Why the fuss

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Why the fuss? Needs based funding for primary care
Peter Crampton Wellington School of Medicine and
Health Sciences University of Otago, Wellington,
New Zealand
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Outline

• Aims
• In the bad old days...
• The PHO funding formulas
• Principles of needs based funding
• Why are both deprivation and ethnicity included
  as measures of need?
• The equity effects of the formula
• Groups not catered for
• Conclusions

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Aim to explain...

• Why the needs vs race language is misleading
  and confusing
• That New Zealand has a sophisticated and
  increasingly fair resource allocation mechanism
  for primary care
• That funding is indeed needs based
• That high needs groups not covered in our current
  funding formulas have to be catered for

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In the bad old days...

• Historical funding mechanisms for primary care
• The main drivers were GP location and patient
  throughput
• A few capitation funded practices
• Capitation funding of Primary Health
  Organisations introduced in 2003

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PHO funding formulas

• There is not one PHO funding formula, but four
• First contact (interim and access)
• Services to improve access
• Health promotion funding
• Care Plus funding
• Collectively this is what we refer to as needs
  based funding

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Principles of needs based funding...

• To allocate funding according to need
• Need is determined by
• Population size (enrolled population)
• Age / sex
• Socioeconomic factors (deprivation)
• Ethnicity

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Why are both deprivation and ethnicity included
as measures of need?
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What are the equity effects of needs-based
funding for PHOs? Annualised PHO capitation
payments by ethnicity (as at 30 Sept 2003)
Source Hefford M, Crampton P, Foley J. Reducing
health disparities through primary care reform
the New Zealand experiment. Health Policy in
press.
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What are the equity effects of needs-based
funding for PHOs?
Source Hefford M, Crampton P, Foley J. Reducing
health disparities through primary care reform
the New Zealand experiment. Health Policy in
press.
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Groups not catered for

• Homeless people
• New migrants and refugees
• Other groups?

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Conclusions

• Needs vs race language is misleading and
  confusing
• New Zealand has a sophisticated and increasingly
  fair resource allocation mechanism for primary
  care
• Funding is indeed needs based
• That high needs groups not covered in our current
  funding formulas have to be catered for

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