Huge task to shepherd in lower fees, add many more community services cards


Huge task to shepherd in lower fees, add many more community services cards

Snaggled powerlines
Primary care funding streams and contracts are haphazard and tortuous
This is about patients and access, and I think everybody has a desire to see movements in access and equity. I think what we are aimi, Northland DHB chief executive Nick Chamberlain is chair of the DHBs’ primary integration steering group, Nick Chamberlain


Dr Malloy has to understand that the extension of low cost GP fees to those outside the VLCA practices cannot be restricted to just Access Practices as the 7% of the population not enrolled in a PHO, including some of the most disadvantaged New Zealanders, would otherwise be excluded.  Reaching this group is in fact very easy as Community Services Card holders already qualify for GMS so at a "stroke of a pen", the Minister can ALREADY increase the amount of this subsidy as high as he likes and any GP or A&M clinic seeing such a patient can reduce their fee by exactly the amount the Minister raised the GMS.  Therefore if he wants them to be charged $8 or less, the GMS must at least be raised to that of a reasonable "casual fee" less $8.  

Any support of this new funding by Dr Malloy or the College is totally contrary to the College's own position statement on funding and equity which is fundamentally opposed to VLCA. The only people who gain from this are those with VLCA practices, especially those with multiple ones. The new funding will see a non CSC adult go from twice to four times the price in an Access funded practice compared to a VLCA one and a teenager from twice to ten times the price. Only a VLCA Practice owner would be celebrating this.

The tidal wave of sentiment from New Zealand's GPs voiced in the Primary Care Working Group aka Moodie Report was they wanted individual targeting of funding. The last thing the huge majority (and I suggest every Access funded) coal face GPs want is this - a strengthening of VLCA practices economic positions don't you think?! 

Where is the College getting their consensus opinions and statements from? I'm confused - the College's proposed Proportional Universalism funding goal is completely at odds with VLCA, and especially a strengthening of VLCA. 

I don't know a GP that doesn't want the VLCA.

Surely the College should be advocating for everyone getting the same sized cake as per the "Moodie Report" if it represented Kiwi GPs. That would encourage good practice through competition, make the job economically sustainable, support the regions and provide patient choice. Am I missing something?

So PSAAP wants to know how Practices have adapted to the changing landscape wrought by Capitation and VLCA. They want details such as prescription charges and nurse consultation fees. All this so they can look at NOT increasing the funding General Practice but still delivering on this Government's ill-considered promise to lower fees without actually allocating sufficient (or indeed any) funding for this.

  • Current Capitation funding for Access funded Practices is worth less in 2004 dollar terms than when it was first introduced in 2004. This is because NO increase in Capitation has met or exceeded the rate of general inflation as determined by the reserve bank. DHBs, on the other hand, have ALWAYS had increases above the rate of inflation
  • The unit of General Practice services is the consultation. The value of this unit = Capitation received/average rate of consultation for age band + patient co-payment (- claw-back where applicable). For many practices, especially those in urban areas, this claw-back amount per annum frequently exceeds the actual capitation payment received for a given patient. If these patients now fall in the "free group", General Practice is now effectively subsidizing their care despite previous promises to address this that as yet go unfulfilled
  • Whilst VLCA Practices receive additional Capitation in exchange for lower fees, the fact is that because of lower fees the utilization rates are even higher...and the co-payment is less.
  • Practices have had to be "inventive" with charges for services that are outside of the Agreement - nurse consultations, repeat prescriptions, forms, referrals, etc. Some Practices have had to be more inventive than others. Some may think that if VLCA Practices do this they are somehow "rorting" the system to boost income. They are simply responding to increasing financial pressures. God help those Practices who have to directly compete with VLCA funded practices as their ability to be "inventive" is significantly curtailed both by the competition and by an incompetent DHB. (You know whom I am referring to)
  • Each iteration of the General Practice Agreement has added significantly to the compliance costs General Practice faces - some of these compliance costs are apparently based on "good ideas" coming from College. Thanks College, you have added to our burden without adding anything to outcomes or the quality of services. So much for the "straw man" eh Tim?
  • Reducing co-payments or indeed making consultations free only serves to increase utilization - but it only really increases the utilization in those whom you already see, it does NOT redress the issues faced by the disadvantaged and marginalized. It does not even identify the disadvantaged and marginalized. They struggle to find a doctor, they struggle to enrol, and frequently they are itinerant and hence miss out on continuity of care, and in many cases care itself. But nobody even talks about them. The Minister and the Ministry pretend they don't exist - certainly when it comes to addressing the issues. It's all about worthless targets and bragging rights (or not). There is no "universalism" . There isn't even access. The haves tend to displace the have-nots.
  • Virtual consultations are a panacea for the convenience of the advantaged. They will do nothing to improve access for the impoverished and marginalized. They will probably end up limiting access. You are delusional if you think otherwise. And they will be a medico-legal minefield. Smoking is the biggest preventable cause of death, medical error is the second biggest. Doctors kill more people than TB, HIV and malaria. Let's make the system less safe. Well played.
  • General Practice cannot be inventive with the funding it receives no matter how hard it tries when it is struggling to survive.

