External factors (Outer context)

External factors or the outer context as termed by Greenhalgh et al. (2004, 2005), proved to be obstructive to Primary Health Care Strategy implementation. The outer context takes into account the impact of the wider environment beyond organisations involved in the implementation of an innovation (Greenhalgh et al., 2005). The new funding formula dictated organisation priorities and ways of working. At the same time shifting political grounds and biomedical interests also disrupted Strategy implementation as critiqued next.

3.5.1 Funding considerations

New funding models were considered crucial to ensure populations like Tairawhiti had access to affordable primary health care services (Ashton & Tenbensel, 2010; MoH, 2001). The new funding arrangement targeted high need populations by incentivising providers to develop services to meet specific community need (Lockett-Kay, 2005). Certainly, funding streams made available through political direction are known to significantly increase the likelihood of successful implementation of an innovation (Greenhalgh et al., 2005).

Significant additional financial investment was put into primary health care between 2000 and 2009. The New Zealand government committed an additional base funding of $284 million7

for 2004/05, $338 million for 2005/06 and $425 million for 2006/07 (McAvoy & Coster, 2005). In 2009/10 additional funding equated to 70.0% of public expenditure and 58.2% of the total current health expenditure (MoH, 2012). Most of this additional funding went through the new PHO structures with the intent to reduce patient fees. It was estimated at the time, that this new payment system would cost the New Zealand government at least an additional $600 million per annum (Raymont & Cumming, 2003).

Substantial changes to the funding formula saw the move from a fee-for- service model to a supposedly fairer population-based formula called capitation funding. This approach was new to the New Zealand health sector, having traditionally provided a fee-for-service primary care model (Abel et al, 2005; Crampton, Sutton & Foley, 2002). Capitation funding was designed to fully or partially meet the cost of servicing each patient during that funding period and was unrelated to the number of patient visits or types of practitioners seen (Cordery, 2008; Crampton et al., 2002; MoH, 2001). To increase the acceptability to GPs, funding was inflation proofed (Mays & Cumming, 2004).

Other PHO based funding included the introduction of Care Plus. Care Plus provided an additional 10% capitation funding targeted toward people with high health needs due to chronic conditions, acute medical, mental health or terminal illness who required more frequent general practice visits (CBG Health Research Ltd, 2005a;McAvoy & Coster, 2005). At a basic level, Care Plus directed funding to improve chronic care management, reduce inequalities, and reduce the cost of services for high-need primary health care users. Care Plus incentivised providers to broaden the flexibility and scope of services within a practice setting (Love, 2008). Unfortunately this funding also suffered from adverse incentives in that the aim of the programme was not always clear to practices and the level of administrative confusion became a constant burden for practice staff (Love, 2008).

The government also provided health promotion funding in the form of an additional $28 _{per enrolled patient per annum, a belated initiative to deliver} population based services. This amount meant smaller PHOs were unable to develop effective health promotion programmes. It was “an issue not adequately thought through by the government prior to implementation” (Gauld, 2008, p.104). Likewise, funding for services to improve access (SIA) was introduced. DHBs signed off this additional subsidy to enable PHOs to develop projects to target Māori, Pacifica and low income populations in order to reduce inequalities. In some districts SIA funding was used to increase

access for Māori and Pacifica patients to cardiovascular screening and mental health assessments (Neuwelt et al., 2009). Potentially, all of these additional funding sources could have been used to develop and implement nurse led services.

Significant unchallenged flaws soon appeared in the new funding formula that restricted innovation and expansion in primary health care (Gauld, 2008, 2009a). Capitation did not drive service change at a practice level (Love, 2008). The new funding model did not deliver on the intent for a system wide shift in focus from the individual to population health outcomes or better coordination between primary and secondary or effective after hour services (Gauld, 2008; Smith et al., 2008).

Funding of primary health care services continues to be a point of contention between the government and GPs creating an ‘uneasy relationship’ (Barnett & Barnett, 2004a; Gauld, 2008; Gauld & Mays, 2006). GPs consider that capitated funding is theirs rather than designed to provide the right service by the right person. Additional funding allegedly went into raising the income for some GPs (Gauld, 2008). GPs continue the fee-for-service mind-set and episodic care, confirming business incentives are still key drivers for many (Cumming & Gribben, 2007; Finlayson et al., 2011).

