Reducing health disparities through primary care reform: the New Zealand experiment

New Zealand experiences significant health disparities related to both ethnicity and deprivation; the average life expectancy for Maori New Zealanders is 9 years less than for other New Zealanders. The government recently introduced a set of primary care reforms aimed at improving health and reducing disparities by reducing co-payments, moving from fee-for-service to capitation, promoting population health management and developing a not for profit infrastructure with community involvement to deliver primary care. Funding for primary care visits will increase by some 43% over 3 years. This paper reviews policy documents and enrollment and payment data for the first 15 months to assess the likely impact on health disparities. The policy has been successfully introduced; over half the New Zealand population (of four million) enrolled in new Primary Health Organizations within 15 months. Over 400,000 people (half of them in vulnerable groups) gained improved access to primary care subsidies in the first 15 months. The combined effect of new payment rules and the deprived nature of the minority populations was that the average per person payment to PHOs on behalf of Maori and Pacific enrollees was more than 70% greater than the per person amount for other ethnicities for the period. The policy is consistent with the principles of the Alma Alta Declaration. Barriers to successful implementation include the risk of middle class capture of the additional funding; the risk that co-payments are not low enough to improve access for the poor; PHO inexperience; and the small size of many PHOs. Transitional equity and efficiency issues with the use of aggregate population characteristics to target higher subsidies are being ameliorated by the introduction of low cost access based on age. A tension between the twin policy goals of low cost access for all, and very low cost access for the most vulnerable populations is identified as a continuing and unresolved policy issue.