You want a review of General Practice and funding Mr Minister? Ministry? DHBs? There you have it. You cannot reduce the value of our services and expect us to survive. You already owe us 14 years of restorative funding just to bring us to parity with the level of funding from 2004 let alone for the increases in utilization. Yeah, I know you don't have the money. Just keep talking to your "yes-men" and I am sure they will tell you what you want to hear. Don't worry, the problem will go away when there is nobody left in General Practice. Well done Minister you really know how to get rid of problems.

There is  one  other   single    major problem  in  General  Practice   and that  is  the    Abacus  based    uni  functional  practice Management system  that  is  still  used  by  the  majority  of  the near   retiring  GPs ,  now  in their   late  fifties and sixties .  The Big data   from the   major system   that    PHOs  are  apparently  mining    and    sharing with  the  DHBs  appears  flawed and   from the  local   Whanganui  experience  would  largely    appear to  be   inaccurate  or even  just  made up  to   fit  a particular  goal  or  target.   Smoking  statistics  and  funding  utilisation   are a case in  point where almost  none of the  local  money,    hundreds of  thousands of dollars given to  the local PHO  assiduously  avoids being paid  to  General Practice .

ACC , likewise   has  decided to  largely  avoid   supporting  General  Practice  financially      with  the  exception   of  some  rural practices   (  which was a purely    political   decision  ).

Are all  doctors  doing call  now  paid  for  their  time   on  call   of even  a token    amount ? Hospice doctors  MECA    has  on  call  payments and call  back for  doctors , included.


New  ownership  models  that  allow   practitioners  to  not  commit  to    investing  in  the   system  of their  work  place   are  becoming  more prevalent . Medical  Trusts   are requiring  more    funds to    function  and operate   that  are  not available  to     private  practices . PHOs   are  still  being   accused of  empire building  and paying   management  and     cronies   inflated    salaries  and perks . 

Having  equitable   and  realistic  funding streams  for  all  General  Practices    would be a good start. The  PSAAP  reasonable  fees  calculator  for   under  5s  for  2017  had a utilisation  at  4 recorded visits  a year to  the  doctor at a rate of  $102/ consultation .  There is  a   good   base line  starting per  consultation   funding   rate .

Our representatives have largely failed General Practice. They have totally ignored the business case. Over the years continuation of VLCA has been quietly supported by some & the anomaly of the quadruple ACC payment for A & Ms & rural GPs compared to urban GPs was been met with a deafening representative silence for fear of losing this perk. All the while utilization rises, the exploding elderly demographic increasingly drown us & are largely unfunded due to the number of times they have to be seen and no payment has remotely kept pace with inflation...but hey, some are happy because they still have the unassailable weapon that is VLCA funding. If there was true equity in the sector for capitation & ACC, there would be NONE of the disaster primary care finds itself in now, General Practice & After Hours included.
Bill, when you state " The PSAAP reasonable fees calculator for under 5s for 2017 had a utilisation at 4 recorded visits a year to the doctor at a rate of $102/ consultation. There is a good base line starting per consultation funding rate." What then should be done with the 65 + year olds? In Northland we are second only to South Canterbury for retirees and this >65 y age band are crippling with the complexity and enormous time requirement that these consults wth the post consult time take. I enjoy these people don't get me wrong, but the funding MUST take the disproportionate workload into account - NOT JUST UTILISATION.


Using the same calculator and the $102 per consult for 6.5 consults a year for  over 65s gives about $663 / yr capitation for over 65s per annum. For my 280 over 65s that is $185,000 per annum or $15,470 per month plus GST . That is more than my total capitation per month for 1100 patients  in  urban   provincial  NZ ! 1820 consults a year at 30 mins average each is 910 hrs spent on the over 65s per annum . That leaves 500 hrs per annum for seeing the rest of the practice , on the 70% patient contact 30% admin time built into the ASMS contract for a 40 hr week . One may need to take out a further 200 hrs per year for registrar supervision , RMO community based attachments supervision and students .



NZMA apparently believe General Practice is already underfunded by 25%.  That means that every 4 years you work a year for free.  

