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Anatomy of a crisis: Layer cake of woe built on workforce and funding shortages
Anatomy of a crisis: Layer cake of woe built on workforce and funding shortages
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Martin Johnston reports on the markers of stress in general practice, where the feeling of failing to cope is palpable and Fiona Cassie spent hours searching for data to explain why general practice finds itself working so hard but ultimately often failing to live up to its own expectations of good care
By Martin Johnston
For some GPs, the crisis in their profession is visible in their loss of faith in the health system. For others, it might be the hard financial facts of their suddenly unprofitable practices.
But crisis it is.
What else can it be when once-stable businesses are forced to rely on cash injections from their GP-owners to keep paying the bills, or satellite clinics shut temporarily because sick or on-leave staff have no replacements, or the mounting financial losses mean no one will want to buy you out?
The negatives are stacking up dangerously. Patients reportedly often wait weeks for a routine appointment, a third of general practices are closed to new patients, more than half of GPs under 55 report burnout, more than a third of GPs plan to retire within five years, and the number in training is fewer than needed.
These are markers of stress in general practice. They result in delayed diagnoses and increased flows to overcrowded hospitals which, stressed themselves, are progressively increasing their access thresholds.
How did it come to this, when everyone in general practice is working so hard?
For Geoff Cunningham, co-owner and specialist GP at Bush Road Medical Centre, an 11,000-patient practice in Whangārei, the rot in capitation was there from day one and now it is gnawing away at business viability.
In its present financial state, Bush Road Medical isn’t saleable, says Dr Cunningham. The centre made a loss in the last three months of the last financial year – as did around a third of practices in the GenPro survey published in August – and it continues to be “marginally” in the red.
Bush Road’s owners have had to put their own money into the business to keep it solvent, as have other practice owners, New Zealand Doctor Rata Aotearoa has reported.
National Hauora Coalition clinical director and specialist GP Ranche Johnson says iwi-owned and other Māori practices too have been topped up by their owners.
“The amount of work required for our high-needs populations with multiple health conditions and multiple inequities due to other determinants of health just can’t be sustained with the current capitation model,” says Dr Johnson.
At Hamilton-headquartered Te Kōhao Health, a provider of health, education, social and justice services, co-owner Lady Tureiti Moxon says even with the new equity funding for Māori patients, the charitable company’s medical clinic needs subsidies from other parts of the operation.
Māori healthcare providers carry a heavier load than average because of their high Māori enrolment and high rates of chronic illness and complex presentation among Māori, Lady Tureiti says.
It’s tempting to consider the pandemic a financial crisis moment for general practice. Once three years of government COVID-19 services purchasing – some $900 million – ended this year, long warned-of troubles suddenly came to a head.
GenPro chair and specialist GP Angus Chambers instead prefers to explain it as a gradual erosion, a thousand compounding cuts. Dr Chambers’ list of factors includes the general practice workforce shortages, the feminisation of the GP workforce (which he applauds), an ageing population that needs more care, the growing range of medical tests, devolution of hospital services without funding, an out-of-date capitation formula and extra time spent on compliance.
GenPro was a signatory to the General Practice Leaders Forum letter and 20-point plan to Te Whatu Ora national commissioning director Abbe Anderson in June. The leaders said current funding levels would only worsen workforce and cost pressures.
Dr Anderson has in several forums acknowledged primary and community care are underfunded, but says more money isn’t necessarily the answer because the current system isn’t achieving equity. The comments have been interpreted by some in general practice as disrespectful to the sector and an indicator that Te Whatu Ora doesn’t understand it.
Capitation rose 3 per cent last year and 5 per cent this year – not enough, sector leaders say, to keep up with rising costs. Government health agencies point out there have been higher increases in vaccination funding, the new equity money and funding for comprehensive primary care teams.
Hospitals can’t cope because we can’t deliver and we can’t deliver because we can’t cope
The Primary Health Care Strategy 2001 set the scene for PHOs and widespread use of capitation from 2002. A media release from the health minister at the time, Labour’s Annette King, said the benefits would include more coordinated care, with more attention paid to how to keep healthy and avoid disease.
