PHO FUNDING FORMULAE REVIEW

Submission presented on behalf of the College of Nurses Aotearoa (NZ)

The College of Nurses Aotearoa (NZ) welcomes the opportunity to respond to the Ministry of Health's PHO Funding Formulae Review.

This submission results from wide consultation within College membership and has been contributed to by a range of people working in PHO and related areas of primary health care.

We believe that adequate resourcing of the Primary Health Care (NZPHCS) sector is vital to effectively implementing the New Zealand Primary Health Care Strategy, and the realisation of improved health outcomes. Given that improved health gain is reliant on evidence based effective interventions delivered by a competent workforce we draw attention to the need for funding formulae to incentivise the development of team based health care as the only means to achieve this.

The following is the College of Nurses response to the PHO Funding Formulae Review.

  1. FIRST CONTACT FORMULA

Effective contributions

(1) Reduction in cost of reactive first contact approaches

(2) Reduction in prescription costs

Ineffective contributions

The First Contact Formula serves an important role for enabling PHOs to improve health outcomes and reduce inequalities, and thus realising the goals of the NZPHCS and the government's priority areas. However, the proxies for First Contact contain flaws with regard to high need populations.

(1) Reliance on the history of utilisation rates within the First Contact formula undercounts those with high need, as many of those with high needs in low socioeconomic areas tend to access health services less, owing to cost. There are access and acceptability barriers, particularly for those who live rurally.

(2) The annual Practice Nurse subsidy is not reflective of need, especially as it was not uncommon for Practice Nurses to be engaged in non-patient activities, such as receptionist roles. This subsidy was a direct payment to a General Practitioner(s) (GP) for the employment of a Practice Nurse(s), and not attached to the patient-related activities. Thus, any correlation between need and the Practice Nurse subsidy is poor, invalidating its value for use as a proxy in any formula.

It is also a barrier to the innovations possible within rural primary health care nursing. Currently nurses are both advancing and expanding the practice to respond to population need but cannot be hired differently to implement new services.

Some PHOs have used this money innovatively to create new roles that are effective in managing populations with chronic care maximising their self management and reducing their hospitalisations, but again this is reliant on the vision of the specific leadership in PHOs and practices rather than required structural and or purchasing decisions. DHBs continue to be challenged to shift resources to the Primary sector even though the opportunities for more cost effective approaches to manage people with chronic conditions are well documented.

(3) The use of the Community Services Card as a proxy would also contribute to an undercounting of high need populations. It has been reported that not all those eligible to hold a Community Services Card hold one.

(4) Ethnicity and deprivation are known determinants of health and should also be proxies for the First Contact formula, as they are indicators of need within populations.

(5) Non governmental organisations are disadvantaged by this model. There are many Trusts that undertake health services/health promotion and yet are unable to access finding via this system. This disadvantages the population they service who are often the target group of the PHCS.

•  The option of choice, as to whom the patient prefers as their health provider, is taken away.

•  Patients attending NGOs are often those who are not enrolled in General Practice.

•  Nurses delivering the services are unable to adequately meet the needs of the patient due to the funding formula and access to services e.g., free podiatry care for diabetics only sits with the PHO.

•  NGOs are often struggling to financially survive yet their services have arisen out of community need and the desire to have a specific service delivered in an acceptable, affordable and appropriate way e.g. youth health trusts.

Certain groups are difficult to enrol e.g. students, seasonal workers, prisoners.

(6) The funding model is not conducive to the employment of Nurse Practitioners either by the PHO or as a contracted provider. Enrolled service users are not able to enrol with a Nurse Practitioner. Why would a GP employ a NP when there is no additional revenue generated by a NP compared to a Practice Nurse? How can nurses address inequalities working in remote or with hard to reach groups, if funding is not attainable?

Example from a Nurse Practitioner: I have been working with the Cook Island Community Centre in Hawke's Bay teaching the community stakeholders about diabetes within their setting.  The stakeholders have decided they want to start a NP/Nurse-Managed Clinic.  We are unable to enrol this population with a NP under the current funding formula as there must be a GP.  The stakeholders feel the nursing approach "fills the gap" providing care that more closely matches Pacific models of health care.  The funding formula is denying this work with the local communities and a barrier to removing health inequalities even though these inequalities have been identified. Requiring GP involvement detracts from efficient utilisation of resources.

