Med School business case unconvincing

It is no wonder the "business case" for Waikato Medical School was released last Friday evening.

That is the traditional timing for government bad news, designed for reduced coverage. The parliamentary gallery journalists will have long gone, and newspapers and news sites will have their Saturday morning plans mostly finalised.

Saturdays see minimal newsroom presence, with staff likely focused on hard news such as crashes and other incidents.

By the time Sunday evening comes around, the news is already two days old. The worst of the sting has been removed, unless fresh controversy is unearthed.

We in the South, the home base for the Otago Medical School, care sufficiently to continue to pursue the matter. However, the national media, with their country-wide impact and influence, will be less interested. Sure enough, by Monday few reports or discussions on the matter featured nationally.

Had the government truly trusted its figures and assumptions, surely it would have released them alongside the Cabinet decision — or at least the next day.

That is what happened with Gumboot Friday announcements, for example. How convenient that the medical school decision was ready only by Friday evening.

The government touted apparent and scarcely believable annual savings of $50 million compared to a rural-focused training programme run by Otago and Auckland Medical Schools. The annual operating costs to the Crown were cited as $45m for Auckland and Otago and $37.2m for Waikato.

A few changes to assumptions and base figures would easily reverse the calculations.

More might be revealed about the manipulations that allowed the consultants — employed by a government desperate for a particular result — to come to their conclusions.

Obvious flaws already emerge, such as Waikato’s supposed large savings due to its four-year programme compared to five at Otago and Auckland. Yet, as a graduate course, the government would have subsidised most of the costs of the Waikato student degrees before medical enrolment.

An artist’s impression of the new Division of Health Precinct at the University of Waikato, which...
An artist’s impression of the new Division of Health Precinct at the University of Waikato, which will be home to the New Zealand Graduate School of Medicine. PHOTO: SUPPLIED
The business case also strongly relies on the assumption that more Waikato graduates will become GPs. This is monetised on the premise that better community health drives long-term savings.

Yet, students in a rural-focused Auckland-Otago programme are arguably just as likely — if not more — to choose provincial GP careers.

As it is, Auckland Medical and Health Sciences School dean Professor Warwick Bagg has said that the consultants ignored the figures supplied to them when estimating GP percentages from the third option, expanding Auckland and Otago’s capacity, opting instead for a substantially lower figure.

Prof Bagg said 35% of graduates from Auckland and Otago medical schools are working as GPs eight years after graduating — a far higher figure than the 23% in the business case for one option.

He said he was "deeply concerned" by the business case. He said it seemed to have a predetermined outcome — to favour the Waikato medical school plan that the National Party took to the last election.

The business case admits that all options are sensitive to assumptions on how many graduates will work in general practice.

The business case for expanding existing medical schools gained a little ground from lower, though still significant, capital costs. Nonetheless, Waikato’s cited total of $232m seems implausibly low for establishing an entirely new programme, even accounting for facility upgrades.

Labour previously faced strong lobbying to approve the Waikato School and may have anticipated electoral rewards in Hamilton. Yet it resisted, recognising that existing medical schools could boost GP numbers more quickly and at lower cost.

That remains true, regardless of what the flawed and seemingly preordained business case now asserts.

While governments should hesitate to make abrupt reversals with each change of administration, Labour should make clear that it would abandon this ill-conceived folly if returned to power. Hopefully, too much money has not been wasted in the meantime.

Treasury, the Tertiary Education Commission and the Ministry of Education all issued sound warnings on cost, duplication and logistical complexity — and those cautions still stand.

Health Minister Simeon Brown, meanwhile, called the new school a "game-changer for the long-term growth of our medical workforce in New Zealand". Really?