Pinnacle welcomes the conclusion of the 2026/27 Primary Health Organisation Services Agreement Amendment Protocol (PSAAP) negotiations. The revised offer has been accepted by contracted providers. The agreed package represents a significant investment in general practice and a further step towards addressing longstanding underfunding of primary care.
Pinnacle, through its affiliation with GPNZ, has played a key role directly in the negotiations alongside a strong connection with those practices that elected to have Pinnacle represent them through the contracted provider caucus. In summary, Health NZ will invest $120.6 million in primary care for 2026/27 and the agreed offer includes:
Capitation
A total increase in base capitation of 6.32%, comprised of:
Flexible funding
Immunisation
Rural
A 3.16% increase in rural funding;
New rural designation
Transitional support package
Performance-based funding
Rural re-weighting
We acknowledge the disappointment expressed by some practices that rural re-weighting didn’t appear in the final offer. Despite the enormous effort from all sides to include this in this year’s agreement, it is clear some further work is required to ensure the model doesn’t negatively impact some of our more rural communities. With a large rural footprint, Pinnacle will continue to advocate for further funding reform to deliver a fairer and more reasonable approach to rural funding.
Re-weighting of capitation
We are encouraged by the adoption of new reweighting formulas for capitation to better reflect patient need. The accepted offer has made the first substantive change to capitation funding in more than 20 years and introduces patient morbidity, deprivation and rurality measures, alongside improved age groupings. The model will be reviewed again in 2028 and every five years thereafter. Pinnacle will continue to hold the line around the importance of ethnicity as a factor in determining healthcare need, and as such advocate for its inclusion in capitation models of the future.
Transition funding
Given the complexity and scale of capitation re-weighting, Pinnacle welcomes the transition funding approach for 1/3 of our practices, thereby ensuring that every practice gets at least a 4% (VLCA) and 4.46% (non-VLCA) increase after capitation reweighting. As a result, all practices across the network receive a minimum uplift while adjusting to the new capitation settings.
Equity Adjustment Performance Funding for Primary Care
While outside the PHO Services Agreement, equity adjustment funding for more practices this year is also welcomed. The distribution model has been updated to include any practice with 40% or more Māori and Pacific enrollees (revised from 50%), while continuing to fund those practices which are Māori or Pacific owned. The funding has a focus on providing a resource boost to enable practices with a higher need population to engage their patients to improve immunisation rates, cardiovascular screening, cancer screening participation rates, and management of long term conditions.
What does this mean for Pinnacle practices?
Ultimately, practices will see an increase in their funding in the new financial year. It’s rewarding to see Health New Zealand respond to the fiscal challenges faced by general practice, and to what many of you shared most recently with us in our pulse survey around manifesto priorities going into the election cycle.
Pinnacle will share more information next week as a direct result of today’s announcement outlining further investments we are making in our general practice network.
