Primary’s serious tilt at IPN should benefit most GPs

7 minute read

TheHill

By

Jeremy Knibbs

Malcolm Parmenter’s defection to Primary will pressure the government to get its act together on health funding

What a difference a couple of years can make in business.

Two years ago, Primary Health Care was approaching pariah brand status in general practice. Now, the appointment of former IPN boss Dr Malcolm Parmenter confirms Primary’s serious intent to engage strategically and meaningfully in the future of general practice.

Two years ago, Primary Health Care was approaching pariah brand status in general practice. Now, the appointment of former IPN boss Dr Malcolm Parmenter confirms Primary’s serious intent to engage strategically and meaningfully in the future of general practice.

IPN, owned by Sonic, would have to have been shocked by Parmenter’s decision to leave for the long-time direct competitor. Indeed, Primary’s chairman, Rob Ferguson, seemed surprised the company managed to snag Parmenter.

Ferguson told The Australian newspaper that he had “formed a view that it was hard to recruit from within the sector because of the competitive nature of the industry. I didn’t think people were prone to move”.

And people such as Parmenter aren’t. He’s wizened, considered and a loyal trooper. He has spent much of his corporate career building IPN, which has for years been the upmarket competitor to Primary’s mainly bulk-billing portfolio.

Parmenter believed strongly in what IPN was doing and was committed to the development of a business that had, as a strategic pillar, the betterment of the life of GPs, along with the company. He’s a brand in himself for the work he did building and positioning IPN.

Above all else, though, he’s a GP. He’s been there and done that. He has experience and learning that very few senior commercial managers in healthcare can demonstrate.

So why did he move?

Parmenter isn’t saying. He is being kept under wraps by his new minders until he starts in September. We presume he is serving out a well-delineated non-compete period. In this period it’s not legally, or commercially, wise to say anything.

But the move and his likely reasons are important for a whole host of reasons to any GP who is thinking of going down the corporate path.

There are a few reasons that would have made the jump attractive to Parmenter, despite his many years spent developing IPN personally:

• The money is pretty good at about $1.6 million a year, plus bonus. It would probably be up to double what he was getting at Sonic as the head of  Clinical Services.

• He’s a much bigger fish in a smaller, albeit not unsubstantial, pond. Sonic is huge and global. At Sonic he was a middle manager in the scheme of things. At Primary he’s the boss. Well, he’s the top manager, reporting to a board, and facing off as the lead person in a public company. In this role he can decide and implement with much more impunity.

• As the boss of Primary, he is in charge of a multidisciplinary business that encompasses not just corporate primary care, but, specialists, pathology and diagnostic imaging. There are new challenges in running such diverse portfolio.

But the key reason Parmenter may have left, from what we know of him (a few of us at The Medical Republic have engaged with Malcolm off and on over the years), would have to be a real worry for IPN. That is, Primary is now sufficiently committed to what Parmenter is committed to, in terms of GP engagement and healthcare service delivery. And Primary is ripe for transformation into a business driven by a purpose that, at its core, is good for Australian health.

Primary previously did not have that feel as a brand, even though most recent CEO, Peter Gregg, has done much to start turning the business that way. We doubt Parmenter would have moved unless he genuinely felt the Primary board and senior management were committed to this different future, and, perhaps, to some other interesting strategies we are yet to see.

This all means that the competition between IPN and Primary should intensify quite quickly. And that should be very good for general practice. Notably, Primary has already started its upmarket brand in Health & Co.

As upset, initially, as IPN and parent Sonic might be, they won’t be standing still for long to ponder the implications. Under Parmenter, the Clinical Services division of Sonic was already pushing the boundaries of changing the health system by organising significantly for a future that embraces the Medical Home, capitation and comprehensive chronic-disease management via the GP network.

Sonic will do all it can to maintain its lead with IPN in technology and in mixed-billing servicing.

With Parmenter at Primary, the march towards this future will no doubt scale quickly.

The very presence of Parmenter at Primary will be a huge reassurance factor for GPs contemplating a move into the corporate sector, and may go a long way to resolving Primary’s current recruitment and retention issues. It would be interesting to try to calculate the value of what Parmenter’s brand might achieve here for Primary.

Primary pushing alongside Sonic is going to put a lot of much-needed extra pressure on the federal government to get its act together and actually commit properly to evolving a funding model to achieve outcomes via concepts such as Medical Homes.

Combined, these corporates have a reasonable degree of political sway. Witness the government cave-in last year to the pathology divisions on bulk billing. Now both companies see a future in Medical Homes and are structuring for that future.

The government’s current healthcare strategy could be summed up as “cost cutting, with the odd platitude to quality outcomes via things like Medical Homes”. Whether IPN likes Primary catching it up or not, there isn’t any question that together they create a powerful reason for GPs to believe that a more-effective funding mix is on its way.

IPN and Sonic have done much to push the technology boundaries in helping the delivery of outcome-based funding through things such as Best Practice and MediTracker.

While at times they can also retard progress in healthcare for commercial reasons (eg, interoperability and secure messaging), on the GP front, both are pushing strongly for technology efficiencies at the GP, and the patient, level.

