The controversial proposal by National to build a third medical school in Waikato has been disputed by both the University of Otago and University of Auckland — the homes of the country’s two existing medical schools.
Health Minister Dr Shane Reti said in September an initial cost-benefit analysis of the project provided "confidence for the project to progress to the next stage".
However, a now released letter sent to the minister by coalition partner and soon-to-be deputy prime minister David Seymour was not so confident.
In the letter, made public by Te Whatu Ora Health New Zealand (HNZ), Mr Seymour expressed concern about a cost-benefit analysis of the project completed by Australasian expert services firm Sapere.
Their analysis concluded the proposed Waikato medical school had the highest benefit-cost ratio of the options considered.
"I do not have confidence in this finding," Mr Seymour said.
Sapere’s analysis had only monetised the costs and benefits of providing general practitioners and had not accounted for the value provided by the roughly 1300 additional specialist doctors expected to be produced by 2042, he said.
This "omission" materially altered the conclusions of the report and failed to meet the Act-National coalition agreement’s commitment to a full cost-benefit analysis of the project.
His office had adjusted Sapere’s results "in a relatively basic way" to include the value of specialist doctors, which he said erased or reversed the proposed advantage of the third medical school.
A cost-benefit analysis of a medical school that did not count the costs and benefits of its specialist doctors, who represented more than 80% of proposed graduates, was not a full analysis, and as such, "is not sufficient as a basis on which to make binding agreements".
"I oppose the continuation to a detailed business case.
"It will distract the Ministry of Health, when clearly their health economics expertise needs to focus on fixing Health New Zealand.
"If you remain committed to this project, I recommend commissioning an enhanced cost-benefit analysis that accounts for all the doctors produced by all three options."
It was obvious there had been a lot of tension within the coalition government and the tone of Mr Seymour’s letter reflected that.
"The fact that this is how they’re talking to each other and this is how they’re kind of allowing their correspondence to be revealed kind of shows the level of discord there is within the coalition.
"It’s clear that this is some weird attempt by National to kind of impose their authority."
Mr Seymour said yesterday it was the government’s responsibility to make sure every health dollar was being spent wisely and ensure the best health outcomes for New Zealanders.
His party had ensured the government would undertake a full cost-benefit analysis before committing to spending money on a new medical school.
"It’s important we get a proper evaluation to make sure the government is pursuing the most effective policy.
"It’s possible this option stacks up, or we might determine that funding is more effectively spent on policies like increasing GP capitation or expanding other medical schools."
The government was currently working through a robust cost-benefit analysis which he looked forward to receiving.
"I intend to honour the coalition agreement with National, which means no binding agreement will be made until a full cost-benefit analysis is considered."
A Ministry of Health spokesperson said they were now preparing a detailed business case and final cost-benefit analysis for Cabinet, working with HNZ, the University of Waikato and key agencies.
"It’s important to take the time to get this right, given the significance for our health and education systems if the proposal progresses," the spokesperson said.
A University of Otago spokeswoman said they wished to carry out their own detailed review before commenting.
"We continue to believe that supporting the universities of Otago and Auckland to train more medical students is a far more cost efficient and effective way to address the medical staff shortages New Zealand faces."
