JANUARY

NEW ZEALAND
provided in GP clinics. The average copayment for a GP consultation for an adult ranges from NZD15 to NZD45
(USD10–USD31), but copayments vary significantly, as there are no limits to these set by GPs. An exception
applies to the one-third of New Zealanders residing in low-income areas, where a higher annual per-patient
capitation rate is paid and, in return, patient copayments are capped at NZD17.50 (USD12.00) per visit. 1 GP
copayments fell during the period 2002–2008, when there were significant increases in government funding
for primary care, but copayments have been increasing since then.
Copayments are also required for drugs prescribed by GPs and private specialists (NZD5.00 [USD3.40] per
item); after copayments are made for 20 prescriptions per family per year, they are free. There are no charges
for residents treated in public hospitals, although there are some user charges, such as those for crutches and
other aids supplied upon discharge. There are various means-tested subsidies, resulting in some copayments
for long-term care, as discussed in the relevant section below.
Safety net: Primary care is mostly free for children age 13 and under, and is subsidized for the 98 percent
of the population enrolled in the networks of self-employed providers known as primary health organizations
(PHOs). PHOs include general practitioners (GPs), practice nurses, and allied practitioners. Additional PHO
funding and services are available for treating people with chronic conditions and for improving access to care
for groups with greater health needs. A “high-use health card” is also available, upon application, to patients
who have had more than 12 GP visits in a year. Subsequent capitation payments for those patients are set at
a higher level to reflect this high-utilization pattern, although patients continue to make copayments.
How is the delivery system organized and financed?
Primary care: The ratio of GPs to specialists is about 2:3. GPs act as gatekeepers to specialist care. They are
usually independent, self-employed providers compensated by a capitated government-determined subsidy,
paid through PHOs and accounting for about half their income; patient copayments, set by individual GPs,
provide the rest. An average of 3.48 GPs work together in each practice, assisted by practice nurses. Nurses
are salaried and paid by GPs, and have a significant role in the management of long-term conditions (e.g.,
diabetes), incentivized by specific government funding for chronic care management. Patient registration
is not mandatory, but GPs and PHOs must have a formally registered patient list to be eligible for government
subsidies. Patients enroll with a GP of their choice; in smaller communities, choice is often limited.
PHOs receive additional per-capita funding to improve access, especially for people who can least afford
primary care, and to aid in promoting health, coordinating care, and providing additional services for people
with chronic conditions. In some cases, this support has led to the development of multidisciplinary care teams
that may include specialists, such as nutritionists or podiatrists; this trend is being further driven by new alliance
arrangements (outlined below). PHOs also receive up to 3 percent additional funding that is handed on to GPs
if they reach targets for cancer, diabetes, and cardiovascular disease screening and follow-up, and also goes
toward vaccinations. Most GPs belong to an organized network that provides management and other clinical
support services. The larger networks represent several hundred GPs each.
Outpatient specialist care: Most specialists are employed by DHBs and salaried for working in a public
hospital. However, they are also able to work privately in their own clinics or treat patients in private hospitals,
where they are paid on a fee-for-service basis. The impact of this “dual practice” on the public sector remains
under-researched and under-debated (Gauld, 2013). Many specialists are based in multispecialty clinics but work
independently, renting their office from the clinic. Private specialists are concentrated in larger urban centers
and set their own fees, which vary considerably; insurance companies have little, if any, control over those fees,
although insurers will pay only up to a maximum amount, meaning that patients pay any difference. In public
hospitals, patients generally have limited choice of specialists.
1
Please note that, throughout this profile, all figures in USD were converted from NZD at a rate of about 1.47 NZD per USD,
the purchasing power parity conversion rate for GDP in 2014 reported by OECD (2015b) for New Zealand.
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The Commonwealth Fund