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New medical school at University of Waikato boasts better cost-benefit ratio, case shows

University of Waikato. Photo: Supplied / Google Maps A new medical school at the University of Waikato has been found to have a better cost-benefit ratio than other options, although only slightly. The business case for the new school has been released, which said it would have lower operating costs than other options, and would produce a higher proportion of graduates going on to become GPs. The University of Auckland has raised concerns over some of the business case's assumptions, but the health minister insists the new school was the most effective proposal at building New Zealand's "critical" health workforce. Last week, the government confirmed it would move ahead with the Waikato school, and was confident it presented the best value for money. From 2028, students will be able to start at the four-year graduate entry programme, which is intended to boost the country's rural GP workforce. National had campaigned on establishing the school at the 2023 election, but a [ full cost-benefit analysis was required as a condition of its coalition agreement with ACT. The Ministry of Health dumped a series of documents on Friday evening, including various Cabinet papers and minutes, the cost-benefit analysis conducted by Sapere, and the Ministry's detailed business case. The business case looked at three options: increasing the intake at the existing University of Auckland and University of Otago schools, a joint rural training programme run by the two schools, and the new Waikato school. The first option was estimated to cost $10.9b over the years between 2026 and 2042, and deemed the more expensive option. The joint rural training programme was estimated to cost $10.27b over the same period, while the new school - the cheapest option - was estimated to cost $9.1b. While it had the most expensive capital costs ($236.3m) the new school's operating costs ($361.6m) were deemed to be cheaper than increasing the intake at the existing schools ($513.6m) or the joint rural training programme ($508m). The lower operating costs were due to the Waikato course being shorter, the business case said. Prior degrees were also out of scope of the business case, despite the Waikato course being a graduate-entry programme. Professor Warwick Bagg, Dean of the University of Auckland's medical school, said this meant it was not a fair comparison, as it did not take into account the total cost of education. Professor Warwick Bagg. Photo: Supplied "In order to enter a graduate programme, you need to have graduated from a degree. So that's a minimum of three years, possibly longer, but at least three years which will have been funded by the government if it's been completed in New Zealand," he said. The new school also had the most favourable cost-benefit ratio, at 1.986 (meaning for every dollar invested, the benefits were worth $1.99), compared to increasing Auckland and Otago's intake (1.495) and the joint rural training programme (1.798). Waikato was also estimated to have a much higher estimated proportion of new graduates that would go on to become GPs than the other two options. The analysis estimated 38 percent of Waikato graduates would become GPs, compared to increasing the intake at Auckland and Otago (23 percent) and the joint rural training programme (33 percent). However, this is only an assumption, based on figures from the University of Wollongong's medical school, which has been used as a model for Waikato's programme. "It offers a new model, provided by a new entrant, underpinned by proven performance in an Australian context. It offers the greatest opportunity to increase GP propensity," the business case said of the Waikato option. "Option 3's propensity to provide a pathway for GPs is a consequence of a purposeful curriculum, training environments connected to communities, and a different way of selecting students. It can do this as a new entrant medical school, whereas change in an existing academic institution may be more difficult." Bagg said the modelling seemed "experimental" and "speculative," and the Australian context was different to the New Zealand context. "There are very big incentives for rural general practice in Australia that, at least to date, haven't existed in New Zealand, and certainly not historically. That's an important market force that will change behaviour. To my way of thinking, they've used the most optimistic possible outcome that could be found to make the case for the new programme." He also said the rate of graduates from the existing universities working as GPs was "quite a lot" higher than what the business case reported, saying it about 35 percent were working as GPs eight years after graduation. The health minister is standing by the figures, saying Sapere's cost-benefit analysis drew upon information about the existing Auckland and Otago graduates, as well as from Australian universities with a similar curriculum to Waikato. Health Minister Simeon Brown . Photo: RNZ/Marika Khabazi Simeon Brown said the decision was a "game-changer" for the long-term growth of New Zealand's medical workforce. "The Waikato Medical School will offer a post-graduate medical qualification based on similar successful programmes in Australia. These programmes include a year-long primary care placement and encourage students to work in primary care settings following graduation. The selection criteria of students alongside their long-term placements in primary care will both support a higher degree of these medical students to work in primary care after graduation," he said. "The Waikato Medical School will support growth of the number of general practitioners who play a critical role in keeping people healthy in the community and in managing long-term health conditions outside of hospital settings. " Labour's tertiary education spokesperson Shanan Halbert said Otago and Auckland were clear that they would be able to produce more doctors faster, if they were funded to do so. "We've got to make sure we're comparing degree with degree, apples with apples, so to speak. Because what we're seeing, as an example, is that we're comparing degrees at different lengths already." The Green Party's tertiary education spokesperson Francisco Hernandez said the dumping of the documents on a Friday evening showed the government was not confident in the business case. "The cost benefit analysis repeats the main mistake the government has made that has made this such a flawed process - rather than engaging in good faith with Otago and Auckland, and running an open process for a new graduate programme, they have deliberately stacked the deck to produce the outcome they want," he said. "The cost benefit analysis also assumes no further cost escalations - and with the minister refusing to rule out further funding - we just don't know how deep the government's blank cheque will extend to back this flawed proposal." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.