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Health inequities by ethnicity are unjust, preventable and amenable to intervention.[[1]] Indigenous peoples, where measured, are often the most marginalised. In Aotearoa New Zealand, Māori have a life expectancy 7.5 years fewer[[2]] than non-Māori, and experience higher rates of unmet health need and disease-specific mortality rates. Māori infants are almost twice as likely to die as non-Māori, non-Pacific infants while ambulatory sensitive hospitalisation (ASH) rates for Māori 0–4-year-olds are over one and a half times higher than non-Māori, non-Pacific ASH rates.[[3]]

There are strong social justice and human rights arguments for intervening in ethnic health inequities, and governments have made firm commitments to do so.[[4,5]] Yet inequities, and racist policies and healthcare systems, remain. In addition to the health, social and moral costs, health inequities have significant economic costs: on families, on communities, on health systems and on national economies.[[6–11]] This growing evidence base contradicts the misconception that eliminating health inequities is costly, but rather the cost of “doing nothing” to address inequity is itself significant.

Health equity, particularly for Māori, is an objective within key New Zealand health policy documents,[[12–14]] and New Zealand changed its position to endorse the UN Declaration on the Rights of Indigenous Peoples in 2010. New Zealand has also ratified the UN Convention on the Rights of the Child, which recognises the right of children to the highest attainable standard of health and healthcare, and to freedom from all forms of discrimination including on the basis of ethnicity.[[15]] Te Tiriti o Waitangi (the Treaty of Waitangi) provides an additional constitutional and legal obligation for the government to ensure equity for Māori. Despite this, very little is known about the costs associated with the disproportionate burden of illness and premature death experienced by Māori. An Indigenous-led New Zealand cost of illness (COI) study[[7]] using data from 2003–2007 found that inequities in illness, injury and potentially avoidable deaths between Māori and non-Māori children aged 0–14 years cost $62–200 million NZD per year in healthcare costs, years of life lost and lost caregiver wages. However, this included a net saving to the health sector of $24.7 million NZD per annum, while costing Māori families $827,175 NZD per annum in lost caregiver wages alone. These findings suggest that under-serving Māori children is cost-saving to the health system, with the additional costs associated with these inequities being met by families, highlighting a lack of financial incentive for the health sector to redress inequitable care.

Our analysis builds upon the 2012 estimate of the cost of Māori child health inequities.[[7]] We applied a broadly similar method, with more recent data up to 2014, and updated costs and coding definitions to provide an updated estimate of the cost of child health inequities. This study aimed to: 1) investigate inequities in potentially avoidable illness, injury and death between Māori and non-Māori children, and 2) estimate “excess” or “under-utilisation” of healthcare associated with inequities in potentially avoidable illness, injury and death, and 3) quantify the costs associated with any “inequity excess” observed.

Methods

Kaupapa Māori methodology

This study is positioned within a Kaupapa Māori methodology, which is an approach to research driven by a Māori worldview, recognising the complexity of Māori historical and contemporary realities.[[16]] A Kaupapa Māori approach purposely acknowledges and challenges the power dynamics that have created and maintain the unequal position of Māori within society. In this study, quantitative epidemiological and health economic methods are used as tools for investigating questions,[[7,17]] while critiquing at the same time the limitations of these methods in terms of reinforcing ethnically biased power dynamics and scientific understandings.

Study design

Ethical approval was granted by The University of Auckland Human Participants Ethics Committee (UAHPEC ref: 018621). We analysed de-identified data on deaths, hospitalisations, primary care and public outpatient consultations, as well as government-subsidised pharmaceuticals, laboratory and accident/injury claims for New Zealand. These data were obtained from comprehensive national datasets held by government agencies, and data were analysed for the year ranges outlined in Table 1. We applied the New Zealand Ministry of Health (MoH) prioritised ethnicity protocols so that anyone who identified as Māori, either as a single ethnicity or as one of multiple ethnic groupings, was considered Māori, with everyone else categorised as non-Māori.[[18]]

View Table 1.

Epidemiological methods

We obtained the number and crude rates of potentially avoidable hospitalisations (PAH) by ethnicity and age group (0–<1 year, 1–<5 years, 5–<15 years) from the national hospitalisation dataset (National Minimum Dataset). PAHs were defined using the International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10AM) codes for hospitalisations that are avoidable through access to timely, appropriate and affordable primary healthcare, population-based health promotion strategies and government policies to address social determinants of child health (e.g., income support, housing). We used the most recent ambulatory sensitive hospitalisation (ASH) codes available,[[19,20]] with the addition of broader codes for conditions amenable to interventions outside of primary care from Anderson et al.[[21]] Of note, this set of codes is restricted to those children aged 29 days and older, so our analysis of PAH was restricted to the 29 days–14 years age range. Estimates for the total Māori and non-Māori population for each year were extracted from Statistics NZ population estimates. We calculated the number of avoidable hospitalisations that would have occurred if Māori had the same rate as non-Māori in each age

group. The difference between the actual and the estimated avoidable hospitalisations in each age group was summed to provide the total “excess” avoidable hospitalisations for Māori.

Similar methods were applied to estimate the total excess number of avoidable deaths, accidents/injury claims, pharmaceutical and laboratory claims, general and mental health outpatient consultations and general practitioner and nursing visits separately. Avoidable deaths were defined using a combination of the most recent amenable mortality ICD-10AM codes from the MoH[[22]] along with the avoidable mortality codes described by Walsh and Grey[[23]] and the MoH. A full list of the ICD-10AM codes used for both mortality and hospitalisations is included as Appendices.

Costing methods

To calculate the costs associated with avoidable death, the value of a statistical life (VoSL) was defined as the 2014 price of $3.95 million NZD.[[24]] The years of life lost (YLL) by Māori children were calculated assuming that all would have lived to the 2014 life expectancy of their non-Māori counterparts of the same gender.[[25]] The VoSL was divided by the male and female non-Māori life expectancies to produce an annual VoSL for each age group and gender. The annual VoSL was then multiplied by the YLL to calculate the annual costs of the inequity in avoidable death. In a sensitivity analysis using four scenarios for discounting, 0%, 3% (the “base case”), 5% and 8%, results were stable across all discount rates.

To calculate the direct costs associated with healthcare utilisation, the unit costs for each admission, claim, or consultation in each of the categories were defined, as shown in Table 4. The cost of hospital care was assessed from hospital reimbursements by the MoH. Because hospital services are provided publicly rather than patient charges, the costs are internal weighted estimates (based on Disease Related Groups and length of stay) of the cost of each type of care.

Hospital and outpatient care for children has associated costs to parents/caregivers. These include loss of wages during hospital caregiving and out of pocket fees for primary care visits. Given that there were no user fees for primary care for children under 6 years of age between 2008–2014, our model assumed out-of-pocket fees applied to less than half of child primary care visits. The costing analysis was unable to go into finer scale by age groups due to the difficulty in further defining the respective unit costs for age sub-groups.

Results

Inequities in healthcare utilisation

Table 2 summarises the differences in hospitalisations and healthcare utilisation between Māori and non-Māori children. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37), with the disparity most marked for children aged under 1 year. This resulted in 3,987 extra hospitalisations of Māori children each year that would not have occurred if Māori had the same rates as non-Māori. The largest contributors to the excess hospitalisations for Māori were respiratory, digestive and skin diseases.

View Tables 2–6.

For most other types of healthcare, interactions measured that (with the exception of primary care nursing and mental health visits) Māori children were significantly less likely to receive services than non-Māori. Māori children received laboratory investigations at approximately half the rate (RR 0.59, 95% CI 0.59–0.59), resulting in over 80,000 fewer tests each year than if Māori had the same investigation rate as non-Māori. Māori children were less likely to receive prescription medications (RR 0.91, 95% CI 0.91–0.91). Accident and injury claims were lower for Māori (RR 0.75, 95% CI 0.75–0.75). Hospital outpatient appointments were also received far less by Māori (RR 0.78, 95% CI 0.78–0.78), and this difference was larger for Māori in younger age groups.

