Health NZ increases funding offer for GPs
Health NZ has issued a redrafted funding offer to general practitioners, increasing the overall funding lift from 6% to 6.32%. The revised package, according to documents seen by RNZ, reworks the rural funding formula following pushback from GPs regarding capitation reweighting and a proposed one-year fee freeze.
Why was the initial GP funding offer rejected?
General practitioners pushed back against an initial offer sent last Thursday that proposed a 6% funding increase. GenPro chair Dr. Angus Chambers stated that the reweighting of capitation funding meant some practices would receive less money than they did under the old system.
Dr. Chambers described these as “loser” practices. While he noted that directing money to higher-need areas is reasonable, he argued the new system leaves some clinics in a less favorable position.
The GenPro chair further claimed the health agency tried to use the “same dollar” to achieve three separate goals: rearranging the rural system, implementing capitation reweighting, and capping patient fees. He stated this approach was “basically bound to fail.”
How does the new capitation formula work?
Capitation provides clinics with a fixed annual amount per patient. The current system considers age and sex, but the new proposal adds comorbidities, deprivation levels, and rural location to the calculation.
Under the first offer, more practices would have been classified as rural to qualify for extra funding. Te Whatu Ora is attempting to mitigate losses for some practices through transitional funding, though Dr. Chambers noted it remains unclear if funding for those practices will improve in future years.
Dr. Bryan Betty, a Te Whatu Ora board member and former General Practice NZ chair, noted that ethnicity is not currently included in the formula, despite sector requests for its inclusion.
What are the implications of the fee freeze?
The proposal includes a clause to freeze patient fees for one year to prevent increased costs from being passed to the public. However, some practitioners expressed concern that this temporary freeze could lead to higher fees in later years as clinics seek to recoup costs.
What happens next with the funding deal?
The redrafted offer is being sent to practices today, with a new ratification deadline set for late next week. Martin Hefford, Health NZ’s acting director of funding, community and mental health, stated the package is being refined based on sector feedback.
Online seminars are scheduled for next week to explain the changes and answer questions from practices. Dr. Bryan Betty stated the health agency has been responsive and acted quickly to produce the new offer.
Parallel to these negotiations, Labour health spokesperson Dr. Ayesha Verrall told RNZ that her party would introduce an independent pricing authority to manage GP funding. Labour is also campaigning on a policy that could provide every New Zealander with three free GP visits annually.
Frequently Asked Questions
What is the difference between the first and second funding offers?
The initial offer proposed a 6% overall funding lift, while the redrafted offer increases that lift to 6.32% and reworks the rural funding formula.
What factors now determine GP capitation funding?
Funding is based on a fixed amount per patient considering age, sex, comorbidities, deprivation, and whether the practice is in a rural area.
What is the political alternative to the current funding model?
Labour proposes the creation of an independent pricing authority to manage funding and a policy to provide three free GP visits per year for all New Zealanders.
How should healthcare funding balance the needs of rural clinics against urban practices?