Primary health care in New Zealand: problems and policy approaches.

• Author: Barnett, Ross

Abstract

Primary health care in New Zealand has been funded by a partial fee-for-service payment from the state for consultations and pharmaceuticals, supplemented by substantial co-payments from patients. Despite some targeting according to income and high need, there have been inequalities in access, with poorer people and Maori often using services at rates less than might be expected given their high levels of need. New policies are directed towards changing both the funding and organisational arrangements through which primary health care is delivered. New primary health organisations will be formed by provider groups, including general practitioners, and will have high levels of community governance. The new organisations will be funded through capitation, with funding levels dependent on the level of deprivation of the area within which individuals reside. The problems of funding on this basis are discussed. The paper concludes that this fundamental shift in strategy has the potential to improve access, but that the risks inherent in the new systems will require careful monitoring.

INTRODUCTION

After more than a decade of neoliberalism, which saw social and economic inequality substantially widen in New Zealand (Mowbray 2001, Howden-Chapman et al. 2000), there are now government initiatives to address the social consequences of past policies. Such initiatives parallel similar moves elsewhere in the developed world where the social costs of neoliberalism are also apparent (Coburn 2000). This has been particularly true in the health sector, where the growing socio-economic costs of inequality are becoming more fully understood (Wilkinson 1996, Macintyre 1997, Acheson 1998, Ministry of Health 2000b, 2002c). The policy context of health has changed dramatically, with governments now fostering co-operative over competitive models of service provision and seeing an increased focus on primary care as the key to overall improvements in service delivery and health (Moon and North 2000, National Health Committee 2000).

Within New Zealand, the New Zealand Health Strategy (Minister of Health 2001b) and the Primary Health Care Strategy (Minister of Health 2001c) are evidence of attempts to develop more equitable policies. The New Zealand Health Strategy, for example, anticipated new institutional arrangements and elected district health boards (DHBs) to implement these policies. Within the framework of DHBs the more recent Primary Health Care Strategy proposes new organisational structures, known as primary health organisations (PHOs), to address problems of access to services and a lack of coordination between providers. While DHBs are now fully established and the process of setting up PHOs well advanced, there is some uncertainty about how their equity goals are to be achieved.

This paper examines problems of access to primary care in New Zealand and discusses whether changes in the institutional and funding environment are likely to lead to greater equity in access to services. Following Starfield (1998), we define equity in terms of "equal treatment for equal need", such that systematic disparities in health and in the use of health services are reduced between more and less advantaged social groups. We primarily view differences in access as arising from socio-economic differences in wealth and pay less attention to geographic variations in access, which, undoubtedly, are also important (Joseph and Phillips 1984). In adopting such an approach, the paper has three specific objectives: (i) to determine the extent to which economic barriers to the use of primary health care services persist in New Zealand; (ii) to outline briefly current policy developments, in particular the development of primary health organisations (PHOs); and (iii) to assess how likely these are to address barriers to access within the wider context of health inequalities.

ECONOMIC BARRIERS TO PRIMARY HEALTH CARE IN NEW ZEALAND

In New Zealand, as in many other developed countries, economic restructuring and the unravelling of the welfare state have contributed to a substantial increase in the incidence of poverty (Waldegrave et al. 1995, Jamieson 1998) and socio-economic differentials in health (Ministry of Health 2000b).

Since the advent of the Social Security legislation in 1938, primary medical services have been provided on a fee-for-service basis assisted by a universal system of government subsidies. However, since subsidies did not cover the full cost of patient care, part-charges remained, sometimes approaching one-third of general practitioner (GP) costs (Brown and Crampton 1997). Initially, the consequences of this system of funding were relatively minor, with high levels of employment and economic prosperity during the years of the "long boom" permitting significantly higher levels of GP use by those on lower incomes (Davis 1985, 1986). However, later research suggested that while these patterns persisted throughout the 1970s, by the 1980s the positive class and ethnic differentials in utilisation appeared to have begun to diminish (Gribben 1992, Barnett and Kearns 1996).