(7) There is no ability for nurses to access capitation usefully because of the GMS related legislation and because this in turn influences issues such as claw backs. It is notable that the introductory section to this review refers to providers, which rather deliberately obscures the fact that in practice it is GPs only.

Unintended consequences

(1) The funding formulae make it difficult for allied health professionals to participate in service provision in an integrated manner.

(2) Most importantly the overall impact of the first contact formula is widespread lack of integration of care especially for those with complex needs. Currently there are minimal opportunities for primary/secondary integration.

(3) There is limited access to primary health care services provided by other than a GP, e.g. NP, podiatrist, dietician, smoking cessation. Some practices charge patients to access these additional services – effectively reducing access to those who cannot afford the additional cost. SIA funding may be used for such services but this is ad hoc and cannot provide a guaranteed service to all ESUs.

(4) For innovation to occur there is excessive reliance on the vision and enthusiasm of individuals rather than the presence of enabling formulae. This is wasteful of time and energy in a sector which is under strain already. Many, many hours of time is invested by people with vision in writing business cases, preparing papers and lobbying to initiate change.

2. SERVICES TO IMPROVE ACCESS

Effective contribution

(1) Age, gender, ethnicity and deprivation are all sound indicators of need. Encouraged targeting of Maori. Pacific and GEO code 4 and 5.

(2) The Services to Improve Access formula would be strengthened by the inclusion of Ambulatory Sensitive Hospital Admissions and avoidable mortality, which could be considered a reflection of unmet need within an enrolled population.

Reduced contribution

(1) This formula would be strengthened by the inclusion of rurality given that those who live rurally can have compromised access.

(2) The Services to Improve Access formula appears to be based on an underlying assumption that cost is associated with improved access, and seems to ignore other variables that are barriers to accessing health services within the primary care sector. For example, the appropriateness and/or acceptability of services (see Davis , Lay-Yee, Dyall, Briant, Sporle, Brunt et al., 2006; Harris, Tobias, Jeffreys, Waldegrave, Karlsen & Nazroo, 2006; Reid & Robson, 2006) are not measured but could be through an audit process associated with the funding formula.

(3) GEO coding does not always capture those who need the services most. Examples are frequently provided of people with extreme need in GEO code 3 residential areas.

Unintended consequences

(1) An especially serious consequence of SIA funding is a proliferation of non integrated nursing roles whichmay provide similar services to the same population without planned integration.

  3. HEALTH PROMOTION FORMULA

While ethnicity and deprivation are important variables to be included in the health promotion formula, so are age and gender. Age and gender-specific health issues should be funded under this formula, especially where evidence exists that such health issues are sensitive to health promotion activities.

Health promotion is by its very nature an embedded community process, not an individual process. The funding formulae risk the perpetuation of limited and fragmented approaches.

Effective contribution

(1) There are good reports of nutritional and physical activity initiatives in some areas.

Unintended consequences

(1) Lack of training opportunities for primary health providers in health promotion and significant confusion with health education.

(2) Confusion between role of health promoters still working out of the provider arms and those employed in PHOs. Potential overlaps and fragmentation as the transition process is not being managed.

4. HOW WELL FUNDING FORMULAE VARIABLES ARE REFLECTIVE OF HEALTH NEEDS

(1) The variables of age, gender, ethnicity and need are highly correlated with each other, and with health need. However, it must be noted that M a ori and Pacific ethnicity are likely to be undercounted, and thus, may not fully represent need (Ajwani et al., 2003; Cormack et al ., 2006; Kukutai, 2004).

(2) As mentioned above, ethnicity and deprivation should be included in the First Contact Formula, as should Ambulatory Sensitive Hospital Admissions and avoidable mortality. These variables are more reflective of health need than the proxies currently used.

(3) Those aged 24-44 years that may only have a single chronic illness e.g. arthritis and who are severely affected by their condition do not receive any additional funding i.e. through Care Plus, or through a higher weighting capitation. They may be on higher income, yet be supporting young family, and likely to have the higher mortgage at this stage in life.