Virtually all practices nationwide eventually opted in to a system that makes their enterprises something different from truly free enterprise.
The first and most obvious restriction is the ability of the Government to disregard the sector’s input into the supposed “negotiating” forum, the PHO Services Agreement Amendment Protocol (PSAAP). This has happened for two consecutive years, with the Crown imposing a funding increase of its own choosing. (PSAAP is currently inactive while a misunderstanding over its future is sorted out.)
Second, the Government exercises significant control over copayments through its fees review process, based on annual analyses of sector cost increases commissioned from Sapere Research.
Dr Cunningham says Northland was an early starter on capitation but was left on lower rates for a time when the system went nationwide; this depressed his practice’s copayment increases.
Bush Road was not admitted to the Very Low Cost Access (VLCA) scheme that began in 2006, but competes to an extent with practices that were admitted and therefore get the scheme’s higher funding in return for lower, capped fees. With Bush Road excluded, it needs to charge more but would be uncompetitive if it did so.
In 2006, the capitation system entered its first review after persistent concerns about the absence of ethnicity and deprivation weightings from First Contact funding.
A group of experts recommended these weightings be used in a revised system based on updated utilisation data. Then health minister Pete Hodgson ruled out any changes.
The system’s second major review, headed by now-retired specialist GP Peter Moodie, was done in 2015. Many of its 19 recommendations were intended to target government funding more towards those with higher health needs. It urged reallocating VLCA money to individual patients, regardless of their practice, based on ethnicity, deprivation and Community Services Card (CSC) status. Copayments should be regulated only for patients eligible for low fees, and practices should be free to charge non-high-needs patients “a fee commensurate with service”, the working group led by Dr Moodie said.
National Party health minister Jonathan Coleman didn’t implement the funding recommendations.
In 2018, Labour health minister David Clark introduced a CSC subsidy in return for low, capped fees, a scheme now in most practices. Dr Clark also extended the age of the free care scheme for children so it applied to under-14s (following the extension to under-13s in 2014).
His other main contribution was promising in 2017 a primary care funding review. That morphed into the Heather Simpson-led Health and Disability System Review. The final report of the Simpson review panel didn’t directly address primary care funding – funding was excluded from the panel's terms of reference - but it urged it be ring-fenced and that there be a move away from the PHO Services Agreement.
A full review of primary care funding hasn’t eventuated.
Current health minister Ayesha Verrall recently outlined a work programme that includes a look at primary care funding from late this year.
But a review of capitation, which looks and smells pretty close to a full review, was commissioned from Sapere and released last year. Among its explosive findings was that, on average, practices needed a 9 per cent income increase just to break even. High-needs practices, depending on the increased service level desired by decision-makers, would need 34 per cent to 231 per cent more capitation.
Health officials, when asked about implementing the report’s findings, said it was a “technical” paper and simply part of the bigger picture of primary care. However, it has produced the Māori and Pacific equity top-up.
Workforce shortages are a vexed issue for general practices. Headaches abound: the persistent disparities that exist between practices’ nurse and doctor pay and that of their Te Whatu Ora counterparts; the lure of even higher Australian salaries; the insufficient number of GP trainees.
The Coast to Coast Health Care network of clinics, based in Wellsford north of Auckland, has not been immune. “We’re struggling financially but we are keeping our head above the parapet,” says co-owner and specialist GP Tim Malloy.
“We are recruiting aggressively around the world and it’s going to cost us a lot of money…it’s not sustainable,” Dr Malloy says.
“Every practice is one doctor retiring or moving to Australia away from collapsing.”
New for Coast to Coast is the need for contingency plans for temporary closure of individual clinics in times of insufficient staffing. The Matakana, Waipu and Paparoa clinics have been closed at times. Dr Malloy, former RNZCGP president, continues to advocate for a doubling of medical school places, a much bigger increase than has been promised as a result of the recent pre-election political bidding war.
