Whither the PHN? by David Guest
Company Boards are ultimately responsible for the direction of the company and are the body to which the Executive answers.
Australia’s Primary Health Networks (PHNs) were originally envisaged as local organisations that knew their local area (a large one) and its needs and could tailor their programs to the population’s individual circumstances, aligning this with clinical capability. They arose following a review of their
predecessors, the misnamed Medicare Locals, in the view of
Prof John Horvath who reported on their performance in May 2014.
The theory was that by devolving Sten, CC BY-SA 3.0, via Wikimedia Commons a lot of decision making from This is a common approach for most PHNs. Canberra to 31 geographic areas, each The North Coast PHN is structured such having just under a million people, the that its members are local organisations Federal Government could be more and not individuals. Initially these member efficient in getting value for the nation’s organisations had a strong focus on, health dollar. Many GPs welcomed this and relationship with, general practice. approach and looked forward to having a However the number and influence of GPclose working relationship with their PHNs led organisations within the membership to improve the planning and delivery of has diminished in recent years. primary care. One criticism of the Medicare Locals was that, on occasions, they were direct providers of services and thus in competition with other similar providers in their areas. The conflict caused by this direct competition was deemed unfair by the Coalition government, which traditionally prefers a market-driven approach to funding government services. PHNs were thus designed to only be commissioners of services and provide no clinical services directly themselves. PHNs are lean organisations that focus on local issues and how to address them through commissioning local services. They concentrate on the government’s priority areas of mental health, ATSI health, population health, health workforce, digital health and aged care. There is only limited funding for other activities that are designated flexible, and innovation funding. PHNs eat their own dog food. The Federal government contract to run a local PHN is put out to competitive tender. In our area the recently rebranded Healthy North Coast was the successful tenderer. HNC is set up as a company limited by guarantee and is registered as a charity.
The primary responsibility of companies’ Boards of Directors is to the continuing viability of their organisations. To maintain financial viability they have to protect their income base. PHNs derive the vast majority of their income from Federal government grants. As such the PHNs are ‘captives’ to the Department of Health and essentially fit the model of being quangos. The PHNs obtain local input by undertaking their own assessments as well as from their Consumer and Clinical Councils. Of course, getting consumer input is historically a difficult task in health and education and is often just tokenistic. Clinical Councils were warmly embraced by GPs initially and many looked forward to a better working relationship with allied health and the secondary health sector. However, as time has passed GPs have found that many of the problems identified by Clinical Councils cannot be addressed by their local PHN because the issues raised were deemed out of scope or exceeded the PHN’s discretionary budget, or simply required more manpower than the PHN had available.
Divisions of General Practice were the first government funded local organisations whose focus was on local primary care. Their Boards were composed solely of GPs. However, after a decade it was recognised that companies needed Board members with skills outside of medical practice in areas such as finance, management and governance. Directors with these skills were appointed directly by the Board and not elected by the membership. These arrangements have been further refined over the last ten years and an increasing number of Australians from business and the public sector are now enjoying a second career as Board members of charities such as PHNs as well as other publicly traded companies. The burden on the membership in reviewing an increasingly large number of applicants for Board positions have been addressed by some PHNs through the mechanism of Nomination Committees. Unsuitable candidates are weeded out and the membership organisations have only a small list of applicants to consider for election as Board members at the Annual General Meeting. The downside of this arrangement is that general practitioners who previously would have been a GP organisation’s nominee do not get past the Nominations Committee. In essence the Nominations Committee has become the de facto membership and this has further weakened the influence of general practice in the directions of their PHNs. Some commentators have argued that these arrangements have resulted in a flawed governance structure for Primary Health Networks. The frustration caused by these various factors has now come to fruition and many GPs previously on PHN Boards and Clinical Councils have walked away. GPs
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