Reportedly, a large amount of the cost of creating and running the new $235 million medical school at Waikato University will be financed by philanthropic donations. The government will be chipping in $83 million directly, and the university will be stumping up the remaining $150 million, with much of that – supposedly – to come from philanthropic donations. Keep in mind that charitable donations qualify for a 33.3% tax write-off for the philanthropist in question.
Even with the tax break, the figures look optimistic. If you look at Waikato University latest annual report (p59) donations in 2023 amounted to $13.4 million, or only 4.3% of the university’s revenue for the year. The trend is also headed in the wrong direction. Last year, the donations came to only $2.27 million, or 0.66% of the university’s total revenue. That’ a long way short of the $150 million being expected of the university, which had an operating surplus of only $8.7 million last year, and a $6 million deficit in the previous year. If there is a magic money tree on the Waikato University campus, it needs to start bursting into flower ASAP.
In one sense, the distinctions as to “who pays what” are somewhat meaningless from a taxpayer point of view. After all, the tax revenue is paying for that $83 million government contribution, is making a significant contribution to university funding, and will be taking a hit from the tax break to the philanthropic donors. One way or another, taxpayers will be paying the lion’s share of the funds involved. It would be nice to think they were getting value for money.
Doing the numbers
The new medical school may be a done deal, but there are a few areas of concern:
1.The inconsistent cost. It was 2023 when National first committed to this new Waikato medical school, at an estimated cost of $380 million. It is now said to be $145 million cheaper, at $235 million. Given this country’s sorry track record of low-balling the initial project cost in order to get a project on the rails and then paying for “blowouts” once reality sets in, it would be useful to know why we should think the new low estimate is any more reliable than the original high number. What changed?
2.The business case. Reportedly, the recently released business case for the Waikato medical school looked at three options (a) boosting intake at the existing medical schools at Auckland and Otago universities (b) establishing a joint rural training programme run by those existing schools, and (c) building the new Waikato school.
It found the Waikato option to be the most cost effective option. How it arrived at that conclusion is fascinating. Building the new facility will be the most expensive option, but – allegedly – the overall costs of $361 million at Waikato would be less expensive than the $513 million cost of channelling the extra intake through the two existing medical schools, or the only slightly cheaper $508 million cost of the rural training programme.
How on earth could there be such a huge gap in these numbers ? You might well ask. Basically, the evaluation did not compare like with like. According to the business case, the cheaper operating costs were due to (a) the Waikato course being shorter because it is a graduate-entry course and (b) it was beyond the scope of the business case to take that key difference into consideration. So the Auckland/Otago option is counting in the undergraduate costs, but the Waikato option isn’t. Apples, meet oranges.
There are also heroic assumptions being made within the business case about the allegedly higher likelihood that the Waikato graduates would go on to become GPs in rural communities. This will be a government priority, and -presumably – this aim will be a big drawcard to attract philanthropic donors. If only. Here’s how RNZ outlined the numbers :
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).
But wait :
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.
Wollongong? This leap of modelling faith did not impress a sceptical Professor Warwick Bagg, Dean of Auckland’s Medical School :
Bagg said the [business case] 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.”
Oh, and BTW :
[Bagg] 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.
If so, that 35% GP retention rate at Auckland is within the margin of error of the 38% expected from Waikato. And for a further BTW, the front page of Wollongong’s website says that its purpose will be achieved through, among other things:
Commitment to supporting Indigenous-led health and wellbeing research that responds to needs and priorities of Aboriginal and Torres Strait Islander peoples.
Is the coalition government – and Waikato’s new medical school – willing to make an explicit commitment to (a) supporting Māori led health and wellbeing research, and (b) responding to the needs and priorities of Māori ? Will there be a Treaty-based ingredient to the core programme at the new medical school, and will this commitment be prominent in the pitch made to philanthropic donors? Or will this medical school be packaged as prioritising the health needs of pakeha farmers in rural Waikato and beyond?
Footnote One : As mentioned, the coalition government is using the Wollongong Graduate School of Medicine outcomes as its justification for the Waikato graduate-entry medical school. Yet as Bagg says, in Australia there are incentives for rural GP practice that are not available here. This incentive gap makes it unlikely that we will achieve a similar exodus from Waikato medical school into GP rural practice. Let alone similar levels of retention.
To a significant extent, the Wollongong outcomes are the by-product of substantial financial incentives (of up to $A60,000) for rural/remote location GPs, intern training scholarships, subsidies and career pathway programmes for the transition to remote/rural locations, as well as higher bulk billing rebates for the GP practices located in those areas. Few comparable incentives to encourage and support rural GP practice exist in New Zealand. Yet the business case argues that the outcomes here will be comparable to those in Australia.
Footnote Two: As an exercise in performative politics, there’s no doubt that building a new medical school in the Waikato – and spinning it as an answer to the medical needs of rural communities – delivers a National-led government far more political gains than getting the job done more efficiently by expanding the capacity of the existing schools in Auckland and Otago. It may be an expensive way to buy votes but – as with the handouts to landlords and Big Tobacco, and the ferries project –unnecessary delays and added expense are no barriers for this government when it comes to the servicing of National’s core constituencies.
Footnote Three: Finally, some good news: back in the real world, the latest workforce survey from the Royal NZ College of GPs shows that while GPs are working longer hours, they are reporting slightly reduced levels of burnout. As long predicted, a significant number of GPs are heading for retirement, with 17% of the GP workforce now aged 65 or over, and with nearly a quarter of that group expecting to retire in the next three years.
In addition, as College President Dr Luke Bradford recently told NZ Doctor magazine, there is an increase in the percentages of GPs planning to leave the profession, and/or leave the country.
While the retirement surge was anticipated, Dr Bradford says the more troubling trends lie in the intentions of younger and mid-career GPs. These include mid-career GPs considering early retirement and the “quite high” percentage of younger GPs considering moving to Australia or further abroad.
“I thought that [those two trends] were probably more alarming,” he says, with the “early exit” and “youngsters’” intentions to leave New Zealand higher than expected.
The numbers are alarming:
35 per cent of GPs aged 30–34 say they are considering leaving New Zealand, and 15 per cent have decided to go within five years. Among those in the 40–44 age range, 17 per cent were considering leaving New Zealand, with 6 per cent intending to make the move within the next five years.
“There are some flags there,” Dr Bradford says, indicating a greater focus should be put on supporting mid-career and younger doctors to prevent them from leaving the profession.
Exactly. Building a new medical school will achieve little if we continue to lose those young doctors to Australia and beyond, at the current rates. Regardless, Health Minister Simeon Brown seems more intent on creating profit opportunities for private health providers – rather than funding the public health system adequately, such that more of the people we are training to serve in primary care and in public hospitals, will feel more inclined to stay here.
The Creator Returns
No, not God Almighty. Tyler, the Creator is due to play Spark Arena on August 18th. His recent “ Sugar On My Tongue” single finds him in Prince mode, complete with risqué lyrics, 80s synths, sinful chugging rhythms and all. Chances are, this visit by Tyler won’t create the same fuss we saw a decade ago, when a truly absurd moral panic resulted in Odd Future (Tyler and his group) being refused entry to this country. But we were so much older then…
And for a more wholesome trip to that mid 1980s sound of earnest, wistful obsession (think Echo and the Bunnymen) here’s a recent single by the Brooklyn, New York trio (two guys, one woman) that calls itself Nation of Language :
This older track finds them more in Jarvis Cocker mode, with ironic/iconic references aplenty in the video, on a track that indulges leader Ian Richard Devaney’s devotion to Kraftwerk-era synths. There are worse obsessions to have: