News

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MBS funding ‘insufficient’ to meet vulnerable population needs

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GP clinics that service vulnerable populations will continue to face financial strain and even closure ‘unless we lift funding for general practice’, the RACGP has warned.
 
The caution comes in a week that saw a remote West Australian clinic announce its closure due to funding strains, as well as the public release of a report into the financial pressures on three Victorian GP clinics which faced closure late last year.
 
The independent review into the financial viability of not-for-profit cohealth’s GP services was jointly commissioned by the Commonwealth and Victorian governments in September 2025 after the board said it had no choice but to close three clinics due to inadequacies of Medicare funding.
 
The move prompted community outrage, given cohealth’s role caring for vulnerable populations.
 
cohealth GPs look after about 7000 patients across its four clinics, with almost 5000 of those in the three sites slated for closure – Collingwood, Fitzroy, and Kensington.
 
The loss would have had a huge impact on the communities they serve – a message acknowledged in the review handed to governments in March by authors Professor Stephen Duckett, Dr John Furler, and Jane Seeber.
 
After meeting with around 100 patients, staff, community members and leaders of cohealth, and receiving 326 submissions, ‘we heard clearly from patients that the decision had caused them distress and anxiety’, they wrote.
 
The cohealth review identified four combined factors that meant ‘the GP clinics were not viable under existing funding and delivery arrangements’:
 

• Management oversight and governance issues
• Lack of a consistent model of care
• Client base of cohealth
• MBS funding model

 
‘Contrary to the views expressed publicly by cohealth – that the MBS funding model was the main cause of the clinics’ losses, and that Medicare did not provide funding for appropriate services for the population served by cohealth – we found that ineffective governance and management had also contributed significantly to cohealth’s financial problems,’ the report said.
 
‘We concluded that the clinic losses were partly driven by cohealth’s management of GPs and clinics, the way it schedules patient appointments, and its allocation of overhead costs to clinics.
 
‘Nonetheless, even with the best management in the world, the three clinics would still run at a marginal loss as other CHCs [community health centres] that run GP practices reported to us.
 
‘So, Medicare funding arrangements do indeed need to change.’
 
RACGP Victoria Chair Dr Anita Muñoz told newsGP this is a situation being faced by many other clinics servicing vulnerable populations.
 
And one of the most important parts of the report is its commentary on what the MBS can and can’t do when it comes to dealing with complex, comorbid care in vulnerable and priority populations, she said.
 
‘This actually proves the point that has been made by many general practices that are looking after people with complex comorbidities, which is that the MBS funding is insufficient to meet the needs of those people,’ Dr Muñoz said.
 
‘Even if you apply bulk-billing incentives, the costs of running a practice, and certainly trying to deliver quality care, cannot be covered by use of the MBS alone.
 
‘That is the reality, because we know other community health centres are themselves at the point of financial collapse, and we have just seen a practice in WA in a rural area have to close its doors as a direct result of adopting the Government’s call to become universally bulk billing.
 
‘If we put all of that together, what it signals is that unless we have a commitment to fund general practice properly, there will be many more closures of clinics ranging from MMM–1 vulnerable population services like cohealth, all the way through to the precious rural clinics that once they are lost will render communities completely without medical services.’
 
The report noted that the ‘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 report said.
 
‘That funding is necessary, and we believe that cohealth could be a pilot for a new funding scheme for multidisciplinary care.’
 
But to get to that point, ‘much will need to change’ and additional multidisciplinary team funding proposed to cohealth ‘should only flow if there are clear signs that can use that money wisely’.
 
cohealth has welcomed the review and its 13 recommendations, saying it ‘provides a clear pathway toward transformational reform of the way multidisciplinary general practice care is funded and delivered in Australia’.
 
‘The recommendations, supported as a full package, will 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 said.
 
The organisation also welcomed the opportunity to pilot a new multidisciplinary model of care and funding that has the potential to inform future Medicare policy and funding settings.
 
But Dr Muñoz said that the ongoing pressure facing these kinds of services has her deeply concerned.
 
‘I’m concerned because instead of funding cohealth properly, and despite knowing what those recommendations are in the report, what we have is instead the Government is spending $25 million on six green-site bulk-billing practices on the Central Coast of New South Wales where there is already ample general practices,’ she said.
 
‘The Government is capable of finding funds for projects in its preferred areas, and that is Central Coast of New South Wales, but it’s also … signalling to the community that it knows without $25 million spread over six sites, those new clinics simply will not survive on MBS funding.
 
‘The entire dial has to shift away from spending 5.5% of the health budget on general practice to what was formerly spent, which was around about 8% of the health budget.
 
‘It is not going to help community general practice and the future of health to continue to divide up the same amount of funding in increasingly complicated ways.’
 
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cohealth funding general practice closures vulnerable communities

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