In Confidence

Office of the Minister of Education
Office of the Minister of Health

Chair, Cabinet Social Wellbeing Committee

School of Rural Medicine proposal: An alternative approach
Purpose
1
This paper seeks agreement to rescind the Cabinet decision to establish a School of
Rural Medicine.  A wider programme of work to address the issues associated with
access to health care, and the lack of availability of health professionals in some rural
areas, wil  be established as an alternative to address rural healthcare issues.
Executive Summary
2
There are issues with access to health services in rural areas due to a lack of health
professionals working in these areas.   This is supported by an analysis of the data
held by Health Workforce New Zealand (HWNZ) and is regularly raised in the media.
3
There have been two recent proposals to address the rural workforce issues.  The first
was  from the  University of Waikato  and the Waikato District Health Board  (DHB),
which proposed establishing a new post-graduate entry medical school (the Waikato
proposal)  based in Hamilton with rural training centres in surrounding areas.   This
would train 60 more doctors per year.
4
The  second  proposal  was  from  the  University of Auckland  and University of Otago
proposed  establishing  a  National  School of Rural Health  (the  Auckland/Otago
proposal).  This would provide undergraduate and postgraduate training experiences
for a range of health professionals in rural areas.  The proposal is based on expanding
a similar initiative already operating for medical students at these two Universities.  It
would increase the number of medical students. At maximum capacity around 300
medical students per year would undertake some study in a rural environment – either
in-depth training, or a short placement – which is significantly more than the current
state. This rural training experience would also be open to other health professionals.
5
The previous Government agreed to establish a School of Rural Medicine through a
competitive tender process.  This was to allow the University of Auckland/University of
Otago and University of Waikato/Waikato DHB, as well as any other parties, to submit
proposals.  The best option to address shortages of health practitioners in rural areas
was to be selected through this process.  It was deliberately decided to not be specific
about the nature and type of services to be provided within the School of Rural
Medicine to encourage innovation and creative solutions to be explored.  The selected

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proposal  could  have been either of the existing  proposals, a blend, or something
different.
6
However, a School of Rural Medicine is only one way of addressing the issue of a lack
of health professionals, and therefore health services in rural areas.   It does not
necessarily take account of the wide range of other possible alternative strategies that
could be used. For example,  better support for existing  practitioners by providing
locums to cover out of hours and emergency  work;  continuing professional
development and holidays; funding changes to provide sole transport costs; and,
community and social support for families of practitioners.
7
The Ministry of Health has now commenced a programme of work to identify a wide
range of initiatives which better support health professionals practising in rural areas,
and encourage others to take up the option of rural practice. The work wil  be
timetabled such that proposals can be included for consideration in Budget 2019.
8
In light of this, we recommend that Cabinet rescind the previous decision to establish
a School of Rural Medicine and direct HWNZ/Ministry of Health to undertake a wider
programme of work to address the issues associated with access to rural health care.
Background
9
In September 2017,  Cabinet agreed in principle to establish a School of Rural
Medicine  [CAB  -17-MIN-0464 refers]  through a competitive tender process. It was
hoped this would at least in part address issues with rural health provision.  At that
time,  the previous Government  had  been considering  two different rural health
proposals -  the Waikato Graduate Entry Medical School and the National School of
Rural Health.
First proposal: Waikato Graduate Entry Medical School
10
The University of Waikato and the Waikato DHB  propose establishing a new post-
graduate entry medical school (the  Waikato proposal) based in Hamilton with rural
training centres in the surrounding areas.  Once established, this new School would
train 60 graduates per year and would focus on recruiting students likely to go on to
practice in rural areas.    Training in rural health would be provided as part of the
qualification.    This sort of approach has been successfully used overseas, usually
alongside a wider suite of activities to improve rural health professional attraction and
retention.    Medical schools are also contributors to  research  capability  and a third
medical school would provide further opportunity  to  contribute  to health sector
research priorities.
11
The  proposal  was estimated to cost $220  million  to establish and then,  once fully
operational, $75 million per annum.  Financing this would require new funding to be
made available from Vote: Tertiary Education and Vote: Health.
Second proposal: National School of Rural Health
12
The University of Otago and University of Auckland propose to establish a School of
Rural Health  (the Auckland/Otago proposal) to  provide undergraduate and
postgraduate training experiences for a range of health professionals in rural areas.
This training would be based in smaller rural hospitals (hubs) with outplacement into
rural health practices (spokes).  It is modelled on existing initiatives in place at each

