Aaron Drew: Counting the costs of campylobacter

City Care water serviceman Tua Moli flushes pipes for chlorinated water after campylobacter bacteria found its way into Havelock North water. Photo / Duncan Brown

Our family of five were some of the early casualties of the gastro outbreak in Havelock North.

It required time off work, doctor trips, cancelled activities, and the stress that comes with looking after sick children when you are not feeling the best yourself: A microcosm of the broader impacts on the community.

Central government is well aware that as bad as the outbreak was for Havelock North, things would be much worse if an outbreak occurs in a larger population centre.

There is a real opportunity to learn from the experience and reduce the risk and consequences of future contamination in New Zealand.

For this reason, the terms of reference for the gastro outbreak is focused on determining its cause and how to prevent future occurrences.

Specific recommendations are sought on management of drinking water supplies, implementation of drinking water standards, and contingency planning and response by government.

A common policy tool used to evaluate options and make recommendations is cost-benefit analysis.

On the cost side of the equation are actions required to reduce the incidence of water contamination to some "acceptable" level of risk.

Costs could include actions required to reduce the source (or sources) of contamination, actions required to better prepare for outbreaks, and the costs of better treating water for contaminants.

The source of contamination is likely to be the critical factor affecting the cost of reducing outbreak risk.

It is likely to be small if contamination is found to be ground-based from a localised area. But if broad-based, then costs could be high.

Reducing risk in the area, and throughout the country, could involve some combination of changes in agricultural land usage patterns and practices around water sources; changes in the sourcing of water; and changes in how water is treated.

The benefits side of the equation involves estimating the harm from contamination and how actions reduce the risk of this harm.

Harm is typically separated into the direct costs of treating an outbreak and the indirect effects on communities.

Direct costs include, for example, the cost of medical visits, laboratory testing and patient travel expenses.

Indirect costs include time off work, reduced business activity, and school absenteeism.

A recent study of norovirus outbreaks in Spain, of a similar scale to Havelock North's, estimated harm at around €260,000 ($400,000).

This excluded the effect on tourism and horticulture, which could be significant for Hawke's Bays "good things grow here" brand.

In my view, it should be part of any assessment of harm from water-borne contamination.

Most Kiwis expect councils to provide safe, clean drinking water. Many think it is unacceptable that our rivers and lakes are no longer safe for swimming.

Part of the chance to learn from this outbreak is the opportunity to develop a better evidence base around the costs of contamination of water supplies, and reducing risks.

We may be pleasantly surprised that the trade-offs are not as stark as we fear.

- Aaron Drew is an Associate of the NZIER and CIO of the Stewart Financial Group. His show Real Wealth can be heard on Radio Kidnappers on Tuesday afternoons and on podcast.