Focused on ethnicity, the directive failed to recognise that many “proxies” for need – such as age, gender, rural location and income – are routinely used in New Zealand and elsewhere to allocate resources.

And this policy goes against substantial evidence that ethnicity is, in fact, a suitable way to identify need.

In addition to making it harder to identify and reach high-need New Zealanders, the policy will likely worsen existing inequities. There is also the concern that it will put providers at risk of financial failure because they are not receiving enough to cover the costs of high-needs patients.

Efficient shortcuts

Proxies such as ethnicity, age, gender and location are efficient shortcuts to guide where money goes. The point of using them is to supply the right resources in the right places at the right times.

Take the main primary healthcare funding formula, for example.

To provide adequate funding for populations with higher needs, the formula for core services is weighted to give higher levels of funding to certain population groups. These include children and older people, women, those who use a lot of services, and those living in rural areas.

The specific characteristics used as proxies are drawn from research that recognises certain groups use or need health services more than others.

Blunt instruments

To be fair, proxies are relatively blunt instruments. But given the challenges of precisely identifying need, they are the best we have.

To identify population health needs without proxies, there would have to be a nationwide survey of people’s health status, across a wide range of conditions and risk factors.

Such a survey would also have to identify which health needs people saw as being most important, so as to determine which services might be prioritised. Such information would be expensive to collect and have a very short shelf life.

Mortality rates (by condition) could also provide data on health needs, but with limitations – not every health condition causes death.

Other data could focus on utilisation of services (another proxy). But this approach also has flaws. It does not reveal unmet need for people who do not or cannot access services, for example.

And there are major gaps in our data sets. We have fairly good data on hospital services, including diagnoses. But data are not as easily available for other services, including for primary healthcare and mental health service utilisation.

And data are virtually non-existent when it comes to understanding the needs of key population groups, such as people with disabilities or the rainbow community.

Providing strong analytical cases for each and every targeted resource allocation is going to be a hard ask in the current environment, especially given recent public sector cuts.

Are all proxies problematic, or just one?

The government has picked out ethnicity as the aspect of personal identity that public sector agencies should be most careful about using as a proxy.

But once all other factors (for example, age and rural location) are accounted for, Māori, Pacific and other ethnic groups have worse health outcomes and inferior access to healthcare services.

And in primary healthcare, ethnicity is only used as a proxy measure when it comes to allocating a small pool of funding aimed at improving access to services.

Māori and Pacific populations in particular continue to face barriers to accessing healthcare which could be removed – if ethnicity informed more resource allocation decisions, rather than less.

A human rights issue

The coalition government frames its aversion to “race-based policy” around human rights – in particular article 1.4 of the International Convention on the Elimination of All Forms of Racial Discrimination.

This allows states to take special measures (only) when necessary to adequately secure the rights of certain ethnic groups. The implication is that the measures taken in Aotearoa have gone beyond necessity.

But the UN’s Committee on the Elimination of Racial Discrimination found health policy in New Zealand was inadequate to meet the needs of Māori. The committee said structural biases against Māori exist such that Māori struggle to access healthcare on an equal footing with other New Zealanders.

It also found Māori providers are marginalised and not compensated for their work at the same rate as other providers. And it expressed concern about the poorer health outcomes Māori and Pasifika continue to face.

Against this backdrop of sustained, well-documented inequity and discrimination, the coalition government wants to pretend ethnicity is not associated with need.

If agencies are required to overlook the role ethnicity plays in health needs, we can expect a lot of wasted work by “back room” employees to pull together evidence about what we already know to justify targeted services. Or a lot of wasted money making some services universally available when targeting would be far more cost-effective.

Proxies, including those based on ethnicity, play an important role in a fair and equitable resource allocation system. They are not random or lazy, or the product of prejudice. They are grounded in what evidence there is of population-level need.

This article was written with independent health researcher Dr Jacqueline Cumming and republished from The Conversation under a Creative Commons licence. Read the original article.