General practitioners in Northland are dipping into their mortgages to keep their practices running after years of continued Government underfunding, and they say have now reached a tipping point.

GPs say a lack of capitation
funding— the payment of a fee to healthcare service providers— is not only impacting on patient care, but their clinics are also having difficulty hiring doctors and nurses, even in the main towns.

Whangārei GP Dr Paula Mathieson has taken out loans to keep her Rata Family Health practice afloat.

“I desperately want to continue to provide a good service to my community. I am a fifth-generation Northlander, so it really matters to me. I shouldn’t be forced out.

“My hourly rates are down. I can only take out enough, not the full salary. I have a tax bill, a mortgage to pay and am surviving on a shoestring budget.”

She said the last time the Ministry of Health allowed her practice to increase its fees was around 2017— from $19 to $19.50.

But Te Whatu Ora said it has provided a 5 per cent price uplift in the Annual Statement of Reasonable GP Fee Increase (ASRFI) for 2023/24, which was the single largest increase to capitation funding in recent times and 4.92 per cent more than the ASRFI calculated.

“Additional investment has been provided to the Community Services Card, Very Low-Cost Access and Zero Fees for Under-14s [initiatives] to keep the patient co-payment levels at their existing rates,” Te Whatu Ora interim director of primary, community and rural commissioning Emma Prestidge said.

But Dr Mathieson described the ministry’s response as “gaslighting”, “disingenuous” and “rude”.

“We have to enrol more patients than is sustainable in order to generate enough capitation just to pay the bills. I keep thinking it’ll be okay because we’ve lobbied so hard for so long with the Government.

“The Government has accepted the situation with GP funding is not okay, so surely things must change, but there’s absolutely no indication that it will get better.”

GPs come under two funding streams. Dr Mathieson’s practice, as with most practices in Northland, is categorised as Very Low-Cost Access (VLCA) and cannot increase its fees because the Government decides on the capitation funding and charges.

She said none of the three reports the Government commissioned into GP funding had been acted upon, and now some VLCA practices needed increases in capitation of up to 231 per cent to keep going.

A report last year from Sapere Research Group on future capitation funding approaches said there were problems with the underlying sustainability of general practice capitation funding. As the population ages, the reports say the average complexity presented by a patient increases in a way that is not recognised in the current formula.

“Overall, funding for general practice care is problematic for a number of reasons, but the core issue is that funding does not align with patient needs. This means that services that have a higher-than-average proportion of people with high health needs are not funded adequately to deliver care to their patients.

“The current approach systematically underfunds services for Māori by not recognising patterns of higher need and historical underutilisation by Māori. It embeds historical inequity.”

Dr Mathieson agrees.

“What patients pay over the counter is around a quarter of what it costs to run consultation slots.”

She said the capitation funding was based on the age bands – for example, where those in their 90s attract the same funding as a fit and active 65-year-old.

“It’s also based on sex, not on ethnicity and how well a patient is. The percentage of my patients over 65 and those with ‘high needs’ and more complex needs are well above the NZ average.”

The situation has prompted Bush Rd Medical Centre practice manager Della-Maree Trask to write to its PHO (physician-hospital organisation) Comprehensive Care about the impact a cut in capitation rates would have on service delivery.

Further reductions in service levels and access to GPs, delays in the diagnosis of serious and life-threatening illnesses and access to specialists were some of the services that would be affected.

Trask said her practice was in a situation where it still has to provide a service with money it did not have.

Bush Rd Medical Centre GP Dr Geoff Cunningham said the funding model punished those who worked in the areas of New Zealand with the highest need.

“We are the canary in the coal mine here in Northland, and now it’s reached a tipping point and [we’re] hamstrung. We’ve got a disproportionate number of Māori, the elderly – all incredibly high consumers of general practice services.

“It’s not rocket science, it’s conditions and remuneration, but remuneration buys the conditions, and when you are funded at less than Consumer Price Index every year for 19 out of 20 years, one year at CPI, but your costs go up every year, you just can’t survive.

“We are increasingly concerned about how we’re going to survive. We’re the only practice that has a duty doctor. We have two paramedics that take phone calls in the morning for anybody that’s urgent. This Government has done everything they can to undermine general practice,” he said.

Dr Cunningham said many GP trainees were quitting within their first year and going into hospitals.

Te Whatu Ora said it was investing further into general practice, including $102 million over three years to support GP clinics with the rollout of the comprehensive primary and community care teams.

“A further $31m in ongoing funding to support the general practice nursing workforce which, on average, represented an 8 per cent increase in salary levels for practice nurses, and $86m over four years to address equity in the capitation formula,” Prestidge said.

She said immunisation services have received an investment of $10.5m.

Imran Ali is a senior reporter who does general news reporting at the Advocate after more than two decades covering courts. He also takes a keen interest in rugby.