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Flexibility In Fees Crucial In General Practice

Media release
13 December 2004

Flexibility In Fees Crucial In General Practice

A survey of South Island general practitioners has highlighted the difficulty for GPs to give relevant information to Government when it surveys PHOs about their advertised fees.

The survey revealed that more than 66 percent of consultations for children aged between six and 17 years were provided free of charge or at less than the “advertised” fee; and more than 61 percent of patients over 65 years were also treated free or at less than the “advertised” fee.

The average “advertised” fee for six to 17-year-olds was $22.22 and for the over-65s was $25.57. The average actual fees charged were $11.54 and $15.31 respectively.

“There are many reasons why fees charged for consultations might vary. A GP might see two young children at the same time and only charge for one consultation although he or she could charge for two. Someone coming in for a very short consultation might be charged less than the standard fee while it is not unreasonable for a GP to charge a premium for a lengthy complicated consultation,” says South Link Health Executive Director, Professor Murray Tilyard, who is also the Elaine Gurr Professor of General Practice at the Dunedin School of Medicine.

The survey, which was undertaken by South Link Health, an Independent Practitioners Association for South Island GPs, follows difficulties experienced at the time of the introduction of the Government’s subsidy of fees for patients over the age of 65 years visiting their general practitioner.

“The Ministry of Health wanted GPs to provide information about their advertised normal fee. GPs argued this information would not inform the public or the Ministry,” says Professor Tilyard.

“The problem is that basing policy on an ‘advertised’ fee is of limited value if that ‘advertised fee’ is not regularly charged. This survey proves the point.”

Professor Tilyard says general practice is a complex business and the setting of fees is equally complex.

“The point we want to make, and which the results of this survey endorses, is that flexibility in a GP’s pricing structure is essential. You wouldn’t expect a lawyer to have a board which reads ‘murder defences $5000; parking violations $200’. This study’s sample of doctors illustrates that doctors are being flexible and being so in a responsible and discerning manner.”

The survey was conducted among South Island general practitioners who belong to PHOs (excluding Christchurch). More than 90 percent of practices asked agreed to take part in the survey. Information on nearly 200,000 consultations was collected. Six South Island District Health Boards were covered: Nelson/Marlborough, Otago, West Coast, Canterbury, South Canterbury and Southern.


This study has been undertaken in order to update previous studies and to inform the discussion of community and policy makers. The main aim of our survey has been to evaluate the success of changes in capitation funding in reducing financial barriers to general practice services for 6-17 year olds and patients 65 years and over.

In October of 2003, government funding for general practice with children aged 6-17 years increased and on 1 July 2004, capitation funding for patients aged 65 and greater increased, committing PHO practices to fee reductions for patients in these age groups.

While the government assesses the impact of its fees policies by surveying PHOs about their advertised fees, it does not examine the actual fee being charged. With the advent of relatively sophisticated computer systems to manage practices’ accounting processes, studying the payments that patients actually make for their general practice care can be managed.

This survey has been undertaken to calculate the proportion of consultations that are charged at the “Advertised Normal Fee,” the proportion charged more or less than the advertised fee, and those consultations that are free of charge to patients.

Electronic data extraction searches were designed for practice management software systems and sent to South Island general practitioners who belong to PHOs (excluding Christchurch). Over 90% of the 145 practiced surveyed chose to participate. The survey data contained the actual fees charged for consultations with patients aged 6-17 years and 65 years and older, after the practice’s PHO join date.


While Table 1 Illustrates that the overall average Advertised Fee for 6-17 year olds was $22.22, it also shows that the actual average fee charged to this age group is significantly lower at $11.54. For the 65+ age group, the average Advertised Fee was $25.57, while the average actual fee charged was $15.31

Those in the 6-17 year age group were charged 48% less than the Advertised Fee on average. For the 65+ group, the average fee actually charged was 40% less than the Advertised Fee.

