Primary Health Care’s new CEO, Dr Malcolm Parmenter, has signalled plans to add appointments and private billing after deciding strong GP recruitment is the key to raising profit margins.
The major operator of medical centres was midway through a five-year transition to offering more attractive contract models for doctors, Dr Parmenter told the group’s annual general meeting of shareholders in Sydney this week.
“To balance the value proposition, the revenue-sharing arrangements have increased in favour of the GP. These changes are also resulting in reduced working hours for the average GP in our clinics,” he said.
The former chief executive of IPN and Sonic Clinical Services, who took over the top job at Primary in September, said retention of existing GPs had firmed as a result of the changes.
But recruitment of new GPs continued to lag below target, especially for Australian-trained and -registered doctors, and the changes were putting pressure on margins, he said.
Dr Parmenter acknowledged Primary’s reputation as a tough workplace, established under the rule of its founder, Dr Ed Bateman, had been “an issue” in the past.
But the group was now undertaking a shake-up of its recruitment team and adopting simpler contracts written in plain English, with “greatly reduced or no restraints” on doctors signing on to flexible arrangements.
“Thirdly, the work environment we are offering GPs must evolve. Many GPs want to provide continuity of care for their patients,” he said.
“They also want to be able to grow their practices to a point where they can have some private billing.
“For this to happen, the ability to taker appointments is essential. Providing appointments is not only good business as it will attract more GPs, it is also good healthcare.”
He said the growth story for Primary’s medical centres business would come first and foremost from placing more doctors at existing centres with spare capacity.
Primary will open four new medical centres in the current financial year.
“Will there be any more? Definitely, but we need to have confidence in our recruitment ability first.”
Dr Parmenter said his experience indicated it would take 12 to 18 months before the new recruitment initiatives were “really firing”.
“Primary is, of course, in a much better situation than IPN was when I joined, with lots of spare capacity in our centres and lots of patient demand,” he said.
Dr Parmenter used the meeting to introduce Dr Tim Haggett, who was appointed in October as Primary’s new CEO of medical centres.
The UK-trained GP founded Gemini Health Services, a healthcare provider to the resources industry and remote communities, acquired by IPN in 2008, as well as Apollo Health, a network of clinics in Perth.
Dr Parmenter noted that other priorities included investing in health care homes – Primary has 11 practices in the federal government’s HCH trials – and other initiatives in chronic disease management.
He also said the group was still considering an expansion into Asia.
New GP recruitment manager Glen Brooks joined Primary in September after serving as IPN’s business manager for NSW West and the ACT.
In the current financial year, the group’s underlying net profit after tax is expected to be in the range of $92 million to $97 million, indicating hopes of an uptick in the second half to lift the result above the previous year’s $92.5 million.