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2012 Conference Presentation

Funding/purchasing New Zealand

7 September 2012

Funding primary care to the tail of the bell curve

Jill Wilkinson, Massey University, New Zealand


Objective: Using a case study approach, the purpose of this paper is to examine the characteristics of a high needs population in the context of the state funding framework for primary care services in New Zealand. The case of interest is The Aro Health Centre, a not-for-profit Trust which provides very low cost health services to about 1,500 people on low incomes who live in Wellington’s inner city.

Data and methods: Data for the study were obtained using the reporting functions of the health centre’s electronic patient management system for the 2011/12 financial year (April 1 – March 31). Basic descriptive statistics using Excel were used to describe the enrolled population and the number of visits to the clinic. In addition to these data, the criteria for state provided funding streams – ‘capitation’, ‘very-low cost access’ (VLCA), ‘health promotion’ (HP), ‘services to improve access’ (SIA) and ‘CarePlus’ – were matched to the enrolled population to identify where the clinic is disadvantaged by current funding policy.

Results: Sixty-eight per cent are aged between 25 and 64 years, and 62% are men (n=1480); 68% live in the most deprived categories of quintile 4 and 5; priority populations are Maori (25%), Pacific (4%), and Asian (17%). Of those enrolled, 47% (n = 677) have one or more mental health diagnoses (R = 1 to 7), and 17% (n=245) have just one mental health diagnosis. There are 89 enrolments in the long-term conditions funded clinics despite approximately 600 people (41%) meeting the eligibility criteria (two or more conditions) of the CarePlus funding stream which is capped at 5%. The overall mean clinic attendance was seven (R= 0 to 62). Of the 53% who attended more than the capitation funded 4 visits, 30% attended between 5 and 9 times, 20% between 10 and 24 times, and 5% attended 20 to more than 30 times. These groups were categorised into four groups: those with extreme-high need (5%), medium-high need (20%), high need (30%), and need consistent with the general population of New Zealand – the ‘NZ average’ (45%).

Policy implications: The funding model is based on historical primary care usage data and is designed to fit a bell curve that is representative of the entire population with each service provider enrolling a similarly distributed population. However, mainstream providers are financially incentivised to game the system by excluding the high need outliers leaving providers such as The Aro Health Centre (who pick them up) with a funding shortfall. Mechanisms of compensation are via VLCA, SIA and HP funding streams, but are insufficient to meet the higher than high categories of need evident in this population. The prevalence of long-term conditions provides a strong case for the 5 per cent cap on CarePlus enrolments to be lifted if provision of proactive management is to lead to reductions in overall morbidity. Implications for policy are that funding streams based on historical usage and the ‘NZ average’ demographic are inadequate for clinics at the tail of the curve.


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