Regional public health units were overrun and unable to trace enough people likely exposed to Covid-19, even when there were fewer than 100 suspected cases of the virus a day.
An audit of New Zealand's contact tracing systems found the units were its main weakness, and recommended they urgently be expanded with extra staff to help isolate possible cases.
It also found that the national service set up to help the regional units was initially working too slowly, partially because it couldn't find phone numbers for people or they chose not to answer calls from an unidentified number.
In response, the Government has allocated an extra $55 million to the 12 units - known as PHUS - so they can expand as required. The national centre will also begin sending text messages if calls are missed.
• Covid 19 coronavirus: Nine new cases as lockdown decision looms
• Covid 19 coronavirus: Winston Peters - 'No value in saving people if greater social damage caused'
• Covid 19 coronavirus: Kiwis warned relaxing and socialising could lead to new outbreaks
• Covid 19 coronavirus: Keep kids at home at alert level 3, professor says
Prime Minister Jacinda Arden said today that having to suddenly scale up from a regional to national system had been a huge ask for the public health teams.
"When you think about what they usually have to do and what we've asked them to contend with their response has been incredible," Ardern said.
"There is more to do though and we're very, very open about that."
Contact tracing is the identification and isolation of people who have been exposed to an infectious case, to prevent onward transmission from the contact to others.
Combined with other basic public health measures, it has over 90 per cent efficacy against Covid-19 at the population level, making it as effective as many vaccines.
It is part of the normal work of public health units, as part of tracking diseases like measles or vaccines.
The contact tracing audit, completed last Saturday by Otago University scientist Ayesha Verrall, found although work had already begun to upscale New Zealand's contact tracing ability, it was not enough.
Verrall recommended the Ministry of Health expand the capacity of PHUs to isolate Covid-19 cases and trace their contacts "three to fourfold" for as long as Covid-19 remained a public health threat.
Some of that additional capacity should include contact tracing teams that could move from one regional unit to another according to need, she said.
Verrall praised the rapid development of a national close contact service hub (NCCS), which began operating on March 24, together with a new technology system designed to help with contact tracing.
However, she said despite support from the national system, PHUs were still at or beyond their capacity to manage cases and contacts when lockdown was introduced on March 25, because it was only being used in a narrow set of circumstances.
Even if changes to the way those two services interacted were made - which will happen - Verrall said the national service was not a suitable nor desirable system for managing all contacts.
"The NCCS also has limited use in certain important situations, such as in the event of a large complex cluster or specific scenarios that require intense involvement of Medical Officers of Health," she said.
The NCCS was also struggling with timeliness at that stage, with issues like a lack of contact details in the National Health Index for some cases, and people not answering their phones because the call was from a strange, four-digit number.
Therefore, Verrall recommended the MOH develop a plan that not only included how to rapidly scale case identification, but that specified task-shifting arrangements between PHUs and NCCS.
She said between them, the system needed to manage up to 1000 cases per day while maintaining high performance.
Verrall gave a suite of other performance indicators that needed to be met, including the need to have 80 per cent of contacts of a Covid-19 case quarantined within four days.
At the time of her report the Ministry of Health and local developers were building a smartphone app to assist with contact tracing, she said, but as it was not completed it could not be meaningfully evaluated.
This afternoon, Director-General of Health Ashley Bloomfield said currently, up to 5000 contacts (which is different to cases) each day could be traced, and the capacity would continue to be built so it could be scaled up rapidly.
Minister of Health David Clark said the funding meant PHUs would be expanded, with additional surge capacity of up to 300 full-time-equivalent staff. The NCCS would also get extra resources to manage complex investigations, such as detailed analysis of clusters.
Clark would appoint an expert group (under Section 11 of the Public Health and Disability Act 200) to advise on progress. Terms of Reference were being developed currently.
The new technology system - the National Contact Tracing Solution - would be developed further and future-proofed so that it could manage the delivery of a Covid-19 vaccine when one became available, he said.