Aide-Memoire: University of Waikato and Waikato DHB proposal for
a third New Zealand Medical School
To:
Hon Paul Goldsmith, Minister for Tertiary Education, Skills and Employment
Deirdre Marshall, Acting Deputy Chief Executive - Operations, Tertiary Education
From:
Commission
Date:
19 January 2017
Reference:
AM/17/00011
Purpose
1.
The purpose of this Aide Memoire is to provide you with more information on the Waikato
Medical School proposal.
2.
This Aide Memoire:
• summarises the University of Waikato/Waikato DHB proposal (the Waikato proposal) to
establish a third New Zealand medical school; and
• provides information about the current New Zealand medical schools and their position
regarding the Waikato proposal.
3.
You are meeting with Professor Harlene Hayne, Vice-Chancellor of the University of Otago
(Otago) when you visit the University on Wednesday 25 January 2017. We have provided
separate advice to you in preparation for that meeting (B/16/01238 refers). Note that it is
likely that Otago’s views on the establishment of an additional medical school will be raised at
that meeting.
The Waikato proposal
The Waikato proposal is a four-year, graduate-entry medical school programme
4.
In the last quarter of 2016, the University of Waikato (Waikato) and the Waikato District
Health Board (DHB) submitted a joint business case to Hon Steven Joyce, then Minister for
Tertiary Education Skills and Employment, proposing to establish a new medical school. The
proposed programme is a four-year graduate entry programme with students able to enter
from any prior degree programme providing they meet academic and dispositional criteria.
5.
In addition, the focus will be on accepting students keen on rural practice, and likely to
continue to practice within the region (or within other rural areas in New Zealand). It is
envisaged that many of these students wil be Māori, reflecting the demographics of the
Waikato region.
A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
6.
The new school would be based in Hamilton, with clinical education and training centres
located throughout the central North Island. This will enable students to undertake a high
proportion of clinical placements in community settings outside the main centres.
7.
The Waikato proposal specifies enrolling up to 60 students a year from 2020. Waikato and
the DHB are hoping to secure capital funding from the Crown to finance the school with
operating revenue coming from TEC funding. Over a 10-year period, capital expenditure is
estimated to be between $58m and $70m, and operating expenditure between $142m and
$240m.
8.
The proposed model is based on established Community-Engaged Graduate Entry Medical
Education schools such as the Northern Ontario School of Medicine (NOSM) in Canada and
Flinders University in Australia.
9.
These Schools instil students with a sense of community responsibility and connectedness
through clinical placements in remote rural settings with significant opportunities to interact
with the community. In addition, student recruitment takes into account factors that indicate
students are more likely to seek rural practice including coming from a rural background, and
having an early interest in rural practice.
10. Representatives of the University and the DHB have met with both Minister Joyce
(B/16/01142 refers) and Rt. Hon. John Key (B/16/01202 refers) to discuss the proposal.
The rationale for the School is to address the shortage of rural practitioners in the
medical workforce
11. Waikato and the DHB indicate there is currently a shortage of rural GPs and associated
specialities. Therefore, student recruitment at the Waikato school would focus on selecting
students who from the outset are more likely to choose rural practice.
12. The Waikato proposal indicates that New Zealand imports around 1,100 doctors per year to
meet its medical workforce needs. These doctors comprise around 60% of the psychiatry,
palliative medicine, obstetrics, rehabilitation, and elderly care workforce.
13. The proposal also notes that only 15% of current medical school graduates elect to enter
general practice with the result that around 60% of GPs outside metropolitan areas are either
locums, or recruited from overseas. Despite this, around 25% of rural GP positions are
unfilled and with 40% of existing GPs set to retire by 2025, there are risks that rural areas will
be further under-served.
14. It is noted that Health Workforce New Zealand remains unconvinced by the need for a third
medical school. It queries the need for more doctors to be trained in NZ, and the ability of
this type of programme to address the issues of difficulty in attracting and retaining rural GPs.
Current medical provision
Current medical school provision is delivered by the Universities of Auckland and
Otago
15. The Universities of Auckland (Auckland) and Otago both offer six-year medical programmes
primarily focussed on enrolling school-leavers. At both universities, prospective medical
students enrol in a Bachelor’s qualification in their first year, along with students seeking
admission to other aligned programmes such as pharmacy, dentistry and physiotherapy.
16. The first-year acts as a ‘weeding-out’ process to ensure students progressing to the medical
programme are academically equipped. Following this, successful students continue for a
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
further five years to complete their medical qualification, which includes several clinical
placements. The final year of study is the Medical Intern year in which students complete a
preparation year of clinical attachments – learning the skills to become a house surgeon.
17. There is a graduate entry pathway at both universities where those who already have an
undergraduate degree start at the second year. About 30% of students commencing the
second year of the current medical training programmes enter as graduates from another
degree programme. Compared to the Waikato proposal, the graduate pathway at
Auckland/Otago involves an additional year of study at a cost of approximately $14,600 to the
student and $43,000 to Government (per EFTS).