Such trends seemed indicative of the increasing costs of care and the impacts of restructuring then being felt in the wider economy. The former were particularly evident in an increasing number of patients expressing dissatisfaction with doctors' fees (Fergusson et al. 1989, Gribben 1993). Efforts by the Labour government (1984-90) to tackle growing disquiet over user charges relied on collaboration with the medical profession. This took the form of some tentative deregulatory moves and greater competition between providers aimed at restraining the growth of primary health care expenditure (Barnett and Kearns 1996). These moves, combined with attempts by government to negotiate formal contracts with GPs for higher state subsidies for patient care in return for restraints in the growth of fees, were largely resisted by GPs and expectations of lower fees were not realised. Another approach included support for a small number of trade union sponsored centres, but while lower fees resulted in improved access to care for some of the poor, the impact overall was minor (McGrath 1989).

The introduction of the Community Service Card (CSC) in 1992 had the potential to increase access by targeting increased levels of benefits according to income. However, the research from the 1990s indicates that the positive impacts of the introduction of the CSC were less than expected (Davis et al. 1994). Barnett and Kearns (1996), for example, in a study of the utilisation of two Auckland accident and medical centres, found that almost one-third of their respondents visited GPs less often than in previous years. This reduced use was largely attributed to changed financial circumstances arising from the effects of economic and welfare restructuring. Most of those reporting financial difficulties were of Maori or Pacific Island origin and 60% of this group, compared with only 24% of Pakeha respondents, mentioned that their changed economic circumstances had restricted their GP visits. Other evidence confirms these findings. Davis, Lay-Yee et al. (1997a, 1997b) found that, in contrast to the 1970s, GP utilisation rates for Maori and Pacific Island patients in the Waikato in 1992 were slightly lower than those for Pakeha patients. They also discovered no close correspondence between vulnerability to ill health (as judged by mortality rates) and levels of GP use. In fact, of six diagnostic conditions with high Maori mortality, in only two did Maori GP utilisation rates exceed those of non-Maori.

Utilisation and Socio-Economic Status

Overall, more recent evidence on patterns of utilisation according to socio-economic status is mixed. The National Health Survey from 1996/97 (Ministry of Health 1999) reports that adults from low-income families or deprived neighbourhoods are more likely to have a high frequency of visits to GPs than are adults from higher-income families or more affluent areas. More local studies based on specific provider groups, however, provide evidence of low rates of GP use by less affluent groups in both South Auckland Gribben (1999) and Christchurch (Barnett et al. 2000, Barnett 2001). Barnett et al. (2000) compared patient utilisation at a GP practice where there was no charge to the patient with a control sample of low-income patients who attended practices charging co-payments. In the practices charging co-payments a large proportion of respondents reported delaying seeking care because of cost. In these practices levels of use were not related to need (self-assessed health status), whereas at the "free" practice there was an inverse relationship between income and consultation rates.

Similar findings are evident in a second study of the "survival strategies" adopted by the urban poor in Christchurch (Barnett 2001). Two surveys were undertaken, one of the health and health service concerns of clients of a large inner-city voluntary welfare agency, and another of the extent to which GPs' surgeries in Christchurch aided lower-income patients in financial distress. The research came to six major conclusions.

1. As noted by Fergusson et al. (1989), patients continued to express high levels of dissatisfaction with GPs' fees. The proportion of patients who considered the fee "too high" or "far too high" rose from 32.3% of those paying $10-14 to 68.3% of those paying $15-19 and to over 90% of those paying $25 or more.

2. Patients, when faced with financial difficulties in obtaining care, adopted a variety of strategies, both active and passive, most commonly delaying seeking care, delaying obtaining medication, and seeking financial help from GPs. Almost half the respondents (49%) also indicated that they often put the needs of others first, the others in most cases being children aged 6-14. High rates of switching GPs also occurred: 31.8% of patients had...