(4) GPs are choosing to keep those who achieve the 12 visits in one year on HUHC because it pays more in most categories. Some practices are choosing to only enrol over 65y on Care Plus because of this.

(5) Those with a single chronic illness may not be eligible for Care Plus, and may also not get to 12 visits in a year (due to cost barrier of visiting practice).

5. No comment

6. No comment

7. No comment

8. OTHER ISSUES REQUIRING CONCIDERATION

(1) The issue of capitation, in its current form, requires review. Howell (2006) claims the decision for capitation based funding was founded on the fee-for-service that had historically been paid to primary health care services. While capitation offered incentives to provide integrated care to its enrolled population, it also intended to offer multi-provider, collaborative approaches. While the PHO funding formulae intended to develop a primary health care service based on the needs of enrolled populations, it has been consumed by provider interests. The capitation of provider oriented PHOs (as opposed to consumer-driven PHOs) (Howell, 2006) has seen a Red Riding Hood effect where IPAs are dressed as PHOs. Capitation of such PHOs has compromised the use of providers other than GPs, and thus denied health consumers of having their unmet need met by others, such as registered nurses, who may be better positioned to offer a service that is more effective in achieving positive health outcomes. This in turn has also created challenges for the achievement of the NZPHCS's goal to improve health outcomes and reduce inequalities through improved access.

(2) The workload of practice nurses has increased and many feel powerless to decline the additional work as the employer accepts the contracts, not the practice nurse. It is also interesting to see that some General Practices pay their nurses the Care Plus subsidies, in recognition of the additional work, yet most practices do not.

(3) A medical or reactive model of practice is still predominant in many settings and general practitioners still have extensive control of decision making. For example:

In a small rural town mobile nurses have been employed by the PHO through the DHB to enhance services to people with chronic illness. Individual GPs in the town however control whether “their” patients can access the service. Some do, some don't which creates considerable inequity of service based purely on how threatened a particular GP feels by the mobile nursing service .

(4) Development of workforce is biased. PHOs are only interested in the development of their own workforce and not others that work in their community. This may be acceptable in a large city but in a small community where nurses often work in isolation this is detrimental to both the individual and the community. Collaboration and access to ongoing education and peer support is essential and can be denied by PHOs who only service their members.

(5) The funding formula has clearly not incentivised inclusion of the full primary health care team; rather it relies on the personal commitment and vision of individuals to move towards collaborative intersectoral population approaches rather than supporting practices to change through purchasing strategies.

References

Ajwani, S., Blakely, T., Robson, B., Tobias, M., & Bonne, M. (2003). Decades of disparity: Ethnic mortality trends in New Zealand 1980-1990. Wellington , NZ: Ministry of Health & University of Otago .

Cormack, D., Robson, B., Purdie, G., Ratima, M., & Brown, R. (2005, February). Access to cancer services for Maori: A report prepared for the Ministry of Health. Wellington School of Medicine and Health Sciences.

Davis , P., Lay-Yee, R., Dyall, L., Briant, R., Sporle, A., Brunt, D., & Scott, A. (2006). Quality of hospital care for Maori patients in New Zealand : Retrospective cross-sectional assessment. Lancet, 367, 1920-1925 .

Harris, R., Tobias, M., Jeffreys, M., Waldegrave, K., Karslen, S., & Nazroo, J. (2006). Racism and health: The relationship between experience of racial discrimination and health in New Zealand . Social Science & Medicine, 63 , 1428-1441.

Howell, B. (2006). A risky business: Moving New Zealand towards a managed-care health system. Monograph Series Number 2 . Wellington , NZ: ISCR.

Kukutai, T. (2004). The problem of defining an ethnic group for public policy: Who is Maori and why does it matter? Social Policy Journal of New Zealand , 23 , 86-108.

Reid, P., & Robson, B. (2006). The state of Maori health. In M. Mulholland (Ed.), State of the Maori nation: Twenty-first-century issues in Aotearoa (pp. 17-32). Auckland , NZ: Reed.