Growing medical education in New Zealand: Cost-benefit analysis of shortlisted investment options

The Ministry of Health engaged us to conduct an independent cost-benefit analysis (CBA) of options to expand medical education in New Zealand. The CBA was a requirement of the coalition agreement.

New Zealand faces a significant shortage of doctors, with a current shortfall of 1,810 full-time equivalents (FTEs) and projections indicating a deficit of 3,440 within the next decade. Population growth, ageing demographics, and increasing healthcare demands exacerbate this issue. New Zealand is highly dependent on overseas-trained doctors, who make up 42 per cent of the workforce—a reliance that is unsustainable given global competition.

The shortage is particularly acute in general practice, which has resulted in increasing patient wait times and one-third of practices closing their books. With nearly half of general practitioners (GPs) expected to retire by 2027, urgent action is needed to expand the general practice training pipeline. The issue is even more pronounced in rural and provincial communities, where GP shortages are leading to service reductions in hospitals and emergency care.

Investing in medical training will improve health outcomes, as evidence shows that increasing the number of doctors directly enhances life expectancy and healthy life years. While workforce retention strategies such as bonding schemes and expanded primary care roles play a part, growing New Zealand’s domestic medical workforce is essential for a sustainable healthcare system.

We reviewed the relevant literature and found multiple studies quantifying the positive effect of increasing the number of general practitioners, or hospital specialists on life expectancy amongst the population. We undertook econometric analysis of OECD data to estimate the impact of increasing the number of both general practitioners and other specialists. Coefficients found were similar to those found elsewhere in the relevant literature.

All of our benefit estimates and, importantly, the estimate of propensity to be a General Practitioner from each course option, were reviewed and discussed with a panel of medical educationalists from across New Zealand.

Our report has been proactively released by the Ministry of Health, with redactions. Cabinet material and other papers including our letter to the Chief Economist, Ministry of Health commenting on Minister Seymour’s letter in 2024 – Waikato Medical School cost-benefit analysis: comments on Minister Seymour’s letter – have also been released.

Press

GPs to get extra funding in agreement government hopes will lead to faster healthcare, RNZ, Quinn, R. (2025, June 24).

Did $2m of consulting work save taxpayers $200m on Waikato medical school? NZ Herald. MacNamara, K. (2025, July 23).