Who Pays What for Primary Health Care? Patterns and Determinants of the Fees Paid by Patients in a Mixed Public-Private Financing Model

Abstract

The New Zealand government introduced a Primary Health Care Strategy (PHCS) in 2001 aimed at improving access to primary health care, improving health, and reducing inequalities in health. The Strategy represented a substantive increase in health funding by government and a move from a targeted to a universal funding model. This paper uses representative national survey data to examine the distribution of fees paid for primary health care by different individuals under the mixed public-private financing model in place prior to the introduction of PHCS. Using multivariate regression analysis, we find that fees do vary, with people who might be expected to have greater needs paying less. However, apart from people with diabetes, there is no direct link between self-reported health status and fees paid. The findings indicate that a mixed public-private financing model can result in a fee structure which recognises differences across different population groups. The findings also provide a baseline against which changes in funding brought about by the PHCS can be evaluated.JEL classification I11, I18, H51

How has access to general practitioner services changed since the Primary Health Care Strategy 2001?

“…My analysis shows that the targeted subsidies prior to new funding successfully distributed co-payments largely on the basis of income and health status, the latter finding contrasting an earlier analysis which did not instrument out the self-reporting errors in the global health status variable [27]. With the roll-out of the majority of new capitation funding by 2006/07, utilisation rates increased for most patients.…”

“…This vision was partially recognised through the Social Security Act 1938, which introduced free hospital treatment and medicines, and subsidised other services for children under 16 [39]. However, efforts to extend these arrangements to PHC were met with opposition from the British Medical Association (representing New Zealand GPs at the time), who argued that user fees efficiently managed service demand, and that practitioners preferred to remain independent business owners [27,29]. After protracted negotiations, the government compromised by introducing a fee-forservice partial subsidy model.…”

“…RHAs were now responsible for purchasing primary health care in place of the central government [44], while GPs were also permitted to collectively contract their services to RHAs through Independent Practitioner Associations [45]. Greater funding was made available for government subsidies, but for adults these were now available exclusively through the use of entitlement cards [27,46]. The Community Services Card (CSC) was available to low income households, with roughly 50% of the population entitled [47].…”

“…The Community Services Card (CSC) was available to low income households, with roughly 50% of the population entitled [47]. The High Use Health Card (HUHC) was made available to an estimated 5% of the population who regularly consulted with health practitioners for an ongoing medical condition [27]. Uptake for both cards was less than perfect, with an estimated 21% of individuals eligible for the CSC failing to hold the card in practice in the late 1990s [12].…”

“…In New Zealand, early evaluations of the PHCS provide evidence of reduced costs and increased consultation numbers, particularly for groups that received priority in the rollout of new funding such as those aged 65 and over, and those enrolled in practices with high-needs populations [7,12,27,28]. However, both earlier and more recent studies suggest inequities in access are ongoing, particularly for younger women, Māori and Pacific Peoples, and people living with chronic conditions [23,26,29].…”