GPs have continued to want to set the level of fees they charge to patients over and above the significant increase in the government subsidy (Ashton & Tenbensel, 2010). They have managed to retain this right but this is subject to a review process with each local DHB. Consequently, co-payment rates are variable throughout the country and in some practices are high enough to remain a barrier to access for poorer New Zealanders (Gauld, 2008). In addition, patients not enrolled in a PHO were required to pay a much higher fee per visit to a health practitioner. The higher fee is also charged if the enrolled person visited a general practice outside of their PHO catchment area.

3.5.2 Shifting political grounds

Policy change has not generated the desired behaviour change within existing health structures and systems (Gauld, 2008). Institutional enablers and constraints, including the underlying cultural values of the time, have historically shaped the trajectory of health system reforms in New Zealand (Aston & Tenbensel, 2010). New Zealand’s entrenched dependency on tax based financing and subsequent government dominance over funding has meant there are fewer obstacles in the pursuit of major policy alteration. This explains the ease with which significant legislative and structural changes have occurred in this country (Aston & Tenbensel, 2010).

A centre-left Labour-led coalition government launched the Primary Health Care Strategy. Further change was signalled following the 2008 election when an incoming National coalition government9 _{was formed. National criticised} the previous government for its failure to deliver on some aspects of the Strategy, at the same time expressing bi-partisan support for its goals. The global recession that followed the election forced drastic action to reduce health spending that had increased significantly over the last eight years. There was also an expectation that health finances would be stretched with the escalating cost of technology, new treatments, new services, and the provision of health care for the aging population and people with chronic conditions. What followed was a new direction in health policy: “Better, Sooner, More Convenient” (MoH, 2011).

“Better, Sooner, More Convenient” health care in the community was, according to the political rhetoric, an initiative intended to deliver a more personalised primary health care system to provide services closer to home, and put patients at the centre of health services (MoH, 2011). The major focus of this policy was “keeping people healthier in the community for longer”

(MoH, 2011, p. 4). It recognised that while hospitals get most of the publicity, over 90% of health care interactions occur in the primary sector (Minister of Health, 2009). The Minister of Health also acknowledged the potential of

9_{National was the major political party, ACT, United Future, and the Māori Party were the} minor partners

primary health care went beyond subsiding doctor fees. The lack of connectivity and collaboration between primary and secondary services was also recognised, along with a lack of shared information.

Under the political rubric of “Better, Sooner, More Convenient” it was envisaged that some hospital services would be devolved to primary health

care (PHCS10 _{Implementation programme, 2009). The alleged intent of}

devolution was to support integrated family centres, co-located

multidisciplinary health teams that provide primary health care services with a much wider range of services and support for patients (including treatment and diagnostic services). In September 2009, to support the development of integrated family centres, the MoH issued an expression of interest for proposals from eligible primary health care providers to implement ‘Better, Sooner, More Convenient’.

More than seventy expressions of interest were received with nine selected to move through to the next stage of development. As mentioned in Chapter One, the strongly IPA led Midland Health Network was successful in responding to the expression of interest. Midland Health Network was formed by amalgamating five PHOs including Turanganui PHO in Tairawhiti. Since then, Midland Health Network has established a number of service level alliance teams to look at opportunities for greater integration, less duplication, with the patient supposedly at the forefront of the proposals. Recommendations have since been put forward to an alliance team for approval. Alliance teams are made up of representatives from the four geographical regions including members of the DHB as well as the PHO. At the time of writing this thesis, implementation plans to move the recommendations forward were under development.

Pressure is also mounting for greater coordination across DHBs to the point of merger. In 2010, 21 DHBs were reduced to 20, with two South Island DHBs joining to form one. The financial viability of smaller DHBs such as Tairawhiti may force further mergers. With mergers comes the risk that the

issues faced in districts with high Māori populations and high health needs may become absorbed amongst the priorities of a much larger population. As yet it is still too early to know if these recent reforms are effective (Gauld, 2012).