National may disband PHOs

Paul Hutchison

National claims up to two-thirds of Labour's new doctor organisations are being run inefficiently and some may need to be disbanded or restructured to get economies of scale.

National health spokesman Paul Hutchison said the primary health organisations (PHOs) under question were the smaller groups catering to fewer than 30,000 people, where management costs were substantially more than for the large ones.

"There is a high chance that we would require rationalisation and [changes to] contracts to manage them so inefficient PHOs are not being propped up."

The changes could involve, among other things, drawing together smaller PHOs under combined management, he said.

Currently more than 90 per cent of New Zealanders are enrolled in PHOs, groupings of doctors and other health professionals who receive state subsidies for enrolled patients.

The Government released the strategy in 2001 aiming to improve health by making it easier to get GP services, particularly among high needs groups.

Subsidies have targeted those groups first, but will be rolled out to all New Zealanders by 2007.

Dr Hutchison claims a handful of reports out so far have identified no great PHO success stories "and the jury is still out" on the overall success of the current structure.

Health Minister Annette King said disbanding smaller PHOs would mean rural and Maori-led practices would disappear, which would be a "terrible shame" and throw the sector into upheaval.

She said consultation rates for groups with the highest health needs had significantly increased and now exceeded those of other groups - particularly in areas where the subsidies were operating.

The number of consultations being undertaken by each patient a year however was currently lower than the amount PHOs were being subsidised for.

Mrs King was not considering lowering them yet, saying it was too early to say whether utilisation would pick up.

The Government's strategy of improving access to primary healthcare via GPs or nurses is also meant to take the pressure off hospitals by having patients managed better earlier.

But Mrs King said it was too early to assess the impact because it took years for improvements to appear.

Victoria University's Health Research Centre is evaluating the primary care strategy and released its first report last month. Director Jackie Cumming said the strategy was "really strongly supported" in the health sector.

Teething problems were identified, but the feeling was access to services among key groups - including Maori and Pacific people - was significantly improving.

The centre was now evaluating concerns about smaller PHOs, including worries about their ability to manage affairs properly.

National is yet to release its policy and is promising a year-long review of all health spending before making major changes.

The party's line is that the country is "restructured out" when it comes to health, so any changes would have to be incremental.

Dr Hutchison has indicated changes are likely in two key areas:

* reversing the roll-out of universal subsidies for GPs' fees.

* restructuring the 77 PHOs, which could see some of the smaller ones disbanded.

He has suggested National will breathe new life into the Community Services Card - or a similar mechanism - to target the subsidies at lower income groups.