For primary care, Māori children were significantly less likely than non-Māori to see a doctor (RR 0.72, 95% CI 0.72–0.72). Māori children were more likely to see a primary care nurse, but the absolute number of nursing consultations was much smaller than doctor consultations.

Inequities in avoidable mortality

Of the 5,541 child deaths between 2003–2014, 54.2% were considered to be potentially avoidable using our classification. Māori children had higher avoidable death rates than non-Māori (RR 1.98, 95% CI 1.84–2.13), resulting in 594 extra avoidable Māori child deaths between 2003–2014 than would have occurred if Māori had the same avoidable mortality rate as non-Māori (Table 3). The biggest contributors to potentially avoidable mortality in Māori children were “external causes of morbidity and mortality” (including accidents and injuries), and “conditions originating in the perinatal period”. Because avoidable child deaths are more common in the youngest age group, the greatest number of excess avoidable deaths for Māori occurred in children <1 year of age.

Costs arising from inequities in healthcare utilisation and deaths

Table 4 shows the unit costs used for each variable, and the annual costs/savings to the government health sector for Māori:non-Māori inequities in utilisation. The higher rate of avoidable hospitalisation for Māori children cost the government health sector $9.2 million NZD each year. However, because the government health sector also received significant savings from the under-servicing of Māori children of other parts of the health system, there is a net annual saving of over $4 million NZD to the government (Table 4). Estimates of direct costs to caregivers associated with child admissions or appointments are also shown in Table 4.

Costs associated with the excess years of life lost as a result of higher rates of avoidable mortality in Māori children (Table 5) were over $175 million NZD per year. Approximately 60% of these YLL came from deaths in the 0–<1year age group.

In putting all of these cost calculations together (Table 6), the inequities we found between Māori and non-Māori children in terms of healthcare utilisation and avoidable deaths cost in excess of $170 million NZD each year between 2003–2014. The burden of this cost was not shared equally—this total figure consists of annual savings of $4 million NZD to the health sector, while society (and disproportionately Māori communities) bore an annual cost of around $175 million NZD.

Discussion

Our attempt to quantify the economic costs of Indigenous child health inequities in New Zealand recognises it is impossible and undesirable to reduce the value of a healthy life to monetary terms. However, we are able to demonstrate that there are economic consequences of Indigenous health inequities, and that these costs are borne disproportionately by Māori families while the government benefits from cost savings. In addition to being in contravention of Indigenous rights, child rights, Te Tiriti o Waitangi and social justice, the inequitable status quo is financially costly.

The pattern of health inequities and costs/savings are broadly consistent with Mills et al,[[7]] even though there were some differences in methods: we used more recent data from a wider year range; we used a different (although overlapping) subset of ICD-10AM codes; and we used a single method for calculating the VoSL, which we considered to be more stable. Our cost estimates must be taken as highly conservative. Not all potentially avoidable causes of hospitalisation or death were included—in particular, injury hospitalisations and sudden unexplained deaths in infancy deaths were not included. Our consideration of out-of-pocket costs is an underestimate—for example, we did not include lost caregiver income for outpatient appointments, recovery at home or transport costs. We have not been able to do justice to nor quantify the costs of pain, suffering, trauma, missed educational and employment opportunities and other important consequences of health inequities for Māori children and their families. Our study uses non-Māori children as the comparator group, which includes children of other marginalised ethnic minorities. For example, 14% of children in New Zealand are of Pacific ethnicity.[[26]] The disparity between Māori children and NZ European will be much wider than the disparity between Māori and non-Māori children.

Considerable efforts have been made over recent years to improve the quality and completeness of ethnicity data recording in New Zealand health datasets, however, weaknesses remain that result in a net under-counting of Māori healthcare interactions.[[27,28]] Between 2000–2005, while no Māori under-counting was found in the mortality database, the national hospitalisation database under-counted Māori by 5–15%, and in 2009 28% of Māori who identified as Māori in the New Zealand Health Survey were not recorded as Māori in primary care enrolment data.[[27]] Ethnicity data for pharmaceutical and laboratory claims and mental health consultations come from the National Health Index (NHI) number, and while efforts have been made to improve NHI ethnicity data, Māori are still under-counted.[[29]] This under-counting of Māori children could partially contribute to the lower utilisation we found for primary care, and underestimate hospitalisations.

We compared Māori utilisation to that of non-Māori children, but this does not mean that if Māori utilisation equated to non-Māori this would be an equitable/appropriate distribution of care. If adjusted for current levels of higher health need,[[3,30]] Māori children should expect much higher rates of utilisation than non-Māori children for all dimensions of healthcare measured in this study, just to deliver an equal healthcare response to the same health conditions. For example, our analysis found that Māori children were 0.75 times as likely to receive care or compensation for an injury through ACC. This is despite evidence that injury rates are higher in Māori children—Māori aged 0–14 years are 5 times more likely to experience a fatal injury and 1.5–2 times more likely to be hospitalised from a non-fatal injury than children of any other ethnic group in New Zealand.[[31]] The lower rate of medicines claims for Māori children is alarming given they need more medicines than non-Māori based on burden of disease. This is consistent with previous findings that, adjusted for need, Māori receipt of prescription medicines is lower than non-Māori for all age groups.[[32]]

By any measure, the health system is clearly failing to serve Māori children. It is beyond this study to interrogate the reasons for this, but there are multiple complex factors that drive Indigenous health inequities including unfair historical and contemporary power imbalances, differential exposure to the social determinants of health[[28]] [[33]] and racist health policies, organisations and models of care. Health professionals and healthcare organisations are important contributors to inequities in health care[[28,34]] and there is growing recognition of the importance of the need to improve cultural safety at both individual health practitioner and organisational levels to achieve equitable health care.[[35]] Unlike many countries, New Zealand’s healthcare system is free at the point of care (including free primary care for children under 6 years of age between 2008–2014, a policy which has since been extended up to 14 years of age). This further demonstrates that even in a “free” healthcare system, inequities in access exist. Māori families are highly over-represented in the poorest socio-economic deciles and even small incidental costs such as transport, parking and subsidised prescription charges can make healthcare unaffordable.

The healthcare utilisation picture in our study is one of a failure to deliver care for Māori children upstream via primary care, resulting in the need for more downstream and serious intervention in the form of hospitalisations. However, like Mills et al. found in 2012,[[7]] this does not result in higher net cost overall to the government health sector. It actually costs the government less to admit Māori children to hospital for ambulatory sensitive conditions than it would to prevent or treat them early in primary care. This means the government health sector does not have a financial imperative to do things better.

Even as a highly conservative estimate, at $170 million NZD each year, the cost of the current Māori child health inequities is clearly significant. But what our study demonstrates is that the cost burden is not shared equally—the savings from these inequities benefit the government health sector, while the bulk of the costs are borne by Māori families. From a whole-of-government perspective, the costs of lost productivity and income to non-health sectors is likely considerable but outside the scope of this study. The distribution of costs is a clear breach of Te Tiriti o Waitangi and contributes to the further exacerbation of poverty and economic drivers of health inequities for Māori in New Zealand.

Conclusions

There are economic consequences of the health inequities experienced by Māori children in New Zealand. The costs ($175 million NZD per year) are borne disproportionately by Māori families while the government health sector benefits from net cost savings ($4 million NZD per year). This study highlights: 1) that delaying healthcare for Māori children through under-provision of primary care resulting in higher rates of hospitalisations is cheaper for the government health sector, and 2) that there is no financial incentive for the government health sector to intervene to reduce health inequities for Māori children, and 3) that “doing nothing” to change the current child health inequities has a high economic cost to Māori families and society.

View Appendices.

Summary

Abstract

Aim

This study estimates of the cost of Indigenous child health inequities in New Zealand.

