Education And Debate

Gp budget holding in new zealand: lessons for Britain and elsewhere?

BMJ 1997; 314 doi: (Published 28 June 1997) Cite this as: BMJ 1997;314:1890
  1. Laurence Malcolma, professor emeritus
  1. a Aotearoa Health Lyttelton R D 1 New Zealand,
  • Accepted 3 February 1997


The recent election in New Zealand resulted in the new coalition government rejecting key aspects of the National government's controversial, Treasury led health reforms implemented in 1993.1 2 Based on the largely successful economic and state sector reforms of the 1980s, the health reforms had two key goals: improved efficiencies and better access, especially to elective surgery.3 Superficial assessment of the hospital sector had led to expectations that savings of 20-30% could be achieved through competitive and commercial incentives.3 Yet actual expenditure has increased by this amount, and waiting lists have grown by 50% since 1993.1 4 The new government favours collaboration over competition, and its health policy is to abolish the market oriented CHEs (Crown health enterprises) and replace them with regional hospital and community service units, which will be required to improve the health of their communities.2 The four regional purchasers that have a contract with providers are to be replaced with a central funding authority. The funder-provider split remains, but “purchasing” has been rejected as being too commercial. The government now seems to recognise that health is primarily a social service, not a business. The bottom line is not profit; it is better health outcomes.

Growth of collaboration in primary care

The new government has recognised that collaboration may be much more effective than competition as an incentive in health care.5 6 Nowhere has this collaboration been more clearly demonstrated than in primary care through the formation of independent practice associations.7 The concept of independent practice associations, and their moves towards managed and integrated care, was borrowed from the United States. In practice, however, these associations have been much closer to British fundholding.7 8

Initial opposition to independent practice associations from the medical profession …

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