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15 May 2014

The Federal Government has announced that network of 61 Medicare Locals will be replaced with a smaller number of primary health networks (PHNs) as part of measures to streamline the health bureaucracy and reduce duplication of services.

In a measure that is expected to be revenue neutral for the Budget, Health Minister Peter Dutton has revealed that the Government will establish a system of PHNs to take over the primary health care coordination role that had been assigned to Medicare Locals.

Though the Minister did not specify how many PHNs there will be, it is believed that they will be significantly fewer in number than the Medicare Locals.

The decision draws heavily on the recommendations of the Horvath review in to the Medicare Locals system, which found the network established by the previous Labor Government had delivered inconsistent and unsatisfactory outcomes.

Mr Dutton said general practice would be “at the centre” of PHNs, which were expected to align much more closely with existing State and Territory health network arrangements to ensure effective working relationships and reduced duplication.

“PHNs will be more locally relevant, accountable and responsive through local health professionals’ involvement in Clinical Councils and consumer-led Community Advisory Committees,” the Minister said.

In line with the Minister’s desire to increase private sector involvement in the delivery of health care, Mr Dutton said the PHNs would work equally with public and private providers “to develop innovative health solutions for people living in their communities. They will also provide practice support to individual general practices to encourage high quality services.”

The AMA has long expressed dissatisfaction with the Medicare Locals system, and a survey of doctors found that many felt Medicare Locals were of little relevance, provided limited support and, on occasion, operated in competition with existing medical services.

In its submission to the Horvath Review late last year, the AMA recommended reforms that focussed on moving to a network of primary health controlled organisations that were led by, and responsive to, GPs; that focused on supporting GPs in caring for patients, working collaboratively with other health care professionals; were not overburdened by excessive paperwork and policy prescription; were focused on addressing service gaps, not replicating existing services; and were better aligned with Local Hospital Networks, with a strong emphasis on improving the primary care/hospital interface.

Mr Dutton said improved primary health care was fundamental to better health outcomes, including the management and prevention of chronic disease.

“While there are some Medicare Locals providing good services, we want to ensure money is not wasted on administration. We want to ensure money can be moved to improve services,” the Minister said.

PHNs will established following a public tender process to be held later this year. Medicare Locals will continue to operate until 1 July next year, when the PHNs will commence operations.

Adrian Rollins


Published: 15 May 2014