Primary health organisation

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Primary health organisations (PHOs) in New Zealand, are health care providers that are funded on a capitation basis by the New Zealand Government via district health boards. They are usually set up as not-for-profit trusts, and have as their goal the improvement of their population's health.


In the early 1990s, general practitioners (GPs) were joining together to form independent practitioner associations (IPAs). They did this to better negotiate with the purchasers of healthcare at that time.

Prior to the introduction of PHOs, general practitioners were paid using a fee-for-service model. For every person that went through their door, the GP received a set amount of money from the state. For some time, the Government had been trying to introduce a capitation model, that is, give practices a set amount of money depending on the population they served. The formation of the voluntary IPAs gave the Government an important stepping stone to introduce capitation-based funding.

The Government introduced PHOs, which were similar to the IPAs, in 2001, with the first PHOs being formed in July 2002.[1] There were 81 PHOs by 2010 but some have since merged.[2]

Structure and goals[edit]

A PHO is set up as a not-for-profit organisation with both community and provider representation. They maintain a list of their enrolled populations for which they get funding. PHOs include not just GPs and nurses, but also other health providers.


Primary health organisations are allocated funds depending on the characteristics of their enrolled population (this is called capitation).

The PHO receives a set amount of money from the district health board for every member, depending on their age, sex, ethnicity and socioeconomic status. They are also allocated funds for health promotion, individuals with special care requirements, as well as for rural practice.

Health care providers that are part of PHOs also have the right to charge fees to their patients for each visit. PHOs may also receive funding through contracting with the Ministry of Health, district health boards or other organisations such as Accident Compensation Corporation (ACC). Usually these contracts are to provide specific services or to pass on additional subsidies to target patient groups (over and above ordinary capitation subsidies).

This policy costs the Government more money to implement, and the expected proportion of each GP visit paid by the Government is higher than it has been previously. This means that generally New Zealanders can expect to pay less for a visit to the doctor.

Perceived advantages[edit]

Benefits for individual patients
  • Overall lower fees
  • Wider range of services
Benefits for the population as a whole
  • Encouragement of rural practice
  • Increased emphasis on preventative measures
  • Services tailored to the needs of the communities PHOs serve
Benefits for general practices
  • Steady and predictable stream of income
  • Better use of nurses (previously, a doctor had to see a patient for a practice to get paid by the Government)

See also[edit]


  1. ^ Ministry of Health. Primary health organisations (PHOs). Retrieved 16 January 2011.
  2. ^ "Push to merge Primary Health Organisations". Stuff. 4 February 2010. Retrieved 16 January 2011. 

External links[edit]

North Island PHOs
  • [1] Compass Primary Health Care Network
  • [2] Central PHO
  • [3] Harbour Health PHO
  • [4] Otaki PHO
  • [5] Pinnacle Midlands Health Network
  • [6] Tamaki Healthcare
  • [7] Wairarapa PHO
  • [8] Whanganui Regional PHO
Management services / primary care networks
  • [9] Compass Health
  • [10] Southlink Health
  • [11] Midlands Health Network
  • [12] ProCare