My Food Bag Founders' Tend Health Win
For-profit healthcare continues its acceleration under National as second largest private healthcare provider in Australia shuts down
My Food Bag Co-Founders’ Tend Health approved to become a Government Primary Health Organisation (PHO)
Opinion and analysis:
In April, I wrote about My Food Bag Co-Founders James and Cecilia Robinson telehealth organisation, Tend, and its positive chances of securing government contracts.
An industry contact wrote this in response to me at the time [interpretation theirs] -
“Health procurement doesn’t work that way, with mates getting good contracts. There are bigger, government funded cartels out there with established [telehealth] monopolies.
Like PHOs who are absolutely dominating in this space because they’ve had the benefit of more than a decade of government funding to develop telehealth capability and they’re already plugged in to general practice patient management systems…
[They] Tend don't have the track record for something of that scale on their own. Doesn't matter how much money they throw at it.”
But those comments were not wholly prescient.
A recent announcement on May 29, confirms that as of 1 July 2025, Tend will be made a formal government “PHO” - a desirable, probably very lucrative, and hard to obtain designation that I understand requires multiple levels of approval - including from the Minister of Health himself.
Interestingly, Tend seems to have pulled out of local contracts in the Western Bay of Plenty to “seek a direct contract with Health New Zealand Te Whatu Ora.”. Western Bay of Plenty Primary Health Organisation expressed concerns about continuity of care and access to services, but Tend noted it was important to “rapidly increase funding for the front line” i.e. I've interpreted this to mean to themselves.
Health New Zealand contracts Primary Health Organisations (PHOs) to provide primary health services across New Zealand. It's largely government funded, but can also charge direct patient fees.
The potential for revenue here is hundreds of millions, if not billions of taxpayers’ money - depending on the size of the PHO.
In the past1, PHOs have typically been set up as, or by, not-for-profit trusts, and needed to comply with a series of not-for-profit and community health objectives, among other things.
As far as I’m aware, Tend Healthcare is a wholly for-profit, private healthcare corporate that raises capital from investors.
This modifies the landscape from e.g. doctors that run private practices to deliver not-for-profit health goals, to bringing in corporations that may be wholly for-profit, and exist largely to provide investors’ returns.
The theoretical analogy I can think of here is changing funding from independent grocery stores that supply basics to in-need-communities, to funding Woolworths type outfits - and saying “You’re going to get your groceries faster, don’t worry!” and the smaller stores all gradually capitulate to the new environment & culture.
i.e. The change is subtle at first - but it is significant.
As a reminder, My Food Bag also had a corporate model and that saw Mum and Dad investors lose up to 97% of their investment, but others, such as its founders (including the Robinsons), profited handsomely.
Anyway, Tend has celebrated their PHO status, writing on their website:
Becoming their own PHO marks a significant milestone in Tend’s mission to provide accessible, modern, and patient-centred healthcare. It enables them to streamline funding flows, reduce unnecessary administrative layers, and deliver more coordinated, efficient care across the communities it serves.
Tend says it anticipates their clients to more than double from 80,000 enrolled patients to over 180,000 over the next year.
According to Health NZ’s website, and assuming Tend meets all other requirements, on management fees alone, that could entitle an operator like Tend to a management rate of $610,000 + $7.1244 per person over 75,000 enrolees, if I’m reading it correctly.
PS
, or others more familiar with the health sector mechanics and funding models may be better placed to parse the above further than I.PPS
I’ve made grammar clarifications2 to make my writing clearer and removed the timeline of the WBOP withdrawal3
HEALTH NEWS UPDATES:
Collapse of private hospitals in Australia raise questions about viability of private healthcare (ABC Australia)
In Australia, the second largest private hospital has collapsed. ABC reports an Australian health policy expert as saying it represents "a canary in the mine" for the private hospital sector, and signals that private equity firms do not see private hospitals as financially viable.
As a result, private hospitals might have to close some services to keep costs down. While the public system and taxpayers will have to look at how to plug the gaps.
Almost 10,000 extra elective surgeries delivered by outsourcing privately [RNZ]
Simeon Brown says the government has delivered 9696 extra elective surgeries, putting it on track to reach its end-of-June target of more than 10,579 operations…
"Our goal is clear - 95 percent of patients receiving elective treatment within four months by 2030."
But the Australian and New Zealand College of Anaesthetists warned outsourcing would worsen medical workforce shortages and could create a two-tier health system.
Any complications were transferred to the public system, increasing the burden on public hospitals and making them less desirable places to work.
“It’s just a recipe for worsening the conditions in the public system."
Māori and Pacific people and people in rural areas were unlikely to benefit from the increased use of the private sector.
Last month, a senior Auckland hospital doctor said public doctors will quit if easy operations continued to be outsourced to private hospitals.
Health Ministry Warns Outsourcing Surgeries Will Impact Doctor Training (RNZ)
The article above effectively means Health NZ is 1/3 of its way through its plan, including outsourcing thousands of more straightforward cases to private hospitals.
Documents obtained by RNZ under the OIA show Health Minister Simeon Brown was told in March that outsourcing more elective operations to private hospitals will worsen training opportunities.
"That's because outsourced procedures are usually of lower complexity, which often makes them suitable for training," Health NZ wrote in a briefing.
It also comes as Health Minister Simeon Brown blanked out the risks of increased outsourcing and privatisation in public documents. However, they were inadvertently released by a Health NZ employee.
Related Articles:
Follow The Money In NZ's Health Privatisation Heist
On Friday, Luxon and Reti were at Ormiston Private Hospital to talk up the benefits of private money in public health.
January 2025, Health NZ issued a set of “interim” guidelines to select PHOs.
At at 11:22am 12/6/25
The NZH article was published a week before the PHO announcement, but it occurs to me they may have withdrawn earlier - but judging from the article it seems to have been in fairly close succession
Having experienced the introduction of generic management into our public health system in the 1990's I cringed as I read this. In my experience, the focus on costs and profit comes at the expense of both the patient and health staff, not to mention the wider community. Those managers who come to health with only a business perspective, and I would include our current prime and health minister in this, would benefit greatly if they were obliged to undertake study in such as sociology. There is more to health than simply feeding people on and off a conveyor belt. Health care should not be seen as a business, or "industry" (a term that really grates). Health care is most definitely a service and as such should be available to all. It is a public good.
Thank you for writing about this, I've been waiting to hear Tend had won govt health contracts. I recently found out the Cecilia Robinson is besties with Luxon, which is likely why she's spearheading his pet initiative to ban under 16s from social media. But sure, these people get rich because of the meritocracy 🙄