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Primary Care in New Zealand - Executive Summary

Primary Care in New Zealand –

Viable but Vulnerable?

An overview of Primary Health Care Strategy Implementation

Claire Austin

Chief Executive

April 2003

8 May 2003

Media Statement

Primary Health Care – Viable but Vulnerable?

The role of District Health Boards in implementing the Primary Health Care Strategy requires much greater scrutiny and management, according to the CEO of the Royal New Zealand College of General Practitioners, Claire Austin.

In order to successfully implement the important goals of the Primary Health Strategy, “the emphasis needs to be upon capacity building to deliver services, rather than shifting risk,” Ms Austin said in a paper released by the College today.

In a constructive overview of the issues affecting the Primary Health Sector and the management of change, Ms Austin found the goals of the Primary Care Strategy are widely supported within the sector, but that some “questionable practices” are already evident in some areas which risk “creating competition rather than collaboration.”

“In the past, the management of change, building of capacity and contracting issues have often been overlooked as health goals and policies are implemented.”

She found considerable variance of DHB contracting behaviours as well as organisational capacity at all levels of the sector.

“The Ministry of Health needs to take a leadership in capacity building, fostering sector development and monitoring of contracting behaviours. Research and development is an essential component of capacity building and requires explicit recognition and funding. (The College is due to release a report that examines the building of primary health care research in New Zealand by the end of May 2003.)

The health sector and primary health care in New Zealand has undergone its third significant restructuring since 1993. The health reforms of the 1990s were intended to increase choice and access to consumers, encourage flexibility and innovation in health care delivery, increase accountability to purchasers, reduce hospital-waiting times and increase the sensitivity of the health system to the changing needs of society.

However, the reforms were also developed in a context of austerity and reduced public spending, with principles of user pays, and reductions in general practice subsidies. Practice nurse subsidies have also eroded over time. Funding was split from service provision, hospitals were set up as independent companies and competition was induced amongst service providers. This resulted in fragmentation of many primary care services including maternity, well-child and sexual health services.

The New Zealand health sector, as a consequence, has been challenged by a legacy of under investment in services both in primary and secondary care, increased compliance costs and an absence of strategic planning. Our performance has not compared favourably with other OECD nations in recent times. Infant mortality and disability years are high, and life expectancy is low in New Zealand compared with the USA, Australia and Canada.

Recent developments in Primary Health Care

“The commitment of an improved funding environment for primary health care is therefore significant and timely, ” Ms Austin said. The New Zealand Government has announced increased funding which will increase up to $195m of new funding targeted at primary health care, introduced gradually over three years.

In a 2002 report, the Auditor General of New Zealand, noted that the primary health sector, could benefit from a period of stability to allow effective purchasing capability for primary health care to develop and to make progress to improve the effectiveness and efficiency of primary health care service delivery. The report further stated:

“The fact that service provision has continued to function as well as it has reflects, to a large degree, the goodwill and tenacity of health professionals working in the primary health care sector….”

This statement was recognition of those who have continued to provide quality health care sometimes despite the conditions within the sector rather than because of them.

Primary Health Organisations and General Practice

The Primary Health Strategy signals a new direction for the health sector, and to the development of primary health organisations. These primary health organisations will be expected to provide both population health services and primary health care. However, in a time of such significant change, it is essential that change is planned and managed effectively.

Primary health care in New Zealand has generally been founded upon the personal investment of private business people. The majority of general practitioners are self-employed, approximately 30% of their income comes from the public purse. Despite being technically ‘independent operators’, operating their own businesses and setting their own fees, New Zealand GPs are significantly influenced by public policy. Public policy which has swung from a market, “laissez faire” model in the early 1990s to a focus upon co-ordination of health services, reduction of health inequalities and community involvement at all levels of health services.

Throughout this time, general practice has continued to play a pivotal role in the delivery of health care to New Zealanders. General practice is the foundation of the health system. General practice teams provide 85% of primary health care in New Zealand. There is evidence that there are better levels of health care in countries where access to health care services occurs through general practitioners. General practitioners have a significant role to play in the future of primary health care in New Zealand, however, it will be critical that they are adequately supported to continue to provide quality services.

General practice in New Zealand is supportive of a system that encourages continuity of care for patients, is well co-ordinated and collaborative, is adequately funded, and primary and secondary services well integrated.

Ms Austin made 11 key recommendations.


1. In order to ensure the viability of the Primary Care Sector, Primary Health Organisations should be supported to build their capacity in order to deliver required goals.

2. The Ministry of Health should ensure that District Health Board contracting practices with Primary Care should build capacity, rather than shifting organisational and financial risks.

3. The Ministry of Health should ensure that District Health Board requirements of Primary Health Organisations remain within the Primary Health Organisation minimum requirements (as defined by Government).

4. Contracting processes should be evaluated to ensure that contractual requirements do not undermine the viability of the organisation or the ability to provide quality, sustainable services.

5. The contracting models and Crown responsibilities agreed to in the Social Services Sector should be applied to the health sector, this includes commitments to Crown Guidelines for Contracting with Non-Government Organisations, Statement of Government Intention with Community Organisations and commitments to sector capacity building within accepted models.

6. The Ministry of Health should develop an explicit implementation plan in collaboration with key stakeholders in the sector. This plan should include process development, capacity building, roles and responsibilities and timelines.

7. Specific resources should be allocated to leadership development, governance and management training for Primary Health Organisations.

8. The Ministry of Health should take a leadership role in facilitating regular exchange of information and experiences in Primary Health Care Implementation – what’s working and what’s not.

9. The issue of the public/private foundations of Primary Health Care need addressing.

10. A sustainable funding and pricing model for primary health care (which realistically takes into account policy requirements, goals and quality frameworks) should be developed with key stakeholders.

11. Research and development is an essential component of capacity building and requires explicit recognition and funding.

(The College is due to release a report that examines the building of primary health care research in New Zealand by the end of May 2003.)


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