New Zealand GPs Take Fee Complaint to the Commerce Commission Amid Funding Concerns

GPs, who traditionally see themselves more as independent small business owners, have taken the unusal step of launching collective action.

A doctor checking a patient's blood pressure at the Temple Fortune Health Centre GP Practice near Golders Green, London, England, on July 29, 2024. Anthony Devlin/PA Wire

New Zealand General Practitioners have lodged a formal complaint against Health NZ with the Commerce Commission, seeking a critical review of the subsidy they are paid per patient.

The General Practice Owners Association describes the current contracts as “unfair,” and potentially “illegal,” raising concerns that they may be putting patients’ lives at risk.

GPs receive annual “capitation” funding from the government for every enrolled patient, with some variation according to age.

This year, the government will put $1.24 billion toward capitation funding and a further $218 million in flexible funding for general practices—a total of $1.46 billion, which amounts to less than five percent of the total $30 billion health budget.

“General practice doctors are overworked and underpaid,” said Dr. Angus Chambers, Chair of the Association.

“They are overworked because there are fewer doctors and higher patient demand. And they are underpaid because New Zealand general practices cannot compete with salaries offered by the public sector, other specialties, and overseas.”

Chambers said GPs were dealing with more complex patients and were expected to do in 15 minutes what specialists did in an hour.

While doctors participate in negotiations over fees, Chambers said they did not have any real negotiating power as the government can issue directives that practices have no choice but to accept.

“The contracts imposed on us with no effective input are unfair. We believe they are illegal and breach the Fair Trading Act,” he said.

“We’ve asked the Commerce Commission to investigate the fairness of the contracts that GPs operate under, and we are seeking intervention from [them].”

83 Percent of Practices Fear for Their Viability

A recent survey by the Association showed that nine out of 10 practices have or will soon increase their charges, 70 percent are in a worse financial position than last year, 83 percent were worried about their long-term viability, and 60 percent have GP vacancies.

Independent analysis by accountancy consultants Grant Thornton found that government funding increases had fallen short of cost pressures ten times in the past twenty years, while patient attendance was up more than 20 percent in the ten years to 2022.

It was recently revealed that a GP working at the clinic where Health Minister Shane Reti once practised is $100,000 in debt.

The Minister has said that structural change to the 20-year-old capitation funding model is under consideration.

Chambers welcomed that announcement but warned that “the end result must not be a trivial activity which ignores the most obvious problem: the size of the total funding bucket must be increased rather than just reallocated.”

Chambers noted that the contract between general practices and primary healthcare organisations says it is the “government’s intention to maintain the value of [capitation and other] payments.”

“So the government has a contractual commitment to maintain the value of general practice funding—a commitment it has consistently dishonoured,” he said.