People who are struggling, with poverty, housing insecurity and chronic health conditions, are not well served by current Medicare funding arrangements. Can the crisis in a prominent Victorian community health organisation help to galvanise long-overdue national health reform?
Melissa Sweet writes:
The Federal Government has been urged to seize opportunity from the crisis at Victorian community health organisation cohealth, and to push ahead with long-recommended reforms to primary healthcare, with a focus on disadvantaged communities.
The recently released independent review of cohealth’s general practice services underscores longstanding concerns that Medicare funding arrangements entrench health inequity by making it financially challenging to provide comprehensive, multidisciplinary care to high-need populations.
The review says community health organisations and similar primary health services around the country are struggling to remain viable. Croakey notes that this is at a time when social and economic hardship make such services more important than ever, while also adding to the complexity of their work.
Experts have urged the Federal Government to act on the review’s recommendation for cohealth to be considered as a pilot for a new approach to funding multidisciplinary teams in primary care services.
The Commonwealth and Victorian Governments jointly commissioned the review of cohealth’s GP services after widespread community outrage when the cohealth board announced last September that its Collingwood, Fitzroy, and Kensington GP clinics would close.
Chaired by health policy expert Professor Stephen Duckett AO, the review team also included Dr John Furler, a GP at North Richmond Community Health Centre and Honorary Professorial Fellow in the Department of General Practice and Primary Care at the University of Melbourne, and Jane Seeber, who has extensive executive and governance experience in health, disability and community service organisations.
The review identifies significant deficits in cohealth’s governance and management, and recommends the Victorian Government either appoint an administrator and a new board, or give cohealth an opportunity to improve itself.
But it also acknowledges that “even with the best management in the world, the three clinics would still run at a marginal loss as other [community health centres] that run GP practices reported to us”.
“So, Medicare funding arrangements do indeed need to change,” it says. “The good news is that perceived weaknesses in Medicare – primarily a lack of weighting for complexity and need, incentives for shorter GP consultations, and lack of support for multidisciplinary care – are issues that are now widely recognised.
“The last of these weaknesses ‒ the lack of an effective funding model for multidisciplinary care ‒ has already been identified in policy, if not yet addressed with funding.”
The review says cohealth is the perfect example of a service where multidisciplinary care should be the norm but isn’t ‒ largely because Commonwealth rules do not facilitate the funding of all professions who could contribute to the effective care of cohealth’s patients.
As a result, GPs have been doing work that could have been done by other health professionals, meaning they were more likely to have longer consultations that are less well remunerated.
The review team recommends cohealth develop a new model of care – including consideration of nurse- led and community paramedic models ‒ via a codesign process involving team members and patients.
They recommend the Commonwealth establish a pilot multidisciplinary team funding grant for cohealth, to be pooled with Victorian community health funding into a single integrated approach.
The review notes that the Commonwealth Government has started on a program to boost multidisciplinary care in general practice, but it is unclear when it might be rolled out.
Wider implications
The review, with some sections redacted and removed, is being closely read across Victoria’s 21 community health services, which operate at 255 locations across the state. The sector reports that demand for community health services has skyrocketed by more than 11 percent over the last year.
The review said cohealth is not unique but shares many similarities with other Victorian community health services, as well as some services in other states.
“Solutions developed for cohealth may therefore apply – to a greater or lesser degree – to other community health services around the country,” it said.
“We have heard from a wide range of community health services and similar primary health providers across Australia who report that, while viability may be possible for some services, remaining viable in the sector is increasingly challenging, and requires clear, consistent, and ongoing work.
“Some organisations working with similar populations report smaller operating deficits from GP revenue that may be offset by organisational reserves or by other, better funded, services they provide. However, many similar providers reported that without changes to current funding levels and structures, they expect to face viability concerns in the future.”
The reviewers cited an unnamed organisation’s submission, which said: “While cohealth has specific organisational characteristics, the structural funding and governance issues identified have broader relevance to community health general practice.
“The review’s findings should therefore be framed with a view to informing how similar services are supported and governed nationally, rather than treating the current circumstances as isolated or exceptional,” this organisation said.
Professor Stephen Duckett, a member of the Federal Government’s Strengthening Medicare Taskforce, which reported in 2023, said many reports, inquiries and processes had urged reform to how the primary healthcare system is funded and organised.
“So the question is, what is the best way of getting from here to there? What we said is that cohealth could be a pilot of how we do that. I would also say that the broader community health world can be a pilot in Victoria and nationally,” he told Croakey.
In an ideal world, Duckett said the Government could consider including in the pilot Aboriginal Community Controlled Health Organisations, LGBTQI+ services and other health organisations “serving specific communities where the benefits of multidisciplinary practice are most obvious and most urgent”.
“We need to be moving on it,” said Duckett. “We missed the [Federal] Budget opportunity. We’ve had Medicare as it currently stands for, depending on how you count it, for 40 or 50 years, so redesign doesn’t happen quickly. The more we are open and engaged, and the more there is codesign with these communities, the better.”
Other comments
Health policy consultant Leanne Wells, (who recently joined the Croakey team), noted the review’s finding that Medicare funding arrangements need to change if community health-oriented models of primary care are to thrive and innovate, particularly to manage complex and co-morbid care and meet the needs of vulnerable people.
“The fundamental shift must be towards more support for expanded multidisciplinary teams and away from the constraints of fee-for-service funding,” she told Croakey.
“The cohealth review now joins a litany of expert reports commissioned by governments over the last two decades. All call for primary care to be funded differently and for Primary Health Networks to be empowered with flexible funding and co-design capability and infrastructure to create new multidisciplinary models of care with clinicians and communities.
