Health NZ has revised its funding offer for general practitioners to a 6.32% increase, up from an initial 6% proposal, following pushback from the sector. The agency is now reworking its capitation model to account for comorbidities, deprivation, and rural status, with a new ratification deadline set for late next week.
Why the funding offer was revised
The health agency returned to the drawing board after general practitioners expressed concerns regarding how the government allocates funding. Capitation, the system used to pay clinics a fixed amount per patient based on age and sex, is being adjusted to include new criteria such as patient health needs and geographic location. According to GenPro chair Dr. Angus Chambers, the initial proposal faced resistance because the reweighting process created a system where some practices would receive more funding while others would see their income drop. While Te Whatu Ora planned to use transitional funding to bridge these gaps, Dr. Chambers noted that many clinics would remain in a less favorable financial position under the new model.
Points of contention for general practitioners
Beyond the funding formula, the proposed contract includes a one-year fee freeze designed to prevent increased costs from reaching patients. Dr. Chambers characterized the agency’s strategy as an attempt to achieve three distinct goals—rearranging rural funding, reweighting capitation, and capping fees—using a single funding pool. He suggested this approach is likely to fail, as practices may be forced to raise fees once the one-year freeze expires to recover lost revenue. Additionally, Dr. Bryan Betty, a Te Whatu Ora board member, noted that the current formula remains incomplete because it does not account for patient ethnicity, a factor the sector has requested be included.
What could happen next
Health NZ is expected to send the redrafted offer to practices today, with a target for ratification by late next week. The agency has scheduled online seminars for the coming week to clarify the changes and address concerns from the sector. Martin Hefford, acting director of funding, community and mental health at Health NZ, stated the agency is refining the package in response to feedback. Meanwhile, the political landscape remains divided on the long-term approach to primary care funding. Labour health spokesperson Dr. Ayesha Verrall stated that her party would push for an independent pricing authority to manage GP funding, alongside a policy to provide three free annual GP visits for every New Zealander.
