Latest Inflation Figures Could Be The Final Nail In The Coffin For Many Essential Family Doctor Services

New Zealand’s latest CPI inflation figure of 6.9% could signal the end of free GP visits for under 14-year-olds, childhood immunisations and many other essential population health services for the country’s most vulnerable communities. That’s according to New Zealand’s general practice association (GenPro) which states that spiralling inflation is the latest in a series of significant, yet unfunded, cost increases for community-based family doctor and urgent care services.

Chair of the GenPro Board, Dr Tim Malloy, said “This country’s network of over 1,000 general practices and urgent care centres are mostly private businesses, yet because of the way the government’s funding arrangements for general practice works, all cost pressures have to be funded from either the government’s annual increase in patient funding paid to practices1 or, increases in patient co-payments2 – and both of those are fixed or capped by the government in a process that is neither negotiable nor disputable by the businesses themselves. The latest increase awarded by the government for these services was a staggeringly dangerous 2.78% despite total cost pressures now, including the latest CPI figures, running at an average of between 14% and 17%3.

“That means that our family doctors and their nurses, who have been the country’s front-line in the fight against COVID and who also provide essential life-saving population health services, may no longer be able to continue to provide some of those services to our most vulnerable populations”.

Family doctor services are already facing a recruitment and retention crisis in the face of significantly higher paid, yet equivalent, jobs in the government’s own District Health Board (DHB) workplace. That’s on top of the well-documented overseas brain drain starting again with the world’s borders reopening.

“The family doctor nursing workforce is already feeling undervalued and underfunded by the government which is proposing pay rises4 for its own DHB employed nurses of between 19% and 21% - that will leave most family doctor-based nurses underpaid by around 27% when compared to their DHB employed nursing colleagues, for the same level of work”, said Dr Malloy.

The essential family doctor services which are most at risk and could potentially start disappearing, without appropriate additional government funding, include:

• Free doctor’s visits for under 14-year-olds
• Low-cost doctor’s visits for community services cardholders – often some of the most vulnerable individuals in our communities
• Childhood immunisations
• Cervical screening
• Flu vaccinations (and future COVID vaccinations/boosters)
• Long-term-condition management and chronic disease management (such as diabetes).

The pressure on many family doctor operators has already become too much. A worrying trend which Dr Malloy says, “Is now resulting in essential doctors and nurses retiring, walking away or selling their practices every week – in all my years as a GP, I have never seen this constant stream of departures”.

GenPro’s warning is set in the context of the most recent government funding increase for family doctors of 2.78%, whilst those same businesses have no other key income sources with which to maintain services in the face of cost pressures which currently include (or will include):

• The latest CPI inflation pressures of 6.9%
• Nursing pay equity claim of between 22% and 27% to meet the government’s proposed settlement for equivalent DHB nurses (separate to the 2022 annual pay award which will be informed by the latest CPI figures)
• An extra 5 days of sick leave as legislated by the government
• An extra statutory holiday for Matariki as legislated by the government
• An extra 1.39% tax on workforce costs to cover the proposed Income Insurance Scheme being legislated by the government
• The latest 3.7% rise in premises rental costs as announced by StatsNZ

Despite the impact of the underfunding and the significant cost pressures already being seen across the sector, Dr Malloy believes there is a solution, “Next month’s Budget is an opportunity for the government to ensure the sustainability of essential family doctor services for all communities and avoid what is becoming a health sector crisis and the otherwise inevitable impact upon this country’s health outcomes and life expectancy”.

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