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medical school that would be expanded to encompass a range of other primary care
professional training e.g. nursing, allied health and midwifery.
13
This proposal does not intend to increase the number of students undertaking medical
training. However, it would add  an element of rural  training as part of the overall
programme  of study  for  the approximate 600 medical students per year.    The
Universities estimated the proposal would cost Government $13.8 million per annum
in addition to the standards Student Achievement Component (SAC) tuition subsidy
and postgraduate medical training that Government already funds, plus any capital
costs.    However, officials are of the view  that these costings require further
development and are very light.
The problem: there are fewer health practitioners in most rural areas
14
National y, urban areas have on average greater access to general doctors than rural
areas.  HWNZ  data from 2014  il ustrates that whilst mostly urban DHBs such as
Capital and Coast have high numbers of general doctors (87 per 100,000 population),
rural DHBs such as West Coast and Taranaki have fewer general doctors (61 and 60
per 100,000 population respectively).
15
The inequality in the distribution of doctors also extends to other health professions as
il ustrated below.

The difficulties of attracting practitioners into rural areas are complex
16
Factors which contribute to difficulties in recruiting and retaining health professionals
in rural locations include:
16.1  a general lack of support, including cover for professional development or
holidays,  due to the  overall shortage of health professionals and lack of
rural staff;
16.2  perceptions of long hours and reduced down-time  in rural practice
(particularly relevant for doctors, nurses and midwives who are often ‘on-
call’ outside of working hours);

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link to page 4 link to page 4 16.3  practices are often located in remote areas with few facilities and few
opportunities for partners and children;
16.4  geographic distance between patients (this particularly applies to midwives
and other professions that undertake home visits) or practices (relevant to
professions that undertake clinics at differing locations); and
16.5  lower intensity than urban practices, which leads to lower salaries for those
remunerated on a per patient or per hour basis.
17
In addition the age profile of the current medical workforce means a significant
number of existing rural doctors wil  retire in the near future.  Only 50 percent of the
trainees who started the GP training programme are aged below 30.    If this trend
continues New Zealand wil  make good progress in building a younger GP workforce
to replace GPs reaching retirement age, but this alone wil  not  ensure appropriate
distribution across rural and urban communities.
International Medical Graduates (IMGs) fil  the gaps
18
New Zealand imports approximately 1,100 IMGs per year.  In 2016, IMGs made up
around 35 percent of the registrar1 workforce.
19
Three distinct groups of IMGs come to New Zealand.  First, junior doctors on short-
term (one to two years) contracts having a working overseas holiday, who help fil  a
short-term service need.  This level of service need is reducing with the rise in the
number of domestic graduates.  The second group of IMGs come to obtain specialist
training in New Zealand’s high quality training programmes.  Many of these are
retained in New Zealand when they obtain employment as a specialist.  Finally, there
are IMGs who obtained their undergraduate and specialist training overseas, or are
working in New Zealand as locum generalists.
20
In 2017, IMGs made up 43 percent of the senior medical officer (SMO) workforce2.
HWNZ estimates that 51 percent of IMG SMOs have a New Zealand or Australasian
vocational qualification  and are committed to practising in New Zealand.    Importing
SMOs assists with the ability to provide high quality specialist training programmes.
21
The following chart shows the past, current and forecast future number of IMGs and
New Zealand medical graduates in the health workforce. Between 2006 and 2013,
the number of IMGs employed in New Zealand rose. However, reliance on IMGs from
2018 onwards is forecast to level off or slightly reduce with increased numbers of New
Zealand medical graduates meeting New Zealand health needs.

1 Registrars are resident doctors who have been employed for at least two years. Depending on experience, a doctor may be eligible to work as a registrar in
their third year post graduation).
2 Based on the number of practising SMOs as at May 2017 according to Medical Council of New Zealand data. An SMO is also referred to as a
consultant/specialist.

