Financial viability of super clinics questioned

GP super clinics might not be a viable long-term business proposition, according to a leading health economist who has warned that the Government may be forced to prop up services in the future.

Speaking at the recent GP Super Clinics Conference in Sydney, Professor Jim Butler, director of the Australian Centre for Economic Research on Health, criticised the controversial $275 million program which has seen operators receive multimillion-dollar grants in exchange for guaranteeing services for 20 years.

Given the private sector had not established equivalent services, this could indicate super clinics may not be the best solution to workforce shortages, he said.

Patient throughput could be lower than anticipated and the super clinics might ultimately not be viable.

“Will the Government enforce this contractual obligation, forcing the clinic to run at a loss for 20 years?” he asked.

“Politically, I can see that there would be a lot of pressure to step in and underwrite these things.”

A spokesperson for Health Minister Nicola Roxon said independent financial advice had been sought on all bids, and that each clinic was expected to be viable without recurrent Commonwealth funding within four years.

The criticisms come just weeks after the Government announced funding for a further three GP super clinics, in addition to the original 31.

Honorary Professor Gavin Mooney, professor of health economics at the University of Sydney, said the move was difficult to comprehend, given the National Health and Hospitals Reform Commission had recommended the smaller format of comprehensive primary healthcare centres.

None of the clinics are yet fully operational, including the Palmerston clinic in the Northern Territory, which opened its after-hours clinic in December last year.