PSAAP insider confident funding deal will be good for most practices

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PSAAP insider confident funding deal will be good for most practices

Napier GP Mark Peterson has been one of the negotiators hammering out a deal for practices when faced with lower patient fees for Community Services Card holders
We think we have reached a pretty fair deal. I hope the vast majority of GPs see it as a deal not costing them money and being good for patients


1) Without any payment for the huge pending nurses pay increases this is a huge fail.

2) What safeguards has General Practice got against skyrocketing utilisation with regard to remuneration?

3) After December 1st just what is the purpose of VLCA?! Oh, now that all of the high needs / low income patients are funded at $18.50 across VLCA & Access practices the only purpose is to continue the sweetheart deal for VLCA practices to keep out any competition & to continue to decimate neighbouring Access practices who can't compete on price. This is BS.

Many of us are aware of the iniquitous situation your practice has been in. We would all like a full funding review so that funding follows the patient as per the Moodie report. This current agreement (yet to be finalised) at least goes part way to resolving your issues.

And don't we want those patients who have not seen you when they should because of the cost to now be able to afford to ? Why would rates skyrocket - the fee will still be $18.50

Our rates / utilization would rise as our new fees would be half the price not "still $18.50" Mark, simple. Yes I am happy that more people can access care but not if my family and I are paying for it which is the current scenario.

Excuse my cynicism Mark but the sector has been dreadfully let down by our representatives over the years. We still have the cancer that is VLCA and PSAAP has year upon year accepted increases well below health inflation, compound this and you see why we're in such a terrible state. Asking the Minister to consider compliance costs and pay for the practice nurse MECA will be as successful it seems as barking at the moon as he's already stated something like "we're an intelligent and resourceful bunch who'll find a resilient way around the tough times" i.e. we're not being given any extra funding for this. I hope you prove me wrong.

PSAAP has systematically failed to adequately represent General Practice over the past 14 years. In the initial Agreement Government promised to maintain the value of funding - and it hasn't. Not even close. What has PSAAP done about that? When the previous Government rolled out the free for under-13 visits there was a promise that if utilization increased there would be an increase in funding. There was an increase in utilization but there was no increase in funding. Pretty good record so far looking after the interests of General Practice PSAAP, Mark. Not

Prior to the introduction of Capitation and the effective elimination of the Community Services Card (because patients were all funded equally independent of their CSC-status after the introduction odf Capitation) approximately one third of patients in NZ held CSC-cards and were eligible for the funding. If holding a CSC is once again incentivized (and given the reductions it is) there is every reason to assume that the number of CSC holders will increase and so will the utilization. In effect the proposed reduction in co-payment is greater than when Capitation was introduced. The amount that Government has budgeted for this is significantly less than the liability. Are you trying to tell us, Mark, that there is actually more funding available than has been announced in the Budget? How much exactly? Or have you assumed that the increase in utilization and hence co-payments will compensate for the reduction in income per consultation? And if it does not? Will you mortgage your house and compensate the practices for their loses? Will the other PHO and GP representatives at PSAAP do likewise? Will they keep doing this until the funding is actually appropriate? I doubt it.

You Mark - and PSAAP - have not provided General Practice with one iota of information regarding the funding and the proposals. You have not allowed General Practice to do its own risk assessments regarding the funding and the proposals and for impact assessments. I know that many practices wouldn't but many would. I would. So on 1 December somebody turns up with a CSC and expects a reduction - but the funding only shows up weeks or months later. Who bares this liability? Who polices the CSC status and insures eligibility? Who bears the costs associated with this? Why has this not been discussed with General Practice? Why has this been behind closed doors? Because we will say "no" and the Government will be politically embarrassed? Who exactly are you representing? It certainly is not me. I did not elect you or ask you to misrepresent me at PSAAP. So you reassure me everything will be ok. What if it isn't? There has been nothing in the past 14 years to suggest that PSAAP acts in the interests of General Practice so why would you want us to trust you now?. Great track record. Do I get to make a formal complaint to Medical Council if this harms my Practice? Would you consider that a reasonable response for inadequately representing General Practices and placing services and patient safety at risk? Not that Council would do a damn thing. Do you somehow believe that working harder for less won't result in increased risk? By what measure? As the saying goes "when you pay peanuts you get monkeys". Thanks for that. Oh, and does your Practice receive VLCA funding? Too many unanswered questions. 0/10

Brian - some of what you say is true. However you criticise your negotiators for not releasing any information about the modelling. That is not the case. Almost all PHOs agreed to share data with an independent analyst and from this were able to model the impact of the agreement and are now sharing this with their practices. I am not sure how you get on in South Canterbury without a PHO but if you want I can arrange to show you some modelling from similar practices in other PHOs. It is highly likely you will find you are better off - possibly quite substantially. 

And the whole idea of this change in funding is to make it possible for your more disadvantaged patients to see you - so yes consultation rates will increase but isn't that a good thing if they been deterred in the past because of cost?

