Te Whatu Ora says the pay gap between GP and hospital nurses has jumped to around 20 percent.
The organisation was on Friday questioned at the health select committee as part of its annual review.
It was challenged on its efforts to close the pay gap, which RNZ reported last year had widened as a result of a pay bump for hospital nurses.
At the select committee, Te Whatu Ora national commissioning director Abbe Anderson put a number on that gap.
"Now our average nursing pay gap is pushing 20 percent, so there is a bigger gap that has opened up."
It was aiming to reduce it to about 5 percent, but the hospital nurses' pay rise blew it out of the water.
To close the gap for the whole general practice workforce would cost about $170 million - and that increased to more than $1 billion if the aged care and support workforce was included, said Anderson.
Te Whatu Ora was mapping how to close the gap and how long it might take, and planned to present it to the government for decision-making, she said.
It was also looking for cost savings throughout the health system to redirect to the workforce.
The organisation was also grilled on "concerning" rates of avoidable hospital admissions. People were not able to get the primary care they needed, so were showing up at hospital instead, said Anderson.
"Just about every indicator that we have shows our indicators of primary care being at capacity," she said. "It's reasonable to say that primary care is operating at 100 percent at the moment."
That was proven by the fact that a third of GPs had closed their books - and that was much worse in rural and regional areas, she said.
Questioned on what might solve the problem, Anderson said Te Whatu Ora was working on things like expanding telehealth services to reduce GP demand.
But she admitted other efforts, like a scheme allowing patients to seek advice on minor ailments from pharmacies, had not made a measurable impact on reducing presentations at GPs and in emergency departments.
"What we have likely affected with minor ailments for example, is the latent demand that's out there.
"Other indicators are showing the same sort of trends, we've got a lot more demand than the system's actually able to cope with at the moment."