Method

Standard quantitative epidemiological and cost of illness methodologies were used within a Kaupapa Māori framework. Data for 2003–2014 on children under 15 years were obtained from government datasets. Rates of potentially avoidable hospitalisations and mortality, as well as excess or under-utilisation were calculated. Publicly funded health sector costs, costs to families and costs of premature mortality were used to estimate the costs (or savings) of inequities.

Results

Māori children had lower utilisation rates than non-Māori for primary healthcare, outpatient care, medicines, laboratory investigations and care after an accident/injury. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37) and death (RR 1.98, 95% CI 1.84–2.13). Inequalities between Māori and non-Māori children cost in excess of $170 million NZD each year. This includes an annual net savings for the government health sector of $4 million NZD, with an annual cost to society of around $175 million NZD.

Conclusion

The under-serving of Māori children in the health sector saves the government health system money, yet imposes a huge cost on Māori families and society. In addition to avoiding considerable human suffering, reducing child health inequities would result in significant economic benefits.

Author Information

Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Chao Li: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Karen Wright: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Ricci Harri:, Te Rōpū Rangahau Hauora a Eru Pōmare, University of Otago, Wellington, New Zealand. Belinda Loring: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Papaarangi Reid: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Acknowledgements

Correspondence

Dr Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Correspondence Email

sj.paine@auckland.ac.nz

Competing Interests

Nil.

1) Braveman P, Gruskin S. Defining equity in health. J Epidemiol Community Health. 2003 Apr;57(4):254-8.

2) Stats NZ. Growth in life expectancy slows. 2021. https://www.stats.govt.nz/news/growth-in-life-expectancy-slows (accessed 2021 May).

3) Simpson J, Duncanson, M., Oben, G., Adams, J., Wicken, A., Pierson, M., Gallagher, S. Te Ohonga Ake The Health Status of Māori Children and Young People in New Zealand Series Two Dunedin: New Zealand Child and Youth Epidemiology Service. University of Otago. 2017.

4) United Nations Declaration on the Rights of Indigenous Peoples: resolution/adopted by the General Assembly. Oct 2 2007. A/RES/61/295. 2007.

5) World Health Assembly. Social determinants of health. Resolution WHA7416. Geneva. 2021.

6) LaVeist TA, Gaskin D, Richard P. Estimating the economic burden of racial health inequalities in the United States. Int J Health Serv. 2011;41(2):231-8.

7) Mills C, Reid P, Vaithianathan R. The cost of child health inequalities in Aotearoa New Zealand: a preliminary scoping study. BMC Public Health. 2012;12:384.

8) Reid P, Paine S-J, Te Ao B, Willing E, Wyeth E, Vaithianathan R. Estimating the economic costs of ethnic health inequities: protocol for a prevalence-based cost-of-illness study in New Zealand (2003–2014). BMJ Open. 2018;8(6):e020763.

9) Elias A, Paradies Y. Estimating the mental health costs of racial discrimination. BMC Public Health. 2016;16(1):1205.

10) Public Health Agency of Canada. The direct economic burden of socio-economic health inequalities in canada. Ottawa, ON: Public Health Agency of Canada. 2016.

11) Frontier Economics. Estimating the Costs of Health Inequalities. A report prepared for the Marmot Review. London, UK: Frontier Economics Ltd. 2010.

12) Ministry of Health. New Zealand Health Strategy: Future Direction. Wellington: Ministry of Health. 2016.

13) New Zealand Public Health and Disability Act 2000. Public Act 2000 No 91. New Zealand. 2000.

14) Ministry of Health. Whakamaua: Māori Health Action Plan 2020–2025. Wellington: Ministry of Health. 2020.

15) UN General Assembly. Convention on the Rights of the Child. United Nations. Nov 20 1989.

16) Smith LT. Decolonizing Methodologies: Research and Indigenous Peoples. 2nd ed. London: Zed Books. 2012.

17) Simmonds S, Robson B, Cram F, Purdie G. Kaupapa Māori Epidemiology. Australas Epidemiol. 2008;15(1):2-6.

18) Ministry of Health. HISO 10001:2017 Ethnicity Data Protocols. Wellington: Ministry of Health. 2017.

19) Te Rōpū Rangahau Hauora a Eru Pōmare. District Health Board Māori Health Profiles 2015. Updated 2016 Apr ed. Wellington: University of Otago. 2016.

20) Ministry of Health. Wai 2575 Māori Health Trends Report. Wellington: Ministry of Health. 2019.

21) Anderson P, Craig E, Jackson G, Jackson C. Developing a tool to monitor potentially avoidable and ambulatory care sensitive hospitalisations in New Zealand children. N Z Med J. 2012;125(1366):25-37.

22) Ministry of Health. A Guide to Using Amendable Mortality as a System Level Measure 2018. Wellington: Ministry of Health. 2018.

23) Walsh M, Grey C. The contribution of avoidable mortality to the life expectancy gap in Māori and Pacific populations in New Zealand-a decomposition analysis. N Z Med J. 2019;132(1492):46-60.

24) Clough P, Guria, J., & Bealing, M. Approaches to valuing injury and mortality risk in transport assessments. NZ Transport Agency Research Report No 571. 2015.

25) Statistics New Zealand. New Zealand period life tables: 2012–14. Statistics New Zealand. 2015.

26) Office of the Childrens Commissioner. Population, ages and ethnicities of children. Wellington, New Zealand. 2018 Mar.

27) Cormack D, McLeod M. Improving and maintaining quality in ethnicity data collections in the health and disability sector. Wellington: Te Rōpū Rangahau Hauora a Eru Pōmare. 2010.

28) Robson B, Harris R, editors. Hauora: Māori Standards of Health IV. A study of the years 2000-2005. Wellington: Te Rōpū Rangahau Hauora a Eru Pōmare. 2007.

29) Cleary L. Using ethnicity data in health statistics. Version 1.1. Wellington: Ministry of Health; 2021.

30) Simpson J, Adams J, Oben G, Wicken A, & Duncanson, M. The Determinants of Health for Māori Children and Young People in New Zealand (Determinants of Health for Children and Young People No. 2). Dunedin: New Zealand Child and Youth Epidemiology Service, University of Otago. 2016.

31) Safekids Aotearoa. Child Unintentional Deaths and Injuries in New Zealand, and Prevention Strategies. Auckland: Safekids Aotearoa. 2015.

32) Metcalfe S, Laking G, Arnold J. Variation in the use of medicines by ethnicity during 2006/07 in New Zealand: a preliminary analysis. N Z Med J. 2013;126(1384):14-41.

33) World Health Organization. Commission on Social Determinants of Health. Final report. Geneva: World Health Organization. 2008.

34) Smedley B, Stith A, Nelson A, editors. Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care. Washington: National Academy Press; 2002.

35) Curtis E, Jones R, Tipene-Leach D, et al. Why cultural safety rather than cultural competency is required to achieve health equity: a literature review and recommended definition. Int J Equity Health. 2019;18(1):174.

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Health inequities by ethnicity are unjust, preventable and amenable to intervention.[[1]] Indigenous peoples, where measured, are often the most marginalised. In Aotearoa New Zealand, Māori have a life expectancy 7.5 years fewer[[2]] than non-Māori, and experience higher rates of unmet health need and disease-specific mortality rates. Māori infants are almost twice as likely to die as non-Māori, non-Pacific infants while ambulatory sensitive hospitalisation (ASH) rates for Māori 0–4-year-olds are over one and a half times higher than non-Māori, non-Pacific ASH rates.[[3]]

There are strong social justice and human rights arguments for intervening in ethnic health inequities, and governments have made firm commitments to do so.[[4,5]] Yet inequities, and racist policies and healthcare systems, remain. In addition to the health, social and moral costs, health inequities have significant economic costs: on families, on communities, on health systems and on national economies.[[6–11]] This growing evidence base contradicts the misconception that eliminating health inequities is costly, but rather the cost of “doing nothing” to address inequity is itself significant.

