Story: Primary health care

Page 5. Reforming the system, 1970s–21st century

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From the 1970s successive governments tried to address the two-tier health system, which by then comprised a largely user-pays primary health sector and a fully funded secondary (public hospital) sector. Health insurance, which was first available in the 1960s, covered GP visits and widened the gap between the upper and middle classes and the less well-off, who were disadvantaged.

The general health system was under almost constant review from this period. Underlying these reviews was a desire to limit state spending on health, better coordinate primary and secondary health care, provide more support to those with the greatest health risks, and later, to introduce more consumer choice in the system. Hospitals were the major focus of reforms, but increasing attention was paid to the primary health-care sector.

Patient charges

Reform of the primary health sector by the mid-1980s was directed at the issues of patient charges and access. While there was a broad consensus among political parties that a fully funded primary health service was not financially viable, attempts were made to control the fees GPs charged their patients. The aim was a targeted system which provided subsidies for low-income people only.

Governments struggled to realise these aims because, as in the past, GPs objected to government control of patient charges. For instance, an attempt in 1985 to reduce child fees in exchange for higher subsidies was rejected by GPs.

Targeted subsidies

In 1991 the new National government wanted to replace all universal subsidies for primary health care with state provision for those on low incomes, while the rest of the population would have to rely on private insurance. Competitive contracting for services was a step in that direction. However, this goal proved politically impossible to achieve, and universal services were actually extended after 1996.

Community services cards for low-income people were introduced in 1992. These entitled users to higher GP and prescription subsidies, but their effect was limited because not all eligible people obtained a card.

Message not getting through

Studies carried out in the 1990s found that around 25% of eligible people did not have a community services card. Eligible Pākehā were more likely to have one than other ethnic groups, and Pacific Island people were the least likely. In one study, 64% of people who did not know what a community services card was, actually held one.

Partial progress

From 1993 all GPs had to sign contracts with regional health authorities, which were created to purchase primary and secondary health services from both public and private health providers, thus creating a competitive market. At first the contractual process allowed the government to exert control over subsidies and fees, and also over where GPs were located.

In response, GPs grouped together as independent practitioner associations (IPAs). By 1998 nearly 70% of GPs belonged to IPAs, which strengthened their negotiating power. Despite the government policy of free primary health care for children under six, GPs had continued to charge for such care.

Non-profit sector

While most GPs were firmly in favour of the fee-for-service system, a small number prioritised social objectives through the provision of free services. In the 1970s the Department of Health funded free primary health centres in some areas. Trade unions set up union health centres from the late 1980s. Māori, and to a lesser extent Pacific, providers of primary health care increased dramatically in the contracting environment after 1991.

GPs staffing these centres were salaried employees. Because they did not rely on individual consultations for their income, they could spend time on activities not directly related to individual patients, such as health promotion. Nurses in these practices were able to take on greater responsibilities with respect to patient care.

Expert nurses

In 2001 the role of nurse practitioner was introduced in New Zealand. Nurse practitioners are expert registered nurses with a master’s degree and can practise with far more autonomy than their non-practitioner counterparts. Some can prescribe medicines.

Primary health organisations

The most significant reform of the primary health sector since 1941 occurred in the early 21st century. The government resurrected the population-based approach of the first Labour government and created a model based on the non-profit sector. This time, the government gained the support of GPs. Group practices, Māori and community health providers (including other professionals like midwives) grouped together as primary health organisations (PHOs).

This was not a universal, fully funded model – PHOs with enrolled populations identified as high need (Māori, Pacific and low-income people) received more funding per person than those with lower-need populations. Visiting a doctor in South Auckland was considerably less expensive than visiting one on the North Shore.

Zero-fee GP visits for children

From July 2015 over 90% of general practices in New Zealand opted into a new scheme that offered zero-fee visits to children aged 13 and under. The $5 per item cost for prescription medicines was also removed for this age group. This scheme extended the under-six zero-fees programme introduced in 1996. General practitioners could decide whether or not to offer zero-fee visits in practice hours for children aged 13 and under. Those who offered this service received capitation funding for children enrolled in their practice and an extra subsidy from the government. District health boards were separately funded to ensure that children aged 13 and under received free after-hours general practice and pharmacy services.

This initiative was directed at ensuring that children had access to health-care services, regardless of parental income. It also aimed to avoid unnecessary visits to hospital accident and emergency departments by low-income parents

Full circle?

By the early 21st century the concepts of consumer choice and patient rights were firmly embedded in the primary health care system. Health professionals had to recognise the cultural and social preferences of patients. Doctors were one of many types of health provider – as they had been in the mid-19th century. The population-based funding approach and attempts to ensure equality of access harked back to the 1930s, while the retention of a user-pays element acknowledged one of the key elements of the 1980s economic reforms.

How to cite this page:

Michael Belgrave, 'Primary health care - Reforming the system, 1970s–21st century', Te Ara - the Encyclopedia of New Zealand, (accessed 14 July 2024)

Story by Michael Belgrave, published 5 May 2011, reviewed & revised 4 Apr 2019