Methodology for Estimating the Underfunding of Māori Primary Health Care
Aims and approach
Sapere were asked by the claimants to respond to the Waitangi Tribunal’s recommendation that a methodology be developed to measure the degree of underfunding of Māori PHOs and providers. The methodology that we proposed has three components:
- We first measure the extent to which the funding formula determining capitation payments worked against Māori providers and Māori primary health organisations (PHOs). This first component identifies direct underfunding of primary health care organisations serving Māori populations, and shows the impact for providers with high enrolment of Māori in their populations.
- We then specify the primary health care team that could be implemented if the Crown were to meet the promise of the Primary Health Care Strategy set out in 2000. We identify the workforce that would be required and show how the cost of that workforce can be estimated. This offers an estimate of the cost of the funding needed to fulfil the promise of the Primary Health Care Strategy.
- Lastly, we set out a methodology by which the consequential health inequity for Māori arising from poor access to good primary health care might be identified and set out how this could be valued. For the 2018 Māori population aged under five, and between 45 to 64 – for whom ambulatory sensitive hospitalisation (ASH) rates are prepared by the Ministry of Health – we estimated the proportion of years of life lost for Māori that might be attributable to primary health care, and used the Value of a Statistical Life to attribute a monetary value to the lost years of life.
“The cost of underfunding and under-provision of primary health care for Māori is borne by Māori – we estimate that the annual health loss in 2018 due to inadequate primary care is valued at $5 billion.”
Proof of concept results
We present results from applying each methodology as a proof of concept.
Results of direct underfunding methodology
As a demonstration of the magnitude of the estimates that our approach generates, we present a series of results for a group of Māori primary health care organisations with a total population of 332,051 people.
|Result||Amount ($ millions)|
|Total accumulated over time (since 2003)||$283m|
|Total accumulated inflated by cost of capital (5%)||$456m|
|High scenario (cost of capital = 6.5%)||$531m|
|Low scenario (cost of capital = 3.5%)||$394m|
Results of the promise of the Primary Health Care Strategy
We present the results of modelling a comprehensive primary health care service for a) the populations of the Claimant organisations; b) the populations of the Claimant organisations if they had grown by 50 per cent; c) the cost of providing the service to 50 per cent of Māori in Aotearoa; and d) the cost of providing the service to all Māori in Aotearoa. These are annual costs in 2020 dollars. We note that costs of providing a comprehensive service encompass aspects not only of providing care to a Māori population, but also those of providing care as Māori, expressing Māori principles, in line with Te Tiriti. This means resources to respect Tikanga and protocol, and to support partnership with the community, as well as direct service provision.
|Cost for test population ($000)||Cost for test population +50% ($000)||Cost for 50% Māori population in Aotearoa ($000)||Cost all Māori population in Aotearoa ($000)|
Tūngia te ururua, kia tupu whakaritorito te tupu o te harakeke.
Clear the undergrowth so that the new shoots of the flax will grow.
Results of valuing inequity in health outcome for Māori
The cost of underfunding and under-provision of primary health care for Māori is borne by Māori. – we estimate that the annual health loss in 2018 due to inadequate primary care is valued at $5 billion.
Overall, we considered the Tribunal’s recommendation to develop a methodology for estimating the underfunding of Māori PHOs and providers in several ways, which we believe will meet the goals of the recommendation both to inform discussions about compensation and to support a future-focused discussion about investment in Māori primary health care services.
Our team included
- Dr Tom Love
- David Moore
- Ashley Milkop
- Lockie Woon
- Michael Young
- Corina Comendant