Te Manawa M Block at the University of Waikato.
Photo: Supplied / University of Waikato

The ACT Party says it remains to be seen whether the benefits of a new medical school at the University of Waikato stack up.

The comments came despite an expert analysis which found they added up.

Newspaper leader David Seymour told the government in August he was “dissatisfied” with an analysis which he said had ignored key costs.

He reiterated those comments Thursday.

“It is important that we get a proper assessment to ensure the government is implementing the most effective policy,” Seymour said after the Health Ministry released its letter in August, along with cost-benefit documents.

“It is possible that this option will stack, or that we may determine that funding is spent more effectively on policies such as increasing GP population numbers or expanding other medical schools.”

The initial analysis identified a new school ahead of expanded training in existing schools in Auckland and Otago, particularly in relation to rural needs.

A more in-depth analysis would take place in a detailed business case, which was due to be published next year.

As part of ACT and National’s coalition agreement, a full cost-benefit analysis (CBA) had to be carried out before a binding agreement was reached.

“We are currently working on a robust cost-benefit analysis for a potential third school in Waikato to continue to increase the number of New Zealand-trained and culturally competent doctors,” Health Minister Shane Reti said in a statement.

In September, however, Reti said the Cabinet had considered cost-benefit analysis “completed”which “proved to provide confidence for the project to move to the next stage”.

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initial business case) and the ABC provided assurance that the proposal would “achieve the government’s objectives and deliver significant benefits”, Reti said in September.

The first CBA stated that of three options considered, a new medical school was the most expensive, but was also expected to reap the most benefits – although noting that this was “highly sensitive to key assumptions”.

Seymour challenged these assumptions in a letter to Reti in August.

“I have no confidence in this discovery,” he wrote.

He wanted the analysis to do more to assess the cost of producing graduates who do not become GPs.

“The omission of the benefits and costs of specialist doctors (who will make up more than 80 per cent of graduates from the proposed medical school in Waikato) materially alters the conclusions” and means that the terms of the coalition agreement have not been not been fulfilled, he said.

He had his own analysis carried out, producing a graph which showed, in many scenarios, that Waikato was not the best option for training and retaining GPs than other medical schools.

The ministry consultant, Sapere, told the ministry’s health economist the next day that all options had scored high in terms of benefits.but Waikato especially.

“The evidence used in the cost-benefit analysis is the best we have, is highly relevant, generalizable to New Zealand and is recent,” the report said.

Reti wrote to Seymour, saying Sapere had relied on experts and made a strong case for her CBA, but that it would be “very complex” to go further.

As we reached this point in September, Treasury best practice guidelines suggested that less than half of the economic case for options should be made; the rest of the tests would follow, Reti told the ACT Leader.

The choice of Waikato does not rule out other measures to strengthen medical education or the workforce, he added.

Last year, National said a $380 million rural school, which would open in 2027 and enroll 120 students a year with any type of undergraduate degree, was a “top priority”.

“New Zealand urgently needs to increase its medical workforce,” Reti said today.

“As minister, I’ve said before that we very much value the work of the medical schools in Otago and Auckland. That doesn’t change.”

Seymour said Thursday he looked forward to seeing the “robust” cost-benefit analysis now underway.

“I intend to honor the coalition agreement with National, which means no binding agreement will be reached until a full cost-benefit analysis has been considered.”

Green Party public services spokesman Francisco Hernández said the documents obscured the specific breakdown of costs, making it impossible to judge the robustness of the ABC, which also did not assess the risks of building a new medical school from scratch.

“The documents… show how fragile the foundations of the proposed medical school are and the tensions within the government on this issue,” he said.

“Even if you were to take this report at face value, the Waikato Medical School proposal only achieves a BCR (benefit-cost) ratio of 2.7, only 0.1 more than the alternative proposal .”

He called on the government to publish the full costs.

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