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Less-than-local replacement for Medicare Locals

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One of the Federal Government’s new Primary Health Networks will span a massive 2.2 million square kilometres under boundaries drawn up by the Health Department.

Federal Health Minister Peter Dutton has announced that 30 Primary Health Networks will be established to replace 61 Medicare Locals as part of the Government’s overhaul of arrangements to support primary health services nationwide.

The overhaul was prompted by widespread dissatisfaction among GPs with the operation of Medicare Locals, and Abbott Government claims that the system established by Labor was top heavy and consumed funds in administration rather than being directed to frontline care.

The AMA has welcomed the move to dump Medicare Locals, and said it was prepared to work closely with the Government to ensure the PHNs were an effective replacement.

“What we’re trying to do in primary care is actually have coordinated primary care with the GP at the centre,” AMA President Associate Professor Brian Owler said. “That is the whole role of the Primary Health Networks that have been established. The AMA wants PHNs to be better targeted and more driven by family doctors at the local level.”

The Government announced the establishment of PHNs from 1 July 2015, in line with the recommendations of the Horvath Review, which examined the performance of Medicare Locals.

The Horvath Review found that the performance of Medicare Locals had been highly variable, had generally failed to engage with local GPs, had tended to duplicate existing services, and had failed to resolve problems with fragmented and disjointed primary health care.

The AMA has proposed that that PHNs focus on identifying community health needs and gaps in service delivery and improve the capacity of general practices to provide care by providing IT support, education and training assistance, support for e-health use and facilitate engagement with Local Hospital Networks.

A/Professor Owler said that evidence from countries such as New Zealand showed that GP leadership and input was vital for PHNs to be effective.

 “GPs are generally the first point of call in the health system and they can provide high quality clinical input as well as first-hand knowledge of where improvements in the health system need to be made,” A/Professor Owler said.

 “While some Medicare Locals have clearly done a good job in improving access to care, the overall Medicare Local experiment has clearly failed – largely due to deliberate policy decisions to marginalise the involvement of GPs,” he said. “We can’t afford to get it wrong a second time, and the AMA stands ready to work with the Government to ensure that PHNs are an effective and integral component of the health system.”

Mr Dutton said the PHNs would align with Local Hospital Networks and deliver efficiencies that would free up resources for service providers.

“Primary Health Networks will deliver better health outcomes for Australians over time by improving the links between local health services and hospital care, and through the better targeting of available funding on effective health programs,” the Minster said.

With the new boundaries, 17 Medicare Locals in NSW will be replaced with nine PHNs, while in Victoria 17 Medicare Locals will be replaced by six PHNs. Queensland will have seven PHNs, Western Australia’s eight Medicare Locals will be collapsed into three PHNs, and South Australia will have two PHNs, down from five Medicare Locals. The smaller jurisdictions, Tasmania, the Northern Territory and the ACT will each have a single PHN.

Some PHNs will encompass vast territory – in both WA and South Australia, there will be one PHN covering all areas outside the state capitals, and in both NSW and Queensland a single PHN will be responsible for each State’s enormous western expanses.  

The huge swathe of ground these PHNs will have to cover has sparked concern in some regional areas.

Deputy Chief Executive Officer of Western New South Wales Medicare Local, Steven Jackson, told the ABC he was worried the vast size of the PHN covering most of the central and western areas of the State would pose serious logistical challenges and might exacerbate chronic problems regarding access to care.

“Six different Medicare Locals are affected into that one area, so we’re in discussions about all six of those and three local health districts so we have to get in discussions there,” Mr Jackson told the ABC.

He said there was disappointment about the abolition of Medicare Locals in the area “because that’s what we’ve been working towards and we believe making a good job of”.

In Western Australia, local rural primary health care organisations have already been in discussions in anticipation that there would be one PHN to cover the entire non-metropolitan area of the huge State.

Kimberley-Pilbara Medicare Local Chief Executive Officer Chris Pickett told Medical Observer operating a single PHN to serve such a vast area would be a huge practical challenge.

“It will be about 2.2 million square kilometres, so it is going to be extremely challenging logistically, and in terms of getting from A to B, but we will make a fist of it,” Mr Pickett said.

Together, his and other rural WA primary health organisations have formed the West Australian Regional and Remote Health Association, which will bid to operate the PHN in the hopes of ensuring it will have strong rural governance.

Aside from the scale of some PHNs, there is also uncertainty about what they will do.

“We’re still waiting for the details of the PHN to outline just how they will function so there’s been discussion but there isn’t any concrete paperwork to give us guidance of how it’s going to work,” Mr Jackson said. “So, at the moment we have boundaries and we can make assumptions.”

According to the Federal Government, PHNs will have five primary roles, including analysing and planning for the health needs of their local communities; assisting general practices in keeping their patients out of hospital; supporting general practices in improving safety and quality of care; helping them establish and operate e-health systems; and purchasing or commissioning clinical services for population health issues such as chronic disease and mental illness.

“Primary Health Networks will be clinically focused, with general practice at the heart of improving the delivery of primary health care in Australia,” Mr Dutton said.

Assistant Health Minster Fiona Nash told the ABC that PHNs would be given a clear set of guidelines, including that they would not operate as service providers except on rare occasion.

“They’re going to be regional purchasers of health services, and providers only in the exceptional circumstances,” Senator Nash said. “What we saw under the Medicare Locals was the fact that, from the outset, there was no clear picture for them.

“A lot of the Medicare Locals were saying to me they didn’t know what they were supposed to be doing. [Primary Health Networks are] going to have a really clear picture of what we expect.”

Tenders to operate PHNs will be invited later this year, with the successful applicants to be announced next year in time for them to be given around three months to set themselves up. They are due to begin operations on 1 July 2015, when Medicare Locals will be officially abolished.

Senator Nash said it was anticipated that several Medicare Locals will tender to operate PHNs.

“There will be some of the existing entities that put in a bid, I’ve been talking to some people that are putting a consortia together,” the Minister said. “I think we’ll see some really innovative ways to make sure we’ve got that regional health delivery.”

Adrian Rollins