Appendix 4: Summary descriptions of primary health care subsidies and initiatives

Ministry of Health: Monitoring the progress of the Primary Health Care Strategy.
Subsidy or initiative Summary description Comment
First Contact A subsidy to PHO for enrolled patients' visits to general practices or other PHO services. This subsidy is the main method for subsidising PHOs for patients' visits to GPs and other PHO staff. It is a form of bulk-funding also known as capitation-based funding.
Health Promotion A subsidy to PHOs to create Health Promotion programmes. The programmes must take a population-based approach to enrolled patients.
PHO Management Fees A subsidy to PHO for their administration costs. Costs include community consultation and representation, processing patient registers, formal enrolment, and reporting and monitoring requirements.
Services to Improve Access A subsidy to PHOs to provide new or improved services. Intended to reduce the differences in levels of health between population groups, particularly those most in need.
Very Low Cost Access Payments to PHOs voluntarily agreeing to charge patients amounts that do not exceed standard consultation fees. Practices receiving a Zero Fees for Under 6s payment cannot receive a Very Low Cost Access payment as well.
Zero Fees for Under 6s Payments to PHOs for general practices that agree to provide free visits for children aged less than six years. Practices receiving a Very Low Cost Access payment cannot receive a Zero Fees for Under 6s payment as well.
Pharmaceutical A subsidy to pharmacies for the costs of dispensing prescribed medicines. For enrolled patients who are prescribed subsidised medicines by their PHO, the maximum amount paid is $3. In other circumstances, the maximum amount is $15 (for example, if the patient is prescribed a medicine by a doctor who is not a member of the patient's PHO, such as an after-hours or hospital doctor).
Laboratory A subsidy to DHBs for laboratory tests ordered by PHOs. This was extra funding to help DHBs with expected increased demand for laboratory tests that was expected to occur because of increased use of primary health care services resulting from reduced patient fees.
Care Plus An extra payment to PHOs for patients with high health need. PHOs select individual patients who, because of their poorer health, have to (or should) visit a PHO more often than was allowed for in the First Contact funding that PHOs received.
PHO Performance Payments Payments to PHOs that voluntarily join the PHO Performance Programme. Payments are proportional to the PHOs' achievements in making progress against, or meeting, specific targets.
General Medical A subsidy to GPs for visits to them by patients who are not enrolled with the GP's PHO. The First Contact subsidy replaced this subsidy as the main method of subsidising patients' visits to GPs.
Other Payments to PHOs and others for various initiatives. For 2007/08, this included payments for influenza, rural services, and mental health services initiatives, and other project costs. In previous years, it included up to seven other assorted initiatives.

Source: Our descriptions are summarised from fuller information available on the Ministry's website (

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