Opinion: In recent weeks the Labour Party has made three significant policy announcements on primary healthcare with specific reference to general practices. Former Health New Zealand chair and now Newsroom commentator Rob Campbell made the following comment on one of them to a small group of recipients on Messenger (30 November):
“This policy is madness. Subsidising an old private model instead of building the soft sustainable infrastructure our primary health care needs. Talk about ‘lite’!”
One announcement was to fund three free general or nurse practitioner visits for all enrolled patients annually. This is driven by a commendable wish to remove financial barriers to accessing primary care.
These visits would be linked to Labour’s proposed limited capital gains tax. However, the revenue generated would be one-off only after an applicable residential or commercial property had been sold in contrast to wealth taxes generating annual returns. It is unclear whether these no-charge visits would be directly linked to the eventual receipt of capital gains tax revenue and, if so, in what way.
Another announcement was to establish an independent statutory pricing authority for the funding of general practices. This has merit as the current system is inherently unfair and ineffective as a result. But the devil will be in the detail. It depends how independent it is from government influence or control, and the fairness and relevance of its terms of reference.
Low-cost loans plan
However, these are not what aroused Campbell’s sharp criticism. It was the third that triggered his reaction – the plan announced at its recent annual conference to offer low-cost loans for general and nurse practitioners to buy owner-operator practices.
The plan involves up to 50 low-interest 10-year loans a year to GPs and nurse practitioners to either buy into an existing practice or set up a new one in communities with no general practice or where practice books (enrolled patients) are partially or fully closed.
Significantly, for general practice, they are only available for those that would be or are GP-owned and operated practices; corporate-owned practices are excluded.
Labour attitudinal shift
This represents a sizeable shift in Labour’s attitude towards private GP-owned practices. When Andrew Little was Labour’s health minister, he asserted that primary care was being held back by this old-fashioned ownership system. Now the party’s health spokesperson, Dr Ayesha Verrall, has overturned this oppositional position.
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Verrall said that Labour is “no longer content to say, ‘General practice is a private business and has to make do.’ We know that it needs to be supported to thrive, otherwise New Zealanders will lose access to primary care.”
She is strongly signalling that primary care will be the focus of Labour’s health policy in next year’s election.
The announcement has been broadly welcomed by GP leaders with concern about the expansion of corporate power in general practice ownership a prevalent factor. This was highlighted by the General Practice Owners Association whose chair, Dr Angus Chambers, told NZ Doctor that if the current trend towards corporate control continued “patients risk facing the same challenges we’re seeing in supermarkets or banking, where a handful of corporates dominate the market. That’s an oligopoly – and it’s not in the best interests of communities”.
College of General Practitioners president Dr Luke Bradford believes one benefit would be to encourage more doctors-in-training becoming GPs, which is central to the success of Labour’s policy, by removing boundaries.
Changing general practice ownership
Campbell was chair of Health NZ when Andrew Little attributed GP ownership as holding primary care back. In some respects Campbell’s blunt observation has some resonance (less so Little’s). But the situation is more nuanced than both their harsh comments.
The Social Security Act 1938 transformed New Zealand’s health system from its charitable foundation to universal in which healthcare was to be an accessible public good to which all New Zealanders were entitled.
Private GP-owned practices dominated the primary care landscape, but it was recognised even then that they were not sufficiently fit-for-purpose for full universal access. Consequently the then health department directly employed GPs in designated rural areas such as Hokianga, East Coast and West Coast.
For many years GP-owned practices continued to dominate primary care. However, a 2022 workforce survey conducted by the College of General Practitioners revealed a significantly different landscape.
GP practice owners are a declining minority. In 2022 they comprised 31 percent of all GPs (nearly 40 percent in 2014). Further, the number of GPs working in a GP-owned practice was 64 percent in 2022 compared with 73 percent in 2015. Contrast this with the number of GPs working in a fully or partially corporate-owned practice. In 2022 it was 14 percent (up from 7 percent in 2015).
Although the corporates are the beneficiaries of declining GP-ownership, they are not its driver. The oldest (and second biggest) corporate, Green Cross Health, was formed in 1981 but was much smaller then. The biggest and first to have private equity ownership, Tamaki Health, became a corporate in 2017. The third biggest corporate, Tend Health, was formed three years later.
Generational shift driver
GP ownership was declining well before the relatively recent corporate expansion. It has been driven by a continuing generational shift among younger GPs, who want a better work-life balance. This is harder to achieve if one has to also run a small business such as a general practice.
GP ownership is further disincentivised by these GPs having to repay high medical student loans and often growing family responsibilities. Then there is the increasing feminisation of the GP workforce that strengthens this generational shift. General practice is the only larger branch of medicine to have more than half of its doctors female. Female GPs tend to work fewer regular hours than their male colleagues. Perhaps they realise the importance of understanding work-life balance.
The overall effect is that though there are still new GPs who wish to become practice owners, they are declining and are far outnumbered by the number of older GPs retiring. Compounding this predicament for GP practice ownership is that just over two-thirds of GPs said they intended to retire in the next 10 years.
The College of GPs 2022 workforce survey also provides valuable data on the changing landscape of this compounding generational shift in its section on categories of GP employment.
The biggest employment category is no longer GP owners. They have been displaced by a category of ‘long-term employees and contractors’ (short-term employees and contractors make up a third smaller category).
Of the total surveyed GPs, 55 percent were long-term employees and contractors and only 31 percent were practice owners. Further, when broken down into age bands the generational shift becomes more evident. Practice ownership increases with almost every age band peaking at 60-64.
In the 30-34 band, owners comprised 6 percent compared with 55 percent for long-term employees and contractors. For the 50-54 band, the former was 35 percent and the latter was 54 percent. For the 60-64 band, the former peaked at 44 percent while the latter was still higher at 46 percent.
GP ownership of practices has been a strength for Aotearoa New Zealand’s health system but it has its limitations, beginning with it being unable to be fully universal for geographic access to it and unable to address current cost barriers to access. But for some time now it has struggled to meet the challenge of the generational shift of GPs to better work-life balance.
I conducted a survey of one GP (my own). He was positive about Labour’s proposal consistent with the above-mentioned GP leaders. It was a helpful low-cost measure that would make some difference for the better. But he was critical of the absence of a much more embracing strategy that would focus on restoring sustainable primary care.
He is right. In fact, no parliamentary political party appears to have such a strategy. Strengthening general practice to meet the needs of people’s work-life balance is a key starting point, including not-for-profit ownership and workforce capacity.
Perhaps this is what Campbell meant when he said that what should happen is “building the soft sustainable infrastructure our primary health care needs”. If it is then, despite being harsh on Labour’s policy announcement, he is on the mark.