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Colour-Coded Health Funding


Colour-Coded Health Funding

Heather Roy Speech to Christchurch Conference, March 2004

My major area of responsibility is health and, recently, I've been highlighting the insidious onset of race-based funding - especially in primary care.

Most people don't realise that General Practice is currently being restructured. GPs have been working effectively as owner-operators, but this structure is now being replaced with Health Minister Annette King's Primary Health Organisations or PHOs.

Primary Health Organisations were originally intended to be one-stop shops: with doctors, nurses, chemists, physiotherapists and other health professionals all under the one roof. But all that has happened with this new Government strategy is that GPs - content as owner-operators - have changed their governance structure with the prerequisite additional layer of bureaucracy. Funding is structured in such a way that those GPs who don't sign up to the PHO system are financially disadvantaged and their patients won't receive cheap healthcare. Voluntary compulsion comes to mind!

But the larger problem with the PHOs is the funding because it is based on race. This is best described with an example:

Here are two 40-year old men earning the same amount and with the same family commitments and health needs but living in different parts of New Zealand. They do not have the same access to their family doctor. The man living in Gisborne can see his GP for $15 a visit but the man living in Newlands, Wellington must pay $50 to see his doctor. The man in Gisborne benefits from living in an area where the population is mostly Maori and the PHO therefore receives a race-based loading of 20 percent. All of these people in the same Primary Health Organisation as him benefit from the cheaper healthcare. The man in Newlands lives in a predominantly white area so his PHO doesn't get the race loading and he has to pay the much higher fee.

I've been saying for some time that this situation is unfair and this week I wrote to Trevor Mallard in his new position of Coordinating Minister for Race Relations. His brief is to conduct a review of government policies. Previously Helen Clark was adamant that all policies were based on need, not race. Now, however, the review will examine all policies to see if they really are based on need.

The Prime Minister likened Mr Mallard's new job to "taking a helicopter view" and said he would look generally at race and Treaty issues. I have asked him to take a special look at the funding for Primary Health Organisations because the race loading that some PHOs receive is clearly an example of race-based funding as opposed to funding based on need.

Another example I used in my letter was one I have recently used in Parliament to explain the race loading on some PHOs.

A Minister of the Crown, earning a Ministerial salary of $195,000 a year, living in Tolaga Bay, is eligible for $10 visits to his local doctor, but a man living in Invercargill earning just $20,000 must pay $45 - $55 for a visit to his doctor. Health need is not a consideration in this case. The inequity of the situation for the man earning almost 90% less arises because he doesn't live in an area with a favourable racial mix.

I look forward to Mr Mallard's inclusion of Primary Health Organisation funding in his helicopter view.

At Parliament we have just completed the first session of the year. This has been four weeks with a very different feel to it than the previous eighteen months and I have to say it has been great. No longer is the government leading from the front. No longer is the National Party on the back foot. And most importantly ACT messages - remember the billboard from last election? Messages you and I have been promoting for many years are now the mainstream. ACT has always been a party of influence but soon we intend to be influencing from the government benches.

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