Fran Baum and Sara Javanparast. Demise of Medicare Locals.

May 16, 2014

Demise of Medicare Locals: impact on community health, partnership and PHC research

Fran Baum and Sara Javanparast  
Southgate Institute for Health, Society and Equity, Flinders University, Adelaide

Tuesday’s budget announced the abolition of the 61 Medicare Locals and that they will be replaced with an unknown but smaller number of Primary Health Networks. Regional primary health care organisations are widely acknowledged to be vital to effective   coordination of PHC activities, reducing service fragmentation, making the health system easier to navigate for users, and reducing health care cost. Primary Health Care Trusts in England, New Zealand Primary Health Care Organisations, Canada/Ontario Local Health Integration Networks, and Scotland Community Health Partnerships are examples of overseas regional PHC organisations which support GPs and other PHC providers and plan for population health initiatives. The World Health Organization  recommends that PHC should be comprehensive and not just concentrate on clinical issues but also emphasise population-based approach, including disease prevention and health promotion, equity of access, responsiveness to community needs and community engagement.

In Australia, various models of PHC have been established including Medicare-funded General Practice, State-funded multi-disciplinary community health centres and Aboriginal community controlled services. In 2009, the National Health and Hospital Health Reform Commission recommended that ‘service coordination and population health planning priorities should be enhanced at the local level through the establishment of Primary Health Care Organisations’. This has resulted in the establishment of Medicare Locals to fulfil the role of co-ordinating PHC services at the local level, improving access and preventing hospital admissions.

The establishment of MLs, introduced by the Gillard Labor government, commenced in July 2011, with a total of 61 MLs operational from July 2012. Since then, the MLs have been conducting community needs assessment, identifying and building partnership with key health, community and social organisations in their region, and developing population health plans that are based on and responsive to local needs. A range of local programs and services have been designed. These include mental health, after hours care plan, Aboriginal health, E-health, aged care, and migrant health. Many resources have been spent building positive relationship with key stakeholders and community members within each ML with some good examples of collaborative work, joint planning and community engagement strategies. Taking the Pulse program in a number of ML including the Gold Coast ML, ACT ML, and Metro North Brisbane ML enabled consultation about health and wellbeing with people from all walks of life. The priorities that emerged from these consultations have been used in the formulation of needs assessment and informed the development of their strategic plans to ensure they respond to local need. The Tasmania ML is addressing social connection and other social determinants of health using strategies including community capacity building. Our local research suggests the MLs are co-ordinating with local health authorities on issues of joint concern. They have begun to fill identify and fill service gaps.

All these programs and initiatives have taken staff and local PHC health providers’ (including many GPs) time, and cost a lot of taxpayers’ money to develop and establish.  Now is the time when Australians should be able to capitalise on this investment and see better co-ordinated local health services, community alternatives to hospital services (which will save money), Aboriginal health programs, and local mental health programs. It takes time to establish the trust and connections needed to develop and co-ordinate PHC services and this social capital that the MLs have established will be squandered by the decision to abolish them in the budget. Of course, the ML model and its programs need to be scrutinised and evaluated, but its demolition while it is still in its infancy will have many negative impacts on the community’s health and represents a failure to capitalise on investment.

The short term life of such large national initiatives also makes it difficult for primary health care researchers to produce rigorous evidence on the effectiveness of existing models and to evaluate the programs in terms of population health and cost benefits that need to be followed through for a longer period of time. “Lack of evidence on program effectiveness” is one the key justifications for budget cuts was evident in the Review of Medicare Locals by John Horvarth ( . Such evidence can hardly be produced in the current rapid changing policy environment which makes rigorous evaluation impossible.

Undoubtedly, replacement of MLs with Primary Health Networks that are more clinically focused will move our primary health care system away from its broader mandate of disease prevention, health promotion, equity and social determinants of health. Of course, communities particularly those most in need are the ones who will suffer the most from these continuing political battles and health system changes.

We now face an uncertain period when the work of the existing ML is undone and new Primary Health Networks are established. The budget papers say this process will be open to tender and that the new organisations will be able to “partner with private health insurance” presumably opening the ways for the privatisation of the Networks and a further move away from equitable and efficient health care. We could see big providers such as BUPA winning tenders to run these PHNs!

As a postscript we note that had the budget taken the fiscally responsible step and abolished the private health insurance subsidies this would have released around $5.5 billion dollars for investment in PHC services and the existing MLs which would have represented a far better investment in our health.
















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