Geoff Milner has copped flak from frustrated GP practices for his roles at Mahitahi Hauora and Ngāti Hine Health Trust. Photo / Michael Cunningham
A third of general practices with Mahitahi Hauora have either quit or given notice to resign from Northland's primary health entity due to frustration over funding arrangements and a working relationship that has deteriorated over the years.
Four GP practices in Whangārei — Bush Rd Medical Centre, Central Family Health Care, Kensington Health and West End Medical Centre — left Mahitahi Hauora at different times last year and are now with Comprehensive Care, an Auckland-based PHO.
Their chief concerns are the amount of 'top slicing' or overhead costs Mahitahi Hauora deducts from the funding it receives from the Northland District Health Board, the process around the appointment of the PHE's chief executive Jensen Webber and board chairman Geoff Milner, and the latter's perceived conflict of interest in that role, given he's also the chief executive of Ngāti Hine Health Trust— a beneficiary of NDHB funds.
Both defended their PHE, saying the work it was doing was fully compliant with the
relevant laws.
Seven other GP practices are leaving at the end of June. They are Green Cross Health-owned The Doctors Tui, The Doctors Kamo, The Doctors Tikipunga and The Doctors Kerikeri.
It's unclear whether that was done in frustration over dealings with Mahitahi Hauora or a purely business decision. Green Cross Health refused to comment on its resignation from Mahitahi Hauora.
Rata Family Health, across the road from Mahitahi Hauora on Rust Ave in Whangārei, James St Doctors, and Te Aroha Noa Medical Centre on Bank St are also leaving at the end of June.
Mahitahi currently has 33 member practices across Northland, including the seven that will leave in June.
The PHE has about 70 staff and there are 120,000 enrolled patients across Northland with GP practices that are with Mahitahi.
Manaia Health PHO and Te Tai Tokerau PHO merged in 2019 to become Mahitahi Hauora PHE, which manages all primary health (non-hospital) services in Northland in collaboration with GP practices.
Dr Geoff Cunningham, of Bush Rd Medical Centre, said the GP practices that have left found the relationship with Mahitahi increasingly hostile with a lack of collaboration.
"We also had major problems regarding the PHE's inability to fulfil a number of its contractual obligations, several of which have now been taken back to the DHB."
Dr Tim Cunningham, of Central Family Health Care, said his practice felt it had no choice but to leave Mahitahi Hauora.
Dr Ian Watkins, of West End Medical Centre, said no other PHEs in New Zealand top-sliced to the extent Mahitahi Hauora did.
"Our issue with the Mahitahi Hauora board was a lack of transparency. Minutes of board meetings were not disclosed, the board wasn't approachable, and they seemed to have an anti-primary healthcare attitude, as if the GPs were their enemy."
"People think GPs make a lot of money. We don't. In fact, we are lucky to break even. We don't have governments bailing us out, like they do with public hospitals. Banks foreclose on us. Every dollar taken away from us is a dollar taken away from patients,' he said.
Dr Watkins said unlike Mahitahi Hauora, Comprehensive Care's better funding arrangement has allowed his practice to buy services such as employ dieticians in medical centres.
Until the recent departure of practices at the end of the 2021 financial year, Mahitahi Hauora received $65 million per annum from Northland DHB.
Of that, $52m was capitation-based and related to practice memberships and patient enrolments. The balance of $13m was a variety of local funding agreements Mahitahi Hauora delivers outside the national PHE services agreement.
Capitation is a payment arrangement for healthcare service providers. It pays a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care.
Northland DHB chief executive Dr Nick Chamberlain said NDHB was not party to the top-slicing figures and arrangement across PHEs in New Zealand so he could not comment on the relative size of the management and service overheads Mahitahi has implemented.
"I have previously raised concerns about the lack of transparency of some funding arrangements within Mahitahi, both as an observer on the board and through Northland DHB's role as the funder. It's my understanding that Mahitahi Hauora is endeavouring to address this."
Because all PHEs received management fees separately, he said discussions with Mahitahi Hauora mainly centred around minimising or eliminating overheads and top-slices for some contracts to enable all funding to be passed through to health providers.
He said the departure of GPs was initially a strong concern for Northland DHB, which had asked the original departing practices to reconsider this disruptive course of action ahead of wider health reform.
Northland DHB funded independent mediation to support the practices and Mahitahi Hauora to work through issues and avoid termination of contracts.
"Over time, it became evident that the relationships had deteriorated to a point where 'locking' these practices to Mahitahi Hauora was not conducive to positive relationships.
"It is better to ensure general practices are happy with the support they are getting from their PHOs as this will help ensure we retain and grow our general practice workforce," Chamberlain said.
Mahitahi Hauora convened a recruitment and appointment committee which appointed Milner as the new chairman after the position was advertised externally.
Webber was appointed acting CEO of Mahitahi Hauora following the departure of Phillip Balmer and was subsequently confirmed in the role by the board. His position was not advertised.
Webber was previously the CEO of Te Tai Tokerau PHO.
On Milner's position as board chairman, Dr Chamberlain said the original Mahitahi Hauora Trust Deed required an independent chair but the board subsequently changed this requirement.
"Northland DHB recommended the Mahitahi Hauora board appoint a chairperson that was fully independent, with no employment, financial or other operational interests in any Northland health provider," he said.
Milner said the board has undertaken external and legal reviews of its appointment processes which confirmed they were compliant with the law.
"Nonetheless, to avoid any confusion, the board has signalled a change in the appointment of the chair role which will make our processes consistent with how the majority of chairs of other PHOs have been elected."
On top-slicing, Milner said in general contracts which allowed that practice have 15 per cent deducted from the total value to pay for business overheads, as was commonly done by public healthcare organisations, including DHBs.
"While the details of top-slicing by other healthcare organisations are not publicly available information, our anecdotal understanding is that Mahitahi Hauora offers greater value for money than many other public healthcare organisations."
Mahitahi Hauora was audited annually by an independent auditor and the 2020/21 auditors have confirmed there were no concerns about financial transparency, he said.
Milner said summaries of board meeting minutes were available on the Mahitahi Hauora website and were shared regularly with its member practices through the monthly newsletter and were publicly available to anyone upon request.
"Naturally, Mahitahi Hauora is disappointed that some general practices have chosen to leave but we respect their right to make these decisions that they see are in the best interests of their business and their enrolled patients.
"Mahitahi has consulted with our member practices on equalising funding arrangements and removing top-slicing. We are also restructuring to better align our organisation with the health reforms," Milner said.
At a glance:
* Four GP practices have left Mahitahi Hauora, and seven are leaving at the end of June
* Northland DHB allocated $65m to Mahitahi Hauora and paid for mediation to dissuade the four GP from leaving the PHO
* Around 120,000 patients are enrolled with GP practices that are with Mahitahi Hauora
* Manaia Health PHO and Te Tai Tokerau PHO merged in 2019 to become Mahitahi Hauora
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