Maori and Pacific peoples were twice as likely to be hospitalised as Europeans. Those in deprived neighbourhoods were almost three times at risk compared with those living in the most affluent areas.
Dr Baker was "taken aback" by the size of the increase, because he expected to see the normal developed world pattern of a rise in chronic diseases such as cancer and diabetes, and a decline in infections.
"New Zealand now has the double burden of rising rates of both infectious and chronic diseases. The increased rates are adding 17,000 hospitalisations a year and tens of millions of dollars in avoidable healthcare costs."
The largest increase in infectious diseases occurred in the 1990s, coinciding with a period of rapidly rising income and wealth inequalities associated with major restructuring of the New Zealand economy.
Overcrowding, lower rates of immunisation and poor access at an early age to primary care were drivers for people being hospitalised.
Professor David Murdoch, an infectious disease specialist in Christchurch, said the report provided figures for something he had long been concerned about.
"Infectious diseases are a marker of a lot of things, and is certainly seen as a marker of development and inequities and poverty in particular. A lot of us have been concerned about what has been an apparent increase in diseases, or at least a lack of decrease in infectious diseases.
"Rheumatic fever for example is a disease we shouldn't see at all in New Zealand. It's been increasing ... almost exclusively in Maori and Pacific population, so that's a national embarrassment in itself that we still have this issue."
He said a multi-pronged approach was needed, and social policies should look at improving access to healthcare, improving housing, and issues related to poverty.
Mangere Budgeting Services' Darryl Evans said he wasn't surprised by the results because respiratory problems, scabs and skin lesions were rife among many south Auckland families.
Prime Minister John Key said the research was concerning, which was why the Government was putting more money into rheumatic fever, insulating homes around New Zealand and trying to lift people out of poverty.
Mr Key said it was hard to say how long it would take to fix the problem, but the issue was one the ministerial committee on poverty would be considering.
The Ministry of Health was tackling infectious diseases through improving immunisation rates, better access to primary care, specific initiatives and looking at underlying determinants, such as healthy housing, said chief medical officer Don Mackie.
Immunisation for under two-year-olds had risen from 70 to 90 per cent over three years, and the Government's four-year rheumatic fever programme would reach 19,000 people by the end of the year, he said.
Nine authors worked on the project for two years, collating data from the hospitalisation records of district health boards around the country. It was based on analysis of 5 million overnight admissions to New Zealand hospitals.
The study has been published in prestigious international medical journal The Lancet. In an editorial accompanying the study, University of Washington Associate Professor Stephen Lim and Professor Ali Mokdad said the findings showed urgent action must be taken to reverse the trend.
Top 10 infectious diseases resulting in hospitalisations in New Zealand, 1998-2008
1. Skin abscesses and cellulitis
2. Pneumonia
3. Infectious diarrhoea
4. Appendicitis
5. Chronic obstructive pulmonary disease with respiratory infection
6. Urinary tract infection
7. Unspecified viral infection
8. Unspecified acute lower respiratory infection
9. Post-operative infection
10. Acute upper respiratory infection
- additional reporting by Amelia Romanos of APNZ
