New Zealand’s healthcare infrastructure is facing mounting pressure due to ageing facilities, historical underinvestment, and increasing demand driven by population growth and demographic shifts. A strategic and forward-thinking approach to infrastructure investment is essential to ensure the sustainability and effectiveness of the health system in the coming decades. 

The Scale of the Challenge 

The Health and Disability System Review estimates that New Zealand requires $14 billion in investment over the next decade to maintain and improve hospital infrastructure—excluding ongoing repairs, maintenance, and ICT costs. This means annual capital expenditure must increase three to four times the historical average of $500 million per year to meet demand. 

District Health Board (DHB) Capital Expenditure Forecast on a Cash Flow Basis
Source: New Zealand Infrastructure Commission, Te Waihanga 

However, the current planning and delivery framework has been widely criticised for inefficiency, fragmentation, and duplication. The existing funding model struggles to keep pace with infrastructure demands, highlighting the urgent need for a more strategic and sustainable approach to healthcare investment. 

A New Approach to Healthcare Infrastructure Investment 

New Zealand is shifting its approach in several key areas to address these challenges. 

1. Long-Term Capital Investment Planning 

A long-term capital investment plan is being developed to align infrastructure projects with national healthcare priorities. This ensures that resources are directed where they are needed most, reducing inefficiencies and improving system-wide coordination. 

2. Diversified Funding Models 

Relying solely on traditional government funding is proving unsustainable. Alternative financing models—such as public-private partnerships (PPPs), infrastructure bonds, and private sector investment—are gaining traction to help bridge the funding gap. 

Landscape of Procurement Approaches That Utilise Private Financing.
Source: Strategic leasing November 2024 

3. Modernising Existing Facilities Over New Builds 

Rather than constructing entirely new hospitals, the focus is shifting towards upgrading and modernising existing healthcare facilities. This approach optimises capital expenditure, extends the lifespan of assets, and improves service delivery efficiency. 

4. Decentralising Healthcare Services 

To alleviate pressure on hospitals, more services are being moved into primary and community-based care settings. Strengthening local healthcare services reduces reliance on major hospitals and enhances accessibility for patients across the country. 

5. Sustainability and Resilience 

Sustainability is a growing priority in healthcare infrastructure investment. Upgrades in energy efficiency, carbon reduction initiatives, and climate resilience are becoming standard to future-proof facilities and reduce the sector’s environmental footprint. 

Asset Management Maturity Across Infrastructure Sectors
Source: Taking care of Tomorrow Today Asset Management State of Play November 2024 

The Path Forward 

To meet future healthcare infrastructure needs, investment strategies must prioritise: 

  • Long-term, centralised planning aligned with national healthcare priorities. 
  • Sustainable funding models, including private sector partnerships. 
  • Innovative infrastructure solutions, such as repurposing existing facilities and expanding digital healthcare. 
  • A shift towards preventative and community-based care, reducing pressure on hospitals. 

By adopting these approaches, New Zealand can ensure its healthcare infrastructure remains fit for purpose, delivering high-quality care while managing future challenges in a sustainable and financially responsible manner.