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Both proposals have some merit
22
In addition to using student recruitment practices that are likely to encourage more
medical graduates to seek a rural career, each proposal has the potential to deliver
several other benefits.
23
Each has some capacity to incorporate training for other health professions.  This is
stronger for the Auckland/Otago proposal where integrated learning between
professions is a key feature. This facilitates closer interdisciplinary working
relationships, postgraduate learning opportunities, and the introduction of alternative
models of care that would support existing rural general practices.
24
Both proposals could contribute to the Government’s provincial development goals.
The Waikato proposal specifically identifies the key economic benefits that the
medical school would bring to the region, including increased GDP, increased direct
and indirect employment, training opportunities, and increased innovation. The
Auckland/Otago proposal would also have an impact, given it proposes to spread the
10 hubs and spokes in rural areas throughout provincial New Zealand.
25
The  proposals could also contribute to  He kai kei aku ringa, the Crown-Māori
economic growth partnership goals.  Areas of contribution include growing the future
Māori workforce, and strengthening Māori educational participation and performance.
26
Each proposal indicates that it would incorporate a research component.  The outputs
from this research would bring benefits to DHBs, primary care providers, community
groups and local iwi, as well as tertiary education providers. There is also significant
opportunity for the research to contribute to the wider aims of government, including
the Health Research Strategy.  This can be considered further as part of the Ministry
of Health’s work programme.
But there are issues and risks associated with each of them
27
The  main  concern with both proposals is that it is not clear how many medical
graduates would enter rural practice or how long they would be retained in the rural
health workforce. They wil  both need to have other programmes and support
measures built around them to support doctors practicing in rural and remote areas.

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28
The Waikato proposal is very  costly.  There is also  potential for the costs of both
proposals  to increase, as they were only in the  early stages of development  when
submitted to Government.
29
An important concern with the Waikato proposal is Waikato DHBs ability to focus on
this work when it has a number of current  issues to deal with.  These include  its
financial performance, updating core IT systems, relationships with Midland Health
Network, performance on the ‘Shorter Stays in Emergency Department’ Health Target,
and the recent change of leadership.
30
Any increase in the  number of medical students may also  affect the availability of
clinical placements.  It is noted that Waikato DHB had informed the Auckland Medical
School that if the Waikato proposal is successful, it wil  look to reduce the number of
University of Auckland students undertaking clinical placements in its hospitals. The
Universities of Auckland and Otago already report difficulties in securing enough
clinical placements for their students. One of the issues behind this appears to be
funding, and the demands on already busy practitioners resulting from having
students in their practice.  However, the Waikato proposal intends to tackle this by
broadening the range of clinical placements.
31
There may also be system capacity issues associated with training additional doctors,
who wil  need further  placements,  mentoring and supervision when they enter the
workforce.    This can also have an impact upon other health care professionals
seeking clinical placements, particularly in primary care.
Multiple factors make rural careers less appealing to many health professionals
32
There are a number of factors which contribute to overall low perceptions of a rural
career  including a general lack of support, spending more free time ‘on call’,  few
opportunities for partners and children, large amount of travel between practices, and
lower salaries.
33
The National Health Committee looked at measures that could be introduced to
mitigate some of these problems.  It  included recommendations around:  service
delivery including the use of technology; different models of care, such as extending
the scope of practice for paramedics and nurse-led clinics;  establishing outreach
clinics or integrated health centres; and, provision of transport subsidies.
34
System performance improvements are also being implemented. These include
alternative ownership models in primary care, integrating health and other social
sector funding schemes, and funding the development of Māori health providers.
35
A diagram setting out the issues faced by the rural medical workforce is provided
below:

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A School of Rural Medicine could only address some of these issues
36
Whilst a School of Rural Medicine is likely to impact the number of students training in
rural areas and selecting a rural career, it is unlikely to address many of the factors
that affect the attractiveness of rural practice.  For example, it is unlikely to provide
better support for existing practitioners by providing locums to cover out of hours and
emergency work; increase salaries, address the costs of buying into a practice, or
provide social support for families of practitioners.
37
We are therefore  proposing not to proceed with the establishment of the School of
Rural Medicine at this point.  Instead, it is proposed that we  direct the Ministry of
Health  and HWNZ  to work with key stakeholders to develop an alternative set of
proposals to address the issues of access to health services in rural areas, and the
availability of health practitioners in rural areas.
An alternative strategy: The Ministry of Health work programme
38
Increasing medical vocational training numbers without addressing the high attrition
rates or maldistribution would be a significant waste of resources.   Initiatives to
support and retain existing graduates (both international and domestic) have proven
successful in Australia,  and  are  likely to be cheaper than increasing the domestic
supply and would help address maldistribution and capacity.
39
There is also an opportunity to generate efficiencies and reduce pressures on DHBs
by providing greater orientation and support for rural medical practitioners and their
families.  This may help reduce turnover.   DHBs spend a  significant amount on
medical outsourcing.
New workforce planning models have been developed which take into account these factors
40
HWNZ has recently  developed workforce planning and demand modelling
frameworks.    These  take into account patient and community need, system level
measures, ambulatory sensitive (preventable) hospital hospitalisations, access to
services and workforce distribution to identify gaps and inform investment decisions.

