Otago hospitals have the potential to cash in on the lucrative medical tourism trade, with North American patients prepared to fly halfway around the world to undergo surgical procedures for a fraction of the price they would have to pay at home.

Dr Hans Raetz, of Queenstown, said medical tourism was a "real possibility" for the resort, as North American insurance companies eyed up partnerships with quality health providers abroad.

New Zealand's first world status, favourable exchange rate, top medical facilities and staff, and it being an English-speaking country were all major factors in its favour, he said.

An increasing number of Americans were taking advantage of "cheap as chips" plastic surgery procedures and New Zealand should capitalise on its appeal as a medical destination.

Dr Raetz, who is involved with Queenstown's first private hospital, which was granted consent last Monday, said big-spending Americans would help with the retention of medical staff as salaries would rise.

"We can't see a down-side to this. If we have comparable salaries to other countries, we will get people coming back from Australia, because right now we are losing the best staff."

Queenstown, with the support of Dunedin-based medical staff, had the potential to become a medical tourism destination offering a "broad range of orthopaedic and general surgery" within the next five years.