As a younger doctor, he was proud of the health system, but now, he’s not sure anyone in general practice is proud.
“I can’t recall a time like this when we were so demoralised,” he says. “In my opinion, the health system is close to collapse.”
Dr Malloy is aware of a number of cases in which people have been either significantly harmed or have died due to system failure.
“Hospitals can’t cope because we can’t deliver and we can’t deliver because we can’t cope,” he says.
2001 – Primary Health Care Strategy released
2002 – National capitation system begins
2006 – Capitation review, Very Low Cost Access scheme established
2008 – Free care for under-6s introduced, building on 1997 NZ First policy
2015 – Free care extended to under-13s
2016 – Peter Moodie-led working group recommends funding be more targeted
2017 – Labour-led government commits to primary care funding review
2018 – Community Services Card fees scheme established; free care extended to under 14s
2020 – Health and Disability System Review report released, urges a move away from the National PHO Services Agreement
2020–22 – COVID-19: Funding progressively provided for testing, vaccination and care in the community
2022 – Government–primary care capitation talks stall
2022–23 – Sector surveys show precarity of general practice workforce and finances; a third of practices are closed to new patients
In the past few weeks of electioneering, political rhetoric suggests the parties, yet again, discovered general practice and primary care are important and underfunded, have a workforce that is hurting, and can be fixed (if only New Zealanders “vote the right way”). But the numbers show no political party has lived up to its promises and confirm the problems afflicting general practice have been years in the making. Journalist Fiona Cassie spent hours searching for data to explain why general practice finds itself working so hard but ultimately often failing to live up to its own expectations of good care.
Declining workforce
Doctors working in general practice make up 25 per cent of the medical workforce, compared with 37 per cent in 2000.1
Slow growth
The number of specialist GPs grew by 65 (1.7 per cent) to 3915 in 2022/232 ; that’s compared with 3 per cent growth in the total doctor workforce to 19,3502 and 2 per cent growth in the population to 5.22 million.3
Ageing workforce
Thirty per cent of the GP workforce in 2022 were aged 60 or more (compared with 18 per cent in 2014). Thirty-seven per cent of GPs are aiming to retire in the next one to five years.4
Ownership declining
Thirty-one per cent of GPs were practice owners/partners in 2022 (39 per cent in 2014).4
Trainee growth slows
There are only 178 GPEP1 trainees in 2023 (out of 300 funded places).5 GPEP1 trainees peaked at 214 in 2021 after climbing from 50 in the early 2000s to 108 in 2010.6
More across Tasman
Medical graduate training in New Zealand increased by 47 per cent between 2005 and 2021 to 10.62 new doctors a year per 100,000 people. But over the same time period, Australia increased its training by more than 70 per cent to 15.36 graduates per 100,000.7
And nursing too…
New Zealand increased its nursing training between 2005 and 2021 by 36 per cent to 43.2 nursing graduates per 100,000. Across the Tasman during the same period, nurse training increased by 127 per cent to 115 new nurses per 100,000.8
Burnout on the up
Nearly half of GPs (48 per cent) in 2022 reported being burned out – a big increase on the 22 per cent in 2016. A further 31 per cent were somewhat burned out.4
Just 21 per cent reported not being burned out – a big drop from 42 per cent in 2016.4
Unpaid paperwork
GPs in 2022 on average worked 35.9 hours a week, up on 34.8 hours in 2020.