18. In 2015, Auckland delivered over $44.5 million (approximately 1,100 EFTS) and Otago
delivered over $52 million (approximately 1,300 EFTS) SAC3+ funded provision in years 2-6
of the Bachelor of Medicine/Bachelor of Surgery qualification. This adds to costs for previous
years, either through the first year of medical study, or a previous qualification.
The impact on existing provision is likely to be on the availability of clinical
placements rather than demand for places
19. Medical provision is considered high-cost and the amount of delivery is therefore capped on
the first-year EFTS intake. The cap currently sits at 565 SAC 3+ funded EFTS. Auckland
and Otago work together to agree the distribution of the cap. Applications to Auckland and
Otago far exceed the number of places.
20. Whilst not affecting demand for places, increasing the existing EFTS cap may affect the
availability of clinical placements in public hospitals. The Waikato proposal involves providing
additional funding and support for community based-placements for students – thus creating
more overall placements. However, there are still likely to be some placements required
(particularly at hospital level) which are currently used by Auckland and Otago schools.
Waikato DHB has already informed the Auckland Medical School that if the Waikato proposal
is successful, it will look to reduce the number of Auckland students undertaking clinical
placements in its hospitals.
21. 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.
Auckland and Otago oppose the establishment of a third medical school
22. The Deans of the Auckland and Otago Medical Schools wrote to Minister Joyce on two
occasions regarding the Waikato proposal. The first letter (August 2016, M/16/00944 refers)
indicated that a third school will bring increased pressure on the number of clinical training
placements available to students.
23. The letter highlighted that the universities are addressing issues with the medical training
pipeline that have been identified in the Waikato proposal as follows:
• There is a graduate entry pathway at both universities.
• Both universities operate a Rural and Regional Admissions Scheme that aims to attract
students from a rural background. The Universities report that 50% of students admitted
under the scheme move into rural practice, but it is not known how long they stay. Both
universities have established training options in rural and regional settings and report a
significant number of students undertaking these options. Although there remain
problems with rural practice.
• Auckland and Otago operate Māori and Pasifika preferential admission schemes. Both
Universities are now preferentially enrolling Māori at demographic equity with a
completion rate of over 90% and report similar success for Pasifika.
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
24. The letter also noted that Health Workforce New Zealand has increased funding for GP
training and indicate that there are approximately 40% more students undertaking GP training
in 2015/16 compared to 2012/13.
25. The second letter (October 2016) reiterated Auckland and Otago’s commitment to educating
New Zealand’s medical workforce and included a letter from the Waikato DHB regarding
reducing the number of clinical placements available for Auckland students if the Waikato
proposal is successful. Officials and advisors from the relevant Ministers’ Offices met with
the Deans following this letter (B/16/01276 refers).
There have been other attempts to establish a third medical school, but they were not
successful
26. In the mid-1990s the University of Canterbury (UC) and Otago proposed establishing a joint
graduate entry medical school in Christchurch to be operated in parallel with the existing
programmes. The proposal included a reduced time graduate entry programme similar to
that of the Waikato proposal, but did not have the focus on GPs and rural health. Otago
subsequently decided to consolidate its medical training within its existing facilities and
programmes and the proposal was not formally submitted for consideration of funding.
27. In 2013 Victoria University of Wellington (VUW) presented Minister Joyce with a business
case for a new graduate medical school, targeting both domestic and international
(Malaysian) students (B/13/00622 and B/13/00252 refer). The Ministry of Health advised that
current and future numbers of medical student places were appropriate for New Zealand’s
short-term and long-term needs. The issue of access to clinical placements was also raised.
28. The VUW proposal was not supported because it was considered that there was no
compelling rationale to justify creating third medical school, the Ministry of Health advised
that current and future numbers of medical student places were appropriate for New
Zealand’s short-term and long-term needs, and the proposal did not show sufficient evidence
of the school’s future sustainability and alignment to regional and national needs.
29. These proposals were both for a “generalist” medical school, as compared to the particular
focus the Waikato school is proposing.
Initial views on the Waikato proposal
The initial proposal needs to be further developed in line with Better Business Case
(BBC) requirements before it can be considered for funding
30. The TEC has reviewed the proposal and considers it has some merit as it provides a different
and innovative approach to medical education, focussing on general practitioner training and
rural health. It also seeks to address a much discussed issue - the ability to attract and retain
doctors in rural and provincial areas. Minister Joyce indicated he would like to give the
proposal further consideration.
31. Our initial view (B/16/01142 refers) is that given the amount of capital funding sought, the
Waikato proposal should be further developed to meet the requirements of an Indicative
Business Case (IBC) under Treasury’s Better Business Case guidelines. Typically an IBC is
required for initial consideration by Ministers and if Ministers are interested in progressing the
proposal further, the IBC would be developed into a Detailed Business Case.
