Primary Health Networks

25 August 2014

United General Practice Australia (UGPA) writes in relation to the Government's announcement in the May 2014 Budget, that Medicare Locals (MLs) will be replaced by Primary Health Networks (PHNs) from 1 July 2015.

UGPA welcomes the announced initiative, which provides opportunity to better meet community need, address market failure where it exists, and improve the integration of services between the primary care and hospital sectors. The success of PHNs will depend on the success of their engagement with general practice.

To ensure that the transition from MLs to PHNs is effectively managed, and that once implemented PHNs meet community need, a number of important areas must be addressed, including:

  1. Governance arrangements
  2. Key Performance Indicators (KPIs) and deliverables
  3. Engagement of general practitioners

1. Governance arrangements

To ensure that PHNs deliver what they are designed to deliver, to improve population health, there must be clear governance arrangements to ensure that conflicts of interest are both avoided and addressed.

Eligibility to tender for PHNs should be limited to organisations that do not have a direct conflict of interest in the delivery or funding of services for their patient population. The Government has stated that PHNs are not intended to be service providers. Therefore, tendering organisations that directly fund or provide patient services should be precluded from tendering, as the conflict of interest is too great to be effectively managed. In applying this test, it would include a tendering organisation that is substantially controlled by another organisation that directly funds or provides patient services.

For successful organisations, there must also be adequate systems for transparent accountability in managing conflicts of interest. A transparent system, designed to manage conflicts of interest that will inevitably arise, will ensure that the delivery of patient services are not adversely affected.

2. Key Performance Indicators (KPIs) and deliverables

UGPA recommends the introduction of KPIs and key service deliverables to ensure that PHNs address patient need, including:

  • Integration of care
  • Addressing market failure

The integration of primary care services with hospital services should be core to the roles and responsibility of PHNs. Supporting general practitioners in their role as the coordinators of patient care, including connecting GPs with hospital discharge plans, hospital in the home, and ongoing care, should be a priority when setting KPIs. Supporting GPs in this role will result in more efficient health service delivery, and will achieve the desired outcomes for implementing PHNs.

It is also of vital importance that PHNs address areas of market failure. As part of their role, PHNs should be required to identify areas of market failure, and implement local solutions that recognise local capacity, involve local clinicians, and build on existing services and networks. It is also important that the process for identifying and addressing market failure is clearly articulated and understood by both PHNs and clinicians.

3. Involvement and engagement of general practitioners

As identified above, the success of PHNs will depend on their ability to engage with general practitioners in their role as coordinators of care.

Therefore, it is vital that tendering organisations have a demonstrated ability to engage and involve GPs at a regional and local level, including both grassroot GPs and existing GP organisations and networks.

As part of their ongoing KPIs and deliverables stipulated in contracts, PHNs should be required to:

  • provide for meaningful involvement of GPs in the leadership and governance of the PHN, including at Board level
  • engage GPs at a grass-root level on clinical issues and programs using local GP organisations and networks
  • provide support for general practices both directly and through GP organisations and networks.

Addressing the above will help ensure that PHNs build on what is already working, and that PHNs develop local solutions to local problems.

We thank you in advance for your consideration of these recommendations and look forward to receiving a response in due course. Please contact me, or Mr Roald Versteeg, on (03) 8699 0408 or at if you have any questions or would like to discuss.