Funding warning as bulk-billing clinic closes

Another general practice has been forced to shut its doors until further notice after being met with challenges around income and retaining enough doctors under its fully bulk-billed business model.
 
It is a loss the RACGP says once again demonstrates how vital funding is for the sector.
 
The Interchange Health Co-operative (IHCO) in Tuggeranong, in Canberra’s south, is a 100% bulk-billed GP and allied health clinic. But after its Board made a ‘deeply difficult and disappointing decision’, it was placed into voluntary administration as of 7 April.
 
‘Despite an intensive recruitment program over several months to fill GP vacancies and increase our overall GP numbers, our 100% bulk-billed business model is no longer able to meet current market rates and conditions to attract much-needed doctors into our practice, putting our services under intense pressure,’ the IHCO Board said in a statement.
 
The clinic operated for six years and had close to 5000 patients on its books, including some of Canberra’s ‘most vulnerable community members’ such as patients seeking opioid substitution treatment, veterans, and people from culturally and linguistically diverse (CALD) backgrounds.
 
RACGP NSW&ACT Chair Dr Rebekah Hoffman told newsGP this is yet another example of why better investment in general practice is critical.
 
‘The ACT already has the lowest bulk-billing rates in Australia, and this clinic closure has made the situation worse, particularly for the vulnerable community who need – and deserve – access to affordable GP care,’ she said.
 
‘GPs need more funding to provide patients with longer consults for complex conditions such as mental health, and for those patients from CALD backgrounds for whom English is their second language.’
 
The Australian Capital Territory’s annual bulk-billing rate sat at 53% during the period November 2023 to October 2024. Nationally, a recently released report from the Productivity Commission reveals that fewer than half of patients are being fully bulk billed for GP services.
 
The RACGP is continuing calls for greater investment in general practice, and while welcoming the Government’s tripled bulk-billing incentives to support concession card holders, pensioners and children, it warns against relying only on bulk-billing rates as a way of judging general practice success, and that these models are not suited to all businesses.
 
In the lead-up to the Federal Election, both main political parties have committed to a major expansion in bulk-billing incentives with measures scheduled to begin in November this year.
 
Canberra’s IHCO describes itself as a clinic ‘heavily reliant’ on Medicare rebates, making it ‘extremely challenging’ to raise sufficient income to cover true operational costs. Members of IHCO are bulk billed for all consultations, with an annual membership fee costing up to $120.
 
Dr Hoffman said there is no ‘one-size-fits-all’ for bulk-billing models of care after decades of Medicare being underfunded.
 
‘For some clinics, a bulk-billing model isn’t a viable financial model for long-term, high-quality care,’ she said.
 
‘This is why we must boost investment in general practice care, including increased patient Medicare rebates.’
 
RSM Australia Partner Jonathon Colbran, who has been appointed as one of the administrators, said despite IHCO’s Board implementing a range of initiatives, the organisation is ‘no longer able to meet its operational costs and provide services’. 
 
‘Unfortunately, we are seeing many entities, including in the health sector, turning towards expert assistance to help them navigate financial challenges as a result of increasing business pressures,’ he said.
 
‘Our preliminary review of the IHCO’s financial statements and records indicate the business lacks the sufficient funding to continue its operations.
 
‘As a result, the responsible decision has been made to cease providing all medical care immediately while all options are explored to either recapitalise the business and recommence services or, if necessary, wind up the organisation.’
 
The IHCO thanked the ‘dedication and professionalism’ of its GPs, nursing and allied health and administration team, saying that thousands of patients ‘benefited from and valued the high-quality care they received’.
 
And with continuity of care one of the clinic’s priorities, it is working with the ACT Government to transition its most vulnerable patients to public health and other service providers.
 
A decision on the future of the IHCO is expected to be made in the next five weeks.
 
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