About 11.5 of those hours were on non-patient-facing activities; 7.2 hours were unpaid.4
Changing work pattern
GPs in 2022 on average worked 35.9 hours a week, down from 2000 when the average GP reported working 42.2 hours.4
Digital demands
During the pandemic, 93 per cent of GPs were texting patients, 87 per cent were emailing, 68 per cent were using patient portals and just under half using video calls.4
Mental health demand back then…
Mental health was the specific reason for 3.2 per cent of patient visits to a GP in 2001/02 and mental health arose as a problem in 7.7 per cent of consultations.9
And now…mental health issues doubling
About 30 per cent of people reported moderate to very high psychological distress in the 2021/22 New Zealand Health Survey compared with 15 per cent in 2011/12.10
Referrals back then…
Back in 2001/02, about 8 per cent of visits to a GP resulted in elective medical or surgical referrals and GPs were “uncertain” about the appropriate action to take in 2.8 per cent of visits.9
And now…
GPs increasingly manage patients with complex conditions stuck on secondary waiting lists – including 51,202 people at the end of May waiting more than 16 weeks for first specialist assessment.11
Some GPs cannot refer to secondary care in the first place, for example, Canterbury and Wellington gynaecology services can see patients with high risk of life or organ-threatening conditions only.12
Ageing patient population
People aged 65-plus now make up 16.4 per cent of the population (compared with 11.8 per cent in 2002).13
GP and nurse visits grow
GP visits grew nearly 12 per cent between 2008 and 2016, from 11.8 million to around 13.2 million a year, with the largest growth in children and those aged 65-plus.8 Practice nurse visits rose by nearly 132 per cent over the same years, from around 1.4 million in 2008 to 3.3 million in 2016.14
…and grow
By around 2021, GP visits were up to about 14 million and practice nurse visits to 4.3 million.15
Utilisation trends
GP consult rates per person on average rose between 2008 and 2016 from an average of 2.9 to 3 while over the same time period nurse consultations (for high-needs groups) rose from 0.5 to 0.9.16
Utilisation still on the up
The number of general practice consultations per person rose to 4.1 in 2022 – 20 per cent higher than the average utilisation of 3.4 in 2012.17
Wait times – an increasing issue
More people (11.5 per cent) reported unmet need for a GP due to wait time in the 2021/22 New Zealand Health Survey than due to cost (10.7 per cent).10
ED usage up
Adults using emergency department services grew from 8.5 per cent in 2006/07 to 13.6 per cent in 2011/12 and 14.9 per cent in 2019/20.16
ED fail
Of the 1,245,881 visits to an ED in 2022, 4.7 per cent (59,153 visits) ended with the person leaving before receiving care (missed attendance). This was an increase from 3.3 per cent in 2021.18
Nurse pay gap
A government-funded pay equity deal for Te Whatu Ora nurses created a pay parity gap of about $6 an hour with primary care nurses, creating problems for recruitment and retention in primary care.19
Services closed
Forty-three per cent of respondents in a survey last month report closing or restricting general practice services due to a nursing workforce shortage worsened by the pay gap.19
Potential doctor pay gap
The pay gap between salaried GPs and Te Whatu Ora doctors is set to widen as bargaining continues between Te Whatu Ora and the Association of Salaried Medical Specialists, after senior doctors rejected a $15,000 to $26,000 increase to their reported average $302,000 salary package.20
Inflation pressures
Capitation increases since 2005 have fallen short of inflation (Consumer Price Index) by an estimated 3.84 per cent, when measured in 2004 dollars.17
Making a loss
Thirty-five per cent of 238 respondents to a general practice owners’ survey in August 2023 reported making a loss in the last quarter of the financial year.21
Worried about future
About 84 per cent of surveyed practice owners reported their practice’s financial position was worse than at the same time last year and 88 per cent were worried about the future financial viability of their practice.21
Staff vacancies
Nearly 60 per cent of practice owners responding to an August survey had GP vacancies and 57 per cent had nurse vacancies.21
Reducing services
Of surveyed practices, 53.5 per cent have had to reduce services in the past six months and 67 per cent are charging for services (like referrals) that were once free.21
Closed books
Practices with fully closed enrolment rose from 7 per cent in 2019 to 14 per cent in 2020, to 21 per cent in 2021 and to 27 per cent in 2022, according to a Victoria University survey.22
A stocktake of 853 practices in July 2022 found that 34 per cent had closed books, up from 25 per cent in 2021.23
In an August 2023 survey, 23.4 per cent of practice owner respondents said the practice had closed its books and a further 47 per cent were enrolling selected patients only.21
1. The New Zealand Medical Workforce in 2022. Wellington: Medical Council of New Zealand; 2022.
https://www.mcnz.org.nz/assets/Publications/Workforce-Survey/64f90670c8/Workforce-Survey-Report-2022.pdf
2. “Latest GP numbers improve but still lag behind other specialities.” New Zealand Doctor Rata Aotearoa, 18 July 2023 (personal request).