32. There are five main areas we recommend are addressed in developing an IBC:
• engagement with government, regulatory and health organisations, iwi and the
community (e.g. the Ministry of Health, Health Workforce New Zealand, the Royal College
of General Practitioners, the Medical Council, neighbouring DHBs etc) should be
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
undertaken to reach a common understanding of health workforce issues and their likely
solutions;
• a full financial case is required which provides greater detail on the quantum of funding
sought and its form. It should also identify all potential sources of financing such as
leveraging the balance sheets of the University and Waikato DHB, borrowing, public-
private partnerships etc;
• the long term affordability of the programme for the University needs to be addressed
looking at recent financial performance, current assets (cash, buildings etc), and a 10-
year financial model to assess the affordability and sustainability of the proposal;
• a stronger management case should be included that outlines a high-level project plan
describing the critical pathway from conception to implementation, and the risks
associated with the project; and
• a full consideration of the other options available to address the issues raised in the
proposal – i.e. is this the best option to address rural provision?
33. We have drafted a letter (Attachment 1) to be sent jointly from you and the Minister of Health
that outlines suggested revisions to the Waikato proposal in order to address the above
issues and meet the Treasury’s BBC guidelines for an IBC. This letter is currently being
reviewed by the Ministry of Health.
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
Next Steps
34. We understand that the Deans of the existing medical schools at the Universities of Auckland
and Otago may be eager to meet with you to discuss Waikato’s proposal. If you do wish to
meet with the Deans we would recommend you first meet with the representatives of the
University of Waikato and Waikato DHB.
35. If a revised business case is developed, it should undergo an independent quality assurance
(IQA) review with the final report made available to agencies. This is a similar process used
for other major capital development proposals in their early phases.
36. If an Indicative Business Case is submitted, the TEC can lead work with the Ministry of
Health, Treasury, MoE and DPMC to assess the revised business case and the IQA report
and provide advice to relevant Ministers accordingly.
pp.
Deirdre Marshall
Acting Deputy Chief Executive, Operations,
Tertiary Education Commission
19 January 2017
Hon Paul Goldsmith
Minister for Tertiary Education, Skills and
Employment
__ __ / __ __ / __ __
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
Attachment 1 – Draft letter to University of Waikato/Waikato DHB
[Date]
Professor Neil Quigley
Vice Chancellor
University of Waikato
Private Bag 3105
HAMILTON 3240
Dr Nigel Murray
CE Waikato District Health Board
Private bag 3200
HAMILTON 3240
Dear Prof Quigley and Dr Murray
Business case for the proposed third medical school in the Waikato region
Thank you for providing us with your business case for a proposed new medical school and for
initial discussion held on 17 October 2016. We were encouraged by the innovative solution to
training more General Practitioners address to the needs of rural communities in the Waikato
region.
We would like to give your idea further consideration. For this, we expect the business case to be
developed further. In particular:
1. Make it into an Indicative Business Case, following the Treasury’s Better Business Case
guidelines. This requires that the proposal would be further developed in a number of specific
areas.
2. Given that several organisations will have a strong interest in your business case, I would like
you to engage deeply with the relevant government, regulatory, and health organisations (e.g.
the Ministry of Health, Health Workforce New Zealand, the Royal College of General
Practitioners, the Medical Council, and neighbouring District Health Boards). The purpose of
the engagement would be to try to reach a common understanding of the workforce problem in
New Zealand. This may require some modification of your long listed options and subsequent
analysis. This should be reflected in the Indicative Business Case.
3. The revised financial case should provide much greater detail on the quantum of funding being
sought, and the nature of that funding. It should also identify all potential sources of financing
such as leveraging the balance sheets of the University and Waikato DHB, borrowings, public-
private partnerships, etc.
4. Long term affordability also needs to be addressed for both the University and the DHB. This
analysis should look at recent financial performance, current assets (cash, buildings etc.), and
a 10 year financial model. This should be used to assess the affordability and sustainability of
the proposed model.
5. A stronger management case should be included that outlines a high-level project plan
describing the critical pathway from conception to implementation, and the risks associated
with the project.
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A ID E M E M O I R E : UNIVERSITY OF WAIKATO AND WAIKATO DHB PROPOSAL FOR A THIRD NEW ZEALAND MEDICAL SCHOOL
The TEC will be in contact to discuss the next steps with you, and will be able to help facilitate
engagement with the other government agencies with an interest in the proposal.
The revised business case should then undergo an independent quality assurance (IQA) review
and the subsequent IQA report made available to government. We expect you to discuss the terms
of reference for the review and the selection of a suitable IQA provider with TEC officials.
We wish you all the best with these next steps and look forward to hearing from you again in due
course.
Yours sincerely
Hon Paul Goldsmith
Hon Dr Jonathan Coleman
Minister for Tertiary Education, Skills and Employment
Minister of Health
Cc: Rt Hon Jim Bolger, Chancellor, the University of Waikato
Cc: Mr Robert Simcock, Chair, Waikato District Health Board
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Document Outline