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41
Using the demand modelling frameworks, and the potential opportunity areas, the
Ministry of Health, via HWNZ  and working closely with the Tertiary Education
Commission  (TEC),  wil  develop a programme of work  to address  rural healthcare
issues.
Engaging stakeholders in the programme of work
42
The development of this programme of work will involve stakeholder engagement and
provide opportunity to input ideas and potential solutions.  This wil  include opportunity
for any interested parties to participate, including but not limited to the health and
education sectors.   There wil  be opportunity for the sector to submit ideas  and
feedback to problems and contribute to the proposed programme of work.
43
This programme of work could include:
43.1  using vocational training agreements as a lever for improved distribution of
practitioners;
43.2  targeting the Voluntary Bonding Scheme criteria to areas and professions
of need;
43.3  evidence-based investment in multi-disciplinary rural vocational education
pathways including  (this could include the development of a school of rural
health);
43.4  building upon existing investment in rural workforce initiatives to strengthen
international medical graduate orientation and  practitioner support –  both
in DHBs and rural practice;
43.5  ensuring that personal and professional support is provided to both
international and New Zealand medical graduates and their families in rural
practice; and
43.6  an evidence based, inter-professional rural education pathway.
44
Following this sector  engagement,  the Ministry of Health  will recommend a
programme of work to address the issues of access to health services in rural areas,
and the availability of health practitioners in rural areas.
Timeframes for this programme of work
45
This recommended programme of work wil  be provided to the Minister of Health for
consideration in October 2018.  This will allow time for consultation with the sector and
the programme of work to be drafted.
46
Key dates for the development of the programme of work:
46.1  terms of reference completed, 30 May 2018;
46.2  request for information released on GETS, 11 June 2018;
46.3  opportunity for interested parties to provide information/ideas, 12 June - 31
July 2018;

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46.4  Ministry of Health to produce draft recommendations document, 31 August
2018;
46.5  opportunity for sector feedback/workshops on recommendations document
3 September, 1 October 2018;
46.6  recommend  a  programme of work to the  Minister of Health, 31 October
2018.
Consultation
47
This paper has been largely drafted by the TEC. The Ministry of Health contributed
data on New Zealand’s health workforce (via HWNZ) and drafting  about the proposed
alternative strategy in the section entitled ‘An alternative strategy: The Ministry of
Health work programme and timelines’.
48
Comments were sought  and included from the Treasury,  the  Ministry of Business,
Innovation and Employment (MBIE), and the Ministry of Education.
49
The Department of Prime Minister and Cabinet (DPMC) has been informed.
Financial implications
50
There are no financial implications associated with this paper.   However,  funding is
likely to be needed to support some of the new initiatives proposed by the Ministry of
Health.    We are intending refining these proposals for consideration as part of the
Budget 2019 processes.
Other Implications
51
Other implications are as follows:
Human Rights
None

Legislative
None

Regulatory Impact Analysis  Not required

Gender Implications
None

Disability Perspectives
Access to health services is particularly important
for some people with disabilities and chronic
diseases.  The Ministry of Health wil  consider the
particular needs of people with disabilities in the
work programme.

Publicity
52
We propose to let the University of Waikato and Waikato DHB, and the Universities of
Auckland and Otago know about this decision, before it is announced publicly.
53
The Minister of Health will make a joint press release to announce the decision and
details of the Ministry of Health work programme.  This will also provide information on

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how stakeholders can make comment and get involved in the development of the new
initiatives.
54
We intend to publicly release this paper.  Some redactions may need to be made
about costs associated with the two proposals.
Recommendations
55
The Minister  of Education and the Minister of Health recommend that the Cabinet
Social Wellbeing Committee:
55.1  note that there is a shortage  of doctors and other health professionals in
rural areas,  which results in decreased access to medical care in rural
areas;
55.2  note  that improving access to health services for rural communities wil
require multiple solutions;
55.3  note  that the establishment of a School  of Rural Medicine may only
address some of the issues;
55.4  rescind  the Cabinet decision to establish a School of Rural Medicine  –
CAB-17-MIN-0464;
55.5  invite the Minister of Health to report back to the Cabinet Social Wellbeing
Committee on a range of proposals to address the maldistribution of health
professionals in rural areas, and to improve access to health services in
these areas, by December 2018; and
55.6  note  that these proposals may  be taken forward  for consideration  in
Budget 19.

Authorised for lodgement
Hon Chris Hipkins
Minister of Education

Hon David Clark
Minister of Health

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Document Outline