Government funding shortfall leaves Northland GPs at breaking point

The chronically underfunded primary health care system has taken another hit and might lead to the loss of GPs in Northland. Photo / 123rf

Patients might soon have to dig deeper into their pockets to pay for GP visits as the primary healthcare funding increase of three per cent falls short of covering real-term costs for practices.

Northland's family doctors say they will be struggling to keep providing their services after the Government announced the increase of their baseline funding from July – well below the current rate of inflation of 6.9 per cent.

This not only left general practices unable to compete with salaries hospitals pay, which is putting more strain on the already stretched workforce, it also means patients may have to pay so that GPs can continue operating.

Whangārei GP Dr Geoff Cunningham, of Bush Rd Medical Centre, said to keep the lights on in the general practice someone has to pay.

"The Government signalled it is not willing to provide the money, so patients will have to."

Practices could not defy the financial gravity of growing inflation, he said.

"Our whole funding system is beyond broken. The mistreatment of GPs by the Government will adversely affect our high-needs region," Cunningham said.

Whangārei GP Dr Geoff Cunningham says health isn't about health but about politics. Photo / Michael Cunningham

Funding for primary health is mostly based on capitation, which takes into account the patient numbers enrolled with each general practice and weighted according to their age and gender.

The Government's annual increase in capitation funding is non-negotiable. It is based on a formula widely acknowledged as being unfit for purpose, which includes a lag of six to 18 months during which general practices have to carry the cost of any increases.

In the 18 years since its inception, the capitation increase has only once met the CPI (consumers price index), meaning primary healthcare funding is well behind the real-terms cost of running a GP practice.

By law, general practices, like all commercial businesses, are not allowed to run on a deficit otherwise they will have to shut down.

Meanwhile, the Ministry of Health has wiped the debt of all DHBs with the 2022 Budget, including Northland DHB's $22 million deficit.

Capitation funding has been agreed as being flawed by the ministry, the DHBs and primary healthcare, however the current health reforms don't provide an immediate alternative.

Patient charges, including GP consultation costs, provide another source of income.

Increases are, however, capped by the same government review system, the Annual Statement of Reasonable Fee Increase.

Northland has one of the lowest patient charges in the country despite presenting one of the most care-intensive patient demographic with an ageing population and underlying health conditions.

General Practice Owners Association (GenPro) chair Dr Tim Malloy had warned the ministry of the risk to family doctor services if funding for those services didn't keep pace with rising costs prior to the capitation increase announcement.

"At that time, the Ministry of Health specifically responded saying family doctors have the ability to negotiate their own funding."

GenPro chair Dr Tim Malloy. Photo / NZME

"If patient access to services is now compromised, it will be as a direct result of unsustainable funding from the Government. This is happening at the same time as the whole health system is under pressure and encouraging more patients to go to their family doctor rather than ED at their local hospital."

Malloy said primary health in Northland already was under immense pressure, considering Northland has one of the lowest doctor-to-patients ratio in New Zealand.

Many GPs in Whangārei had their books closed because they can't enrol more patients, which leaves some people without a family doctor.

The Government's decision also directly impacts the salaries of primary healthcare workers, doctors and nurses.

With a pay gap of up to 27 per cent between general practice and hospital nurses, Northland GPs fear a major loss to their nurse workforce.

Practices might have to close their doors if they lose any more doctors and nurses because they can't find anyone to hire.

"Northland GPs can't compete with the DHB's remuneration for staff. We're facing the prospect of losing a large number of nurses to the hospitals," Malloy explained.

He said practices were at breaking point and some are considering ignoring the three per cent cap for the increase for patient charges because there was no other alternative.

Martin Hefford, Interim Health NZ's interim lead for commissioning and localities, said the health authority was listening to concerns from primary care and had offered a number of measures to address funding pressures.

Interim Health NZ is currently assisting this year's capitation funding review.

The three per cent capitation increase would amount to over $48 million for the current year, Hefford said.

In addition, Budget 2022 provides $86 million over four years to ensure general practices are allocated funding more equitably and on the basis of their enrolled high needs populations.

"Additional funding is also being offered for immunisation, including additional funding for priority groups - Māori and Pasifika," Hefford said.