Super Clinics little more Than a Sick Joke on the Taxpayer

By Judith Sloan, “The Australian,” April 15, 2014

WE were told they would be super. Bulk-billed services, out-of-hours care, one-stop shops for medical and allied health services. And all located in areas of need where the provision of general practitioner services was clearly inadequate.

Labor took the dream of GP Super Clinics to the 2007 election. Notwithstanding the wholly unimpressive start to the program, the dream was re-promised in the 2010 election.

There were to be 64 clinics in all. They would relieve the pressures on public hospitals. They would also cater for the special needs of patients with chronic conditions. What was not to love about the GP Super Clinics?

As it turns out, quite a lot. In keeping with other Labor thought bubbles, the GP Super Clinic scheme has run over budget and over schedule. It has been a politically motivated shemozzle in which taxpayer funds have been frittered away in an almost completely uncontrolled fashion.

Before I list off the litany of disastrous features of the scheme, let us return to basics. What really was the rationale for the government funding these clinics in the first place?

Notwithstanding that most of the income of general practitioners is sourced from the government, via Medicare rebates and other funding, GP practices have all the hallmarks of private small businesses. The GP Super Clinic scheme was a completely unjustified intervention in the private market for GP services.

For those owning and running these practices — note that GPs can also be employees or contractors — decisions have to be made about location, premises, staff, insurance, regulatory compliance, attracting customers and the like, just like any other small business. And there is no guarantee of success.

To be sure, there have been parts of the market that have been underserviced by GPs, just as there are parts of other markets underserviced by dentists, lawyers, accountants, motor mechanics and so on.

There are relatively fewer GPs in parts of rural and regional Australia, for instance. Foreign trained doctors have been filling this gap for many years. But as the number of medical graduates from Australian universities has increased — nay, exploded by doubling in a decade — the locational imbalance of GP practices has begun to diminish.

Against this backdrop, the Labor government decided to spend some $650 million subsidising the building and operation of 64 GP Super Clinics. This is more than $10m a clinic. There was an emphasis on bricks and mortar, which is generally not a first-order issue when it comes to operating successful GP practices. But, of course, shiny finished buildings provide photo opportunities for generous politicians in marginal electorates.

And here’s another thing about the scheme. Rather than ask for the advice of bureaucrats from the Department of Health and Ageing to pinpoint areas of urgent need, the task of establishing the location of the Super Clinics was undertaken in the minister’s office.

This, more than anything else about the scheme, gave the game away — GP Super Clinics were a way of buying votes in marginal electorates, rather than a way of improving the provision of primary health care. In fact, the National Audit Office reported that half the Super Clinics in 2007 were in marginal seats; in 2010, the proportion was 43 per cent.

Problems beset the scheme from the very beginning. Grants were provided to state governments, universities, private operators and community groups. There were huge delays in the construction of the clinics and a number are still not finished. In fact, 10 have not even been started. At this stage, more than six years into the program, 40 of the planned 64 clinics are up and running, with another 14 still under construction.

But the delays have been only part of the problems. A number of the clinics promised to provide out-of-hours care, to bulk-bill patients and, in some instances, to employ only local graduates. Most of these pledges have now been ditched.

Indeed, many of the GP Super Clinics resemble standard GP practices. In some instances, there has been no net increase in GP services as doctors have simply relocated within the area.

But here’s another appalling feature of the program. Even though the operators of these GP Super Clinics have entered into 20-year contracts with the commonwealth, it turns out there are no effective means by which the government can enforce performance standards. And, if that is not bad enough, the ownership of the assets is unclear.

The standard practice for such an arrangement would be BOOT — build, own, operate and transfer. But whoever oversaw the design of the scheme forgot the T — there is nothing in the contracts that ensures that the assets will be transferred back to the commonwealth at the end of the contract period. In effect, the taxpayer will have funded a fully kitted out facility that is owned by the operators, in perpetuity.

So where does this leave the current Health Minister, Peter Dutton? He is on record as being mightily unimpressed by the whole scheme, saying: “It was like giving taxpayers’ money to help set up a McDonald’s, when one privately funded McDonald’s already existed on the diagonal corner opposite. These clinics cannibalised existing doctors’ practices and undermined the opportunities for young doctors to buy into the practices.”

For those clinics that have not been constructed, the government should be able to suspend further funding. But for those clinics that are up and running, the government has no option but to honour the contracts entered into.

The GP Super Clinic scheme is another example of a poorly designed and badly implemented project undertaken by the Labor government which has wasted scarce taxpayers’ money. If members of the public were not wary of promises of you-beaut new services provided courtesy of the government, they should be now.