Growing Corporate Power And General Practice

Saturday, 27 September 2025, 5:18 am
Opinion: Ian Powell

The increasing level of corporate ownership of general practices is a ‘below the radar’ growing concern within Aotearoa New Zealand’s health system, including many general practitioners and their professional bodies.

Broadly speaking there are four main forms of general practice ownership. The largest but declining is GP-owned practices.

Then there are the corporates (private for-profit companies) whose number of practices and enrolled patients are increasing. Community based not-for-profit ownership is the third form while Health New Zealand (Te Whatu Ora) is both the fourth and smallest

Who are the corporates

There are four corporate owners. Tamaki Health Ltd is described as the biggest with 50 general practices covering 230,000 enrolled patients. Adding to its size is its ownership of the White Cross urgent care clinics.

Tamaki Health began, in 1970, as a GP owned practice (initially called East Tamaki Healthcare). Dr Kantilal Patel and his wife Ranjna Patel focussed on high-needs patients in Auckland.

Over the years the number of practices gradually expanded but its founding focus remained as its mantra. It did not become corporate owned until 2017.

Today it is the only corporate which is owned by a private equity firm (Sydney based Mercury Medical Holdings). This ownership makes it permanently vulnerable because private equity owners are in for a shorter-term profit through on-sale.

On the other hand, Tamaki Health retains much of the operational cooperative patient focus that prevailed for over 40 years prior to corporate ownership.

Green Cross Health Ltd is the oldest corporate owning 66 general practices covering 423,000 enrolled patients.

Although the company was formed in 1981, until 2014 it was only involved in pharmacy ownership (currently Unichem and Life Pharmacy). From 2014 it began purchasing general practices.

Tend Health Ltd is the newest corporate. Formed in 2020 it currently owns 13 general practices covering 80,000 enrolled patients. It is also starting to branch out into urgent care clinics.

Formed in 2010, Third Age Health Services Ltd has a narrower focus than the other corporates. It provides healthcare services to older adults residing in aged residential care facilities along with private hospitals and secure dementia units. Based in Hawke’s Bay it has 20,350 enrolled patients and owns six practices.

All the corporates are driven by the imperative to be profitable. They all promote telehealth with Tend Health arguably having the biggest profile.

Tend Health and Green Cross have the most in common as they both started as corporates from their inception.

In contrast Tamaki Health has only been corporate owned for the last eight years of its 55-year history. This does have a contrasting impact on its operating culture.

It is also reflected in its average practice size. Whereas Green Cross and Tend Health practices have on average noticeably larger enrolled populations (6,409 and 6,154 averages respectively), Tamaki Health has an average 4,600 enrolled patients per practice. [Third Age Health’s average is 3,392.]  

Alarm bells over corporate ownership power

For over two years I have been ringing alarm bells over the increasing corporate ownership of the health system’s general practices.

On 12 June 2023 BusinessDesk published an opinion piece by me reporting on the results of a College of General Practitioners workforce survey: GP ownership declines; corporate ownership increases.    

The survey identified that general practice owners were a declining minority of GPs falling from nearly 40% in 2014 to 31% in 2022.

Further, the number of GPs reporting that they worked in a GP-owned practice was 73% in 2015. By 2022 the number has dropped to 64%.

On the other hand, the number of GPs reporting they worked in a fully or partially corporate-owned practice has doubled since 2015. By 2022 it was 14%.

This led me to conclude that:

Whether the decline accelerates or not, the indications are that the winner will eventually be corporate ownership. Unless something of significance changes, much of general practice will be provided by relatively big, rather than small businesses. Further, it will happen by drift, in the absence of debate over whether this is a good thing.

Corporate expansion by stealth

On 29 February 2024 Newsroom published my opinion piece on expanding corporate general ownership: Corporate expansion by stealth.

Much of my focus was on Tamaki Health and Green Cross Health in the context of corporate expansion into general practice ownership within a policy vacuum. I concluded that:

Whether GP-ownership’s decline accelerates or not, the indications are that the winner will eventually be corporate ownership. Unless something of significance changes, much of general practice will be provided by relatively big, rather than small businesses. Green Cross’ endeavours to concentrate its general practices in the only primary health organisation with a national mandate suggests a shift from drift to stealth.

Whether increased corporate control of general practice eventuates by either means, the absence of debate over whether this is a good thing and the presence of a policy vacuum is a bad thing.

Policy vacuum

On 2 May 2024 I posted in Otaihanga Second Opinion my concerns about how this policy vacuum enabled corporate general practice ownership by stealth: Profit-driven corporate ownership expansion is enabled.

This stealth enabling policy vacuum led me to issue the following call:

It is time the leadership of the health system stepped up. Failure to do so is likely to lead to increasing corporate driven profit extraction dominating general practice. It would mark a transition from healthcare being a public good  to a commodity.

Perverse outcome

On 6 July 2024 Otaihanga Second Opinion discussed, in the context of the experience of a Green Cross Health owned practice in Lower Hutt, a perverse outcome linked to the misuse of the capitation funding formula: Perverse outcome.    

My main observation was as follows:

This leads to the critical question: why has corporate ownership led to the crisis at its latest Lower Hutt practice with its mass loss of doctors and nurses. At the heart of it is the drive of corporates for profit-maximisation.

One means of achieving this overriding objective is the use of the capitation funding formula for general practice in a way that was not contemplated by its designers.

Further:

In essence, capitation is per capita funding of practice enrolled patients supplemented by age and gender factors.

The more the number of enrolled patients, the greater the funding revenue to the corporate owner. The big variable is the length of patient consultations.

The shorter the consultation, the greater the patient throughput, the greater the number of enrolled patients, the greater the ring of the metaphoric cash register, and the greater the work pressures and dissatisfaction of the GPs and nurses.

And now we have corporates positioning to extend their influence on Primary Health Organisations. But that is another post. Look out for it; just saying!

© Scoop Media

Ian Powell

Otaihanga Second Opinion is a regular health systems blog in New Zealand.

Ian Powell is the editor of the health systems blog 'Otaihanga Second Opinion.' He is also a columnist for New Zealand Doctor, occasional columnist for the Sunday Star Times, and contributor to the Victoria University hosted Democracy Project. For over 30 years , until December 2019, he was the Executive Director of Association of Salaried Medical Specialists, the union representing senior doctors and dentists in New Zealand.

Contact Ian Powell

• Website - Otaihanga Second Opinion