Pam Newlove

Our tax and industry experts have cut through the noise to focus on the most significant announcements in Budget 2025, and reveal what they mean for your business.

As the country's primary healthcare crisis deepens, Pam Newlove looks at missed opportunities in Budget 2024 to support overbooked and underfunded GPs.

Post-election 2023, can we expect to see our newly formed Government acting on their campaign cries of supporting a “health system that’s in crisis”? Or is it time for the industry to more actively participate in its own rescue? Either way, the time for action was yesterday – today, we are at risk of the state of our healthcare system being treated as business as usual. So, apart from healthcare professionals working in a perpetual crisis that’s stymying innovation, as well as the time and energy they need to truly transform the sector – what else is holding the primary healthcare sector back from change? A recent report issued in August 2023, Lifeline for Health, Meeting New Zealand’s need for General Practitioners, by Emeritus Professor Des Gorman and Dr Murray Horn, suggests the solution lies in transforming funding models. The authors’ comments about primary care being funded on an activity-based model resonated the greatest with me. The cries for additional funding across the healthcare system have been heard loud and clear, with more than enough evidence to justify this. However, if more money is tagged to more activity, how does a healthcare system already stretched from a human resource point of view improve outcomes – or the wellbeing of our healthcare professionals - by engaging in more activity? The report suggests behaviours and outcomes barely differ between a capitated funding system versus a fee-for-service model that previously existed in New Zealand, thereby challenging future health ministers to be bold and innovative. The report’s authors recommend, ‘the “health system” must focus more on outcomes and value.’ They also acknowledge this would mean a reduced rate of investment in hospitals and hospital care, while focussing more funding on primary care. This makes perfect sense - investment in prevention and early detection of major illness will require less hospital funding for a healthy, well-looked after nation. Prevention is less expensive than the cure. And, General Practitioners can take heart, as the report reiterates the importance of the role of good primary care in a well-functioning health system, re-affirming their role as ‘specialists’. The sector needs to support and financially incentivise specialist GPs to be the architects of their future and lead an innovative, sustained transformation. They need to be empowered to focus their expertise and efforts on improving health outcomes in the long term, rather than being underpinned by a ‘fee for service’ system that leads to more activity, stretched resources and poorer health outcomes for Kiwis. A quick look back at history History tells us drastic overhauls of public systems are achievable. In the 1990’s our accident compensation system was facing a crisis. The looming tail of investment required to fund both current claims in any one year, plus the ongoing funding required for historical claims was becoming unsustainable. The system was in dire need of transformation and many thought it could not be done. Despite the stop-start process of privatisation - and unravelling of privatisation - and a blowout in debt in the next decade, strident efforts to manage claims better on a fully funded model, coupled with the prudent investment of funds, ACC turned its fortunes around to become one of the largest investment funds in the country. No system supporting health will be completely perfect, but as with ACC, if hard calls are made, it can be turned around to deliver better outcomes. Time to be bold, not just tinker around the edges To date successive governments haven’t attempted to offer truly revolutionary solutions such as social insurance models which could be the way out of the current dilemma. Social insurance schemes such as those established in Switzerland, France, and the Netherlands, focus on funding for the long term. The fear in New Zealand in the past when these schemes have been suggested, is that it is a move to privatising the health system. However, the reality is, the majority of primary healthcare services here in New Zealand are already delivered by private providers. This leaves the current financial risks associated with funding primary care sitting with the private sector, which will only encourage primary providers to vote with their feet; and when the financial viability of their business is declining, difficult decisions will be made that will impact many communities. In the meantime, let’s harvest the low hanging fruit The new Government’s promises to establish a third medical school, increase medical placements at Otago University, establish satellite training centres in regional areas, and training alliances to deliver more doctors to rural parts of the country are all welcome. Those promises need to be followed up with a more structured process for managing the careers of those trainees to ensure that they do stay in New Zealand. We need to incentivise over 50% of current trainees to commit to working in general practice in the longer term, if the current primary care workforce is to be maintained, let alone grow to accommodate future population growth. If the new Government follows through on its partial student loan repayment and bonding plans for midwives and nurses, it is at least starting to show a commitment to help build up the primary care workforce.