Appendix 2: Funding arrangements

District health boards (DHBs) are responsible for planning, funding, and providing health and disability services within their districts in a manner that meets the Government's service coverage requirements. This includes planning, funding, and/or providing after-hours services.

DHBs have some influence over the type, number, and location of after-hours service providers, but there will be instances where these factors are determined by private business decisions made independently of the DHB.

Primary health organisations (PHOs) receive First Contact funding from DHBs. This is a form of bulk-funding also known as capitation-based funding. The PHO Service Agreement (attached to this funding) states that a PHO is responsible for providing:

… access to First Level Services on a 24-hour a day, 7 day a week basis for 52 weeks a year for all Service Users. … First Level Services must be available for 95% of your Enrolled Population during: … the normal Business Day within 30 minutes travel time; and … after hours within 60 minutes travel time.²⁸

No specific amount of money is identified within the First Contact subsidy for providing after-hours services.

Providers of after-hours services may also receive funding through other funding streams. These include the General Medical Subsidy for some casual patients, a rural primary health care premium, and Accident Compensation Corporation payments. We refer readers to the work of the After Hours Primary Health Care Working Party and our report on the Primary Health Care Strategy for specific information about other funding sources.²⁹

Additional funding for providers also comes from co-payments paid directly by patients.

PHOs may set up arrangements with their provider members to deliver after-hours services and/or they may subcontract with other providers to deliver these services. If a PHO subcontracts a service, it is required to notify the DHB of this. PHOs must not knowingly be a party to any arrangement that results in a DHB paying more than once for the same service.

For general medical services provided outside PHO agreements, the Government subsidises the cost of access for certain people. General practices are required to reduce any fee they would otherwise charge these patients by at least the amount of the subsidy.³⁰

28: DHB PHO agreement [template], Version 18, 17 December 2008, page 82.

29: After Hours Primary Health Care Working Party (July 2005), Towards Accessible, Effective and Resilient After Hours Primary Health Care Services: Report of the After Hours Primary Health Care Working Party, Ministry of Health, Wellington, page 15; Controller and Auditor-General (October 2008), Ministry of Health: Monitoring the progress of the Primary Health Care Strategy, Wellington, Appendix 4.

30: Ministry of Health, 2009/10 Service Coverage Schedule, page 14.