Health equity, particularly for Māori, is an objective within key New Zealand health policy documents,[[12–14]] and New Zealand changed its position to endorse the UN Declaration on the Rights of Indigenous Peoples in 2010. New Zealand has also ratified the UN Convention on the Rights of the Child, which recognises the right of children to the highest attainable standard of health and healthcare, and to freedom from all forms of discrimination including on the basis of ethnicity.[[15]] Te Tiriti o Waitangi (the Treaty of Waitangi) provides an additional constitutional and legal obligation for the government to ensure equity for Māori. Despite this, very little is known about the costs associated with the disproportionate burden of illness and premature death experienced by Māori. An Indigenous-led New Zealand cost of illness (COI) study[[7]] using data from 2003–2007 found that inequities in illness, injury and potentially avoidable deaths between Māori and non-Māori children aged 0–14 years cost $62–200 million NZD per year in healthcare costs, years of life lost and lost caregiver wages. However, this included a net saving to the health sector of $24.7 million NZD per annum, while costing Māori families $827,175 NZD per annum in lost caregiver wages alone. These findings suggest that under-serving Māori children is cost-saving to the health system, with the additional costs associated with these inequities being met by families, highlighting a lack of financial incentive for the health sector to redress inequitable care.

Our analysis builds upon the 2012 estimate of the cost of Māori child health inequities.[[7]] We applied a broadly similar method, with more recent data up to 2014, and updated costs and coding definitions to provide an updated estimate of the cost of child health inequities. This study aimed to: 1) investigate inequities in potentially avoidable illness, injury and death between Māori and non-Māori children, and 2) estimate “excess” or “under-utilisation” of healthcare associated with inequities in potentially avoidable illness, injury and death, and 3) quantify the costs associated with any “inequity excess” observed.

Methods

Kaupapa Māori methodology

This study is positioned within a Kaupapa Māori methodology, which is an approach to research driven by a Māori worldview, recognising the complexity of Māori historical and contemporary realities.[[16]] A Kaupapa Māori approach purposely acknowledges and challenges the power dynamics that have created and maintain the unequal position of Māori within society. In this study, quantitative epidemiological and health economic methods are used as tools for investigating questions,[[7,17]] while critiquing at the same time the limitations of these methods in terms of reinforcing ethnically biased power dynamics and scientific understandings.

Study design

Ethical approval was granted by The University of Auckland Human Participants Ethics Committee (UAHPEC ref: 018621). We analysed de-identified data on deaths, hospitalisations, primary care and public outpatient consultations, as well as government-subsidised pharmaceuticals, laboratory and accident/injury claims for New Zealand. These data were obtained from comprehensive national datasets held by government agencies, and data were analysed for the year ranges outlined in Table 1. We applied the New Zealand Ministry of Health (MoH) prioritised ethnicity protocols so that anyone who identified as Māori, either as a single ethnicity or as one of multiple ethnic groupings, was considered Māori, with everyone else categorised as non-Māori.[[18]]

View Table 1.

Epidemiological methods

We obtained the number and crude rates of potentially avoidable hospitalisations (PAH) by ethnicity and age group (0–<1 year, 1–<5 years, 5–<15 years) from the national hospitalisation dataset (National Minimum Dataset). PAHs were defined using the International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10AM) codes for hospitalisations that are avoidable through access to timely, appropriate and affordable primary healthcare, population-based health promotion strategies and government policies to address social determinants of child health (e.g., income support, housing). We used the most recent ambulatory sensitive hospitalisation (ASH) codes available,[[19,20]] with the addition of broader codes for conditions amenable to interventions outside of primary care from Anderson et al.[[21]] Of note, this set of codes is restricted to those children aged 29 days and older, so our analysis of PAH was restricted to the 29 days–14 years age range. Estimates for the total Māori and non-Māori population for each year were extracted from Statistics NZ population estimates. We calculated the number of avoidable hospitalisations that would have occurred if Māori had the same rate as non-Māori in each age

group. The difference between the actual and the estimated avoidable hospitalisations in each age group was summed to provide the total “excess” avoidable hospitalisations for Māori.

Similar methods were applied to estimate the total excess number of avoidable deaths, accidents/injury claims, pharmaceutical and laboratory claims, general and mental health outpatient consultations and general practitioner and nursing visits separately. Avoidable deaths were defined using a combination of the most recent amenable mortality ICD-10AM codes from the MoH[[22]] along with the avoidable mortality codes described by Walsh and Grey[[23]] and the MoH. A full list of the ICD-10AM codes used for both mortality and hospitalisations is included as Appendices.

Costing methods

To calculate the costs associated with avoidable death, the value of a statistical life (VoSL) was defined as the 2014 price of $3.95 million NZD.[[24]] The years of life lost (YLL) by Māori children were calculated assuming that all would have lived to the 2014 life expectancy of their non-Māori counterparts of the same gender.[[25]] The VoSL was divided by the male and female non-Māori life expectancies to produce an annual VoSL for each age group and gender. The annual VoSL was then multiplied by the YLL to calculate the annual costs of the inequity in avoidable death. In a sensitivity analysis using four scenarios for discounting, 0%, 3% (the “base case”), 5% and 8%, results were stable across all discount rates.

To calculate the direct costs associated with healthcare utilisation, the unit costs for each admission, claim, or consultation in each of the categories were defined, as shown in Table 4. The cost of hospital care was assessed from hospital reimbursements by the MoH. Because hospital services are provided publicly rather than patient charges, the costs are internal weighted estimates (based on Disease Related Groups and length of stay) of the cost of each type of care.

Hospital and outpatient care for children has associated costs to parents/caregivers. These include loss of wages during hospital caregiving and out of pocket fees for primary care visits. Given that there were no user fees for primary care for children under 6 years of age between 2008–2014, our model assumed out-of-pocket fees applied to less than half of child primary care visits. The costing analysis was unable to go into finer scale by age groups due to the difficulty in further defining the respective unit costs for age sub-groups.

Results

Inequities in healthcare utilisation

Table 2 summarises the differences in hospitalisations and healthcare utilisation between Māori and non-Māori children. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37), with the disparity most marked for children aged under 1 year. This resulted in 3,987 extra hospitalisations of Māori children each year that would not have occurred if Māori had the same rates as non-Māori. The largest contributors to the excess hospitalisations for Māori were respiratory, digestive and skin diseases.

View Tables 2–6.

For most other types of healthcare, interactions measured that (with the exception of primary care nursing and mental health visits) Māori children were significantly less likely to receive services than non-Māori. Māori children received laboratory investigations at approximately half the rate (RR 0.59, 95% CI 0.59–0.59), resulting in over 80,000 fewer tests each year than if Māori had the same investigation rate as non-Māori. Māori children were less likely to receive prescription medications (RR 0.91, 95% CI 0.91–0.91). Accident and injury claims were lower for Māori (RR 0.75, 95% CI 0.75–0.75). Hospital outpatient appointments were also received far less by Māori (RR 0.78, 95% CI 0.78–0.78), and this difference was larger for Māori in younger age groups.

For primary care, Māori children were significantly less likely than non-Māori to see a doctor (RR 0.72, 95% CI 0.72–0.72). Māori children were more likely to see a primary care nurse, but the absolute number of nursing consultations was much smaller than doctor consultations.

Inequities in avoidable mortality

Of the 5,541 child deaths between 2003–2014, 54.2% were considered to be potentially avoidable using our classification. Māori children had higher avoidable death rates than non-Māori (RR 1.98, 95% CI 1.84–2.13), resulting in 594 extra avoidable Māori child deaths between 2003–2014 than would have occurred if Māori had the same avoidable mortality rate as non-Māori (Table 3). The biggest contributors to potentially avoidable mortality in Māori children were “external causes of morbidity and mortality” (including accidents and injuries), and “conditions originating in the perinatal period”. Because avoidable child deaths are more common in the youngest age group, the greatest number of excess avoidable deaths for Māori occurred in children <1 year of age.

