The Government will be revising its funding method for general practice, to ensure New Zealanders can get access to timely, quality care from GPs.
This change is proposed to take effect from 1 July 2026.
Capitation funding for general practice services was introduced in 2002. It is the core way general practice is funded.
GP clinics receive a fixed amount of funding per enrolled person each year so they can meet the needs of patients in the best way. The funding helps cover the costs of delivering essential services such as general consultations, routine checks, and preventative care.
Capitation funding is not provided directly to patients.
Updating capitation
On 25 July 2025, the Minister of Health Hon Simeon Brown announced the Government will update the way it decides capitation funding, to ensure New Zealanders can get access to timely, quality care from GPs.
- Read the press release from Minister Brown on the Beehive website.
The 2002 funding formula was introduced based on how people used general practice services in the late 1990s, and there have not been any major changes to the formula since then.
The way New Zealanders use general practice and how care is delivered has changed considerably since 2002. These changes include:
- Demographic changes in our population
- Increasing comorbidity (when people have two or more chronic conditions)
- More treatments are available to patients
- A move to provide more complex long-term management of health conditions in the community.
These changes mean the current formula does not reflect the health needs of New Zealand’s population nor the cost of delivering primary care.
The new approach will include factors that have an evidence-based effect on health outcomes and on how much people use health services. The new formula considers age, sex, multimorbidity (when people have two or more chronic conditions), rurality (how close people are to urban areas) and socio-economic deprivation.
The revised formula was developed following analysis of how a sample of over 2 million patients across 18 Primary Health Organisation used general practice during 2023.
Next steps
The Ministry of Health and Health New Zealand will work with the sector on these changes.
Subject to negotiation with the primary care sector through the Primary Health Organisation Services Agreement, the revised formula is expected to take effect from 1 July 2026.
