Yes, the going is good right now, thanks to favourable commodity prices and no thanks to the government, which has just increased taxes. Probably Lord of the Rings and King Kong also account for at least 1% of the annual economic growth over the last four years or so. ;-) Social services like health continue to underperform despite increasing expenditures, so lack of funding cannot be solely blamed.

In NZ, private health insurance is not so expensive and therefore not employer-subsidised, normally. I therefore see no reason why the government cannot make health insurance tax-deductible, given the highest budget surpluses in history. Well, actually, I do - the government is a bunch of "Profit in medicine is evil! EVIL! E-V-I-L!" ideologues who oppose "Americanisation" of the public health service.

In my scenario, the public system (which is adequate for many people's less urgent needs) continues to be funded at present levels, yet tax-deductible health insurance means people can now afford private cover and avoid long surgical waiting lists. As more people stop queuing at public hospitals, the system starts clearing the surgical backlog. Private and public sectors working together so that no patient is left behind.....

Well, chance would be a fine thing. 2005 is an election year in New Zealand, though. :-)

I'm sure New Zealand is a nice place to visit if you're a rich American or European, but many people actually trying to make a living and raise a family there are not making much headway. Monetary gains have been mostly consumed by inflation or tax hikes over the last six years. You Americans get tax cuts even when you're deep in the red, while Kiwi taxpayers continue to pay unnecessary billions. Please invade. Now! :-)

Back on topic: America's quasi-private, semi-for-profit, massively-regulated health sector is very different to New Zealand's, so I cannot advise the best course of action. Medical savings accounts alone probably aren't enough, but it's a start. Of course, libertarian purists or welfarist true believers won't be very happy, but politics is the art of the possible. Each country has to find their own solution and balance.