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$43 million invested in high need practices

$43 million invested in high need practices

General Practices that charge very low fees will receive extra government funding to make sure they can continue to provide services for their often high need communities, Health Minister Pete Hodgson announced today.

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$43 million over four years will be invested in practices that voluntarily agree to maintain their fees within a very low threshold - zero fees for children 0-5 years, $10 for 6-17 year olds, and $15 for adults.

"The Labour-led government believes that no family should have to choose between putting food on the table and paying for the cost of a doctors visit," Pete Hodgson said. "Our work to make primary health care affordable for all families has been one of our most significant achievements.

"While we're already investing heavily in reducing the cost of seeing the doctor for all New Zealanders, there are a number of practices whose dedication to low fees has been even more ambitious than our own. These practices are currently charging very low fees - and in a number of cases, no fees at all - to make sure their communities can access primary health care.

"With profits in the sector increasing very significantly in the last few years, it's become more difficult for very low fees practices to meet salary expectations while maintaining facilities. The government feels that these practices are too valuable to the health of New Zealand families to lose.

"The funding will be available to any practice that is willing to charge very low fees. It is expected that 15 per cent of practices covering some 615,000 people will be the most likely to take up the new funding.

"With this funding the government is recognising the extra effort involved in providing services to concentrated high need populations. The success of these practices is crucial to the success of the government's Primary Health Care Strategy."

The total cost of this initiative is estimated at $8.6 million in 2006/07 and $11.5 million from 2008 onwards. The funding will be made available to practices from 1 October this year.

Attached: Questions and answers on the new initiative.


Questions and Answers


Low cost access payment effective from 1 October 2006

A low cost access payment for Primary Health Organisations (PHOs) and their practices that meet and maintain low fees thresholds will be introduced from 1 October 2006.

Those PHO practices that charge very low fees typically serve high need communities. The low cost access payment is a way to support, encourage, and reward PHOs and their practices that, in order to deliver on low cost access to primary health care and reduce health inequalities, have forgone revenue from patient fees.

Why support very low cost access?

This initiative is designed to:
· provide extra support to Primary Health Orgainsation (PHO) practices that charge very low fees. This is expected to be about 15 per cent of PHO practices (166 practices) serving around 615,000 people.
· recognise that the eligible practices typically serve communities with high health needs who do not have the income to support higher fees
· provide extra funding in return for PHOs and their practices agreeing to maintain fees within the fees thresholds. Most PHO practices charge around $26 for adults
· recognise the extra effort involved in providing services to concentrated high need populations and making the aims of the Primary Health Care Strategy real for those communities
· keep fees low for people who can least afford primary health care and improve health outcomes for those likely to have the worst health. (Sixty-eight percent of the people expected to benefit from this initiative are Maori, Pacific or living in areas of high deprivation.)

Eligibility criteria for low cost access payment
Eligibility for the low cost access payment will be open to all PHOs/practices currently charging or prepared to reduce their fees for standard consultations to the thresholds specified below:
· zero fees for children 0 - 5 years
· $10 maximum for children 6 -17 years and
· $15 maximum for all adults 18 years and over.

Interim PHOs/practices that have not yet received increased capitation payments for adults 25 - 44 years will be eligible for the payment for their enrolees in other age groups, provided that they meet the fee thresholds and the DHB is satisfied they have not unreasonably increased fees for the adults 25-44 years. However, they will not be eligible for the low cost access payment for the 25-44 year age group until 1 July 2007.

As well, the PHO must meet two pre-requisites:
· it must have signed the latest variation (variation 4 of version 17.0) of the PHO Service Agreement by 6 November 2006 and
· it must be participating in the PHO Performance Management Programme, or as a minimum, have obtained DHB sign off to its establishment plan for the PHO Performance Management Programme and participate in the programme no later than 1 July 2007.

The value of the low cost access payment
The low cost access payment will comprise an individual practice component and a "whole of PHO" component.
The individual practice component will comprise a 15 percent increase on First Contact capitation funding rates at non High Use Health Card rates for each PHO practice that meets the low fee thresholds. This is equivalent to an extra $4.15 per notional visit for all enrolees 6 years and over and an extra $5.80 for children under 6 years at 2006/07 rates. This is the major portion of the low cost access payment and PHOs will flow it through to the eligible practices.
The whole of PHO component will comprise a 15 percent increase on Services to Improve Access funding for PHOs where all their practices meet the low fee thresholds. PHOs will have flexible use of this portion of the low cost access payment so long as its use is related to implementing the primary health care strategy including reducing health inequalities, and subject to DHB approval for transparency and accountability purposes.

Adjusting the fee benchmark over time
As the low cost access payment will be calculated as a percentage of the First Contact and Services to Improve Access funding, the value of the low cost access payment will be adjusted annually in line with the adjusted base. As well, the low fees threshold (that is, the maximum fees that can be charged to be eligible) will be annually adjusted to maintain value by the same percentage as the capitation base adjustment.


ENDS

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