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A GP practice in the Bay of Plenty could be forced to reduce its services after a pay equity claim was raised against 492 practices in New Zealand.
“We have identified a significant risk that is likely to materially reduce or affect our ability to meet our obligations,” the practice manager wrote in a Clause 14 notice addressed to Western Bay of Plenty Primary Health Organisation chief executive Lindsey Webber.
The notice was prompted by a pay equity claim raised by the New Zealand Nurses’ Organisation against 492 GP practices across the country.
According to the General Practice Owners’ Association (GenPro), as of February 1 at least 155 of these practices had written similar notices to their contractor primary health organisations.
The practice owner shared the notice with the Bay of Plenty Times on the condition their business remain anonymous due to the sensitivity of the claim settlement process.
“The vast majority of our service is either fully funded, fee-controlled or fee-restricted,” the notice said.
“We will therefore be unable to meet the costs of such an equity claim.”
The notice said the practice needed the primary health organisation to cover the costs of the claim “in full and in perpetuity” or provide urgent funding uplifts.
“If the funder does not act on this urgently, we are likely to need to restructure and/or reduce services far in advance of claim settlement to remain solvent. This is very likely to include reducing nursing capacity.”
The notice said staff reduction could mean handing some responsibility for national cervical screening and vaccination programmes back to the primary health organisation.
Western Bay of Plenty Primary Health Organisation chief executive Lindsey Webber.
In response to the notice, Webber said pay parity between primary and community health nurses and Te Whatu Ora - Health New Zealand-employed nurses was “vital” for practices to recruit and retain their workforce.
“We also acknowledge the need for a long-term sustainable funding solution for general practices to be able to meet their obligations,” Webber said.
Webber said an earlier pay equity settlement for Health NZ nurses and healthcare workers which “resulted in significant pay increases” had created a stark pay gap between Health NZ-employed staff and those working in primary, community and telehealth services.
“A separate equity claim is therefore a logical next step,” Webber said.
Webber said Health NZ’s response to the situation was expected this month.
“Our role is to keep practices informed of progress on the claim and any relevant Government decisions,” Webber said.
“We believe that it is essential a successful claim is fully costed, and fully and separately funded by Government, as was the case with the Te Whatu Ora claim.”
Health New Zealand national director of living well, Martin Hefford.
Health New Zealand Te Whatu Ora national director of living well Martin Hefford said general practice was the cornerstone of the health system.
Health NZ was aware a number of general practices sent notifications to their contractor Primary Health Organisations after the NZNO made pay equity claims against 492 GP practices for nursing and administration staff last year.
“[Health New Zealand] will work with PHOs, GP practice representatives and relevant Government agencies to progress the pay equity claim through the established process.
Hefford said Health NZ acknowledged that “changes are needed”.
“Recently, general practices have received an additional $31 million per annum to support them to lift their nursing salaries by an average of 8 per cent.”
NZNO kaiwhakahaere [co-president/co-leader] Kerri Nuku. Photo / Paul Taylor
New Zealand Nurses’ Organisation kaiwhakahaere [co-president, co-leader] Kerri Nuku said the organisation shared the concerns raised by GP practices.
“We knew that when we raised the pay equity claim in December of last year, it would cause some concerns. It was about identifying that the funding model has been problematic for some time.”
Nuku said the issue was that pay varied greatly across the health sector.
“We need to get some standardisation around what safe working environments look like and what safe staffing levels look like.”
Nuku said at the heart of the claim was the quality of care patients deserve.
“That is about access to healthcare services. That is the fundamental issue that must be preserved. Along with that, patients must have access to quality, skilled nursing staff and medical staff. Those two things go hand-in-hand.”
General Practice Owners' Association (GenPro) chief executive Mark Liddle.
GenPro chief executive Mark Liddle said the association had supported practices to notify their primary health organisations if they were concerned about their ability to maintain service levels.
“It is time for the Government to invest in the capacity, capability and workforce of general practice teams.Retention of the current workforce is essential.”
Liddle said a GenPro survey in August 2023 found 35 per cent of respondent practices reported making a loss in the previous quarter, with 85 per cent reporting being concerned about the future financial viability of their practices.
Liddle said as of February 1, GenPro had been copied into 155 notifications similar to the notice sent by the Bay of Plenty practice.
Minister of Health Dr Shane Reti told the Bay of Plenty Times he was aware of both NZNO’s pay equity claim and the notices sent by practices.
“Employers are responsible for these claims. However, I understand Health New Zealand will be providing additional information to support them to work through the pay equity process. Officials will keep me informed with relevant updates,” Reti said.
“I have previously been on record as saying that the overall funding model for general practice is not fit for purpose, and look forward to receiving advice on a sustainable solution for our primary care providers.”
Hamilton clinic writes candid letter to patients after some refuse to pay fees
Dr Marilyn Griffiths co-owns the Flagstaff Medical Centre in Hamilton. Photo / Mike Scott
Meanwhile, a GP practice in Hamilton wrote a frank letter to its customers after some patients began pushing back against fee increases.
The clinic’s fees are now $59 for an adult consultation, up from $54 last year and $50 the previous year. It has also started charging for blood test forms and referral letters.
GP and practice co-owner Dr Marilyn Griffiths said they had little choice. Government “capitation” funding increasingly failed to cover her clinic’s costs, so the only way to pay the bills was to increase fees.
The practice’s letter to patients read:
“Our business is running at a loss, so to remain solvent we must do two things. Sadly, we may need to increase fees, and we will need to cut services further.”
Griffiths said she knew many people who were “worse off”.
“We’re not saying, ‘Us poor GPs, we can’t make a living’. The issue is that this is affecting patient care, and it is going to exponentially worsen if things don’t improve fast.”
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