All of what I say is true. PHOs are NOT organizations that represent General Practice. They are organizations that are funded by Government and represent Government interests - they simply will not bite the hand that feeds them. Statements to the contrary are disingenuous and deny the facts. PHOs do not take the risk if General Practices fail. PHOs do not take the risk if funding is inadequate. We don't have a PHO in South Canterbury for precisely those reasons. As for not giving us information "after the fact" what good is that? You cannot possibly claim to have adequately represented General Practice when by your own statement you say that "maybe 10% will be worse off". How is this even remotely fair and reasonable?

As for the idea that this would benefit "disadvantaged" patients that is simply laughable. It has not worked in VLCA Practices. What happens is that the advantaged pay less and squeeze out the disadvantaged. The ability to access practices is reduced because utilization is increased - predominantly by those who can now see the practice more often for the same level of out-of-pocket expenditure. Those who have limited opportunity to access services then find their ability to access is further restricted rather than improved. Then these practices add in additional charges for "non-standard consultation items" - so it is not actually as cheap as is alleged. Why do these practices do this? Well, because they have lost income from the unit consultation and need to adapt to maintain overall income and survivability. Then they disrupt the economy of General Practice because some practices receive VLCA funding whilst their competitors do not and so the playing field is not level. The same occurs when some practices adopt "increased" funding and reduce their fees - all others are forced to do the same because otherwise they cannot compete. In any other sphere of business in New Zealand this would be illegal. In fact in 2002 the then Minister of Health Annette King was told by the Crown solicitors (Buddle Findlay) that it WAS illegal - and that is why we have PHOs. I have a copy of that legal opinion (mistakes were made and it was published on-line). PHOs were a construct to protect DHBs from the Commerce Act. It is there in black and white. And somehow I am wrong and what I say is not true?

The Minister of Finance announced in the Budget that Primary Care funding was to be increased by $70 million. This increase is to fund the annual capitation increase, the free under-14 visits and the reduced cost of access for CSC holders. Seems an aweful lot for $70 million. It is. The numbers do not stack up. I have no idea how you have massaged those numbers at PSAAP but they still don't stack up. There WILL be considerably more people on CSCs than has been accounted for - because there are a lot of people who will qualify but don't know that yet. There WILL be a dramatic increase in utilization - because there was when Capitation was introduced and again when VLCA was introduced. The precedent has been set. 

As for this Minister and Government wanting "equity". What a joke. In South Canterbury 15% of our workforce is now expatriate and/or migrant workers. The overseas workers get 23 month work visas. Why? Because 24 month work visas would entitle them to reduced cost of doctors visits. Then there are the New Zealanders who are migrant workers who cannot register with practices and are "casual" because of their addresses and transitory nature. When the subject is raised that these are amongst our most vulnerable patients the response is essentially "tough, they do not qualify for funding". What has PSAAP done for these people? Nothing. What has Government done for them? We have available funding in our Primary Care budget and we are NOT ALLOWED to use it for these disadvantaged people. Our DHB shares my frustration but they do not make the rules. So please do not give me some bullshit story about how this is all going to help the disadvantaged because we both know it won't. But Government will spin some even more outrageous bullshit about what they have done and that everybody will be better off. You need to stop believing your own propaganda. 

Well said Bryan, and I should know as ALL of my patients are "casuals", even though they may have been patients for 37 odd years and the little they get from the Government is direct (non-DHB, non-PHO) such as ACC and a piddling amount of GMS (if they have a CSC).

The PSAAP may have very little mandate from GPs in PHOs, and even less from Canterbury GPs (whom I believe get funding from their DHB) and it certainly has NO mandate from independent GPs who service the vulnerable and transient, and made no attempt to have "funding follow the need"  by recommending strategies such as significant increases in GMS for those with a CSC. 

You sound angry Bryan (and rightly so) about this inequity, so imagine how an independent GP who has kept his fees artificially low for his patients feels when not just my Practice Nurse, but also my receptionist earns way more than I do (which I calculated at $19/hr).  Our options are either to liquidate our business or to start charging what many Auckland practices charge (even with capitation). Either option will force virtually all our low income patients to swamp the local VLCA clinic, but as they have now closed their books due to low GP numbers, these patients will flood the Hawera Hospital ED at $400 a pop!  

I thought Labour wanted to help homeless, destitute and low to middle income New Zealanders (and promised funding for ALL New Zealanders), but it is funding well-off patients attending their ridiculous creation (VLCA clinics and in fact all PHOs) and ignoring the 6-7% outside PHOs (nearly 300,000 people).  It is clear that GPs are not valued, we should all work for love not money, and should aspire to a management role where the real money is.

For the sake of transparency - and presuming they commentator here is the same person -  Dr Mark Peterson is a part owner in Taradale Medical Centre AND Deputy Chair of Health Hawkes Bay, a PHO.  I'd prefer the garden variety GP practice owner (with no seats on any paid boards, committees or advisory groups) to represent the garden variety practice owner.

