must outline, explore and understand the problems.
Excellent article!