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The bell tolls for AMLA and Medicare Locals

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Medicare Locals, as announced in the new Government’s 2014-15 Budget, will no longer be funded by the Commonwealth after 30 June 2015.

From 30 June, Commonwealth funds will also stop flowing to the Australian Medicare Local Alliance. In relation to the latter, it has been the long held view of the AMA that it was just an extra layer of bureaucracy.

The AMA recognised the need for more integrated and streamlined health care and has been supportive of the introduction of a network of Primary Health Care Organisations (PHCOs) to help achieve this goal.

However, the Medicare Local model the former Government introduced was fundamentally flawed – it sought to down play the role of general practice rather than to engage and support it in caring for patients.

The AMA, in its 2011 Medicare Locals Position Statement, laid out the framework and principles under which Medicare Locals could be effective PHCOs. The AMA emphasised the importance of general practice and the need for GPs to be involved in the high level decision making of Medicare Locals.

To be effective, the AMA said that Medicare Locals needed to work with GPs and needed to be accountable to their membership. They also needed to work effectively with Local Hospital Networks. The final point of the Position Statement was that the Government should review Medicare Local operations within three years of their implementation.

On coming to power, the new Government fulfilled its election promise, ordering an independent review of Medicare Locals by former Chief Medical Officer Professor John Horvath.

The findings of the Horvath review reflected in many ways the outcomes of the AMA’s GP member survey on Medicare Locals. The performance of Medicare Locals was patchy, they had failed to improve the coordination and delivery of primary care services, failed to appropriately involve or engage with GPs, and were duplicating existing services.

The Horvath Review recommendations, in summary, included:

·        that the Government should implement Primary Health Organisations (PHOs) to integrate patient care across the health system;

·        that it should reinforce general practice as the cornerstone of integrated primary health care;

·        that there be principles for the establishment of PHOs which covered contestability, flexible structures to reflect regional characteristics, engagement, and clear performance expectations;

·        that the Government should not fund a national alliance of PHOs;

·        that the PHOs should be limited in number and align with Local Hospital Networks;

·        that the Government should review the after-hours program and consider how, in time, PHOs could administer additional Commonwealth-funded programs;

·        that PHOs should only provide services where the market has failed to do so, or where there are significant economies of scale; and

·        that PHO performance indicators should reflect outcomes that are aligned with national priorities and contribute to a broader primary health care data strategy.

Many of these recommendations reflect the concerns expressed by the AMA about Medicare Locals in our public commentary and submission to the Horvath Review.

That said, there are some recommendations, including the potential for for-profit organisations to set themselves up as PHOs, that are of concern. In addition, it will be essential that funds allocated to PHOs are quarantined for primary care use only.

The Government has responded to the Horvath Review by announcing the establishment of Primary Health Networks as part of its first Budget.

The AMA Council of General Practice is discussing the design and implementation of the Government’s proposed Primary Health Networks, and will seek to ensure that we don’t get the model wrong this time around.

Primary Health Networks offer a significant and important opportunity to support general practice in delivering high quality care to improve patient outcomes, and to ensure that services across the health sector align and work together in the interests of patients.