I do not own a practice. Because I cannot risk my remaining 10-5 years in work; on a loosing proposition. The contract we sign w PHOs is no longer realistic or achievable. You could work 24hrs and still take home nothing after paying reasonable business overheads for employees and rooms. The urgent cares have sprung up and so have the VCLA in response to the heroin of govt funding. Cut the ACC and the ability to charge what ever you like if not enrolled - and they would vanish like snow in springtime. It is a mess and its a shame this attempt to “fix” it will make life more difficult for primary care - its like putting oatmeal in the radiator  to stop the leaks instead of admitting you need to get a new vehicle. 

Beautifully said Rose. Sadly General Practice has been absolutely divided and conquered due to a lack of effective representation over the years. We desperately need to approach negotiations like the ASMS rather than worry about losing dinner dates. What's hugely concerning is the now compounded percentage the sector is behind because of passively accepting the ridiculously low Sapere figures that don't represent true health inflation year upon year. Oh dear, I suppose I'll be vilified for this too...

It’s quite an interesting space. The analysis PHOs have been provided(courtesy of GPNZ)  has attempted to quantify the extra income practices will receive but also the extra costs of providing the increased utilisation. This costing is seriously flawed which is why Mark has such an optimistic view.

The costings assess that it will cost $120 to provide 4 consultations. The assumptions behind this are that a GP costs $120 per hour, there will be no extra nurse or reception wages paid while the GP is seeing the patients. There will be no time spent checking results, writing and receiving letters, phone calls, no extra medical supplies, paper ink, power etc. Moreover these CSC cardholders are often elderly and complex and I myself struggle to see 4 patients per hour like this.

In my view this funding is great for our patients. Not so sure with respect to sustainability of General Practice.  If you are around the $46 mark you will be doing more work for break even. If you are well under you will gain.

Further to all this we see the deal proposing a $20 million funding boost to VLCA - which will go straight into VLCA practice owners pockets - the patient fees and services in VLCA will remain the same.

This has come about because the csc funding boost would have funded a csc holder in a nonVLCA practice at a much higher rate than VLCA.

In my view that would not have been fair and I was the first at PSAAP to suggest we addressed this, but alongside it I argued that we should take the position that compliance costs should also be funded. I believed we had the negotiating power to bring this to pass. It is also clearly the fair thing to do. Moreover it was part of the Labour parties manifesto promises($46 million). I’m not sure fairness as a principle is shared by my PSAAP colleagues.

Unfortunately majority of PHOs and the GP reps- the contracted providers -declined to back this position. I understand their position was that we have to wait for the next budget so we can do it properly. I think their view is that GPs should pay for NES, patient experience of care survey, administration of cscs -etc etc. in the interim. I’m not exactly sure where their faith that it will be addressed in the next budget comes from. History would suggest otherwise.

One thing you should understand is that PHOs have a primary responsibility to their enrolled population. GPNZ is primarily made up of PHOs so their interests do not necessarily align with GPs. Your contracted provider reps are the people who represent your interests at PSAAP  - Mark is one of them.

My view is that GP sustainability is vital to providing  care to our populations. I am happy to argue the case for General Practice even though I am a PHO chair. It is unfair and unreasonable to expect General practice to cover the costs of government initiatives which do not benefit them. Up til this point I am in the minority both among PHOs but also the contracted providers.


Thank you for that insight Angus. It is sincerely appreciated - as is your presence and representation at PSAAP. I am aware of your commitment to the sustainability of General Practice AND the welfare of the communities that we serve. I do believe, however, that PHO's do not understand the ecology of Primary Care and the welfare of their enrolled populations. Furthermore they seem to show little interest in the welfare of their communities that fall outside of their enrolled populations and this seems to instinctively gel with the attitudes of Government and Ministry. Essentially this simply reinforces the opinion that the majority of PHO's view themselves as extensions of Government policy rather than concern for their communities and providers. If their providers are not sustainable, nothing that relates to the provision of services is sustainable. Of course they will object to this view point but unfortunately their actions would tend to contradict their positions.

Last night I attended our Primary Care Alliance meeting (a group of which I am a member representing both the DHB and Primary Care) to evolve a strategy for a whole-of-system approach to sustainable, affordable and effective health care. We have no PHO. We engage directly with our DHB and you would be surprised just how much we have in common and how many ideals we share - or how much we actually agree. And nobody is left behind. PHOs and PSAAP are not fit-for-purpose. Time they were kicked to touch. Time most of these pointless organizations were kicked to touch.

Thanks for your insight and hard work Angus. Your passion for a fair and comprehensive funding arrangement for the sector gives me hope. We desperately need a sea change in our funding and representation. I must admit however that I tend to agree with Bryan that it increasingly looks like PSAAP and PHOs are past their used by date. Does anyone else find it odd that PHOs and PHO influenced organisations make up PSAAP? Why don't we stop the facade and have the Ministry negotiate for us?! 

Oh, an oversight, forgot to mention, just a bit of Maths for Mark: if those who charge less than $46 will be ok or benefit and those who charge around $46 will have to work harder, then those who charge more than $46 will actually lose out. Now considering $46 is the average, Mark, it is 50% or so who will lose out - even if they work harder - not 10% - because that is how averages work. Do you even NHS? Thanks for that.