Emails provided by Te Whatu Ora Health New Zealand (HNZ) under the Official Information Act also said demand for the scanner — used to detect conditions including cancer — was underestimated and experts in nuclear medicine were sidelined.
The issues were raised by former Otago Medical School dean Rathan Subramaniam, then professor of radiology and nuclear medicine and an HNZ consultant, in September and October last year.
HNZ relies on the private sector to provide these scans. The machine cut from the hospital plan in December as part of a bid to save $90 million would have been the first owned by the public sector.
In a proposal document last year, HNZ said the medium-term gap would be mitigated by the private Pet CT scanner planned for Dunedin.
Dr Subramaniam warned of conflicting interest of private providers within HNZ Southern in an email responding to a value management document proposing the cut.
Private provider Pacific Radiology had publicly announced a plan to install a Pet CT scanner in Dunedin in August 2022, after the value management process was under way.
"The document must highlight the risk and serious potential for indirect promotion of induced ‘self-referral’," he said.
"Te Whatu Ora current mechanisms are inadequate to address this issue."
He also criticised using the private sector as a mitigation strategy, saying it would weaken the public health system, stunt workforce development and lead to a costlier health model long term.
HNZ had underestimated the demand for the scanner in the South, he said.
The value management document had not highlighted the policy disparity between Southern and other regions that meant some patients, such as those with prostate cancer, had to pay for their own scans.
The Australian Medicare rate for a Pet CT scan was about $A950 ($NZ1025). The cost was higher in Christchurch, the location of the South Island’s only Pet CT scanner, he said.
"This is due to the monopoly of the private provider in the South and leads to wasting public funds and promoting further inequity."
OIA data provided to the Otago Daily Times stated about 93% of scans for South Island patients took place in Christchurch, at a typical procedure cost of $2416.
HNZ did not state what a scanner would cost.
Dr Subramaniam also told HNZ there was "no discussion or engagement with the clinical and physics expertise in nuclear medicine" over the months of the value management development process, despite the claims of the document.
In another email, he suggested a public fundraising campaign if the government could not afford to have the scanner from day one at the new hospital.
HNZ South Island Hospital and Specialist Services regional director Dan Pallister-Coward said a phased consultation included all user groups and staff and concerns raised were responded to.
HNZ abided by clear conflict of interest policies and guidelines when using external providers for health services. Any concerns were investigated accordingly.
A national Pet CT policy was being developed in conjunction with the Cancer Control Agency, which would align access criteria across New Zealand, he said.
In April, $10 million worth of new hospital cuts were reversed.
Mr Pallister-Coward said space designated to install a scanner at some point in the future would now be "warm-shelled" and prepared with electrics.
"We acknowledge the importance of enabling equitable access for a Pet CT once demand ... is met," he said.
Pacific Radiology did not respond when contacted about the issue.
