General practices are already underfunded, running at a loss of $29 per patient, but hundreds of dollars per Māori patient would be needed to make care more equitable, Marc Daalder reports

A report commissioned by the Government during the transition to the new health system highlights the yawning gap between the healthcare needs of Māori and Pasifika patients and the funding GPs receive to meet those needs.

The dryly titled “A Future Capitation Funding Approach” report was quietly released on the website of the Department of the Prime Minister and Cabinet in November. It shows GPs ought to be operating at a loss even to provide their current level of care and would need in excess of $600 million more each year to address 70 percent of current unmet need.

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“This was a review focused on the equity impact of the current capitation funding system. It was intended as one input to the design of the future funding arrangements for the health system – and that work is ongoing,” Health Minister Andrew Little told Newsroom.

“The Review does not reflect Government policy but does provide useful input into further work on the design of future funding arrangements for the health system.”

National Party Health spokesperson Shane Reti said he was concerned by the way the report was released.

“Why was it quietly dropped onto the DPMC website about three weeks ago? It had been years in evolution. David Clark said in 2018 he was going to bring it forward,” he said.

“The fact that they’ve ignored it says several things to me. First of all, they don’t like the contents of it. And secondly, that GPs aren’t being heard.”

Reti wouldn’t commit to addressing the funding gap if National is in government after next year’s election. He has asked the Health Select Committee to seek a briefing from officials on the report. 

Flexibility needed

Samantha Murton, president of the Royal New Zealand College of GPs, said she wasn’t surprised by the findings. “GPs do know that they’re underfunded because we are scraping the barrel sometimes to be able to provide care and to be able to provide salaries to our staff.

“There’s no wriggle room at the moment, at all. We can only do the bare minimum. If we’re going to meet the needs of Pae Ora, we need to be able to do at least the majority of what’s able to be done as far as healthcare is concerned.”

The Sapere modelling found GPs received an average of $347 in revenue per patient ($255 in public funding and $93 in private co-payments) but needed an average of $376 to provide each patient with the current level of care.

“This means practices run a loss of $29 per person and suggests that the current environment is unsustainable,” the report said.

“It is important to note that these losses are unlikely to translate directly into literal accounting losses for all practices. Losses will be managed by approaches such as reducing incomes, by minimising staff, relying upon voluntary time, constraining access to care. The impacts of these constraints are likely to be seen in phenomena such as long delays in order to get appointments, or closed books to new enrolments. Therefore, even though many practices here may break even financially in 2021, we suggest that the losses listed here are real but they may have just been paid implicitly.”

Making up this gap alone would cost about $137m a year, according to the report.

Murton said the existing funding model only covered 45 minutes of appointment time per patient per year, so any excess comes out of her pocket and leads to delays and cancelled appointments for others.

“When I have someone who has got a crisis, whether it’s a diagnosis of cancer or they’ve been subjected to family violence or sexual abuse or all those really complex, gnarly things we have to deal with at times, there is no specific funding or time or availability for us to do anything,” she said.

“If I have someone who needs me to take an hour with them because their needs meant they weren’t going to walk out that door in 15 minutes and still be fine, there’s nothing I can do. I can’t charge that patient for an hour. My capitation doesn’t cover an hour in a year, it covers 45 minutes at the most and that means I would never see them again for the rest of the year.”

In addition to boosting the quantum of cash available for practices, the Government needed to rework the funding model to allow for greater flexibility, Murton said.

“If I was going to change how my practice worked, in that I was going to do whānau meetings or I was going to provide out of hours services that make access easier or I was going to make my rooms bigger so I could have the whole whānau in the room, all those things require all sorts of change. Staff training, infrastructure change, out of hours care, all sorts of other stuff that our funding does not even consider.”

Her colleague Rachel Mackie, the chair of Te Akoranga a Māui, the College of GPs’ Māori special representative group, agreed. “After working for a long, long time, it’s definitely the biggest thing that you do notice. That there’s not the ability to be flexible to provide the care that someone needs in the current structure,” she said.

Little has advocated in the past for another approach to ease pressure on GPs, which is to move some of the services provided by practices to other healthcare providers. Pharmacists and community healthcare providers, for example, can do a lot of the work done by GPs.

“Locality planning, carried out properly, will enable an open conversation with health providers and the community about health services, and will result in a plan on what is needed. It will be an opportunity to explore alternative ways of organising the provision of health services,” he said in a speech in July.

The future funding model and allocations for GPs will be decided ahead of Budget 2024, he told Newsroom.

Funding gaps

The $137m funding shortfall is just the tip of the iceberg, however. That’s what would be needed to maintain the current level of care, but the Sapere report estimated there was significant health need not being met by the existing model, particularly for Māori, Pasifika and low-income patients.

“Māori, Pacific, and Quintile 5 have been historically underfunded in New Zealand’s health system (and hence the current level of care is not an adequate benchmark of need),” the report found.

To cover 70 percent of current unmet need without expanding the limits on private co-payments, total Government funding for practices would need to increase by half – a massive $614m.

This would involve an extra 1000 GPs (on top of the current roster of 3000), 700 more nurses and nurse practitioners and 900 more administrative and management staff.

On a patient level, GPs need another $350 per Māori patient to address most unmet Māori need and $333 per Pasifika patient to meet the same threshold.

“The Government recognises that Māori, Pacific or deprived populations are not well-served by the current capitation formula,” Little said. ““The Government has provided Te Whatu Ora with $86 million over four years to more equitably allocate funding to general practices on the basis of their enrolled high needs population. Distribution of this additional funding will begin in 2023.”

“There’s a historical context where a number of people haven’t been included in the health system, including Māori people generally. In decision-making, their perspective isn’t really accounted for,” Mackie said.

“So what happens is you have a service that is trying to treat everyone the same when clearly their needs are not the same. A 15-minute consultation for someone who is not engaged with the health system, has high complexity health issues, is not going to be the same for someone who comes in that’s well-engaged with the health system and has got a simple infection.”

As with Murton, Mackie believes a funding boost is part of the solution but it won’t be enough on its own.

“That’s not going to fix the problem for Māori. Otherwise we wouldn’t have these gaps,” she said. Non-Māori live just over seven years longer than Māori, according to the most recent statistics.

“There’s still a massive gap in nearly every health condition you can think of. We’ve never been able to address that. By funding the same system, we’re going to get what we’ve always had.”

Marc Daalder is a senior political reporter based in Wellington who covers climate change, health, energy and violent extremism. Twitter/Bluesky: @marcdaalder

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