https://www.nzdoctor.co.nz/article/news/latest-gp-numbers-improve-still-lag-behind-other-specialties
3. “Population growth rebounds on removal of COVID border restrictions.” Stats NZ
.https://www.stats.govt.nz/news/population-growth-rebounds-on-removal-of-covid-border-restrictions/
4. Te Rangahau Ohu Mahi The Workforce Survey 2022. Wellington: RNZCGP; 2023.
https://www.nzdoctor.co.nz/Collection-workfarce
5. “Local marae across Aotearoa will host GPEP orientation this month.” New Zealand Doctor; 1 February 2023.
https://www.nzdoctor.co.nz/article/news/local-marae-across-aotearoa-will-host-gpep-orientation-month
6. “RNZCGP welcomes highest intake of GP registrars in more than 10 years.” New Zealand Doctor; 2 February 2021.
https://www.nzdoctor.co.nz/article/news/rnzcgp-welcomes-highest-intake-gp-registrars-more-10-years
7. “Medical graduates” – OECD Data
https://data.oecd.org/healthres/medical-graduates.htm#indicator-chart
8. “Nursing graduates” – OECD Data
https://data.oecd.org/healthres/nursing-graduates.htm#indicator-chart
9. Raymont, A, Lay-Yee, R, Davis P, et al. Family Doctors: Methodology and description of the activity of private GPs. Wellington, Ministry of Health; 2004.
https://www.health.govt.nz/system/files/documents/publications/report1familygpsall.pdf
10. New Zealand Health Survey – Ministry of Health
13. Regional Economic Profile. New Zealand – Infometrics
https://ecoprofile.infometrics.co.nz/new%20zealand/Population/AgeComposition
17. GenPro Financial Analysis and Benchmarking Report (unpublished draft). Auckland: Grant Thornton; 2023.
21. “Survey paints damning picture of pressure GPs are under.” New Zealand Doctor; 31 August 2023.
https://www.nzdoctor.co.nz/article/news/survey-paints-damning-picture-pressure-gps-are-under
22. “Practices with closed books have risen four-fold since 2019.” New Zealand Doctor; 24 November 2022.
https://www.nzdoctor.co.nz/article/news/practices-closed-books-have-risen-four-fold-2019
23. PHO Closed Books Stocktake Report 2022. Wellington: GPNZ; 2022.
https://gpnz.org.nz/publications/pho-closed-books-stocktake-report-2022/
11. “Low response to first round of Te Whatu Ora waiting list review.” New Zealand Doctor; 22 August 2023.
https://www.nzdoctor.co.nz/article/news/low-response-first-round-te-whatu-ora-waiting-list-review
12. “Wellington’s non-cancer access difficulties repeated in Canterbury.” New Zealand Doctor; 26 September 2023.
14. Middleton L, Dunn P, O’Loughlin C, et al. Taking Stock: primary care innovation. Wellington: Productivity Commission; 2018.
15. Health minister Andrew Little speech to Rotorua GPCME 2022.
16. Cumming, J. Aotearoa New Zealand’s primary health care strategy: equity enhancing in policy and in practice? The Lancet Global Health; Working Paper: 2022.
18. Health and Independence Report 2022. Wellington: Ministry of Health; 2023.
19. “Nurse shortages force 43 per cent of practices to curtail services.” New Zealand Doctor; 27 September 2023.
20. “Te Whatu Ora frustrated union rejects settlement offer.” Media statement – Te Whatu Ora, 4 September 2023.