Costs arising from inequities in healthcare utilisation and deaths

Table 4 shows the unit costs used for each variable, and the annual costs/savings to the government health sector for Māori:non-Māori inequities in utilisation. The higher rate of avoidable hospitalisation for Māori children cost the government health sector $9.2 million NZD each year. However, because the government health sector also received significant savings from the under-servicing of Māori children of other parts of the health system, there is a net annual saving of over $4 million NZD to the government (Table 4). Estimates of direct costs to caregivers associated with child admissions or appointments are also shown in Table 4.

Costs associated with the excess years of life lost as a result of higher rates of avoidable mortality in Māori children (Table 5) were over $175 million NZD per year. Approximately 60% of these YLL came from deaths in the 0–<1year age group.

In putting all of these cost calculations together (Table 6), the inequities we found between Māori and non-Māori children in terms of healthcare utilisation and avoidable deaths cost in excess of $170 million NZD each year between 2003–2014. The burden of this cost was not shared equally—this total figure consists of annual savings of $4 million NZD to the health sector, while society (and disproportionately Māori communities) bore an annual cost of around $175 million NZD.

Discussion

Our attempt to quantify the economic costs of Indigenous child health inequities in New Zealand recognises it is impossible and undesirable to reduce the value of a healthy life to monetary terms. However, we are able to demonstrate that there are economic consequences of Indigenous health inequities, and that these costs are borne disproportionately by Māori families while the government benefits from cost savings. In addition to being in contravention of Indigenous rights, child rights, Te Tiriti o Waitangi and social justice, the inequitable status quo is financially costly.

The pattern of health inequities and costs/savings are broadly consistent with Mills et al,[[7]] even though there were some differences in methods: we used more recent data from a wider year range; we used a different (although overlapping) subset of ICD-10AM codes; and we used a single method for calculating the VoSL, which we considered to be more stable. Our cost estimates must be taken as highly conservative. Not all potentially avoidable causes of hospitalisation or death were included—in particular, injury hospitalisations and sudden unexplained deaths in infancy deaths were not included. Our consideration of out-of-pocket costs is an underestimate—for example, we did not include lost caregiver income for outpatient appointments, recovery at home or transport costs. We have not been able to do justice to nor quantify the costs of pain, suffering, trauma, missed educational and employment opportunities and other important consequences of health inequities for Māori children and their families. Our study uses non-Māori children as the comparator group, which includes children of other marginalised ethnic minorities. For example, 14% of children in New Zealand are of Pacific ethnicity.[[26]] The disparity between Māori children and NZ European will be much wider than the disparity between Māori and non-Māori children.

Considerable efforts have been made over recent years to improve the quality and completeness of ethnicity data recording in New Zealand health datasets, however, weaknesses remain that result in a net under-counting of Māori healthcare interactions.[[27,28]] Between 2000–2005, while no Māori under-counting was found in the mortality database, the national hospitalisation database under-counted Māori by 5–15%, and in 2009 28% of Māori who identified as Māori in the New Zealand Health Survey were not recorded as Māori in primary care enrolment data.[[27]] Ethnicity data for pharmaceutical and laboratory claims and mental health consultations come from the National Health Index (NHI) number, and while efforts have been made to improve NHI ethnicity data, Māori are still under-counted.[[29]] This under-counting of Māori children could partially contribute to the lower utilisation we found for primary care, and underestimate hospitalisations.

We compared Māori utilisation to that of non-Māori children, but this does not mean that if Māori utilisation equated to non-Māori this would be an equitable/appropriate distribution of care. If adjusted for current levels of higher health need,[[3,30]] Māori children should expect much higher rates of utilisation than non-Māori children for all dimensions of healthcare measured in this study, just to deliver an equal healthcare response to the same health conditions. For example, our analysis found that Māori children were 0.75 times as likely to receive care or compensation for an injury through ACC. This is despite evidence that injury rates are higher in Māori children—Māori aged 0–14 years are 5 times more likely to experience a fatal injury and 1.5–2 times more likely to be hospitalised from a non-fatal injury than children of any other ethnic group in New Zealand.[[31]] The lower rate of medicines claims for Māori children is alarming given they need more medicines than non-Māori based on burden of disease. This is consistent with previous findings that, adjusted for need, Māori receipt of prescription medicines is lower than non-Māori for all age groups.[[32]]

By any measure, the health system is clearly failing to serve Māori children. It is beyond this study to interrogate the reasons for this, but there are multiple complex factors that drive Indigenous health inequities including unfair historical and contemporary power imbalances, differential exposure to the social determinants of health[[28]] [[33]] and racist health policies, organisations and models of care. Health professionals and healthcare organisations are important contributors to inequities in health care[[28,34]] and there is growing recognition of the importance of the need to improve cultural safety at both individual health practitioner and organisational levels to achieve equitable health care.[[35]] Unlike many countries, New Zealand’s healthcare system is free at the point of care (including free primary care for children under 6 years of age between 2008–2014, a policy which has since been extended up to 14 years of age). This further demonstrates that even in a “free” healthcare system, inequities in access exist. Māori families are highly over-represented in the poorest socio-economic deciles and even small incidental costs such as transport, parking and subsidised prescription charges can make healthcare unaffordable.

The healthcare utilisation picture in our study is one of a failure to deliver care for Māori children upstream via primary care, resulting in the need for more downstream and serious intervention in the form of hospitalisations. However, like Mills et al. found in 2012,[[7]] this does not result in higher net cost overall to the government health sector. It actually costs the government less to admit Māori children to hospital for ambulatory sensitive conditions than it would to prevent or treat them early in primary care. This means the government health sector does not have a financial imperative to do things better.

Even as a highly conservative estimate, at $170 million NZD each year, the cost of the current Māori child health inequities is clearly significant. But what our study demonstrates is that the cost burden is not shared equally—the savings from these inequities benefit the government health sector, while the bulk of the costs are borne by Māori families. From a whole-of-government perspective, the costs of lost productivity and income to non-health sectors is likely considerable but outside the scope of this study. The distribution of costs is a clear breach of Te Tiriti o Waitangi and contributes to the further exacerbation of poverty and economic drivers of health inequities for Māori in New Zealand.

Conclusions

There are economic consequences of the health inequities experienced by Māori children in New Zealand. The costs ($175 million NZD per year) are borne disproportionately by Māori families while the government health sector benefits from net cost savings ($4 million NZD per year). This study highlights: 1) that delaying healthcare for Māori children through under-provision of primary care resulting in higher rates of hospitalisations is cheaper for the government health sector, and 2) that there is no financial incentive for the government health sector to intervene to reduce health inequities for Māori children, and 3) that “doing nothing” to change the current child health inequities has a high economic cost to Māori families and society.

View Appendices.

Summary

Abstract

Aim

This study estimates of the cost of Indigenous child health inequities in New Zealand.

Method

Standard quantitative epidemiological and cost of illness methodologies were used within a Kaupapa Māori framework. Data for 2003–2014 on children under 15 years were obtained from government datasets. Rates of potentially avoidable hospitalisations and mortality, as well as excess or under-utilisation were calculated. Publicly funded health sector costs, costs to families and costs of premature mortality were used to estimate the costs (or savings) of inequities.

Results

Māori children had lower utilisation rates than non-Māori for primary healthcare, outpatient care, medicines, laboratory investigations and care after an accident/injury. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37) and death (RR 1.98, 95% CI 1.84–2.13). Inequalities between Māori and non-Māori children cost in excess of $170 million NZD each year. This includes an annual net savings for the government health sector of $4 million NZD, with an annual cost to society of around $175 million NZD.