Table 1
6-17yrs 65+ yrs
Average Advertised Fee $22.22 $25.57
Average Actual Fee Charged $11.54 $15.31

Table 2 compares the average Advertised Fee and the average fee actually being charged for both the 6-17 year olds and the 65+ group. This is presented for the six South Island District Health Boards: Nelson/Marlborough, Otago, West Coast, Canterbury, South Canterbury, and Southern.

Table 2 6-17 yrs. 65+ yrs.
Average Fee Advertised Average Fee Actually Charged Average Fee Advertised Average Fee Actually Charged
NMDHB $21.55 $12.28 $26.27 $16.04
ODHB $24.92 $11.55 $25.09 $15.31
WCDHB $16.50 $6.40 $22.50 $12.19
CDHB $20.00 $11.07 $23.16 $14.56
SCDHB $20.00 $11.52 $25.53 $16.53
SDHB $21.00 $11.53 $27.00 $15.02

Frequency of Charges:

The following is an analysis of the frequency of fee charges. These tables contain the actual number of consultations followed by the percentage of consultations that constituted: no charge, less than the normal Advertised Fee, normal Advertised Fee, and greater than normal Advertised Fee charges. A “normal fee” charge is defined as the amount advertised by the doctors as the fee to the patient for a normal consultation at the surgery during normal surgery hours.

Table 4 illustrates overall frequencies for the entire survey for both 6-17 year olds and the 65+ age category. The table shows that 66% of 6-17 year olds and 61% of 65+ years of age were charged less than the normal Advertised Fee or no charge at all. In the case of 6-17 year olds, only about 25% of the time did consultations occur where the charge made to the patient was the amount advertised as the normal fee for consultation. Those 65 years and greater were charged the advertised fee approximately 29% of the time.

Only 8% of consultations reflected a greater than normal Advertised Fee for 6-17 year olds. For the 65+ age group, 10% of consultations cost patients greater than the normal Advertised Fee. This greater than normal fee includes charges for services as diverse as in-practice surgical procedures to home visits to after-hours consultations. These “greater than normal” charges are not considered “normal” consultations.

Table 4 Frequency of Charges Entire Survey
6-17 yrs 65+ yrs
No Charge 19985 (25.4%) 18411 (15.9%)
>Advertised Fee 6343 (8.1%) 11665 (10.1%)
No. Consults 78641 115448

Table 5-1 indicates the frequency of charges for all 6-17 year olds in the 6 DHBs: Nelson/Marlborough, West Coast, Canterbury, South Canterbury, Otago, and Southern.

Table 5-1 Frequency of Charges by DHB 6-17 yrs
No Charge 5374 (24.5%) 869 (35.0%) 5392 (27.0%) 2499 (22.9%) 5348 (25.4%) 493 (21.7%)
>Advertised Fee 1833 (8.4%) 248 (10.0%) 1732 (8.7%) 1135 (10.4%) 1090 (5.2%) 305 (13.4%)
No. Consults 21927 2480 19979 10915 21064 2276

Table 5-2 indicates the frequency of charges for all those in the 65+ age group in the 6 DHBs: Nelson/Marlborough, West Coast, Canterbury, South Canterbury, Otago, and Southern.

Table 5-2 Frequency of Charges by DHB 65+ yrs
No Charge 3900 (14.4%) 278 (16.9%) 3341 (18.9%) 2042 (13.3%) 7635 (15.9%) 1215 (20.9%)
>Advertised Fee 2486 (9.2%) 112 (6.8%) 1892 (10.7%) 1443 (9.4%) 5167 (10.8%) 565 (9.7%)
No. Consults 27014 1644 17700 15303 47962 5825


The amount charged to a patient for a general practitioner consultation has long been a concern of patient, general practitioner and government alike. General practitioners in New Zealand have always provided flexibility in their pricing structures. This study’s sample of doctors illustrates that this flexibility is being used in a responsible and discerning manner, even after PHO structures are in place.

General practitioners provide a wide variety of medical services to the community, in return for which a variety of charges are made. To argue the merits of an “Advertised Fee” or regular fee charge for general practice service becomes redundant, when “regular fees” are not regularly charged.


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