Add a 10% increase in utilisation because GP visits are now a fraction of what they were.  Can we work 10% harder for more than $100k less every year?

And to this they want to add a million patients with community services cards entitle to be charged only $8 by private business owners, in exchange for?  The difference between the usual consultation fee and $8?  For every consultation in a year?

Or a calculated 1.24 utilisation rate so $50 minus 8 x 1.24 = $52.08.  the princely captivated amount for unlimited medical care each year?  This is how we were conned into under 13s "deal"  which was shocking and does nothing to cover the increased utilisation rate for under 13s.

Surely we won't fall for it again?  Out practice would lose more than $100,000 we are no VLCA with 56% high needs

Plus Labour manifesto wants to drop ALL consultations by $10 in exchange for an unnamed sum  That is another $58,000 in copays we lose, will that be offered in exchange?

AND free visits for nurses.  And free visits with GPs an unspecified number of times a year

What other profession would allow their private business practices to be determined by the government?  Why do we, for far less money than it costs to provide the service?

There is no way the government can do what they promised in health for the money offered.  They based their budgeted amount on false National government figures.

It cannot be done for the money unless we go under.  Why did I invest in general practice to take another kick?


No increase in Capitation has met or exceeded General Inflation since it was introduced in 2004 (broken record I know). According to the Reserve Bank's inflation calculator to correct for this General Practice should receive a 33% increase in capitation just to achieve parity in 2004 dollar terms. This does not account for "medical inflation" which is considerably higher than General Inflation - in 2015 this was 5.6% and 5.0% in 2016. The "reasonable fee increase" calculated by Sapere has also consistently not met General Inflation and has NEVER taken "medical inflation" into account. For 2017/2018 for most non-VLCA practices (assuming a 60/40 split) the reasonable fee increase is 0.99%. I assiduously monitored utilization from 2004 until 2014 when I gave up because keeping track just made me depressed. I have avoided looking too closely at the under 13's utilization because I knew from past experiences that none of the promised increase in funding would be forthcoming (no matter what was promised) and I simply chose to bury my head in the sand. Seems that I chose a nuclear testing ground to do so....or maybe I should have. Up until 2014 I can state that Government would have to at least DOUBLE capitation just to bring it in line with what has happened to utilization rates - and for some age groups (such as the over 65's) it would need to treble it for Access funded practices and more than quadruple it for VLCA Practices. All of these actions would simply bring us to parity with 2004 and maintain the value of the funding as promised let alone compensate for any fee reductions that the current Government proposes. As for "false National Government figures" I have just trawled through the last "Vote Health" from Treasury. It is pretty detailed and includes projected increases in spending....and there aren't any for Primary Care. I don't know where they found this money because it simply isn't there. I think I know where those Enron accountants found new employment.

As it always has been with subsidies, Bryan. When GMS was first introduced by the first Labour Government, it was designed to make attending GPs free so the Government wanted to take away a GP's right to charge. However the BMA (now the NZMA) knew politicians couldn't be trusted and insisted, thank God, on GPs' right to charge a co-payment. History proved them right as the GMS wasn't increased and while 12 shillings and sixpence was a reasonable fee in 1941, the equivalent $1.25 in 2002 was virtually irrelevant to GPs' fees.

When capitation was introduced, many felt that GPs were at last being valued, but I believed the Red Letters of the NZMA and the RNZCGP that it was all about fees control of "greedy GPs" so once GPs became reliant on Government subsidies, the loss of the ability to raise patient fees meant the Government had made GPs its servant without having to pay a decent salary.

Accepting fee control is a very dangerous road to take when we are not valued. GP representatives should look back at our history and not continue that mistake. If General Practice is to survive, any funding arrangement has to lock the Government into yearly increases based not on the opinion of highly paid out of touch accountants at Sapere but on an agreed formula that includes Cost of Living, Medical Inflation and Utilization with the automatic right to increase patient fees each year by the amount the Government reneges, so patients know their fee rises are Government driven.

Two other alternatives are: (1) tell them we don't want subsidies or unrepresentative PHOs. Give the subsidies to low income patients (CSC holders) but we will charge patients as I have done (income drops but Quality of Life increases as you get patients who value your care and that is well worth the income drop) or (2) push for a salaried GP service with all the perks of Super, sick leave, study leave, income based on qualifications and experience etc but you will be controlled even more and British NHS GPs don't recommend it!.