Conclusion

The under-serving of Māori children in the health sector saves the government health system money, yet imposes a huge cost on Māori families and society. In addition to avoiding considerable human suffering, reducing child health inequities would result in significant economic benefits.

Author Information

Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Chao Li: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Karen Wright: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Ricci Harri:, Te Rōpū Rangahau Hauora a Eru Pōmare, University of Otago, Wellington, New Zealand. Belinda Loring: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Papaarangi Reid: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Acknowledgements

Correspondence

Dr Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Correspondence Email

sj.paine@auckland.ac.nz

Competing Interests

Nil.

1) Braveman P, Gruskin S. Defining equity in health. J Epidemiol Community Health. 2003 Apr;57(4):254-8.

2) Stats NZ. Growth in life expectancy slows. 2021. https://www.stats.govt.nz/news/growth-in-life-expectancy-slows (accessed 2021 May).

3) Simpson J, Duncanson, M., Oben, G., Adams, J., Wicken, A., Pierson, M., Gallagher, S. Te Ohonga Ake The Health Status of Māori Children and Young People in New Zealand Series Two Dunedin: New Zealand Child and Youth Epidemiology Service. University of Otago. 2017.

4) United Nations Declaration on the Rights of Indigenous Peoples: resolution/adopted by the General Assembly. Oct 2 2007. A/RES/61/295. 2007.

5) World Health Assembly. Social determinants of health. Resolution WHA7416. Geneva. 2021.

6) LaVeist TA, Gaskin D, Richard P. Estimating the economic burden of racial health inequalities in the United States. Int J Health Serv. 2011;41(2):231-8.

7) Mills C, Reid P, Vaithianathan R. The cost of child health inequalities in Aotearoa New Zealand: a preliminary scoping study. BMC Public Health. 2012;12:384.

8) Reid P, Paine S-J, Te Ao B, Willing E, Wyeth E, Vaithianathan R. Estimating the economic costs of ethnic health inequities: protocol for a prevalence-based cost-of-illness study in New Zealand (2003–2014). BMJ Open. 2018;8(6):e020763.

9) Elias A, Paradies Y. Estimating the mental health costs of racial discrimination. BMC Public Health. 2016;16(1):1205.

10) Public Health Agency of Canada. The direct economic burden of socio-economic health inequalities in canada. Ottawa, ON: Public Health Agency of Canada. 2016.

11) Frontier Economics. Estimating the Costs of Health Inequalities. A report prepared for the Marmot Review. London, UK: Frontier Economics Ltd. 2010.

12) Ministry of Health. New Zealand Health Strategy: Future Direction. Wellington: Ministry of Health. 2016.

13) New Zealand Public Health and Disability Act 2000. Public Act 2000 No 91. New Zealand. 2000.

14) Ministry of Health. Whakamaua: Māori Health Action Plan 2020–2025. Wellington: Ministry of Health. 2020.

15) UN General Assembly. Convention on the Rights of the Child. United Nations. Nov 20 1989.

16) Smith LT. Decolonizing Methodologies: Research and Indigenous Peoples. 2nd ed. London: Zed Books. 2012.

17) Simmonds S, Robson B, Cram F, Purdie G. Kaupapa Māori Epidemiology. Australas Epidemiol. 2008;15(1):2-6.

18) Ministry of Health. HISO 10001:2017 Ethnicity Data Protocols. Wellington: Ministry of Health. 2017.

19) Te Rōpū Rangahau Hauora a Eru Pōmare. District Health Board Māori Health Profiles 2015. Updated 2016 Apr ed. Wellington: University of Otago. 2016.

20) Ministry of Health. Wai 2575 Māori Health Trends Report. Wellington: Ministry of Health. 2019.

21) Anderson P, Craig E, Jackson G, Jackson C. Developing a tool to monitor potentially avoidable and ambulatory care sensitive hospitalisations in New Zealand children. N Z Med J. 2012;125(1366):25-37.

22) Ministry of Health. A Guide to Using Amendable Mortality as a System Level Measure 2018. Wellington: Ministry of Health. 2018.

23) Walsh M, Grey C. The contribution of avoidable mortality to the life expectancy gap in Māori and Pacific populations in New Zealand-a decomposition analysis. N Z Med J. 2019;132(1492):46-60.

24) Clough P, Guria, J., & Bealing, M. Approaches to valuing injury and mortality risk in transport assessments. NZ Transport Agency Research Report No 571. 2015.

25) Statistics New Zealand. New Zealand period life tables: 2012–14. Statistics New Zealand. 2015.

26) Office of the Childrens Commissioner. Population, ages and ethnicities of children. Wellington, New Zealand. 2018 Mar.

27) Cormack D, McLeod M. Improving and maintaining quality in ethnicity data collections in the health and disability sector. Wellington: Te Rōpū Rangahau Hauora a Eru Pōmare. 2010.

28) Robson B, Harris R, editors. Hauora: Māori Standards of Health IV. A study of the years 2000-2005. Wellington: Te Rōpū Rangahau Hauora a Eru Pōmare. 2007.

29) Cleary L. Using ethnicity data in health statistics. Version 1.1. Wellington: Ministry of Health; 2021.

30) Simpson J, Adams J, Oben G, Wicken A, & Duncanson, M. The Determinants of Health for Māori Children and Young People in New Zealand (Determinants of Health for Children and Young People No. 2). Dunedin: New Zealand Child and Youth Epidemiology Service, University of Otago. 2016.

31) Safekids Aotearoa. Child Unintentional Deaths and Injuries in New Zealand, and Prevention Strategies. Auckland: Safekids Aotearoa. 2015.

32) Metcalfe S, Laking G, Arnold J. Variation in the use of medicines by ethnicity during 2006/07 in New Zealand: a preliminary analysis. N Z Med J. 2013;126(1384):14-41.

33) World Health Organization. Commission on Social Determinants of Health. Final report. Geneva: World Health Organization. 2008.

34) Smedley B, Stith A, Nelson A, editors. Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care. Washington: National Academy Press; 2002.

35) Curtis E, Jones R, Tipene-Leach D, et al. Why cultural safety rather than cultural competency is required to achieve health equity: a literature review and recommended definition. Int J Equity Health. 2019;18(1):174.

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Health inequities by ethnicity are unjust, preventable and amenable to intervention.[[1]] Indigenous peoples, where measured, are often the most marginalised. In Aotearoa New Zealand, Māori have a life expectancy 7.5 years fewer[[2]] than non-Māori, and experience higher rates of unmet health need and disease-specific mortality rates. Māori infants are almost twice as likely to die as non-Māori, non-Pacific infants while ambulatory sensitive hospitalisation (ASH) rates for Māori 0–4-year-olds are over one and a half times higher than non-Māori, non-Pacific ASH rates.[[3]]

There are strong social justice and human rights arguments for intervening in ethnic health inequities, and governments have made firm commitments to do so.[[4,5]] Yet inequities, and racist policies and healthcare systems, remain. In addition to the health, social and moral costs, health inequities have significant economic costs: on families, on communities, on health systems and on national economies.[[6–11]] This growing evidence base contradicts the misconception that eliminating health inequities is costly, but rather the cost of “doing nothing” to address inequity is itself significant.

Health equity, particularly for Māori, is an objective within key New Zealand health policy documents,[[12–14]] and New Zealand changed its position to endorse the UN Declaration on the Rights of Indigenous Peoples in 2010. New Zealand has also ratified the UN Convention on the Rights of the Child, which recognises the right of children to the highest attainable standard of health and healthcare, and to freedom from all forms of discrimination including on the basis of ethnicity.[[15]] Te Tiriti o Waitangi (the Treaty of Waitangi) provides an additional constitutional and legal obligation for the government to ensure equity for Māori. Despite this, very little is known about the costs associated with the disproportionate burden of illness and premature death experienced by Māori. An Indigenous-led New Zealand cost of illness (COI) study[[7]] using data from 2003–2007 found that inequities in illness, injury and potentially avoidable deaths between Māori and non-Māori children aged 0–14 years cost $62–200 million NZD per year in healthcare costs, years of life lost and lost caregiver wages. However, this included a net saving to the health sector of $24.7 million NZD per annum, while costing Māori families $827,175 NZD per annum in lost caregiver wages alone. These findings suggest that under-serving Māori children is cost-saving to the health system, with the additional costs associated with these inequities being met by families, highlighting a lack of financial incentive for the health sector to redress inequitable care.

