Are New Zealand's new primary health organisations fit for purpose?BMJ 2006; 333 doi: https://doi.org/10.1136/bmj.39029.493542.94 (Published 07 December 2006) Cite this as: BMJ 2006;333:1216
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To one directly involved in both the provision of primary health care
services through general practice and governance of a Primary Health
Organisation (PHO), the lack of detailed knowledge of PHOs displayed by
Gauld and Mays in their commentary on New Zealand's PHO-based health
reforms  is disappointing. Wider consultation with a range of those
involved in PHO governance, and with general practitioners (GPs)
contracted to them, might have prevented a number of the errors in the
article, and addressed some of the authors' concerns.
To note a few errors and ommissions:
* it is nonsense to claim that before 1990 most GPs were sole
practitioners (in 1990 our Health Centre team included 9 GPs, 6 nurses,
psychologist, dietitian, acoustician, and physios, as well as
* PHOs are not required to be "community owned" (many are owned by
* patient co-payments form no part of PHO funding (they are
charged, or not, directly to patients by individual practices);
* other funding, often contestable, is available for specific
purposes, such as mental health care;
* if there are 81 PHOs, 19 seem to be missing after Gauld and Mays
have counted 37 'access' and 25 'interim' PHOs;
* PHOs are NOT "primary care providers" (they contract providers to
do the work of primary health care).
More importantly, it is wrong to claim that "the government does not
have a clear vision of what it wants for primary health." Gauld and Mays
refer to the Primary Health Care Strategy (PHCS) of 2001 . This
document does, in fact include a brief vision for primary health care, but
it should be read in conjunction with the New Zealand Health Strategy
(NZHS) of 2000 . The PHCS was the mechanism to achieve through primary
care the widely endorsed vision of the NZHS, its seven principles, and its
key goals and objectives. Contrary to the scepticism many of us felt
about the reforms when first proposed, they are providing a way of
addressing that vision. In many ways they are rejuvenating primary health
care, especially for the most deprived and the general practices and other
providers caring for them.
The conflict over co-payments reflected GPs' historically justified
fear of government controlling prices without fully funding them. Having
said that, it should be acknowledged that this is the first system, in the
67 years since primary care subsidies were established in New Zealand,
with built-in provision for annual adjustment of the subsidy.
Enrolment of patients through general practice reflects the aim that
GPs be co-ordinators of care rather than just the sole providers, as well
as providing a workable, immediately available, mechanism. The rules
require any other providers to be able to influence decision-making at PHO
level, usually achieved by Board representation. The move from fee-for-
doctor-service subsidy to capitation encourages effective teamwork between
doctors, nurses, and other providers, and there is no reason to suppose
that integration of other providers into the team is discouraged by the
enrolment method. Local decision-making, capitation-based funding, and
the dedicated 'Services to Improve Access' and 'Health Promotion' monies
have enabled local initiatives to meet local needs, in particular those of
the most deprived. Universal enrolment should provide improved data to
enable population-based health initiatives.
The Government, understandably, had concerns about doctor control of
PHOs , given the number of them contracting with the doctor-dominated
Independent Practitioner Associations (IPAs) for management services. The
recent trend for PHOs to set up their own management systems, or buy
services elsewhere, and the ring-fencing of IPA-provided management
services from other IPA business, will leave IPAs free to concentrate on
their key future: that of supporting general practice.
Workforce issues remain a concern, despite being flagged in the NZHS,
but the Ministry is finally starting to address the issue. Some PHOs have
not waited for government action, but have already put resources into
development of the medical and nursing workforces .
While mistakes have been made, and much remains to be done as the new
system evolves to address outstanding issues, the coalition government
that enacted the reforms, and the Minister who oversaw its implementation,
should be congratulated for reversing the earlier trends which saw primary
health care facing death by slow starvation and the deprived often unable
to access care except through charity. The future of general practice is
now much brighter in New Zealand, thanks to the Government's recognition
of the value of good primary care, its articulation of a vision through
the NZHS and PHCS, the reforms which allow fexibility to meet local needs,
reduce inequalities, and improve preventative care and population-based
health, and its substantial financial investment in improving access.
1. Gauld R, Mays N. Are New Zealand's new primary health organisions
fit for purpose? BMJ 2006;333:1216-1218.
2. King A. The primary health care strategy. Wellington: Ministry
of Health, 2001.
4. Hon Pete Hodgson, Minister of Health. Speech to PHO Alliance;
5. Mornington Primary Health Organisation. Annual Report; Dunedin,
I earn my living from general practice, and as a GP contracted to a PHO I receive a significant part of my income from Capitation Based Funding paid through that PHO. I am also a Trustee of the Mornington PHO and receive a small honorarium for that work.
Competing interests: No competing interests