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Introduction to...

Primary health care systems

This Guide provides information about and sources of further information on the primary health care systems in Australia, Canada, the Netherlands, New Zealand, United Kingdom and the United States.


Australia has three levels of government: federal, state/territory, and local government and a complex PHC system with both public and private components.

The Australian Government introduced the Medicare system in 1984. All Australian Government funding for health services comes from taxation through its general revenue. A Medicare Levy is set at 1.5% of taxable earnings (for all but low income earners). A surcharge of an additional 1% is levied on high income earners who do not have private health insurance.

While general practices are private businesses, Medicare covers general practice consultations although in many cases a co‑payment is also charged by the practice. The Australian Government funds the Pharmaceutical Benefits Scheme (PBS) which substantially covers the cost of medications.

Private healthcare financing is from out of pocket payments and optional private health insurance. Unlike many countries, Australia has no employer based health insurance schemes.

The Australian Government also funds the Divisions of General Practice. These are located regionally around Australia and work with general practitioners, practices, other PHC providers and the community to improve quality and access to the PHC sector, implement government programs and run diverse health projects. The State Based Organisations provide leadership, representation and advocacy at state level, coordinate Divisions' activity in each state and liaise with the state government, and a peak body, the Australian General Practice Network located in Canberra which provides national leadership and governance.

Boundary issues are among the greatest challenges to PHC in Australia, due to divided responsibility for health care between federal and state/territory governments, private and public systems, and community, hospital and long term care settings. Medicare, PBS and Divisions of General Practice are funded by the Australian Government but the hospitals are jointly funded and managed by the states.

Both the Australian Government and the states run health programs and initiatives which are implemented in primary care and in practice this leads to duplication in bureaucracy, cost shifting and conflicting requirements. The GP workforce supply is a major issue in rural and remote areas and increasingly so in the urban fringes. As in other countries, increasing demand due to the changing demographics of the population, ageing of the population and the increasing need for services to manage chronic health conditions, are driving system reforms.


In Canada, health responsibilities are divided between federal and provincial governments. The federal government is responsible for setting and administering national standards, financing the system through payments to the provinces, delivering care to First Nations, Inuit and veterans, and providing drug and food safety regulation, data collection and research but provincial governments retain responsibility for the shape and administration of their health systems, guided by the Canada Health Act.

Most family physicians are remunerated on a fee-for-service basis paid by the national insurance system (Medicare), which is funded through taxation. There are some salaried GPs and in some areas there is a blended system of salary, capitation and fee-for-service in order to provide incentives for better preventive and chronic disease care. Primary health care is delivered at no charge to the patient. GPs receiving any funding from the public system cannot charge higher than the rate fixed for the specified service.


The USA government is a federal system. Federal government power is defined and limited by the Constitution, with health and education falling within the control of the States, resulting in considerable diversity.

The United States does not have a universal health care system although a majority of its citizens have some sort of healthcare coverage. Primary Health Care is run through private enterprise with a major role played by insurance companies and managed care organisations which provide subscribed individuals access to their network of employed or contracted physicians and of healthcare services.

In order to provide a safety net, the US purchases health insurance (Medicare) on behalf of those over 65 who have worked for at least 10 years in Medicare covered employment and those with specified illnesses or disabilities. The US Government also administers Medicaid which provides insurance for low income people who meet stringent eligibility requirements, purchases health insurance on behalf of government employees and the military and runs a health care system for military veterans. In addition, the Indian Health Service provides federally funded health services to over half the Native American and Native Alaskan populations. Some states are attempting to implement universal health insurance coverage. Other states provide supplementary funding for hospitals and providers are funded to cover healthcare expenses for the uninsured.

The shape of the health system is a result of market forces rather than government led reforms. The market approach results in underinsurance, poor population health, and healthcare disparities. Moreover, capital investment is directed at delivering high-end lucrative products and services, rather than improving health outcomes.

United Kingdom

The UK health system, the National Health Service (NHS) is funded through taxation to provide free primary health care services to all UK permanent residents.

The English Department of Health takes responsibility for UK wide issues but responsibility for healthcare has been devolved to each of the constituent countries which are adapting the NHS model to local preferences and circumstances.

Strategic Health Authorities (SHAs) administer NHS health care organisations in their local area. The role of the SHAs includes planning and improving health services in an area, monitoring performance, increasing service capacity and integrating national health priorities into local health service plans. Within each SHA, the NHS is split into Trusts of different types which take responsibility for planning and running different types of health services.

One type of trust is a Primary Care Trust (PCT). PCTs were set up in 2002 and now control 80% of the NHS budget. PCTs serve approximately 200 000 registered patients within defined geographic boundaries, and work locally to provide appropriate health and social care for their community. The services include general practice, NHS Walk-in Centres (staffed by nurses), out of hours Commuter Clinics, NHS Direct telephone and internet health advice, optometry, pharmacy and more.

