His particular concern related to the CBA’s omission of the benefits and cost of specialist doctors.
He said the fact that specialist doctors, who would represent more than 80% of the graduates of the school, were excluded from the analysis “materially alters the conclusions of the report and fails to meet the coalition agreement’s commitment to a full cost-benefit analysis”.
Seymour said he did not have “confidence” in the CBA provided in the report.
The CBA compared the option of a new Waikato medical school to two other options: increasing capacity at Auckland and Otago Universities, or a new training pathway run by existing medical schools, also at Auckland and Otago.
Labour argued at the election that boosting the number of doctors would be better achieved by increasing capacity at Otago and Auckland.
Seymour argued that recognising that many trainee doctors went on to become specialists reduced the relative benefits of the Waikato option over the other two options.
An analysis provided by Seymour’s office found that even if specialists cost 60% more to train than a GP and provided 20% less economic benefit, the Waikato Medical School would only provide a relatively small net benefit of 0.2.
Seymour’s letter to Reti said he opposed moving to a detailed business case, saying it would distract the Ministry of Health’s economic expertise from fixing the financials at Health NZ.
He said if Reti wished to progress, he would like to see a business case that factored in the number of doctors who went on to become specialists.
Reti replied to Seymour saying that Sapere, the economists that drew-up the draft business case, judged that non-GP graduates should be included as a qualitative rather than quantitative benefit “to focus the quantitative analysis of the CBA on the investment objectives agreed by Cabinet”.
Sapere said it would be a “very complex undertaking” to produce an analysis of specialists’ benefits.
The Ministry of Health added that while specialists create great value, they also have higher operational costs since “hospital doctors usually require more support staff and substantial additional capital”.
Reti said that Treasury’s business case guidelines expected only 45% of an economic case of a project to be completed in developing a business case, with further analysis coming as the project moved to a detailed business case.
He said the Government’s Quarter 3 action plan made it a priority to take decisions on the business case and therefore he intended to take a paper to Cabinet. In September, the Government announced it would move to a detailed business case.
Reti told the Herald he had “previously said that we very much value the work of the Otago and Auckland medical schools. That doesn’t change”.
“We are currently working through a robust cost benefit analysis for a potential third school in Waikato to continue to grow the number of New Zealand-trained and culturally competent doctors,” he said.
Seymour said that one of Act’s “jobs in this government is to get value for the taxpayer and if our partners can show that this really is the most cost-effective way to get more doctors in front of patients then we’re all for it, but they haven’t done that yet and so we remain vigilant”.
Seymour said “expanding capacity” at the other med schools was “probably a good idea”, however, he was also interested in other solutions to the health workforce crisis including ways of retaining the existing workforce.
“With limited money, you’ve got to choose between expanding capacity and retention because if there’s a hole in your bucket and you’re losing doctors, then it might be better to block the hole before you tip more water in and in this case, the water is very expensive,” he said.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