Our analysis builds upon the 2012 estimate of the cost of Māori child health inequities.[[7]] We applied a broadly similar method, with more recent data up to 2014, and updated costs and coding definitions to provide an updated estimate of the cost of child health inequities. This study aimed to: 1) investigate inequities in potentially avoidable illness, injury and death between Māori and non-Māori children, and 2) estimate “excess” or “under-utilisation” of healthcare associated with inequities in potentially avoidable illness, injury and death, and 3) quantify the costs associated with any “inequity excess” observed.

Methods

Kaupapa Māori methodology

This study is positioned within a Kaupapa Māori methodology, which is an approach to research driven by a Māori worldview, recognising the complexity of Māori historical and contemporary realities.[[16]] A Kaupapa Māori approach purposely acknowledges and challenges the power dynamics that have created and maintain the unequal position of Māori within society. In this study, quantitative epidemiological and health economic methods are used as tools for investigating questions,[[7,17]] while critiquing at the same time the limitations of these methods in terms of reinforcing ethnically biased power dynamics and scientific understandings.

Study design

Ethical approval was granted by The University of Auckland Human Participants Ethics Committee (UAHPEC ref: 018621). We analysed de-identified data on deaths, hospitalisations, primary care and public outpatient consultations, as well as government-subsidised pharmaceuticals, laboratory and accident/injury claims for New Zealand. These data were obtained from comprehensive national datasets held by government agencies, and data were analysed for the year ranges outlined in Table 1. We applied the New Zealand Ministry of Health (MoH) prioritised ethnicity protocols so that anyone who identified as Māori, either as a single ethnicity or as one of multiple ethnic groupings, was considered Māori, with everyone else categorised as non-Māori.[[18]]

View Table 1.

Epidemiological methods

We obtained the number and crude rates of potentially avoidable hospitalisations (PAH) by ethnicity and age group (0–<1 year, 1–<5 years, 5–<15 years) from the national hospitalisation dataset (National Minimum Dataset). PAHs were defined using the International Statistical Classification of Diseases and Related Health Problems, Tenth Revision, Australian Modification (ICD-10AM) codes for hospitalisations that are avoidable through access to timely, appropriate and affordable primary healthcare, population-based health promotion strategies and government policies to address social determinants of child health (e.g., income support, housing). We used the most recent ambulatory sensitive hospitalisation (ASH) codes available,[[19,20]] with the addition of broader codes for conditions amenable to interventions outside of primary care from Anderson et al.[[21]] Of note, this set of codes is restricted to those children aged 29 days and older, so our analysis of PAH was restricted to the 29 days–14 years age range. Estimates for the total Māori and non-Māori population for each year were extracted from Statistics NZ population estimates. We calculated the number of avoidable hospitalisations that would have occurred if Māori had the same rate as non-Māori in each age

group. The difference between the actual and the estimated avoidable hospitalisations in each age group was summed to provide the total “excess” avoidable hospitalisations for Māori.

Similar methods were applied to estimate the total excess number of avoidable deaths, accidents/injury claims, pharmaceutical and laboratory claims, general and mental health outpatient consultations and general practitioner and nursing visits separately. Avoidable deaths were defined using a combination of the most recent amenable mortality ICD-10AM codes from the MoH[[22]] along with the avoidable mortality codes described by Walsh and Grey[[23]] and the MoH. A full list of the ICD-10AM codes used for both mortality and hospitalisations is included as Appendices.

Costing methods

To calculate the costs associated with avoidable death, the value of a statistical life (VoSL) was defined as the 2014 price of $3.95 million NZD.[[24]] The years of life lost (YLL) by Māori children were calculated assuming that all would have lived to the 2014 life expectancy of their non-Māori counterparts of the same gender.[[25]] The VoSL was divided by the male and female non-Māori life expectancies to produce an annual VoSL for each age group and gender. The annual VoSL was then multiplied by the YLL to calculate the annual costs of the inequity in avoidable death. In a sensitivity analysis using four scenarios for discounting, 0%, 3% (the “base case”), 5% and 8%, results were stable across all discount rates.

To calculate the direct costs associated with healthcare utilisation, the unit costs for each admission, claim, or consultation in each of the categories were defined, as shown in Table 4. The cost of hospital care was assessed from hospital reimbursements by the MoH. Because hospital services are provided publicly rather than patient charges, the costs are internal weighted estimates (based on Disease Related Groups and length of stay) of the cost of each type of care.

Hospital and outpatient care for children has associated costs to parents/caregivers. These include loss of wages during hospital caregiving and out of pocket fees for primary care visits. Given that there were no user fees for primary care for children under 6 years of age between 2008–2014, our model assumed out-of-pocket fees applied to less than half of child primary care visits. The costing analysis was unable to go into finer scale by age groups due to the difficulty in further defining the respective unit costs for age sub-groups.

Results

Inequities in healthcare utilisation

Table 2 summarises the differences in hospitalisations and healthcare utilisation between Māori and non-Māori children. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37), with the disparity most marked for children aged under 1 year. This resulted in 3,987 extra hospitalisations of Māori children each year that would not have occurred if Māori had the same rates as non-Māori. The largest contributors to the excess hospitalisations for Māori were respiratory, digestive and skin diseases.

View Tables 2–6.

For most other types of healthcare, interactions measured that (with the exception of primary care nursing and mental health visits) Māori children were significantly less likely to receive services than non-Māori. Māori children received laboratory investigations at approximately half the rate (RR 0.59, 95% CI 0.59–0.59), resulting in over 80,000 fewer tests each year than if Māori had the same investigation rate as non-Māori. Māori children were less likely to receive prescription medications (RR 0.91, 95% CI 0.91–0.91). Accident and injury claims were lower for Māori (RR 0.75, 95% CI 0.75–0.75). Hospital outpatient appointments were also received far less by Māori (RR 0.78, 95% CI 0.78–0.78), and this difference was larger for Māori in younger age groups.

For primary care, Māori children were significantly less likely than non-Māori to see a doctor (RR 0.72, 95% CI 0.72–0.72). Māori children were more likely to see a primary care nurse, but the absolute number of nursing consultations was much smaller than doctor consultations.

Inequities in avoidable mortality

Of the 5,541 child deaths between 2003–2014, 54.2% were considered to be potentially avoidable using our classification. Māori children had higher avoidable death rates than non-Māori (RR 1.98, 95% CI 1.84–2.13), resulting in 594 extra avoidable Māori child deaths between 2003–2014 than would have occurred if Māori had the same avoidable mortality rate as non-Māori (Table 3). The biggest contributors to potentially avoidable mortality in Māori children were “external causes of morbidity and mortality” (including accidents and injuries), and “conditions originating in the perinatal period”. Because avoidable child deaths are more common in the youngest age group, the greatest number of excess avoidable deaths for Māori occurred in children <1 year of age.

Costs arising from inequities in healthcare utilisation and deaths

Table 4 shows the unit costs used for each variable, and the annual costs/savings to the government health sector for Māori:non-Māori inequities in utilisation. The higher rate of avoidable hospitalisation for Māori children cost the government health sector $9.2 million NZD each year. However, because the government health sector also received significant savings from the under-servicing of Māori children of other parts of the health system, there is a net annual saving of over $4 million NZD to the government (Table 4). Estimates of direct costs to caregivers associated with child admissions or appointments are also shown in Table 4.

