Patients to be hit hard after too-little, too-late 4% offer

Budget-pinched Te Whatu Ora telling practices they can increase patient fees, on average, by 7.76 per cent to make up for the capitation funding shortfall has drawn a sharp response from primary care leaders.

Hauora Taiwhenua Rural Health Network chief executive Grant Davidson describes the “underwhelming” offer as a “cost-shifting exercise to the general public who are already in a cost-of-living crisis”.

General Practice Owners Association deputy chair Stephanie Taylor agrees, saying the “Government basically [is] going to shift the cost of providing that GP care onto the patients, which none of us supports”.

The “disproportionate” proposed increase in patient fees is also noted in a media release by General Practice Leaders Forum chair and RNZCGP president Samantha Murton, who says the “disappointing” offer could see patients picking up the shortfall in funding.

Likewise, General Practice NZ chair and specialist GP Bryan Betty says the expectation that patient fee increases will compensate for the “absolutely inadequate” funding will mean patients “bear the brunt again”.

For many, Nelson specialist GP Graham Loveridge says that any tax benefit under Budget 2024 could be “neutralised” by potentially higher GP fees and prescription charges.

General practice leaders also voiced their frustration at the Coalition Government’s lack of action on its preelection commitments to implement the 2022 Sapere report.

Dr Davidson recalls all coalition partners before the election saying they would work to resolve chronic underfunding highlighted by the report. “But [the offer] is not even keeping pace with inflation.”

Māpua specialist GP, Andre Bonny, agrees, saying the proposed increase is “nowhere near the amount needed” and points to the ACT Party’s preelection promise of a 13 per cent capitation increase.

GenPro chief executive Mark Liddle echoes Dr Bonny’s reference to ACT’s promise, adding that ACT and National both campaigned on the 2022 Sapere report and the need to address underfunding: “But they haven’t delivered.” The Sapere report indicated that most practices needed a median capitation rise of 10 to 20 per cent and much more for very-high-needs practices.

ACT leader and associate health minister David Seymour, in an email, says the country’s “dire fiscal situation” meant that not all policies campaigned on were included in the Coalition Government’s first Budget.

Primary care leaders also expressed exasperation at the capitation increase’s failure to recognise the sector was in crisis due to long-standing underfunding and workforce pressures.

Dr Taylor, a specialist GP, says GenPro warns of the risk of more practice closures after a capitation offer that “definitely falls short” of stabilising the already financially struggling sector.

“In an ideal world, we would have seen a double-figure investment just to stabilise general practice,” Dr Taylor says. Failing to invest in chronically underfunded practices will force them to increase fees or decrease the services they provide just to remain viable.

Dr Betty says: “We know that a lot of practices are becoming marginal in terms of their sustainability, and this just adds to the pressure…”

Health minister Shane Reti has indicated he is most interested in the 2025/26 Budget, Dr Betty says. “However, that’s another year’s delay in sorting out the underlying funding problems.”

RNZCGP medical director Luke Bradford says the 4 per cent offer is “patently below” what’s needed to rectify chronic underfunding. Dr Bradford argues that relying on fee increases to cover underfunding risks limiting patient access to care and pressures practices to bear the cost of discounting care or carrying patient debt.

Mr Liddle agrees, saying he spoke to a GenPro practice, which gets half its income from capitation. Its patients can’t afford a fee increase so that effectively halves the increase the practice could receive in 2024/25 from 4 per cent to just 2 per cent, he says.

Very Low Cost Access general practice leaders also rejected the suggestion from Te Whatu Ora that struggling high-needs practices can boost income by charging higher fees to non-Community Services Card holders.

Lloyd McCann, chief executive of Tāmaki Health, which owns many VLCA practices, says the suggestion was unworkable and “purely theoretical” as there was “no way we can put our fees up...Our patients, a lot can’t afford another $10; people are already making decisions between seeing the doctor or putting food on the table.”

Dr McCann says the proposed capitation increase is “incredibly demoralising”, and the sector needs a public outcry like that which resulted in the Government's U-turn on funding new cancer drugs.

“Especially as, while such drugs are important, we know everything starts and ends in primary care, and if we don’t make a decision to invest in this sector, you can have the extra stuff you like, but you will still have inequitable health outcomes.”

National Hauora Coalition chief executive Rachel Brown says, by email, that charging non-CSC holders more would impose a significant financial burden on whānau already feeling the pinch. “This decision will only perpetuate Māori health inequities.”

The coalition and other Māori PHOs are calling for an in-person hui to find more effective solutions, she says. “Our focus remains advocating for a re-prioritisation of funding, aligning with our overarching commitment to delivering equitable outcomes for Māori and other high-needs populations who deserve better healthcare.”

Procare chief executive Bindi Norwell says the lacklustre offer leaves practices with little option than to raise fees, making a GP appointment unaffordable for some patients and pushing more to queue at hospital emergency departments.

“The entire healthcare system is already in crisis, and this inadequate capitation offer adds more fuel to the fire,” Ms Norwell says in an email.

WellSouth Primary Health Network chief executive Andrew Swanson-Dobbs, also by email, says the offer “signalled a lack of commitment” by the board of Te Whatu Ora to address the sector’s deep-seated underfunding.

“This will not address our southern challenges: our large rural population, our workforce pressures and, like other regions, our continued inequitable health outcomes.”