The Katikati Medical Centre co-owner Dr Vicky Jones says the centre is facing losing its rural funding contract with Health New Zealand Te Whatu Ora. Photo / Supplied
A Bay of Plenty medical centre has warned it may have to increase fees, cut opening hours and reduce services if it loses its rural funding contract.
Katikati Medical Centre, about 40 minutes’ drive north of Tauranga, receives government funding through a rural primary health care agreement.
The centre’s co-owner and GP Dr Vicky Jones told the Bay of Plenty Times it could be reclassified as “urban” under potential new funding provisions, which would come into force on July 1.
She feared it could lose its rural contract worth “several hundred thousand dollars”, forcing patients to travel to Tauranga for care on weekends, public holidays, and for “anything complicated”.
Health NZ says no decisions have been made for rural medical centre funding as part of its nationwide review of rural funding. It was in negotiations to implement recommendations for a “nationally consistent” funding framework.
Jones said its rural contract funded services that went “above and beyond” those of an urban clinic.
“We open at the weekends to see clinics then and slightly later in the weekdays … than most urban clinics.”
Jones said Health NZ had been reviewing “what rural means” and the centre now fell “in the urban boundary”, as under the geographical classification for health.
“But if you were to travel … literally outside of the Katikati sign, then you’re rural again.”
Jones said Health NZ gave the centre a provisional notice on March 31, which said its rural funding agreement would end on June 30 if changes to funding schedules came into force.
Jones questioned if Health NZ could unilaterally make the changes or if they could be vetoed or appealed.
“We’re definitely not the only practice affected around the country.”
Jones said many services “would just have to disappear overnight” if the changes went ahead.
The practice would also close on weekends and public holidays.
“We’ve been managing to kind of run services that run at a loss because we know that they are important for the community to save having to drive into Tauranga.”
Jones said its acute services would be “scaled down”, its phone triage service would end, and the practice would no longer be part of St John’s Primary Response in Medical Emergencies service – where rural doctors attend emergencies with St John.
She was concerned its rural contract with Accident Compensation Corporation (ACC) could also change.
She understood this could mean injured patients with “anything complicated would be sent to Tauranga”.
For fracture management and suturing complex wounds, for example, “the patient would no longer be able to pay us a co-payment big enough to cover the discrepancy between the money we would now get from ACC versus what we get under the rural contract”.
ACC told the Bay of Plenty Times the funding available to the practice under its rural general practice contract would not change.
Jones said the practice had about 9500 enrolled patients. A third were community service card holders and more than a third were older than 65.
“We don’t want prices to go up for patients but that’s what would happen. If we’re getting less funding from elsewhere, it has to come from somewhere.”
Jones started an online petition to “save” the centre’s rural funding. It had more than 1900 signatures as of Wednesday midday.
The Bay of Plenty Times put Jones’ concerns to Health NZ and asked if the change could be vetoed or appealed, when a decision would be made, and how many practices nationally received this notice.
Health NZ living well acting director Astuti Balram said no funding decisions had been made for Katikati Medical Centre or any other rural medical centres as part of a nationwide review of rural funding available under the Primary Health Organisations Services Agreement (PHOSA) - a national agreement through which primary care is funded.
Rural funding had been part of the agreement for more than 25 years, but inconsistencies in eligibility, use and impact had developed between districts over time, Balram said.
Last year, Health NZ worked with primary health organisations and general practice rural experts to review the PHOSA agreement’s rural funding approach.
The group was tasked with developing recommendations for a “nationally consistent, transparent, and equitable” rural funding framework.
Recommendations and their implementation approach were subject to annual primary care negotiations, which were underway, Balram said.
These would include making a transition plan to support service and funding continuity for primary health organisations and practices, allowing time for adapting to any agreed changes.
ACC system commissioning and performance deputy chief executive Lisa Williams said it paid a higher rate under its rural general practice contract (RGPA) because of the higher costs to deliver care in rural areas.
In urban areas, people could be more easily referred to nearby hospitals, urgent care clinics or specialists.
While Health NZ’s rural definition changes would “not automatically affect a practice’s rural status with ACC”, Williams said ACC had also updated its definition of rural to align with the geographic classification for health.
This was part of a “variation” it was issuing to existing RGPA contracts, seeking to extend the contract by two years until June 2028.
Contracted rural practices that did not meet the revised definition of rural would be “grandparented”, keeping their funding until June 2028.
Practices in three identified geographical classification areas or those “otherwise approved” by ACC remained eligible for rural contracts.
St John was approached for comment.
Megan Wilson is a health and general news reporter for the Bay of Plenty Times and the Rotorua Daily Post. She has been a journalist since 2021.