Medicare Locals


The Commonwealth Government in Australia, through Health and Ageing Minister, Ms Nicola Roxon, call in 2010 for submissions into the introduction of Medicare Locals throughout Australia. An initial group of Medicare Locals were identified and funding was announced recently for a further 38 Medicare Locals. Medicare Local’s are supposed to take up the work done previously by the Division of General Practice (DivGP). Membership of DivGP was originally restricted to General Practitioners though some did attempt to draw other providers in as members.

What is the Government seeking to acheive with Medicare Locals? They see the role of Medicare Local to be a coordinating role, actively creating pathways for consumers to access care, mostly primary care, with the aim of reducing the level of people requiring acute care in hospitals and where possible even reducing the level of visits to GP for preventable illnesses.

Medicare Local’s are to be independent nonprofit organisations with regional governance and management, while being funded by the Commonwealth. Medicare Locals are not owned and operated by hospitals or hospital networks though there is likely to be some overlap of governance and perhaps management. Medicare Local share similarities with Primary Healthcare Organisations (PHO) in New Zealand.

There are numerous challenges associated with establishment and operation of Medicare Local. The first is mapping the healthcare services within the geographical boundaries of the Medicare Local. In any of the regions nominated for Medicare Local there are numerous healthcare providers, many overlapping, each protective of their own patch and funding and each with their own agenda. The challenge will be to coordinate these providers for the benefit of the consumer while enabling each provider to continue to operate independently. The success of Medicare Local is dependent upon its ability to bring all providers together as members so as to maximise the benefits for consumers and ensure collaborative contribution towards community wellbeing.

How Medicare Locals are evaluated and measured for success will be critical. Without clear guidelines for achievement and outcomes and without an acceptable process of monitoring and evaluation there will be no way of identifying the real contribution of Medicare Local, their effectiveness or value for money. If Medicare Local is expected to improve wellbeing in the community and contribute to reducing the cost of medical care then those measurements should be in place from the outset. Similarly any performance indicators need to apply equally to all Medicare Locals to enable comparison of effectiveness. The expected outcomes, performance indicators and achievement levels should be made public.

Many of the programs that Medicare Local might wish to engage in may already be provided in some form by either community health, Primary Care Partnerships and Divisions of General Practice, along with a variety of other providers in areas of aged care, disability, mental health, alcohol and drug addiction. The challenge for Medicare Locals will be to develop programs that compliment, and add value to those in existance while avoiding unnecessary duplication and cost to the consumer.

If Medicare Local is to be an effective contributor to community wellbeing then it must have a good understanding of wellbeing indicators for their region and some means of demonstrating improvement. Community engagement with each Medicare Local will be important. Possibly through both community representation at board level of service advisory level and ongoing community consultation. This will be important in countering the potential of a single group of providers using the Medicare Local to further their own agenda.

Assumably local healthcare providers will become members of a Medicare Local. Whether this will incur a cost to the provider is unknown at this point. It will always be a challenge to maintain operations of a Medicare Local on Government funding only, therefore increasing the likeliness of some form of membership cost in the future. Members, whether they pay a fee or otherwise will need to see a benefit to themselves for their involvement. Even if there is no exchange of money for membership this will always be some cost involved in time, resource allocation etc. The benefit must be seen to exceed the cost. Any perception by members that their independence is being trampled upon will likely result in declining membership – which would make the Medicare Local impotent.

Medicare Local is a new and emerging force in Australia. The PHO experience in New Zealand demonstrated that at times the tail can wag the dog, with some PHO’s becoming administrative behomths in their own right, often duplicating programs of other providers, in particular District Health Boards (DHB). This has resulted in a number of DHB’s rationalising the PHO’s. In New Zealand a PHO is funded by the DHB on behalf of the Government. In Australia Medicare Local’s will be funded directly by the Commonwealth. Medicare Local boards will report directly to the Commonwealth Government. This has potential for Hospital Networks and individual health services and Medicare Local’s to get offside with each other. Political bickering will not benefit the community or the consumer.

One can foresee the benefits of Electronic Health Records (E-Health) and the ability of any provider to access, immediately, the same records of the same patient inherent in the development of Medicare Local. This will save time and make it easier for both the provider and the consumer. Overall Medicare Local’s should seek to utilise informational technology and its associated products to help contain costs. Like any healthcare provider, the greatest cost for Medicare Local’s will be labour and history has shown such organisations have the potential to invest heavily and sometimes wastefully in this area.

Those are my thoughts for the day
John Coxon

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About John Coxon

Principal consultant for John Coxon & Associates, a management consultancy working with boards and management teams in healthcare, aged care and not for profit organisations to develop effective strategic planning processes and social enterprise business plans
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