Primary Health Care

Funding

• Roll-out of Primary Health Care funding
• Primary Health Care Budget
• Subsidy Rates

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PHOs get a set amount of funding to subsidise a range of health services for their enrolled populations, including funding to:

• subsidise the costs of visits to the doctor and pharmaceutical charges
• run health promotion programmes
• provide new services or improved access to reduce health inequalities among high-need groups
• provide more continuous care under the Care Plus programme.

The funding is based on the numbers and characteristics of people enrolled in a PHO. The factors that influence the level of subsidy paid in respect of each person enrolled in a PHO are age, gender, ethnicity, deprivation quintile and whether the person holds a Community Services Card or a High Use Health Card. These factors may vary according to the funding stream.

The factors that are relevant for each type of subsidy are:

Subsidy Type	Age	Gender	Ethnicity	Deprivation Quintile	HUHC Card	CSC Card	Access/ Interm Practices
First Contact	Y	Y	N	N	Y	Y	Y
Health Promotion	N	N	Y	Y	N	N	N
Services to Improve Access	Y	Y	Y	Y	N	N	N
Pharmaceutical Co-payments	Y	N	N	N	Y	Y	N

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Roll-out of primary health care funding

Initially PHOs were funded under two different models – Access and Interim. It was not possible to provide the same level of funding to all PHOs from the start. To ensure that funding was targeted to the areas of greatest need in the early phases of the implementation of the Primary Health Care Strategy, most funding was directed at Access PHOs. Access PHOs and practices had high proportions of low-income, Maori and Pacific peoples - groups that have traditionally had poorer health outcomes than the rest of the population. Since 1 July 2002, all people enrolled with general practices in Access-funded PHOs have been eligible for subsidies to lower the cost of doctors' visits.

The first step in extending low cost access to people in Interim-funded PHOs took place in October 2003 when enrollees aged between 6 and 17 years became eligible for subsidies to lower the cost of doctors’ visits. The final rollout for people enrolled in Interim PHOs (those aged 25-44 years) took place on 1 July 2007.

Primary health care funding to extend low cost access has been rolled out as follows:

• 1 April 2004 – funding for low cost pharmaceuticals for enrolees in Access-funded PHOs, and 6-17 year olds enrolled in Interim-funded PHOs (maximum charge of $3 per item on subsidised pharmaceuticals)
• 1 July 2004 – funding to lower the cost of doctors visits and pharmaceutical charges for people aged 65 years and over enrolled in Interim-funded PHOs
• 1 July 2005 – funding to lower the cost of doctors visits and pharmaceutical charges for people aged 18-24 years enrolled in Interim-funded PHOs
• 1 July 2006 – funding to lower the cost of doctors visits and pharmaceutical charges for people aged 45-64 years enrolled in Interim-funded PHOs
• 1 July 2007 – funding to lower the cost of doctors visits and pharmaceutical changes for people age 25-44 years enrolled in Interim funded PHOs

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Primary health care budget

The total funding path comprises funding for:

• Capitation based subsidies
• Other initiatives that are not funded on a capitation basis

The 2007/08 primary health care budget for capitation based subsidies is $730.0m

Capitation Based Subsidy	$million
First Contact	$520.5
Pharmaceutical	$126.3
Services to Improve Access	$39.1
Health Promotion	$9.1
Management Fee	$31.8
Laboratory subsidy to DHBs for increased utilisation	$3.2

Capitation Based Funding is allocated according to the volume of enrollees on PHO registers and is also highly sensitive to the demographic characteristics of enrollees (as different demographic categories are paid different capitation based subsidy rates).

The 2007/08 primary health care budget for other initiatives is $88.8m

Other Initiatives	$million
Care Plus	$30.2
Performance Payments	$29.2
Rural Health	$12.6
Mental Health	$7.3
Other Items	$9.5

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Subsidy Rates

View the current Subsidy Rates:

PHO Capitation Rates from 1 July 2009


Page last updated: 1 July 2010