Could not have put it any better myself, Keith. Back when Capitation introduced in 2004 I made a prediction that withing 8 years due to failure to maintain the value of funding just in the form of utilization increases General Practice would find itself in the invidious position of declining incomes and limited ability to respond. This was before Government introduced "fee review". I was wrong. It was 6 years. Not that long ago I had the current Minister of Finance tell me to my face that the reason for allowing for a "co-payment" was to maintain the value of the doctor-patient relationship. I smiled on the outside and cried on the inside. In the NHS this relationship is free. Something that is free has no value to the users, and the users have no value to the providers other than how the users makes them feel (essentially their "need to be needed"). All other vale is associated with the funder and the funding. This is not good for healthcare, it is not good for the users and it is not good for outcomes. Devaluing the relationship has the same effect over time. Paying lip-service to this effect whilst progressively devaluing the service just increases distrust, Grant.
Can I please copy your posting here Brian for a group of concerned GPs who are discussing the issues?
Sure Kerry, no problem. I have been banging on about this for years - and so far it seems that nobody has actually listened. Now I read with despair that the former Minister of Health who gave us this dog's breakfast called the PHCS (a strategy which had nothing to do with health CARE - or even a strategy) at all now is the chair of an organization involved with Primary Care. I could think of a chair...let's not go there. Now if we actually had a Strategy (that is if either Government, Ministry or College actually knew what a strategy was) we could have a considerably more effective and valued health care system in NZ - but it would involve almost a paradigm shift and I don't think they have the stomach or imagination for it.

Goodwill is gone, since I was required to provide unlimited appointments to as many children who are brought to the practice for $70 each a year

Current Capitation for under 5s is $102 per consult according to the Ministry utilisation dta on Sapere 2017 calculation spreadsheet. Lady popped in with a 5 year old to get a referral for assessment of autism with the paediatrician. Expected it to be a standard 15 minutes , and did we need to see the child as he didn't like strangers and in 4 years I had not met them let alone got a relationship and done a physical exam . The B4 schools check funded to the PHO at over $200 and to the practice at $70 had not noted any concerns .(  $130 x 660 is  $85,000 for     the  PHO  admin   overheads ) . The Childrens team referral is 10 pages long .

Can  some one  do  a survey  of  the     DHB  emergency  departments  and  compare the  numbers of   patients   going through   each  in 1980, 1990, 2000, 2010 and 2017?

 How many   senior  doctors  were  working  in each    ED   in each of those  years? How many  junior  doctors. As the    workload has changed,  gone  up  or  down  and  doctors   terms and  conditions  have   become   less onerous and  more  favourable   DHBS   and their  precursers  have  been forced  to    employ   more  doctors  (  Many    in the  central  North  Island  from  overseas  working under   Medical  council  supervision and  have  osteopathic  medical  degrees .)None of those  doctors  were asked or  forced  to  take a pay  cut  to   fund the  new   staff , Their holiday and study  and    Long Service  leave  are all   the problem of the  DHBs   not  the  senior  Principals of thel  Practice .

 In 1989 my  wife and   I  borrowed  $240,000 to  build  new rooms for  two  doctors   with  nurses  rooms and  communal  rooms  and  a shower and   kitchenette  because  Helen Clark  said  they  were going  to  get  patients  out  of  ED  and  back  to  general  practice . The  floor rental for    1989  was $180.00  a sq meter.

In 2018  there is  a new  tennant  in  our rooms  , an accountant  , and  they  are up  for sale. The  present  valuation  is  $230,000 to   $240,000 and  the   " market"  rental is   $130 - 135 / sq meter.  Not  exactly  a huge  capital  gain  over  almost   30  years  of investment and inflation . 

Doctors in Whanganui  got  out  of  owning  a  communal  collective  after hours  and GPs are still  not paid  for  being on  call overnight.  Rural  staff are  , Hospice  doctors are ,Trust  doctors are ,  Hospital  Doctors  are .The  current  trust is  owned  by   a local  PHO  where the  top  four  Key  management personnel collect a cool  $193,000  each  on average  for  playing  with   $10 million  of  tax payers  funds  .The  PHO Board seem to    share around  $240,000  for  their efforts  exclusive of   funding  as clinical  directors , advisors , supervisors  and   other taxpayer  funded  projects. .

In 1986   the Whanganui ED  was  staffed by  1 doctor and  house surgeons   after hours . In 2017  the numbers  are not specified.

 Is  general  Practice  going  to  be  a secure and sensible place  to  invest ones  retirement  funds ? Will  the  work  and  lifestyle  reward  practitioners  appropriately   or  enough  to  meet the   market  forces . Auckland  DHB  pays  some  of  its  medical  staff in  excess of  $1,000,000 per annum . For general  practice $1, 000,000  is the  turnover of a  practice   serving  2,500- 3,000 patients  Not the   personal  taxable  income of  the senior  partner  GP !


As the  Americans  like  to  say   "  You  do the  math ! "