The transition from Medicare Locals to Primary Health Networks is one of the most significant challenges currently facing our health system.

The success (or otherwise) of these new primary health care organisations will have far reaching and long term impacts on the health of our community.

The outcomes of the PHNs will also be a test of the Abbott Government’s policy credentials in health, in particular of some of the Government’s ideas around the involvement of private health insurance, the role of the market in health and the measurement of performance.

In this third instalment of the rural health series, Lesley Barclay, Deputy Chairperson, and Dane Morling, Policy Adviser, National Rural Health Alliance (NRHA) discuss the implications of the transition to PHNs for rural communities and, in particular, argue that rural communities have specific primary health care needs which may not be met by some of the possible operators of PHNs, such as private health insurance funds.

The other two instalments can be read at Croakey here and here

Lesley and Dane write:

The NRHA strongly supports a role for the Commonwealth Government in providing leadership in primary care. The objectives will include increasing the overall role of primary care in the health sector, maintaining uniform quality and safety standards across the whole country, ensuring adequate primary care research and information dissemination, and working to secure equity of access to primary care – including for disadvantaged groups.

Medicare Locals (MLs) are key drivers of these objectives and the Primary Health Networks (PHNs) will become so after 1 July next year.

At CouncilFest 2014 one of the top priorities agreed for the NRHA’s current work was to ensure that local effectiveness is not only retained but enhanced in the transition from MLs to PHNs.

Commonwealth funding has been instrumental in achieving some improvement in rural and remote primary care services through the MLs. While not all MLs have been equally effective1, the transition to PHNs must not result in the loss of the hard won gains in rural Australia achieved by those that are starting to be successful. Examples include improvements in health services provided for underserved rural and remote populations and productive cooperation between MLs and hospital networks.

Independently-derived baseline data of health status and service usage in ML catchment areas, produced by the National Health Performance Authority, show that 16 out of the 19 rural/remote MLs have poorer health status than the national average. Nine of the 16 have fewer GP attendances than the national average.2 The reality of fewer health professionals as remoteness increases will mean that the work of the fifteen rural PHNs will need to include the identification and coordination of innovative, flexible models of service delivery not dependent on good access to all necessary clinicians. This is where truly local engagement and understanding is so important.

Many MLs in rural and remote Australia are making good progress and it is important to learn lessons from this about localism and its strengths – and the risks of size. We are a large country with a third of our population scattered over rural and at times very remote areas. These people are less wealthy and less healthy3 and too many of them struggle to access health services. Size matters and excessive spread introduces risks and diminishes the power and effectiveness of localism. While we need to balance localism and spread because of efficiency and practicality, some Australians have had services and care they have never received previously because of the ML initiative. For example, one ML in a rural area has provided nearly 40,000 clinical services by GPs, psychology and other allied health practitioners to people who previously had no such services available to them.

Another example of the expansion of sorely needed services has been through the MLs’ management of the Access to Allied Psychological Services (ATAPS) program. Although relatively small, ATAPS has helped provide skilled mental health therapists in rural areas despite the mal-distribution of GPs.

Our concern is that these services survive and we do not lose the practitioners who provide them in the transition to the even larger PHNs.

It is critical that PHNs work effectively with Local Health or Hospital Networks to attempt to provide seamless patient journeys. Again, our members have reported this is starting to bear fruit in a number of places around Australia, with examples of agencies involved in primary and acute care identifying shared opportunities and benefits from working together.

The closer match of PHN and LHN boundaries should make it simpler for the two agencies covering a particular area to build relationships and cooperation – something that the best MLs have already been doing. Close cooperation with hospitals, clinicians, local authorities and patients will be essential for the success of PHNs – and this is particularly challenging over vast distances and numerous primary health and acute care teams.


One of the NRHA’s concerns has been that, due to perceptions of an uncertain future, some of the health professionals who have been employed by the MLs have been leaving rural areas. This is very damaging for patients, particularly where continuity of care is concerned. The recent announcement of the PHN boundaries has hopefully reduced some of this uncertainty.

It is understood that PHNs will only provide frontline services where there is ‘market failure’. The simple fact is that – especially in more remote areas – there is frequently not the population base to provide economic viability for a general practice, a community pharmacy or an allied health practitioner.

State and Territory Governments also find it hard to provide such areas with services, partly because they struggle to address the politically sensitive issue of acute hospital care. We now have areas where salaried or sessionally paid practitioners provide the primary care.


The emphasis on ‘local’ is threatened by the increased size and spread of PHNs. For many rural and remote MLs the previous spread was only just manageable or was not working well. It is not just the logistics of managing distance, it is that priorities change. Known practitioners who are leaders and innovators are no longer influential and policies also get enacted variously as one moves across vast distances, groups and populations.

Despite the size of the PHNs (just one each for the non-metropolitan parts of WA and SA), it is essential that local communities and clinicians have a genuine say in the management of their health care, so that health services are responsive to local needs. This is a real risk in the new arrangements that will need to be managed. It is likely to be costly and create inefficiency as the new organisations and staff try to bridge even greater distances and communities.

Tendering and funding

We also have concerns about the possibility that large national organisations or State health authorities might win some of the tenders. We do not believe that jurisdictions or health insurers are the best bodies to run PHNs in rural areas. It is not only their ‘size’ that is problematic. Jurisdictions have competing priories that have made it difficult for almost all of them to run community health/primary health services in the past. It is not likely this will change. Similarly, health insurers do not make their money out of rural or remote Australians – the rate of insurance is much lower, as are incomes, and the level of chronic disease and its antecedents greater. The notion of local knowledge, experience and even capacity is problematic for insurers because of their lack of experience with this ‘market place’.

It is vital that the tender process looks at local credibility, experience and evidence of success in activities that the PHNs will need to undertake. People in the areas of greatest need often have less capacity to develop competitive applications in a tendering process. In that sense, there is a risk that some rural and remote communities’ interests will not be represented or given due consideration in tendering processes and therefore lead to an unfair allocation of resources.

It is critical that PHN services are developed through consultation with local communities, services and practitioners that already exist. One of the key strengths of health services and practitioners in rural and remote areas is their flexibility and the ease with which they can adapt. The NRHA is similar. We exemplify in our wide range of membership the breadth of roles and leadership required for primary care. It is not just general practice. Even where GPs would be the most desired practitioner, we often do not have them. Remote area nurses, Aboriginal health workers, visiting or outreach services, small local hospitals or Multi-Purpose Services are often the only or first point of care. PHNs will need to nurture this combination and help them work together.

The NRHA is keen to assist with the transition to PHNs through its member bodies, through the practitioners who belong to those bodies, and through the rural and remote communities that we are close to and from whom we hear concerns.

1 Professor John Horvath AO, March 2014. Review of Medicare Locals, Report to the Minister for Health and Minister for Sport;$File/Review-of-Medicare-Locals-may-2014.pdf

2 National Health Performance Authority. Healthy Communities: Australians’ experiences with access to health care 2011-12, released 20 June 2013, including associated media information and supplementary data.

3 NRHA and ACOSS October 2013. A snapshot of poverty in rural and regional Australia.

The image used in this post was produced by the Darling Downs South West Queensland Medicare Local


(Visited 64 times, 1 visits today)