Rather than providing remuneration to individual practitioners, funding is provided at the practice level. The PCTs contract general practices, which are independent businesses, to provide services for NHS patients who are enrolled with the practice.


The Netherlands Ministry of Health, Welfare and Sport is responsible for the development of policies to ensure the health and social wellbeing of the residents in this small densely populated country. The Netherlands is similar to the United States in having a health system based on private providers with government responsibility for the accessibility, affordability and quality of health care. Health insurance is compulsory and the government contributes for those unable to pay.

General practices are private businesses which enter into a contract with insurers to supply services to the customers of the insurance company. GPs are paid a capitation fee per patient registered with their practice, a fee per consultation and a negotiable reimbursement for practice costs, depending on services offered, staff employed, and the achievement of quality and efficiency indicators. These fees are paid to the GPs by the insurance companies.

Most GPs are independently established and self-employed. Patients in The Netherlands choose their own family physician, but are required to register with a practice. Many practices employ a practice nurse to provide chronic disease management and most GPs employ doctor's assistants who can perform simple medical procedures such as taking blood pressure, syringing ears, giving injections and performing vein punctures under instruction from GPs. Out-of-hours centres or cooperatives provide access to PHC services from GPs, nurses or doctor's assistants from 5pm to 8am.

New Zealand

The NZ parliament consists of one chamber, the House of Representatives. Local government has a two-tiered structure consisting of 12 regional councils and 73 territorial authorities.

With the New Zealand Public Health and Disability Act 2000 and the 2001 Primary Health Care Strategy, New Zealand has moved away from a competitive purchaser/provider market model towards a community oriented system with a focus on prevention, health promotion, population health and community engagement. Twenty District Health Boards (DHBs) have responsibility for the provision of health and disability services within specific geographic boundaries.

Funded through the DHBs through capitation funding formulas, 46 Primary Health Organisations (PHOs) deliver and coordinate a team of health professionals (doctors, nurse practitioners, allied and other) to provide services for enrolled members of their communities and distribute funds to contracted GPs and other primary health care providers. Enrolment with a PHO is not compulsory but enrolled citizens can receive population health and preventive care through the PHO. Capitation payments to general practitioners are administered through the PHO however general practitioners also have the option of charging patients a co-payment.


PHCRIS Getting Started Guide: Introduction to Australian health reform

Roadmap of Australian Primary Health Care Research (ROAR)

Australian Government Department of Health

Australian Medicare Local Alliance

Australian Health Ministers' Advisory Council (AHMAC)

Pharmaceutical Benefits Scheme (PBS)

Medicare Benefits Schedule (MBS) Online

Australian Primary Health Care Research Institute

Australian Institute of Health and Welfare

Health Policy Monitor

Pan American Health Organization - World Health Organization

Health Council of Canada

Health Canada Website: Primary Health Care

Statistics Canada

Canadian Foundation for Healthcare Improvement

Health Canada: Primary Health Care Transition Fund

Commonwealth Fund

Association of Departments of Family Medicine

Robert Graham Center

Health Policy Monitor

Pan American Health Organization - World Health Organization

United Kingdom
European Observatory on Health Systems and Policies
WHO Regional Office for Europe

Health Policy Monitor

Nuffield Trust

King's Fund

National Institute for Health Research Service Delivery and Organisation (NIHR SDO)

UK Department of Health Primary Health Care Website

Department of Health (England) GP Patient Survey
(compiled by Ipsos MORI)

Primary Health Care in the Netherlands
Netherlands Ministry of Health Welfare and Sport. (2008)

European Observatory (WHO) Health Care Systems in Transition, Netherlands

Health Policy Monitor

The new care system in the Netherlands: durability, solidarity, choice, quality, efficiency
Netherlands Ministry of Health Welfare and Sport. (2006)

New Zealand
Health Policy Monitor

Primary Health Care Strategy
New Zealand Ministry of Health

Data and Statistics
New Zealand Ministry of Health

Victoria University of Wellington- Health Services Research Centre

Sources for international comparison

The Commonwealth Fund International Health Policy Center

Health Policy Monitor

Health Care Systems in Transition -World Health Organization

Pan American Health Organization- World Health Organization

European Observatory on Health Systems and Policies
World Health Organization Regional Office for Europe

International Observatory on Health Systems and Policies

World Health Statistics 2010 - World Health Organization

Health Affairs
The journal Health Affairs has published a series of multi country studies by Cathy Schoen and her colleagues. This is the latest publication in the series.
Mirror, mirror on the wall: How the performance of the U.S. health care system compares internationally: 2010 update

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compiled by Ann-Louise Hordacre and Eleanor Jackson Bowers and updated by Jodie Oliver-Baxter
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