NZIER report shows hospital infrastructure expenditure trajectory unrealistic

Building a healthy future, commissioned from NZIER and released today by New Zealand Infrastructure Commission, Te Waihanga sets out that the expected cost of hospital infrastructure expenditure based on current projections over thirty years will be an estimated $115 billion. The current trajectory would mean four times the current public spending on hospitals by 2050.

Report author Sarah Hogan says, “the future we modelled on the business-as-usual approach to health infrastructure planning shows just how unsustainable the current practice really is.”  Hogan says, “Our results should be a wake-up call. Even with ambitious plans factored in to modernise and reconfigure services, the projections are still not even close to financially sustainable. We will not be able to meet future demand for services unless we fundamentally change the relationship between health services and physical infrastructure”.

Te Waihanga has a critical role in taking an overview of all infrastructure with lessons that apply to each sector with infrastructure plans. Hogan says, “health is just one part of a wider social sector that includes education and justice including demands for physical infrastructure. Once you include transport, energy, and climate adaptation infrastructure, it becomes clear that we cannot have it all. Fresh and more radical thinking is needed”.

The future of healthcare infrastructure will be hybrid and virtual

With the nature and magnitude of the problem and dilemmas in health set out in the report, the task now turns to finding a different path. NZIER has just completed a cross-industry study with Australian colleagues looking at how other countries are managing more radical moves to hybrid and virtual systems of care that may reduce our unsustainable dependency on physical infrastructure. 

“The culture and relationships needed to build the future are very different from what we have now. We found real insights into the opportunities and the steps needed to ensure we meet the tsunami of demand and maintain quality and coverage with limited resources”, says Todd Krieble, NZIER Deputy Chief Executive.

For further information, please contact: