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Health funds set to pounce on primary care

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The nation’s two biggest health funds are eyeing off contracts to operate primary health care organisations being set up to replace the dumped Medicare Local model of primary care.

Both Medibank Private and Bupa have expressed interest in tendering to operate Primary Health Networks (PHNs), which are due to come into operation from mid-2015 when funding for the 61 Medicare Locals runs out.

While the Federal Government is yet to detail the final shape of the PHNs, in the Budget it announced they would be aligned with Local Hospital Networks “to ensure primary health care and acute care sectors work together to improve patient care”, and would be advised by Clinical Councils which had significant GP presentation.

The Government is understood to be considering putting the operation of PHNs up for competitive tender.

Both Medibank Private and Bupa told Fairfax Media they were watching the process closely and would consider the opportunity to expand their health service offering.

The possibility that the major private health funds may operate PHNs has arisen as the Government has directed the Health Department to consider ways to partner with private health insurers in the delivery of health services.

Already, Medibank Private is trialling a controversial scheme in Queensland in which it contributes to the administrative costs of GP clinics in exchange for guarantees that its members will receive an appointment within 24 hours and after-hours home visits.

Under current arrangements, private health funds are prohibited from providing coverage for primary health care services, but in the trial Medibank has circumvented the ban by contributing instead to practice administrative costs.

The arrangement has provoked concerns that it could drive up fees and create a US-style two-tier health system.

But Medibank told the Sun Herald its members were not given a priority over other patients, and it was not intended to create a two-tier system.

Health Minister Peter Dutton has indicated he is watching the trial closely, but his spokesman has sought to assure the public that “he supports Medicare and will never go down the path of a US-style health system”.

AMA President Associate Professor Brian Owler said the medical profession was open to greater involvement of health insurers in primary care, but it needed to be done carefully in order to preserve the strengths of the current health system.

A/Professor Owler warned that giving private health fund members privileged access to care amounted to a fundamental change in the funding of general practice.

“If people go too far, or the role of private health insurers is unchecked then, yes, it could have very significant consequences and produce greater inequity,” he told the Sun Herald. “We have a good health care system in Australia and the US model is not one we should be trying to emulate.”

Adrian Rollins