Like using a refrigerator to heat food: capacity and capability funding in primary care and the legacy of the Primary Health Organisation Performance Programme Reuben Olugbenga Ayeleke PhD; 1,2 Timothy Tenbensel PhD; 1 Pushkar Raj Silwal MPH; 1 Lisa Walton PhD 1 1 School of Population Health, The University of Auckland, Auckland, New Zealand 2 Corresponding author. Email: r.ayeleke@auckland.ac.nz J PRIM HEALTH CARE 2020;12(4):345–351. doi:10.1071/HC20012 Received 30 August 2020 Accepted 2 November 2020 Published 9 December 2020 ABSTRACT INTRODUCTION: In 2016, the New Zealand Ministry of Health introduced the System Level Measures (SLM) framework as a new approach to health system improvement that emphasised quality improvement and integration. A funding stream that was a legacy of past primary care performance management was repurposed as ‘capacity and capability’ funding to support the implementation of the SLM framework. AIM: This study explored how the capacity and capability funding has been used and the issues and challenges that have arisen from the funding implementation. METHODS: Semi-structured interviews with 50 key informants from 18 of New Zealand’s 20 health districts were conducted. Interview transcripts were coded using thematic analysis. RESULTS: The capacity and capability funding was used in three different ways. Approximately one- third of districts used it to actively support quality improvement and integration initiatives. Another one-third tweaked existing performance incentive schemes and in the remaining one-third, the funding was passed directly on to general practices without strings attached. Three key issues were identified related to implementation of the capacity and capability funding: lack of clear guidance regarding the use of the funding; funding perceived as a barrier to integration; and funding seen as insufficient for intended purposes. DISCUSSION: The capacity and capability funding was intended to support collaborative integration and quality improvement between health sector organisations at the district level. However, there is a mismatch between the purpose of the capacity and capability funding and its use in practice, which is primarily a product of incremental and inconsistent policy development regarding primary care improvement. Keywords: Primary health care; funding incentives; performance; quality improvement; integration Introduction Funding is one policy tool that has been used extensively as a way of achieving primary health- care policy objectives such as improved integra- tion and quality. 1 Yet, funding can be used in different ways: to punish organisations for poor performance, to reward them for good perfor- mance through incentives or to stimulate better collaboration between health sector organisations. ORIGINAL RESEARCH PAPER ORIGINAL RESEARCH: HEALTH POLICY 345 CSIRO Publishing Journal compilation Ó Royal New Zealand College of General Practitioners 2020 This is an open access article licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License