Most people believe that general practices are owned by the doctors that work in them.
In 1938, the first Labour government, led by prime minister Michael Savage, legislated for a universal public health system.
Despite this world-leading change, GP-owned, for-profit, practices were still the overwhelming providers of primary healthcare.
However, recognising that more isolated and poorer communities could not be served by this structure, the then Department of Health set up ‘special areas’ like Hokianga, the east coast of the North Island, and South Westland.
The prevalence of GP ownership went on for decades.
Then, in the mid to late 1980s, area health boards were brought in for a broader approach to healthcare. One of the changes was that ‘special areas’ were transferred to these health boards. That meant that the new short-lived boards became the employers of these GPs.
Area health boards were abolished in 1993 and new crown health enterprises took over running public hospitals. But their brief didn't include the ‘special areas’, which set up local non-government, but not-for-profit community trusts.
As crown health enterprises started to exit smaller rural hospitals which also employed GPs, more community trusts were formed.
Meanwhile, in an attempt to improve access to healthcare in poorer and isolated communities, unions and Māori also set up not-for-profit providers employing GPs.
Small populations need GPs, too
District health boards (DHBs), set up in 2001, managed healthcare services in both primary care and public hospitals. This allowed them, if they wished, to employ GPs in general practice.
There was a sprinkling of GPs providing primary care employed by DHBs, but little happened in this space. Some GPs were also employed by DHBs to provide other healthcare, such as addiction treatment and medical care in mental health and smaller emergency departments.
The most significant development was West Coast DHB, where there wasn't a big enough population to sustain an accessible for-profit general practice.
So, it was necessary for the DHB to directly employ GPs so that general practice didn't collapse.
The Taranaki DHB was also starting to move in this direction, particularly around Hawera.
Counties Manukau DHB was seriously considering directly employing GPs because of the lack of GPs per capita and the higher health needs of its population compared with other urban DHBs.
Had this happened in the Counties Manukau area, its impact may have set in train similar moves in other DHBs where access to general practice care was difficult. However, it was stopped in its tracks when district health boards were abolished last July.
Since the 2000s, the predominant role of GP-owned general practices has been increasingly challenged. The main driver is a generational shift among younger GPs, who don't want to become practice owners.
Running a practice can be rewarding but also time-consuming on top of the core job of diagnosing and treating patients.
Increasing numbers of new GPs don’t want to run a business, which is what for-profit practices are. It's expensive for younger GPs to buy into a practice, compounded by having to repay high student loan debt and often growing family responsibilities.
Underpinning this is a generational shift among younger GPs.
Instead, they want a better work-life balance.
At work, they want to devote their time to the practice of medicine rather than also running a for-profit business. And they want an improved quality of life away from work, including having families and spending time on recreation.
This shift is strengthened by an increasing feminisation of the GP workforce. General practice is the only larger branch of medicine to have more than half of its doctors female. Women GPs tend to work fewer regular hours than their male colleagues.
There are still many new GPs who wish to become practice owners, but they are well outnumbered by the number of older GPs retiring. For some time, the seriousness of this situation has been eased by existing partners buying the equity of their retiring colleagues.
But it has reached a point where most GPs working in GP-owned practices are not the owners – they're either salaried employees or engaged contractors.
However, this fudging by partners extending their practice equity isn't a solution. The latest annual workforce survey of the Royal New Zealand College of General Practitioners (RNZCGP) highlights this.
It says GP practice owners are a declining minority, reaching a new low in 2022. In 2014, nearly 40% of respondents were practice owners. This declined to 34% in 2020. In 2022 it declined further to 31%.
The number of GPs reporting that they worked in a GP-owned practice was 73% in 2015. It dropped to 69% in 2020, followed by an even bigger fall in 2022 to 64%.
The survey also confirmed the expansion of a new player in practice ownership – corporations. The number of GPs reporting they worked in a fully or partially corporate-owned practice has doubled since 2015. In 2022, it was 14%.
This is all in the context of the survey revealing that just over two-thirds of GPs said they intend to retire in the next 10 years.
Will big business take over small business?
In response to these workforce survey findings, both the General Practice Owners Association (GenPro) and the RNZCGP are advocating a frank national discussion with the profession about how ownership is evolving.
GenPro’s membership comes from GP-owned practices, corporate-owned practices and non-government organisation-owned practices such as community trusts. Nearly 100% of all GPs are RNZCGP members.
GP-owned practices appear to be facing a grim future of slow decline; not quite a death by a thousand cuts.
But, at a certain point, a slow decline can reach a tipping point where it exponentially accelerates.
Whether the decline accelerates or not, the indications are that the winner will eventually be corporate ownership. Unless something of significance changes, much of general practice will be provided by relatively big, rather than small businesses.
Further, it will happen by drift, in the absence of debate over whether this is a good thing.
Had the district health boards not been abolished and had Counties Manukau, as one of the largest DHBs, gone on to directly employ GPs to fill the gaps GP-owned practices could not fill, potentially this could have been a gamechanger.
It could have put expanding corporate ownership in check.
Health NZ (Te Whatu Ora) is another story. DHBs at times had their difficulties in their relationships with general practice, but they had a much better understanding of the issues and relationships than central government.
Health NZ’s unprecedented level of centralisation, its vertical approach, its preoccupation with internal restructuring, and its top-down culture could not be more unappealing as an employer of GPs.
If this changes, then perhaps a new gamechanger might emerge. But, so far there's no light at the end of the tunnel (only a train coming towards us).
GenPro and the RNZCGP are right to call for a frank national discussion within the general practitioner profession.
But it's not just the profession that should be doing this. It is also a wider critical health system issue.
The health system has to have this national discussion too. And sooner, not later.