Proposals to reform how Medicare supports primary care need to take account of the changed ownership structure of general practice as well as changing health needs.
The fiftieth anniversary of the election of the Whitlam Labor government in 1972 prompted many reflective articles on the achievements of his government. In the health sector, the introduction of Medibank on 1 July 1975 as a system of social health insurance brought Australia into line with most other first world countries.
While it was shortly dismantled in all but name by the Fraser government, the next Labor government under Bob Hawke reintroduced it under the Medicare banner in February 1984 – coming up to 40 years ago. At the time Kim Hughes had just led the Australian cricket team to a series victory over Pakistan, and Wham was about to top the Australian charts for almost two months with Wake me up before you go-go. It was another world.
A child born in Australia in 1984 could expect to live 75.4 years, while a child born this year can look forward to 83.8 years. There are many reasons for this shift (gun laws, better immunisation, better roads, cancer screening, reduced smoking, safer workplaces, …), but the effect has been to create an older population living longer with various chronic diseases.
A recent report from the Grattan Institute sums up the problem this has caused for general practice: “Australia’s universal healthcare system has failed to keep up with changes to Australians’ health needs since it started four decades ago. GPs’ work has become much more complex, as the population has grown older and rates of mental ill-health and chronic disease have climbed.
But the way we structure and fund general practice hasn’t kept up. Other countries have reformed general practice, and their rates of avoidable hospital visits for chronic disease are falling. But Australia is spending more on hospitals while neglecting general practice: the best place to tackle chronic disease.”
The report goes on to propose reforms to how Medicare supports primary care to manage the changed nature of health needs since 1984.
However, there has been another major trend affecting general practice: the shift away from a doctor-owned sole practice or partnership model towards a corporate-owned structure with doctors working effectively as employees.
In the mid-1980s Dr Geoffrey Edelsten was one of the first entrepreneurial doctors to take advantage of the universal cover and guaranteed payments available under Medicare when he established 24-hour bulk billing clinics with chandeliers and grand pianos. (His many emulators have had less flamboyant interior design tastes.)
Since then many GP corporate groups have come and gone, often merged into others. Some privately owned enterprises have subsequently listed on the stock market listing (e.g. Primary Health Care which became Healius). Others (e.g. IPN) became parts of bigger corporate health groups such as Sonic Health Care.
Data on the size of the corporate general practice sector is hard to come by. The annual registration data collected by the Medical Board of Australia does not include information on the types of practice in which doctors participate, and the administrative data collected through the Medicare is of no assistance.
Since 2017 the Royal Australian College of General Practice has published an annual state of general practice report based on a survey of members. Its 2022 edition (based on a sample of 3,200 doctors) found that 19 per cent of GPs worked in corporate group practices. This is almost double the 9 per cent working in such practices five years ago when the first report was produced.
If this trend continues it is quite likely that a third of GPs will be employed by corporate practices within a decade.
At this point there is no definitive evidence of the impact of corporate ownership on the quality of GP services. A 2021 article in the MJA by Dr Caroline Moel-Mandel and Professor Vijaya Sundararajan sought to “synthesise the available information about the impact of changes in size and ownership [of general practice] on the delivery of patient care and the health system”.
Much of the information cited in the article came from the grey literature, as there are few formal studies of the issue. In brief the material identified suggested that:
- continuity of care diminishes as practice size increases, while pathology ordering is positively associated with practice size;
- patient satisfaction is lower in corporatised practices compared with traditional ones;
- non-traditional providers performed worse than traditional ones on a range of performance indicators related to cost and efficiency, access, and clinical effectiveness.
However, one Australian study showed no difference between types of practice in the management of patients with diabetes.
The authors concluded that “while there is little Australian evidence that worse clinical care is delivered in corporate-owned general practice, there is no evidence that care is better… more Australian research and potentially regulation are needed to track and control what [changing patterns of ownership] means for patient care in terms… of patient experience [and] health outcomes”.
The Medical Board and the Department of Health should support such efforts by collecting and publishing information on the number of GPs working for corporate providers, and including the type of practice ownership in publications and in datasets made available for research.
The experience over the last thirty years of private corporate involvement in the delivery of public goods suggests that the profit motive does not drive better quality. The privatisation of the VET sector has led to poorer quality outcomes and a shift away from the provision of less-profitable trade courses to classroom-based courses such as business studies.
The Aged Care Royal Commission found that for-profit providers delivered lower quality care than not-for-profits. It heard evidence that managers at one of the largest for-profit providers were encouraged to “save a shift” wherever possible as a way of contributing to profitability. The profit motive appeared to have driven a culture of minimal compliance with standards, rather than one of competition on the basis of quality.
Any proposed reform of how general practice and primary health care is funded needs to be designed to take into account the corporatisation of general practice, and counter the incentives for corporate practices to maximise profit at the expense of quality.
• Charles Maskell-Knight PSM was a senior public servant in the Commonwealth Department of Health for over 25 years before retiring in 2021. He worked as a senior adviser to the Aged Care Royal Commission in 2019-20. He is a member of Croakey Health Media. Follow on X/Twitter at @CharlesAndrewMK.
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