The Interchange Health Cooperative practice in South.Point, Tuggeranong closed on Monday. Photo: Facebook.
Canberra’s bulk-billing crisis has worsened with the closure of the Interchange Health Cooperative (IHCO) practice in Tuggeranong, which had almost 5000 patients on its books.
The six-year-old 100 per cent bulk-billed general practice and allied health service at South.Point called in administrators from RSM Australia on Monday (7 April).
The move comes after the Albanese Government promised in February to spend $8.5 billion over four years to triple the incentive for GPs to provide almost universal bulk-billing services, although doubts remain that the goal of nine in 10 visits be free of out of pocket expenses can be achieved in the ACT, which has the lowest bulk-billing rate in the country.
In a statement, IHCO said its current business model was no longer sustainable, and it had become increasingly difficult to recruit doctors to the practice.
“This was a deeply difficult and disappointing decision given the significant transformation work we’ve undertaken to create a sustainable medical practice,” IHCO said.
“However, in the face of financial challenges, this was the only responsible choice, ensuring that IHCO can be independently assessed by administrators with a view to review all available options and recommend a forward plan.”
IHCO said it had been heavily reliant on Medicare rebates, a small number of government project grants, and membership fees to sustain its services, and it had been extremely challenging to raise sufficient income to cover true operational costs.
IHCO received $500,000 from the ACT Government’s Bulk Billing General Practices Grant Fund in 2018.
“Despite an intensive recruitment program over several months to fill GP vacancies and increase our overall GP numbers, our 100 per cent 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,” it said.
IHCO provided services to some of Canberra’s most vulnerable community members.
It said the organisation had already reached out to the ACT Government to transition the most vulnerable patients to public health and other service providers.
“The board, key administrative, clinical and medical staff will continue to work closely with the administrators and the ACT Government to support the seamless transition of our patients – especially those with complex health issues,” IHCO said.
Rachel Stephen-Smith speaking at the opening of IHCO in Tuggeranong on 28 August 2019. Photo: AHCO Facebook.
Administrators will work with the ACT Government to assist with the transition of IHCO patients.
An ACT Government spokesperson said the government would work closely with IHCO, the administrator and the Capital Health Network to ensure its patients were safely transitioned to other services.
The ACT Government provided more than $1.4 million in funding to IHCO since its inception in 2018, including more than $350,000 in this financial year to support the delivery of care to some of Canberra’s most vulnerable community members.
“The ACT Government continues to advocate for increased funding for primary care services across Canberra with the Australian Government,” the spokesperson said.
RSM Australia Partner Jonathon Colbran and Director Adam Cormack were appointed joint and several voluntary administrators of the IHCO at a board meeting on Monday.
Mr Colbran said the IHCO’s voluntary board had advised administrators that it had implemented a range of initiatives to address challenges in the organisation and ensure it could continue to serve the community, but ultimately was 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.”
Mr Colbran said a decision on the future of the IHCO would be made in about five weeks’ time at a second meeting of creditors.
“Prior to our appointment, the organisation was providing services to some 4900 patients with a significant number of these requiring care for complex health issues,” Mr Colbran said.
“The board, together with key administrative, clinical and medical staff will work closely with administrators in conjunction with ACT Health to transition existing patients to other service providers, ensuring patients experience as little disruption as possible.”
Administrators will write to members and creditors this week to advise them of their appointment and outline the rights of creditors and the steps involved in a voluntary administration.
Creditors impacted by the administration should contact RSM via email – IHCOCreditors@rsm.com.au – or phone 03 9286 8230.
Patients who may have questions about the administration process can contact RSM via email – IHCOPatients@rsm.com.au or phone 03 9286 8020.
