In just over five months, the first 15 of the new primary health care organisations to be known as Medicare Locals are due to be up and running.

But there are still many unanswered questions, not just about what they will actually do, but about their fundamental nature, including what sort of organisational structure will they have.

The Government has made it clear that MLs will be independent legal entities and not government bodies.  It seems that the preference is for not-for-profit companies limited by guarantee.

This would ensure they are subject to a tried and tested regulatory regime – the Corporations Act and associated legislation.  It would also avoid the need to pass legislation which would be required to set up MLs as new statutory authorities.

Yet, from what Croakey hears around the traps, there has still been no definitive guidance on that matter.

A company has to have one or more owners, and MLs will be no exception.  The owners sign-off on the company’s constitution dictates how and by whom the company will be governed, and what its objectives should be.  The owners also typically choose the directors, in a manner laid down by the constitution.

Clearly the owners of a ML have the power to shape the way it functions and to influence how it deals with health professionals, with the public and with governments and others who provide its funding.

So the crucial, as yet unanswered, question is, “Who is going to own Medicare Locals?”

Below are some of the options – it would be good to hear what Croakey readers think of these…

What are the options?

1.    MLs as companies owned by GPs

MLs are expected to be responsive to the needs and priorities of the communities they serve.  It has been argued this can be accomplished by simply ‘re-badging’ existing divisions of general practice as MLs and requiring them to increase the representation of non-GPs (eg consumers and other health professionals) on their boards of directors.

The idea of putting the governance of MLs in the hands of more diverse boards is appealing but fails to recognise the fact that, in a corporate setting, it’s ultimately the owners and not the directors who call the tune.

Divisions of general practice, which are commonly seen as evolving into MLs, are owned by their members, and those members are typically GPs.

But is it realistic to expect GP-owned companies to take on the much broader role envisaged for MLs?

How would that be viewed by other primary care providers such as nurses, pharmacists, physios, community development workers and psychologists?

How would a GP-owned ML react if asked to implement a Government policy perceived as prejudicial to the interest of GPs?

2.    MLs as companies owned by a range of primary health care providers

Another possibility might be to have MLs owned by a diverse range of primary care providers, giving each of the main professional groups a stake.  That might go some way towards eliminating inter-professional rivalries.

But there would be many challenges involved in having a diverse mix of professionals functioning effectively in this way.  And other than GPs, few professional groups have formally constituted local representative bodies that could take on the ownership role.

As well, if MLs are supposed to act in the interests of their communities, then would it really be wise to vest their ownership wholly in the hands of the people who deliver those services?

I’m sure that most Croakey readers would not expect the interests of service providers and service users to always be in alignment…

3.    A social enterprise model

This model, which has been used to run some health and welfare services in the UK and elsewhere, seeks to involve the local community as owners by offering them the right to acquire shares.

While that might sound appealing as a way of ensuring MLs are accountable to those they serve, it could create a nightmare when it comes to choosing directors. An obvious risk would be for MLs to be ‘captured’ by unrepresentative interest group/s.

4.    Government-owned companies

It’s difficult to believe the Commonwealth would willingly take on the task of establishing and subsequently overseeing 50 or more new ML companies.

Another option might be for the Feds to set up a single, national, Government-owned company (dare we say a “super ML”) which could then form a series of separate, local MLs as subsidiary companies, each with its own board of (effectively Government-appointed) directors.

That’s not dissimilar to the approach being proposed by the new Health and Social Care Bill in England, which envisages a national network of ‘commissioning consortia’. This would be something like having MLs accountable to a single, National Health Service Commissioning Board.

The bottom line: If there is to be a balance between the requirements for good governance, responsiveness, local accountability and the need to avoid possible conflicts of interest (not to mention the need to balance clinical imperatives with population health perspectives), it seems there’s no easy answer to the question of who should own MLs.

It will be interesting to see what approach the Government chooses to adopt.  For the sake of the 15 pioneering MLs, the sooner things become clear, the better.

Meanwhile, perhaps Croakey readers have some thoughts about what model might work best?

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