Costs associated with the excess years of life lost as a result of higher rates of avoidable mortality in Māori children (Table 5) were over $175 million NZD per year. Approximately 60% of these YLL came from deaths in the 0–<1year age group.

In putting all of these cost calculations together (Table 6), the inequities we found between Māori and non-Māori children in terms of healthcare utilisation and avoidable deaths cost in excess of $170 million NZD each year between 2003–2014. The burden of this cost was not shared equally—this total figure consists of annual savings of $4 million NZD to the health sector, while society (and disproportionately Māori communities) bore an annual cost of around $175 million NZD.

Discussion

Our attempt to quantify the economic costs of Indigenous child health inequities in New Zealand recognises it is impossible and undesirable to reduce the value of a healthy life to monetary terms. However, we are able to demonstrate that there are economic consequences of Indigenous health inequities, and that these costs are borne disproportionately by Māori families while the government benefits from cost savings. In addition to being in contravention of Indigenous rights, child rights, Te Tiriti o Waitangi and social justice, the inequitable status quo is financially costly.

The pattern of health inequities and costs/savings are broadly consistent with Mills et al,[[7]] even though there were some differences in methods: we used more recent data from a wider year range; we used a different (although overlapping) subset of ICD-10AM codes; and we used a single method for calculating the VoSL, which we considered to be more stable. Our cost estimates must be taken as highly conservative. Not all potentially avoidable causes of hospitalisation or death were included—in particular, injury hospitalisations and sudden unexplained deaths in infancy deaths were not included. Our consideration of out-of-pocket costs is an underestimate—for example, we did not include lost caregiver income for outpatient appointments, recovery at home or transport costs. We have not been able to do justice to nor quantify the costs of pain, suffering, trauma, missed educational and employment opportunities and other important consequences of health inequities for Māori children and their families. Our study uses non-Māori children as the comparator group, which includes children of other marginalised ethnic minorities. For example, 14% of children in New Zealand are of Pacific ethnicity.[[26]] The disparity between Māori children and NZ European will be much wider than the disparity between Māori and non-Māori children.

Considerable efforts have been made over recent years to improve the quality and completeness of ethnicity data recording in New Zealand health datasets, however, weaknesses remain that result in a net under-counting of Māori healthcare interactions.[[27,28]] Between 2000–2005, while no Māori under-counting was found in the mortality database, the national hospitalisation database under-counted Māori by 5–15%, and in 2009 28% of Māori who identified as Māori in the New Zealand Health Survey were not recorded as Māori in primary care enrolment data.[[27]] Ethnicity data for pharmaceutical and laboratory claims and mental health consultations come from the National Health Index (NHI) number, and while efforts have been made to improve NHI ethnicity data, Māori are still under-counted.[[29]] This under-counting of Māori children could partially contribute to the lower utilisation we found for primary care, and underestimate hospitalisations.

We compared Māori utilisation to that of non-Māori children, but this does not mean that if Māori utilisation equated to non-Māori this would be an equitable/appropriate distribution of care. If adjusted for current levels of higher health need,[[3,30]] Māori children should expect much higher rates of utilisation than non-Māori children for all dimensions of healthcare measured in this study, just to deliver an equal healthcare response to the same health conditions. For example, our analysis found that Māori children were 0.75 times as likely to receive care or compensation for an injury through ACC. This is despite evidence that injury rates are higher in Māori children—Māori aged 0–14 years are 5 times more likely to experience a fatal injury and 1.5–2 times more likely to be hospitalised from a non-fatal injury than children of any other ethnic group in New Zealand.[[31]] The lower rate of medicines claims for Māori children is alarming given they need more medicines than non-Māori based on burden of disease. This is consistent with previous findings that, adjusted for need, Māori receipt of prescription medicines is lower than non-Māori for all age groups.[[32]]

By any measure, the health system is clearly failing to serve Māori children. It is beyond this study to interrogate the reasons for this, but there are multiple complex factors that drive Indigenous health inequities including unfair historical and contemporary power imbalances, differential exposure to the social determinants of health[[28]] [[33]] and racist health policies, organisations and models of care. Health professionals and healthcare organisations are important contributors to inequities in health care[[28,34]] and there is growing recognition of the importance of the need to improve cultural safety at both individual health practitioner and organisational levels to achieve equitable health care.[[35]] Unlike many countries, New Zealand’s healthcare system is free at the point of care (including free primary care for children under 6 years of age between 2008–2014, a policy which has since been extended up to 14 years of age). This further demonstrates that even in a “free” healthcare system, inequities in access exist. Māori families are highly over-represented in the poorest socio-economic deciles and even small incidental costs such as transport, parking and subsidised prescription charges can make healthcare unaffordable.

The healthcare utilisation picture in our study is one of a failure to deliver care for Māori children upstream via primary care, resulting in the need for more downstream and serious intervention in the form of hospitalisations. However, like Mills et al. found in 2012,[[7]] this does not result in higher net cost overall to the government health sector. It actually costs the government less to admit Māori children to hospital for ambulatory sensitive conditions than it would to prevent or treat them early in primary care. This means the government health sector does not have a financial imperative to do things better.

Even as a highly conservative estimate, at $170 million NZD each year, the cost of the current Māori child health inequities is clearly significant. But what our study demonstrates is that the cost burden is not shared equally—the savings from these inequities benefit the government health sector, while the bulk of the costs are borne by Māori families. From a whole-of-government perspective, the costs of lost productivity and income to non-health sectors is likely considerable but outside the scope of this study. The distribution of costs is a clear breach of Te Tiriti o Waitangi and contributes to the further exacerbation of poverty and economic drivers of health inequities for Māori in New Zealand.

Conclusions

There are economic consequences of the health inequities experienced by Māori children in New Zealand. The costs ($175 million NZD per year) are borne disproportionately by Māori families while the government health sector benefits from net cost savings ($4 million NZD per year). This study highlights: 1) that delaying healthcare for Māori children through under-provision of primary care resulting in higher rates of hospitalisations is cheaper for the government health sector, and 2) that there is no financial incentive for the government health sector to intervene to reduce health inequities for Māori children, and 3) that “doing nothing” to change the current child health inequities has a high economic cost to Māori families and society.

View Appendices.

Summary

Abstract

Aim

This study estimates of the cost of Indigenous child health inequities in New Zealand.

Method

Standard quantitative epidemiological and cost of illness methodologies were used within a Kaupapa Māori framework. Data for 2003–2014 on children under 15 years were obtained from government datasets. Rates of potentially avoidable hospitalisations and mortality, as well as excess or under-utilisation were calculated. Publicly funded health sector costs, costs to families and costs of premature mortality were used to estimate the costs (or savings) of inequities.

Results

Māori children had lower utilisation rates than non-Māori for primary healthcare, outpatient care, medicines, laboratory investigations and care after an accident/injury. Māori children had greater rates of avoidable hospitalisation (RR=1.36, 95% CI 1.35–1.37) and death (RR 1.98, 95% CI 1.84–2.13). Inequalities between Māori and non-Māori children cost in excess of $170 million NZD each year. This includes an annual net savings for the government health sector of $4 million NZD, with an annual cost to society of around $175 million NZD.

Conclusion

The under-serving of Māori children in the health sector saves the government health system money, yet imposes a huge cost on Māori families and society. In addition to avoiding considerable human suffering, reducing child health inequities would result in significant economic benefits.

Author Information

Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Chao Li: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Karen Wright: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Ricci Harri:, Te Rōpū Rangahau Hauora a Eru Pōmare, University of Otago, Wellington, New Zealand. Belinda Loring: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand. Papaarangi Reid: Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Acknowledgements

Correspondence

Dr Sarah-Jane Paine: PhD, Te Kupenga Hauora Māori, Faculty of Medicine and Health Sciences, The University of Auckland, Auckland, New Zealand.

Correspondence Email

sj.paine@auckland.ac.nz

Competing Interests

Nil.

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