Wakefield Health says a Government announcement should help it secure long-term contracts with district health boards.
The private healthcare company has warned that a drought in DHB work, allied with people deferring operations, could see its profit down as much as 40% in the six months to September.
At the company's annual meeting, directors tried to reassure investors by talking up the long-term prospects of private health care in New Zealand.
An aging population, a greater expectation of choice and pressure on the public services were all highlighted as drivers for private healthcare demand.
At present, less than 10% of Wakefield's work comes from DHB contracts.
Chief executive Andrew Blair says he welcomes a Government message for DHBs to purchase services as efficiently as possible, because it could lead to their greater use of private health care.
In exchange for longer contracts, Mr Blair says the DHBs will want to see some reduction in cost.
1.4 million people covered
Some 1.4 million people In New Zealand use private healthcare and this figure is expected to rise.
Mr Blair says many people are choosing to reduce their health insurance cover rather than give it up completely.
He says the health insurance sector needs to be innovative in structuring policies so they are more affordable and targeted.
Mr Blair says the number of people who are over 65 is set to double in the next 20 years.