‘Life or death’: Fears patients could lose local care under rural funding review
Saturday, 25 April 2026
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A Bay of Plenty medical centre says proposed funding changes may force patients to travel over an hour to access care, as it could lose “hundreds of thousands” in rural funding.
Katikati Medical Centre has been told its Rural Primary Health Care Premium agreement may not be renewed from July, depending on the outcome of ongoing negotiations.
Clinical director Dr Vicky Jones told Stuff that losing the rural contract could strip the practice of “several hundred thousand dollars worth of funding”.
That would mean the loss of weekend clinics, reduced urgent care capacity, and fewer procedures offered locally - pushing more patients to Tauranga Hospital or after-hours services further away, Jones said.
“We currently do weekend clinics … and those clinics have always made a loss. But we've always used our rural funding to make those clinics happen, because otherwise, our patients would have to drive to Tauranga.”
The clinic provides services such as fracture management and complex wound care, she said, warning that changes could significantly impact access to care for its patients, many of whom are older or on low incomes.
Without a local service, patients would be forced to go to ED or after-hours clinics, potentially waiting “three to eight hours to be seen. So I imagine that's going to cause quite a lot of distress in our community”.
For 86-year-old Katikati resident Gail Martin, that prospect is concerning.
Martin, who has been a patient at the clinic for nearly 30 years, said many older people relied on it because they could no longer drive or had limited transport options.
“A lot of people have mobility scooters and others are sort of relying on neighbours to take them to the medical centre. So it would be a really bad, backward step for everybody.
“If you’re needing urgent attention, it can take up to an hour-and-a-half to get into Tauranga, and when you’re in pain or bleeding, that’s major,” she said, adding it could be “life or death”.
Jones said the proposed changes stem from a shift in how “rural” is defined.
But Health New Zealand said no decisions had been made about how “rural” would be defined for funding under the Primary Health Organisations Services Agreement (PHOSA), the national agreement through which primary care is funded.
Ensuring there is a “fair, transparent process” for considering exceptions to the application of any new definition and funding approaches is part of the negotiations, it said.
Stuff asked Health New Zealand how many practices had received the notice or could be affected, but it did not provide a figure, saying rural funding is delivered through a mix of direct contracts with general practices and primary health organisations (PHOs) subcontracts with general practices.
It said notices were issued to providers it directly contracts and it was not privy to how PHOs communicated with general practices they subcontract with.
Dr Angus Chambers, chair of the General Practice Owners Association, said there were “quite a few” practices that could be negatively affected by the proposed changes, while others could gain funding.
He said the proposal was aimed at fixing inconsistencies in how rural funding had been applied, with some clearly rural practices missing out while others on the fringe had received support.
“One of the troubles here is there's just not enough rural funding and this proposal doesn't actually necessarily address that issue, which is why there's going to be all these complications if it's not worked through.”
Astuti Balram, Health New Zealand acting director living well, said no decisions had been made about funding for Katikati Medical Centre or other rural practices as part of a nationwide review of rural funding available under the PHOSA.
“For more than 25 years, rural funding has existed as part of PHOSA, however, over time the framework has evolved differently across districts, leading to inconsistencies in the eligibility, use, and impact of the funding,” Balram said.
In 2025, Health New Zealand worked with a sector group that included primary health organisations and general practice rural experts, to review the current approach to rural funding via the PHOSA.
“The working group was tasked with developing recommendations for a nationally consistent, transparent, and equitable rural (primary care) funding framework. These recommendations and their implementation approach are subject to annual primary care negotiations, which are now underway.”
Balram said any changes would be agreed with the sector and include a transition approach to support service and funding continuity.
Associate Minister of Health Matt Doocey said he had been assured no decisions had been made that would reduce services at Katikati or any other practice.
He said rural general practitioners were the “backbone of healthcare” in many communities, and strong primary care was key to reducing pressure on hospitals and emergency departments.
“Any change should be about bettering support for rural communities… no patient should be worse off due to any change. I expect Health New Zealand to work with providers to ensure there are no unintended consequences from the change.”
Rural health funding had increased under the coalition Government, Doocey said, with the Government investing $175 million in general practice and funded initiatives to support rural GPs, grow the workforce and strengthen urgent and after-hours care.
But Jones said she expected a strong reaction from patients if the changes went ahead.
“People will be angry because they’re fearful, and I would say their fearfulness is completely justified,” she said. “If they’re unwell, they can’t be seen here… and they’re going to have to try and drive to Tauranga at a time where fuel costs are really high.”
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