The Cost of Indigenous Health Inequities in New Zealand

A first-of-its kind study estimates that inequity costs the New Zealand health system over $800M every year.

three women on a walk


Health inequities are unjust and preventable. Despite this, they are widespread across the world – including in Aotearoa New Zealand, where Māori experience significant inequities in health compared with the non-Indigenous population. 

But what is the financial cost of health inequity? Despite there being great interest in the economic impacts of health inequities globally, few studies have quantified the costs associated with unfair and preventable ethnic/racial health inequities. 

Now, an Indigenous-led study has attempted to fill this void for New Zealand, looking at health inequities between Māori and non-Māori adults and estimating the economic costs associated with these differences.

Estimating the economic costs in New Zealand:

Estimating the economic costs of Indigenous health inequities in New Zealand: a retrospective cohort analysis is the first study to focus on quantifying the costs of inequities between Māori and non-Māori adults, following an earlier study quantifying health inequities for Māori children .

The study’s findings – which its authors say are conservative estimates – show that health inequities between Māori and non-Māori adults cost NZ$863.3 million per year. 

This is comprised of direct costs of NZ$39.9 million per year, including costs from ambulatory sensitive hospitalisations and outpatient care, with cost savings from underutilisation of primary care. Indirect costs of NZ$823.4 million per year came from years of life lost and lost wages.


Professor Rhema Vaithianathan from the Auckland University of Technology (AUT), a co-author of this study, says she and her fellow researchers found that Māori are underutilising health care services – a finding they believe “is not surprising.” 

“You can also see [underutilisation by Māori] in other public benefits,” says Rhema. “In the lifetime evaluation of Māori utilisation of health and disability services, you will invariably see that they have a lower lifetime predicted consumption of publicly funded services.”

Understanding the dollar cost of health inequity is important for a number of reasons, Rhema continues.

“The burden of not putting enough [funding] into Māori [health], or an equivalent amount, is that Māori have a shorter life expectancy. And that is a cost both in increased disability and morbidity, and a cost borne by the community who are sick and die younger.”

“[This study aims to] give another lens to the conversation. It’s a very economic and data lens that sometimes can be valuable for people who maybe see it as a debate about other things, more about culture. I think it puts some numbers into a debate that is being had in a fairly esoteric way.

“For those who are experiencing it, you don’t need numbers… It’s when describing the world to people who don’t know it, and don’t feel or live it, that you need these numbers.”

Gaps in the system:

Study co-author Dr Braden Te Ao, a Senior Lecturer in Health Systems, School of Population Health, University of Auckland, says the study looked at data over a 12-year period “to try and account for any variations from year to year.”

“Sometimes getting accurate information is difficult. Because it’s a retrospective study, we couldn’t contact some of these individuals and actually ask them these questions. All of those biases were inherited within the approach that we took.”

Indirect costs were estimated conservatively for this study, taking the number of days in hospital and conservatively estimating these as days off of work, and applying it to the median weekly wages for the reference year. 

Braden says: “One of the reasons why we focused [on hospitalisations] is because that’s the biggest cost. But what this study has found is that there’s huge gaps, particularly within the primary care sector, where government doesn’t really have much control.”

“Te Whatu Ora now owns hospitals, [but] primary care is predominantly privately owned. I think a lot of the biggest [potential improvements] could be looking at different models of care where government can actually intervene, to improve access in primary care and ACC injury claims.” 

“The current funding models that we have, particularly in primary care, is that when you have these sorts of inequities that are inherent somewhere within a system, it’s really hard to make changes under the current regime. There’s no real incentive to look at some of those access to care regimes.”

According to Braden, the main strength of the study “is that we were able to utilise nationally, routinely-collected data that we do have and to actually make sense of the sorts of information that our government collects in a meaningful way, and trying to look at equity [between] Māori and non-Māori between the three age groups.”  

Braden says he’s hopeful there will be further research to expand on this study’s findings, particularly “around understanding access more, or understanding what sorts of things primary care could do to actually improve access to care – whether it’s health literacy, cultural competency, or something different.”

About this study:

  • Papaarangi Reid, Te Kupenga Hauora Māori, The University of Auckland Faculty of Medical and Health Sciences, Auckland, New Zealand
  • Sarah-Jane Paine, Te Kupenga Hauora Māori
  • Braden Te Ao, Health Systems, School of Population Health, University of Auckland, Auckland, New Zealand
  • Esther J Willing, Kōhatu—Centre for Hauora Māori, University of Otago, Dunedin, Otago, New Zealand
  • Emma Wyeth, Te Rōpū Rangahau Hauora Māori o Ngāi Tahu (Ngāi Tahu Māori Health Research Unit), Department of Preventive and Social Medicine, University of Otago, Dunedin, New Zealand
  • Rhema Vaithianathan, School of Economics and Centre for Social Data Analytics, Auckland University of Technology, Auckland, New Zealand
  • Belinda Loring, Te Kupenga Hauora Māori