Although Primary no longer owns MedicalDirector, its agreements with the new private equity owners means Primary has leverage with technology as well.

One thing which will slow a move towards better funding models, however, is the lack of data the government has to work with. In New Zealand, the data coming out of the patient management systems is comprehensive and live, and is used to target funding in both in social and geographic terms. The data also moves well between primary care and allied health, something that MediTracker is trying to do.

IPN is pushing the boundaries in this respect through Precedence Health’s MediTracker product, and, to some degree, through Best Practice. Best Practice is about to move in a big way into New Zealand and take on the dominant provider there, called MedTech. To do that, it’s had to write a lot of additional routines to handle the additional data reporting requirements of the New Zealand system.

So all the elements are out there, and in some respects they are starting to come together. Technology, by rights, should make the system a lot more efficient. This is important because more money is needed, and anything that helps ameliorate that will be welcomed by the government. But the government isn’t really watching the technology carefully and helping in this respect. Not yet, anyway.

Parmenter’s move is a final aligning of the major corporate medicine providers in a way that will be hard for the government to ignore. Both these corporates are gearing themselves for a funding model based on Medical Homes. That’s a model that’s better for patients, and should be better for GPs. That’s if the government can be convinced to fund the model, as it’s likely to be more expensive, at least in the short term.

It’s a lot of change. Moving to mixed funding will be hard at first for GPs to forecast and make their businesses work.  This makes the change scary. But all change is scary, and at least it’s change that is moving in the right direction.

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Glenn Rosendahl
Glenn Rosendahl
7 years ago

I once worked for Primary. One of the first things I noticed – on my first day – was that the printer started printing instantaneously, when I hit the ‘print’ button. Every time I hit the print button. No wasted time there. But there was one helluva-big waiting room. Two corridors lead to the consultation rooms. Between that corridor was the ‘reception desk’. Behind it, on a bench against the wall, the line of assignment forms. One walked behind the desk, picked up the next assignment form, called out the patient’s name, waited for them to come – from what could be up to 20 metres away – and lead them to your room. However far down the corridor it was. That was wasted time. On the staff-room wall, every month, was a page with the previous month’s billings listed. Under each doctor’s name. We knew how our billings compared with our colleagues. It was a small room. A single small table with about 4 chairs. Not a place to congregate. Perhaps we were not supposed to.
I got a reputation for dealing with the ‘druggies’. I knew I had, because when I called one in, I discovered the other doctors – having heard the request for a narcotic – simply handed the patient the assignment form, having written my name on it, and told them to put it back in the queue. They were to see me. Yes, I knew how to deal with them. I listened to their spiel, they did not get the script. They did not come back. But it took time to do that job. The more time you took, the less money you made.
There was a GP in a sister clinic who routinely saw about 75 patients in a shift. The less time you took, the more money you made. For yourself – and the clinic. So why was I valuable? I presume it was because – in my final year of medical school – I had taught myself to touch type. My notes are readable, cogent, succinct. I expect they were valuable for accreditation. I don’t know for sure, I was never told.
The corporates were the product of a Labor government’s initial obsession with bulk-billing. Neal Blewett considered that private medicine would ‘whither on the vine’ with the introduction of ‘Medicare Mark II’. Medicine under Labor would be egalitarian. Same price for rich and poor. Zilch. But doctors – specialists and GPs (myself included) – continued to charge gap fees. I suspect (I cannot prove) that the bulk-billing corporates arose in a negotiation between Labor politicians – and some clinical entrepreneurs, prepared to put up some money on gamble. The result was – in its introduction – a new form of general practice. 10 minute consultations that were on appointment, but vertically integrated pharmacy, pathology and imaging. A requisition or script begun in minute 8 would have the patient out the door by minute 10 – with a repeat visit booked in almost every case. A much better punt than you could ever make at the races.
It was the politicians who were diddled. Hawke finally understood the problem. A decade later his imposition of a co-payment cost him his job as Prime Minister. Two decades later, Tony Abbott’s attempt to impose a co-payment had exactly the same effect. So now we are to be forcibly enlisted to run ‘My Health Homes’. Patently the government is interested in cost containment. The corporates are now interested in a business model that will provide competitive advantage over smaller clinics – in the name of ‘quality of care’. It is my prediction that the ‘Care Plan’ model will supercharge as clinics for the interval management of chronic and complex illness – on a three tier strata of complexity and clinical gravity – essentially and fully run by nurse practitioners. There may – initially – be a skeleton staff of general practice clinical supervision. Other GPs will look after ‘odds and sods’ in short consultations, to service the needs of the ‘walking well’, to service the needs of the ‘walking well’, and the incidental care of the ‘registered patients’.
This model may have the advantage of a relative economy in cost. But a major problem of how will remuneration be apportioned to the centre’s GPs.
At least, that is the plan. Loyalty will be transferred from the GP to the clinic. you will be seen, by appointment, with the nurse practitioner. Or the GP who picks up your assignment form from the queue. How well Australian citizens will take to it, remains to be seen.
How will private primary care compete? ‘Specialist-primary care’ privately billing clinics for those who want that form of care, who are prepared to pay? Or copy the ‘big corporate model’ as best as one can?
It will be ‘deja vue’.

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