The economic costs of the Havelock North August 2016 waterborne disease outbreak

Report prepared for the Ministry of Health
Drinking water Economic cost Water Public health Hawke's Bay

The Ministry of Health (MoH) asked Sapere Reaserch Group to determine the costs of the waterborne disease outbreak in Havelock North, the largest outbreak of its kind in New Zealand. The contamination was discovered on 12th August 2016 and the primary impacts lasted for approximately four weeks, though there was a relatively long ‘tail’ of secondary and residual impacts felt outside that period.

Sapere estimate the total economic costs to society resulting from the outbreak to be around $21M. The vast majority of costs ($12.4M or 59 percent of total costs) relate to household inconvenience due to having to boil water, buy bottled water and take time off normal activities during the outbreak. The costs are due to the large number of households affected (5,088) and the relatively high costs per household (around $2,440).

Central Government costs were estimated to be just over $0.5 million (2 percent of total costs) with most costs incurred post-event (eg, Inquiry-related costs including expert reports and legal advice). The Ministry of Health accounts for almost 60 percent of the total estimated costs, with the largest single cost stage being for investigation/diagnosis (ie, testing).

Local government costs ($4.1M) are the second largest (20 percent of total costs) and relate mainly to investigation/remediation and consequential stages (associated with the Inquiry).

The impact on the business community was noticeable but not significantly material as the estimated cost to business of $1.3 million was less than ‘normal’ retail expenditure in Havelock North in a week for the corresponding period. However, Sapere acknowledge that some businesses were particularly hard-hit (eg, food and beverage and accommodation providers).

Estimated health-related costs were relatively modest ($2.5M or 12 percent of total costs), given the spread of the outbreak. This reflects the prominent role that general practice played in dealing with the affected patients in an efficient and cost-effective manner. In addition, the wide array of support services that were mobilised in response to the outbreak helped reduce the potential for costly hospital stays.

Publication Details
License type:
Access Rights Type: