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King welcomes four new Primary Health Organisation

King welcomes four new Primary Health Organisations

Health Minister Annette King says the establishment of four new Primary Health Organisations will give thousands of New Zealanders in high health need, low income parts of the country access to good, affordable primary health care.

Ms King is launching one of the new PHOs in the Hutt Valley tomorrow. The other three are in the Tairawhiti region (two) and the West Coast of the South Island.

"Tens of thousands of New Zealanders will only be charged low fees when they visit their doctor," said Ms King. "For example, visits will be free for under 18s, and $10 at most for adults, in normal hours at the new Hutt Valley PHO."

The PHOs, along with two established in South Auckland on July 1, are being funded from $50 million allocated this financial year to begin implementing the Primary Health Care Strategy.

"When I announced the funding on March 13, I said it represented the most important development in caring for the health of New Zealanders since the first Labour Government introduced patient subsidies in the 1940s. Now we are starting to see that vision come to reality."

Ms King said the PHOs -- West Coast (West Coast District Health Board), Piki te Ora ki te Awakairangi (Hutt Valley DHB), Turanganui (Tairawhiti DHB) and Ngati Porou Hauora (Tairawhiti DHB) -- would play essential roles in their communities.

"PHOs are the key to implementing the Primary Health Care Strategy, which is all about keeping people well in their communities by making primary health care more readily available. New Zealand can no longer tolerate a situation in which some parts of the country suffer significant levels of deprivation and poor health.''

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Ms King said the first two PHOs, TaPasefika and Te Kupenga o Hoturoa, targeted low-income, high-need groups in the Counties Manukau DHB region.

The West Coast PHO, which includes all the GP practices in the region, will cover the entire West Coast and its population of about 32,000 people.

The two East Coast PHOs will cover the entire Tairawhiti DHB region. Turanganui PHO is a combination of Maori health provider Turanga Health, Pinnacle Independent Practice Association (IPA), and First Health IPA. It will provide services to about 32,000 people, mainly in Gisborne. Ngati Porou Hauora PHO will serve a population of about 12,000 people from Potaka to Gisborne.

Piki te Ora ki te Awakairangi PHO, comprised of Whai Oranga o te Iwi, Hutt Union and Community Health Service Incorporated, and Kokiri Marae Trust providers, will serve about 13,000 people in Lower Hutt and Wainuiomata.

Ms King said the PHOs were being funded using one of two funding formulas, Access (five of the PHOs) or Interim (West Coast only).

The Access formula is targeted at parts of the country with high health needs, and the Interim formula is available to all other PHOs. Over time, PHOs in the latter category will receive increased funding. From 2003-04 patient fees will start to be lowered for under-18s and over-65s enrolled in PHOs.

"Our aim is to target high-need parts of the country first, and in developing the interim formula we have also taken on board a proposal put forward by the Independent Practice Association Council (IPAC) aimed at improving funding for 'priority patients' -- high users of primary health care services, like people with diabetes or heart disease.

``I have asked the Ministry of Health to work with IPAC to develop their priority patient proposals further over the coming months. I see their approach as complementary because it targets another high-need group.

"Initially the interim formula provides additional funding for extra functions including services to improve access for high-need groups and health promotion. When the second year of primary health care money ($165 million) is rolled out to reach under-18s and over-65s, it will mean that it can quickly be offered to hundreds of thousands of New Zealanders who are already enrolled in PHOs."

Ms King said that by July next year between 1.7 million and two million New Zealanders could be enrolled in PHOs. "I am delighted by the high level of support for the Strategy from communities and GPs, nurses, Maori and Pacific providers. Nearly all DHBs in the country have signalled they are likely to have at least one PHO established by early 2003.

"I know many primary care providers have struggled in the past. This has happened partly because public funding has not matched rising costs, and partly because in many places patient fees have deterred people who should seek care.

"From now on this will change. The funding for PHOs will be regularly reviewed to keep pace with inflation. The aim of the new funding is to ensure that gradually everyone has access to free or low-cost health care. Today is a day to celebrate because these new PHOs take us further down that track."

Attached: Q and As and Government achievements in primary health care.

Questions and Answers

What is primary health care?
Primary health care covers a broad range of out-of-hospital services, although not all of them are Government funded. It aims to improve the health of the people in communities by working with them through health improvement and preventative services, such as health education and counselling, disease prevention and screening.

Primary health care includes first level services such as general practice services, mobile nursing services and community health services targeted especially for certain conditions, for example maternity, family planning and sexual health services, mental health services and dentistry, or those using particular therapies such as physiotherapy, chiropractic and osteopathy services.
Chronic diseases, such as diabetes are best managed by primary health care services so that complications can be prevented or mitigated.

What is the Primary Health Care Strategy?
The Primary Health Care Strategy was launched in February 2001 by Health Minister Annette King. It builds on the population health focus and the objectives of the New Zealand Health Strategy and the New Zealand Disability Strategy and outlines how a different approach to primary health care will improve the health of all New Zealanders through:
· a greater emphasis on population health, health promotion and preventative care
· community involvement
· involving a range of professionals and encouraging multidisciplinary approaches to decision-making
· improving accessibility, affordability and appropriateness of services
· improving co-ordination and continuity of care
· providing and funding services according to the population's needs as opposed to fee for services when people are unwell.
What is a Primary Health Organisation (PHO)?
PHOs are the local provider organisations through which District Health Boards (DHBs) will implement the Primary Health Care Strategy. The essential features of PHOs are set out in the Minimum Requirements released by the Health Minister in November 2001:
· PHOs will aim to improve and maintain the health of their populations and restore people's health when they are unwell. They will provide at least a minimum set of essential population-based and personal first-line general practice services
· PHOs will be required to work with those groups in their populations (for example, Maori, Pacific and lower income groups) that have poor health or are missing out on services to address their needs
· PHOs must demonstrate that they are working with other providers within their regions to ensure that services are co-ordinated around the needs of their enrolled populations
· PHOs will receive most of their funding through a population needs-based formula (capitation)
· PHOs will enrol people through primary providers using consistent standards and rules
· PHOs must demonstrate that their communities, iwi and consumers are involved in their governing processes and that the PHO is responsive to its community
· PHOs must demonstrate how all their providers and practitioners can influence the organisation's decision-making
· PHOs are to be not-for-profit bodies with full and open accountability for the use of public funds and the quality and effectiveness of services.

What is the Government's high-level direction for the Primary Health Care Strategy?
The agreed high-level direction is as follows:
· Subject to the availability of funding, the public share of primary health care funding will be substantially increased over the next 8-10 years
· Over time, as PHOs are formed, they will be funded according to the needs of their enrolled populations to provide more effective and affordable care with a population health focus
· As this happens, reliance on the Community Services Card (CSC) will be progressively reduced
· As the CSC will still be needed for a number of years, measures will be implemented to improve its take-up in the meantime.

What funding is available for the Primary Health Care Strategy?
The Government has committed just over $400 million over three years to begin implementing the Primary Health Care Strategy.
The funding package is as follows:

$million (GST incl.) 2002/03 2003/04 2004/05 Total over 3 years
Primary Health Care Strategy funding (included in Health Funding Package) 50 165 195 410
Total Health Funding PackageMade up of:Cumulative increase in new fundingDemographic adjustment funding 501400101 997800197 1,4951,200295 2,9932,400593

Where has the new funding been directed?
The Government's priorities for the new primary health care funding (in order of priority) are:
1. High needs populations: Extra funding will be made available to PHOs covering very deprived populations in order for them to have low fees for all their atients, provide services to ensure care gets to where it is most needed, include services to improve and maintain health as well as restore health, and to move to fairer funding allocations on a population needs basis.
2. Adjust subsidy for children under 6: The General Medical Services subsidy for children under six years was adjusted in July for inflation since 1997.
3. Progressively lower cost of access to primary health care: As more funding becomes available from 2003/04, it will start to be applied to extend free or low cost access to primary health care services through PHOs. The priorities will be reducing costs for school-age children followed by the elderly and others with high health needs.
4. Sustainable rural services: Measures have been introduced to help implement the Primary Health Care Strategy in rural areas and to retain and recruit the rural health care workforce.
5. PHOs across the country: Primary Health Organisations are being encouraged to set up across the country; they will be funded according to their enrolled population to provide a range of population based services to improve and maintain health as well as treatment services; and to address health inequalities.
6. Improvements to CSC and HUHC: A range of measures will be introduced to improve take-up of Community Services Cards until such time as increased funding means cards are no longer needed. Improvements to the High User Health Card will also be implemented.

How are PHOs being established?
A small amount ($3m-$4m) has been made available to help get PHOs established.

What will happen to the Community Services Card?
The Community Services Card will be phased out over the next 8-10 years. As it will still be needed by many people over the medium term, improvements will be made to make it more effective. Improvements will include measures to:
· Increase the numbers of people who get the card automatically rather than having to apply
· Simplifying the process for low-income people to gain a card
· Making it easier for providers to determine whether an individual has a card.

What initiatives are planned or underway to improve the take-up of the CSC?
They include a greater promotion of the card, via Maori and Pacific Island networks, as well as employer and union representatives, streamlining the application process and greater automation of assessment of entitlement. The Ministry of Health is also continuing to fund a free telephone service for providers to verify patients' card status.

What about changes to General Medical Services subsidy (GMS)?
The rate of subsidy for children under 6 increased from $32.50 per visit to $35 per visit from 1 July 2002. This accounts for inflation from 1 July 1997 to June 2002.

How are PHOs different from Independent Practitioner Associations?
PHOs must meet a set of minimum requirements that do not apply to IPAs. Many IPAs would already meet some of these requirements but few would meet all of them at this stage. Several IPAs are considering making the changes necessary to become a PHO while others are supporting the establishment of PHOs locally.

When did the first PHOs begin operating?
TaPasefika Health Trust and Te Kupenga O Hoturoa, in the Counties Manukau District Health Board (DHB) region, were established in July 2002.

How many PHOs are beginning around the country on 1 October, 2002?
Four. They are West Coast (in the West Coast DHB area), Piki te Ora ki te Awakairangi (in the Hutt Valley DHB area), Turanganui (Tairawhiti DHB) and Ngati Porou Hauora (Tairawhiti DHB).

Which health providers are involved in the PHOs established so far?
· TaPasefika Health Trust providers are: South Seas Healthcare, Health Pacifica, Health Star Pacific
· Te Kupenga O Hoturoa providers are: Turuki Health, Raukura Hauora o Tainui, Papakura Marae
· West Coast providers are: All the GP practices on the West Coast -- about 22 GPs, 20 practice nurses and eight other health providers
· Piki te Ora ki te Awakairangi providers are: Whai Oranga O te Iwi, Hutt Union and Community Health Service Incorporated, and Kokiri Marae Trust
· Turanganui providers are: Turanga Health, First Health IPA, Pinnacle IPA
· Ngati Porou Hauora providers make up this PHO

How many PHOs are expected to be up and running soon?
Nearly all the country's 21 DHBs have signalled they are likely to have at least one PHO established by early next year. As many as 1.7 million to two million New Zealanders could belong to PHOs by July next year. DHB areas that have
providers working towards establishing PHOs include Northland, Hawke's Bay, Whanganui, Capital and Coast, Waitemata, Waikato, and the Bay of Plenty.

What are the formulae that have been developed to fund PHOs?
There are two: Access and Interim.

How will the Access formula work?
It will allow all those enrolled with an Access PHO to be charged low patient fees, or access free care, and there will be no need to use CSCs. In the first instance, the Access formula will be available only for PHOs (or practices/clinics within PHOs) serving populations with high concentrations of NZ Deprivation Decile 9/10 and people with high health needs.

What about the Interim formula?
Until there is enough funding for all PHOs to be on the Access formula, an Interim formula will apply to other PHOs/practices. The Interim formula will continue to use CSC status both for determining funding and setting patient fees. It includes additional funding for a range of new functions such as health promotion and extra services to improve access for high-need groups.

Over time, as funding allows, the per capita amounts in the Interim formula will be increased towards the levels in the Access formula. This will start in 2003/04 with increases for all school-age children, and for older people.

What are the key factors of the two formulae?
Both the Access and Interim Formulae recognise ethnicity and deprivation, alongside age and sex, as key determinants of population need, and both provide increased funding for HUHC-holders. Weightings for ethnicity and deprivation will target extra funding to improve access for high need populations through services such as clinics on marae or employing community health workers. PHOs will need to satisfy their DHB on how the extra access funding will be used.

What alternative funding approaches have been proposed and why?
GP groups have voiced the following concerns with the Access formula:
· that, by enabling some PHOs/practices to offer low patient fees, it will lead to patients changing their GP
· that not all high needs groups will be in Access PHOs/practices during the transition, and not all people enrolled with Access PHOs/practices are high need
· that it requires a commitment to low patient fees.

In response to these concerns, Health Minister Annette King invited GP representative bodies to put forward an alternative approach.

The Independent Practice Association Council (IPAC) developed a proposal based around the concept of 'priority patients'. These are individuals who have already been heavy users of care and/or have been diagnosed with a specific range of illnesses (eg people with diabetes or heart disease who have seen their GP six times in six months). IPAC proposed that this concept be used instead of the Access formula to target low patient fees during the transitional period.

Is the Government going to use the 'priority patient' concept put forward by IPAC?
Health Minister Annette King has determined that the IPAC 'priority patient' concept will be developed over the coming months. The priority patient concept is complementary to the Access formula in that it targets another high need group to have low patient fees in the transitional period. It is also a way of emphasising the importance of good management of chronic conditions, and implementing the agreed Cabinet priority to enhance the effectiveness of the HUHC.

How much will it cost New Zealanders to visit PHOs?

All people enrolled with 'Access' PHOs will have low patient fees. Although charges will vary, many Access PHOs may be able to offer free care for children, and adults may pay in the order of $10-$15. Each Access PHO will agree maximum patient fees with its DHB.
In 2003-04, patient fees for under-18s and over- 65s will start to be reduced for people enrolled with PHOs funded under the Interim formula.

Primary Health Care achievements to date


· New Zealand Public Health and Disability Act 2000 is passed. This set up District Health Boards, and gave them overall responsibility for assessing the health and disability needs of communities in their regions, and managing resources and service delivery to best meet those needs.

· Meningococcal Vaccine Strategy Group is formed to advise the Ministry of Health, obtain and interpret information from vaccine manufacturers and to explore options for the future.

· Re-establishment of 24-hour Plunketline.

· Healthline, a free 24-hour, $7.5 million health information and advice line, is piloted in Gisborne/East Coast, Canterbury, the West Coast and Northland.

· Launch of the "Get Checked" national diabetes programme, involving health promotion, prevention, early detection, education and management, secondary prevention, and treatment.


· Health Minister Annette King launches the Primary Health Care Strategy. It aims to improve the health of all New Zealanders and reduce inequalities
between groups through:
- a greater emphasis on population health, health promotion and preventative care
- community involvement
- involving a range of professionals and encouraging multidisciplinary approaches to decision making
- improving accessibility, affordability and appropriateness of services
- improving co-ordination and continuity of care
- providing and funding services according to the population's needs as opposed to fees for service when people are unwell.

· The Ministry of Health commissions the New Zealand Health Information Service to do a survey into registered nurses working in primary health care and community nursing. Among other data, the survey provides information on the type of work, employment arrangements and nursing leadership for primary care nurses.

· Child and Youth Mortality Committee established. It is responsible for providing information and advice to the Minister of Health on child and youth mortality by reviewing deaths of people aged between 4 weeks and 24 years.

· The Government approves a set of Minimum Requirements for Primary Health Organisations (PHOs), the key organisations that will implement the

· The Government announces a three-year funding package to allow District Health Boards to plan health and disability services with certainty.

· Work begins on developing a national immunisation register.


· Two new sources of Primary Health Care funding are announced: Reducing Inequalities Contingency Funding and Primary Health Organisation (PHO) Establishment Funding.

· The Government announces funding for Primary Health Care Strategy implementation -- more than $400 million in new funding to be injected into primary health care over the next three years as part of the nearly $3 billion health funding package announced in December 2001.

· Cabinet approves the principles of implementation of the Primary Health Care Strategy.

· Vote Health gets nearly $3 billion, three-year funding path in Budget 2002.

· The Ministry of Health, working with the sector, develops a framework for the service delivery of Well Child.

· The Ministry of Health releases The Well Child Tamariki Ora National Schedule Handbook.

· Announcement that GPs, nurses and other health workers serving rural communities will receive extra funding of more than $32 million over the next three years as the Government extends its primary health care funding package in rural New Zealand.

· Health Minister Annette King announces a commitment of up to $200 million to the Meningococcal Vaccine Strategy to be funded over a five-year period, with $35 million to be spent in 2002/03.

· The Ministry of Health hosts Primary Focus, a major conference on the future of primary health care. More than 700 people, including many of those who will be active in the first PHOs, attend. The conference, which includes local and overseas experts, allows shared learning, debate and
highlighting of issues to give impetus to Strategy development.

· Investing in Health: Whakatohutia te Oranga Tangata released. This is a document developed by the Primary Health Care Nursing Expert Advisory Group, which presents a framework for primary health care nursing in New Zealand and ways to maximise the contribution of nursing in primary care settings.

· Primary health care groups invited to consider applying to a new $8.1 million fund designed to develop innovative new models of primary health care nursing and evaluation of these models, post-graduate scholarships for primary health care nurses, collaboration between groups of nurses and other health professionals, and reducing fragmentation among providers.

· The first two PHOs are established in South Auckland. They are Te Kupenga O Hoturoa, an organisation built from three existing Maori providers, and TaPasefika, formed by three Pacific providers.

· Nurse Practitioners in New Zealand document is launched, informing the sector of the development of the nurse practitioner role, their scopes of
practice and their potential contribution to the quality and effectiveness of health care in New Zealand.

· Rural Expert Advisory Group to the Ministry of Health releases its report, Implementing the Primary Health Care Strategy in Rural New Zealand.

· Individual registered nurses are invited to apply for funding for primary health care nursing post-graduate scholarships.

· Four more PHOs start up on October 1 on the West Coast, in the Hutt Valley and on the East Coast. They are: West Coast (in the West Coast DHB area), Piki te Ora ki te Awakairangi (Hutt Valley DHB), Turanganui (Tairawhiti DHB) and Ngati Porou Hauora (Tairawhiti DHB).

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