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Govt told to think GP on Medicare Locals


The AMA has urged the Federal Government to transform the Medicare Locals system into a GP-led network of primary health care organisations amid widespread doctor dissatisfaction with its performance.

Calling for a fundamental overhaul of the $1.8 billion Medicare Locals structure set up by the Rudd Government to replace the Divisions of General Practice system, the AMA said there was “little evidence” it had resulted in any improvement in health care despite a massive injection of taxpayer funds.
The AMA delivered the unflattering assessment in its submission to a Government-initiated review of Medicare Locals overseen by former Chief Medical Officer Professor John Horvath.

The Horvath review’s wide-ranging remit reflects the Government’s scepticism about Medicare Locals in their current form, and its desire to pare back spending on what is sees as unnecessary bureaucracy and red tape.

Though in the lead-up to the Federal election Health Minister Peter Dutton backed away from an earlier commitment to abolish Medicare Locals, the review’s terms of reference show he is far from convinced they should continue to operate, at least in their present form.

Professor Horvath has been asked to assess and report on the role of Medicare Locals and their performance against stated objectives; the extent to which they consume funds that would otherwise go to support clinical services; the degree to which they work in with Local Hospital Networks and other health services; the extent to which they support rather than compete with or hinder existing clinical services; and their ability to administer contracts and tenders.

In keeping with his rhetorical emphasis on the centrality of GPs to health care, Mr Dutton has also asked the review to report on the extent to which Medicare Local functions and arrangements embody the concept of general practice as “the cornerstone of primary care”.

The terms go to several of the AMA’s core concerns with Medicare Locals, particularly the perceived marginalisation of GPs in their governance and operations and, related to this, a reluctance to consult with and listen to practitioners – most emblematically demonstrated in the botched administration of after-hours GP service contracts, many of which have had to be re-written because of onerous conditions.

AMA President Dr Steve Hambleton said the review was a welcome opportunity to overhaul the system and replace it with something much more useful and worthwhile.

“We recognise the need for a network of primary health care organisations to improve the integration of health services within primary health care, and to improve the interface between primary care and hospitals, but the current Medicare Locals model has not delivered,” Dr Hambleton said. “The performance of Medicare Locals against their objectives has been patchy, and there is little evidence of improvement over the divisions of general practice structure they replaced, despite significant additional funding.”

Health funding

The Government has framed the review in the context of a sharp deterioration in Commonwealth finances, underlining its warnings about the need to rein in spending.

Mr Dutton announced the review a day before the 17 December release of updated Budget figures showing a revised deficit in 2013-14 of $47 billion, up almost $30 billion from the May 2013 Budget estimate.

The update showed a blowout in health spending, with expenditure on the Medicare Benefits Schedule forecast to be almost $660 million greater than anticipated over the next four years.

Mr Dutton said the Government’s priority in commissioning the Medicare Locals review was to ensure that health funding was used as effectively as possible.
“We are committed to reducing waste and spending on administration and bureaucracy, so that greater investment can be made in services that directly benefit patients and support health professionals who deliver those services to patients,” the Minister said.

In its submission, the AMA argued that, in terms of effective use of taxpayer funds, Medicare Locals had so far fallen short.

It cited as an example the administration of GP after-hours care funding by Medicare Locals, which had been characterised by increased red tape and compliance costs for general practices.

Similarly, it reported that 50 per cent of more than 1200 GPs surveyed by the AMA found that their Medicare Local was duplicating existing services, not only wasting scarce health funds but providing unfair competition from an organisation that was meant to be supporting them.

The AMA said Medicare Locals suffered from a lack of input from GPs, who had an intimate knowledge of local health needs and gaps in services.
In its submission, it lamented that “from the outset, there was a concerted effort by the former Government and the Department of Health to dilute the role of GPs in governance arrangements for Medicare Locals. The current model is designed to deliberately constrain the level of GP input and leadership”.

It argued that the inclusion of GPs at the highest levels of local leadership was fundamental to ensuring a strong and well-coordinated primary care system that could deliver good health outcomes and relieve pressure on beleaguered public hospitals.

Unsurprisingly, the Australian Medicare Local Alliance said the Horvath review would find the current network of 61 Medicare Locals was working well and delivering tangible and cost-effective benefits for patients and the Government.

AMLA Chair Dr Arn Sprogis said the review was an opportunity to measure and demonstrate what Medicare Locals had achieved, individually and collectively, “in a very short period of time”.

Dr Sprogis said Alliance members had reduced hospital demand and costs by “keeping people well”, had ensured more bang for taxpayer funds by tailoring and targeting local health services and cementing general practice as the cornerstone of primary care.

“Each of the 61 Medicare Locals has shifted the emphasis from a centralised approach to primary care to a system that is focused on service delivery at the local community level and, importantly, by reducing the bureaucracy,” he said.

Professor Horvath has been directed to provide his recommendations to the Government by March, in time for any changes to form part of Budget deliberations.

Adrian Rollins