COVID money masked practice losses: What was the ‘huge’ amount of funding paid to general practices?

COVID-19 funding in the peak pandemic years masked the fact general practice funding is inadequate, says General Practice Owners Association chair Angus Chambers.

It is bizarre, says specialist GP Dr Chambers, to hear health minister Ayesha Verrall refer to the Government paying “huge amounts” to general practice during the COVID-19 response.

Under the Official Information Act, Te Whatu Ora has released to New Zealand Doctor Rata Aotearoa a document showing just over $900 million was paid to general practice for pandemic work. The table, “Payments to general practices for COVID-19 services (2020–2022)” shows how the money was disbursed.

The total is the equivalent of just over $180 per enrolled patient across the three years, or just under 10 per cent of the $10 billion allocated to Vote Health for COVID-19 at the outset of the pandemic.

Last year, former health minister Andrew Little used the expression “extra” COVID-19 funding as a reason for initially refusing to extend to general practices money from the nurse pay disparities fund.

Mr Little’s successor, Dr Verrall, pointed to COVID-19 funding at a 7 September pre-election forum hosted by Hauora Taiwhenua Rural Health Network.

Asked about general practice funding falling behind inflation, Dr Verrall said the Government’s payments were “above and beyond” regular general practice funding during the pandemic.

“And probably more than what was required, recognising that there was a gap to make up,” she said. There was a “huge amount of payments”, she said.

However, Dr Verrall says she wants to “turn the dial” and have more funding increases to primary care in the future than previously.

Meanwhile, Te Whatu Ora last year noted its expectation that COVID-19 funding would generate “a healthy rate of return” for practice owners. The comment appeared in a background paper on practice nurse pay funding.

Dr Chambers says the Government had six years to recognise that general practice funding was deficient and Dr Verrall’s talk of using COVID funding to make up the gap is “very bizarre”.

In a recent GenPro members survey, 35 per cent of practice respondents had made a loss in the last quarter of the financial year and 84 per cent said their financial position was worse than this time last year.

The cost of providing care has been going up “significantly faster” than funding in the past two to three years, leading to more practices becoming financially unsustainable, Dr Chambers says.

The COVID funding just “papered over those cracks” for a time, he says.

“It’s a bit like the boiled frog analogy. You don’t realise it’s slowly happening and COVID kind of obscured it. Then suddenly [the COVID funding buffer] has been withdrawn and the deficits are starkly revealed.”

Iain Watkins, co-owner and practice manager of West End Medical Centre in Whangārei, says he and his specialist GP wife Moira Chamberlain worked seven days a week for nearly six months last year delivering COVID in the Community services.

“To turn around now and say ‘you got all that extra money’, well, we worked darned hard to get that extra money,” says Mr Watkins. The money has been a buffer to use for maintenance work on their building, whereas “capitation barely breaks us even”, he says.

Three Rivers Medical general manager Michelle Te Kira says her Gisborne practice couldn’t use COVID-19 funding for nurses’ pay. The money was invested in a telehealth hub “to try and give our vulnerable population more access” to care, says Ms Te Kira.

Funding to general practices for COVID-19 services between 2020 and 2022 included:

• $60 for a telehealth consultation
• $120 for a COVID-19 consult and swab
• $36 for a COVID-19 vaccine (during office hours), and
• prior to a 70 per cent funding cut in February, fees of between $187.50 and $402 for COVID in the Community initial assessments plus follow-up care reviews.

At the time the COVID-19 funding was reduced, GP leader Bryan Betty said capitation should have been fixed first.

“[A] lot of general practices have really relied on the COVID funding over the last three years to keep going,” Dr Betty says.