“We have the right primary care policy intent. Implementation and funding is playing catch up.” (See her full comments here.).
Health policy analyst and Croakey columnist Charles Maskell Knight PSM said the cohealth review was the latest in a long series of reports to conclude that Medicare funding structures are inadequate for supporting the multidisciplinary primary care required by patients with complex chronic conditions.
Indeed, this premise led to the decision to establish the first coordinated care trials over 30 years ago, and underpinned the second series of coordinated care trials (2002-05) and the Health Care Home experiment (2018-21), he told Croakey.
Maskell-Knight suggested that “perhaps it is time for the Government to stop messing around with trials and pilots, get together with a group of providers and consumers, design the best possible system based on existing knowledge, and implement it”.
“A new system can hardly achieve worse outcomes than the present one,” he said.
Peter Breadon, Health Program Director at the Grattan Institute, said many previous reports had recommended reform to primary healthcare financing with blended funding models.
“The Government needs to respond to the recommendations, do what the reviews have recommended, launch an opt-in model for blended funding that takes into account morbidity and disadvantage, and scale it up nationally over time,” he said.
“It’s definitely time to act.”
Tracey Johnson, CEO of the Sandstone Healthcare Group – Practices at Yeerongpilly and Inala in Brisbane, said the review presented a clear message that should come as no surprise, that “the current Medicare system is not sustainable when high need communities are involved”.
She outlined a long list of reports identifying the need to better support organisations servicing high-need communities, with long-term flexible funding for coordinated, multidisciplinary team based care.
“The cohealth review is a timely reminder that recommendations in many reports must be actioned. The blueprint exists and is becoming clearer with each report and evaluation,” she told Croakey.
“The priority should be embracing these models in those settings with the greatest aggregations of patients with complex health and social needs. It is in those settings that the change process will pay off fastest. These are the settings most at risk of staffing and financial deficits which will undermine care sustainability.” (See her full comments here).
Dr Tim Woodruff, President of the Doctors Reform Centre, and a Director of North Richmond Community Health, issued a critique of the Governments’ responses.
“The glaring omission from governments has been the complete lack of acknowledgement that this problem is not unique to cohealth. Without a change in funding for other community health centres serving vulnerable communities, their general practices will inevitably also have to close because they are simply not financially viable under current arrangements,” he said.
Calls to action
The review recommended the Commonwealth extend its support to cohealth for another two years, during which a new funding basis can be introduced, and internal changes in cohealth embedded to ensure practice viability.
On 8 May, Health Minister Mark Butler announced the Government would provide up to $1.5 million for up to 12 months to cohealth, so services remain open at the Collingwood, Fitzroy and Kensington sites, while cohealth made changes, including strengthening senior management and board governance.
Other points and recommendations from the review include:
- The pilot of multidisciplinary teams at cohealth should include a clear, funded, independent evaluation strategy.
- Submissions from cohealth GPs and others proposed new or revised Medicare Benefits Schedule item numbers to deal specifically with high-need clients. The review team suggested the Department find out more about these proposals.
- If well-functioning, cohealth could be a good training site for general practice registrars. A steady stream of registrars flowing through a revitalised cohealth would benefit the broader primary care system and likely facilitate recruitment to cohealth.
- Registrars should be encouraged to attend community health services, such as cohealth, where they serve very marginalised populations as part of their training experience.
- The Department of Health, Disability and Ageing should add community health services (and other not-for-profit practices) serving high need communities to the list of area of need settings that must be included in GP training.
The review also recommended that cohealth formally acknowledge the trauma caused in recent months to the communities it serves and its staff, and work to rebuild trust and strong local links.
It also makes clear the high level of support among patients for services provided by cohealth, and notes “the very high levels of dedication and commitment of cohealth’s GPs”.
“Across these submissions, GPs, nurses and the wider clinical and allied health team are described as compassionate, highly skilled and deeply trusted, with care characterised as holistic, trauma-informed and relational rather than transactional,” said the review.
Submissions from culturally and linguistically diverse community groups also attested to the value of cohealth’s role.
“All of this evidence speaks to the view that cohealth’s primary medical care is perceived by patients as good,” said the review. “The critical question is not whether it can be better, but rather whether it can be organised differently, so that the same high quality of care noted in patient comments can be achieved in a financially viable way.”
While the review was focused on GP clinics, these account for only about five percent of cohealth’s revenue. In 2024-25, cohealth revenue was almost $120 million, for diverse programs including alcohol and other drug services, mental health, refugee health and prison healthcare. It also manages the Medicare Urgent Care Centre associated with the Royal Children’s Hospital, and delivers primary care services in Tasmania.
The review’s table below demonstrates that cohealth – like other community health services – is providing care for people with complex needs. Most of its clients experience economic hardship and chronic mental heath conditions or other long-term conditions.
On 3 June, cohealth issued a statement, accepting all recommendations identified for it to implement.
It said the review recommendations, supported as a full package, would provide a more sustainable approach to multidisciplinary healthcare for communities with high and complex needs and greater long-term certainty for the people who rely on these services every day.
“cohealth welcomes the opportunity to pilot a new multidisciplinary model of care and funding that has the potential to inform future Medicare policy and funding settings to support stronger, more sustainable healthcare for vulnerable communities across Australia,” said the statement.
Time will tell if this much-vaunted aspiration becomes a reality, whether for cohealth or more broadly for communities in need across Australia.
See Croakey’s archive of articles on cohealth, and primary healthcare
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