The private hospital provider Wakefield Health has reported a loss of $1.9 million in the six months to September, a turnaround from last year's profit of $3.6 million.
Operating earnings fell 13% to $7.7 million.
Wakefield's chief executive, Andrew Blair, says district health boards are outsourcing less surgery to private hospitals, and at the same time those with health insurance are buying plans with lower cover.
Profits have also taken a big hit, he says, from changes to the way Accident Compensation claims are processed.
Mr Blair says that as the first of the ageing baby-boomer population approach their 65th birthdays, the company is pinning its future hopes on their rising demand for private healthcare.
Shareholders will receive a reduced dividend of 7c a share.