If the RACGP had shareholders, would they be happy with this annual report? Plus, the college responds on JobKeeper.
Dear RACGP Board,
I am of the firm belief that the RACGP does a lot of important work which is good for GPs and good for the community and that within the organisation you have a lot of committed and good officers and members, who have good intention and give over much of their time to improving the lot of GPs and their patients. I note that some are paid for doing this, but many aren’t.
As you might be aware, I have expressed concern in the past that that the governance (and possibly even the constitution) of college is possibly no longer fit for purpose for what it is aiming to achieve these days, and that this problem reveals itself at times in some poor outcomes for members, which I assume would reverberate through to their patients in some manner.
I refer to your latest annual report to members published about a week ago.
Your report is full of infographics shouting out growth in just about every number you could possibly think of. It sings of a continuing track record of going from financial strength to strength, and is full of narratives about good deeds and success everywhere you look.
Certainly, the college does a lot these days and I get that it is important to make sure you cover all your activities off, particularly acknowledging those people who have worked hard in carrying them out.
I also get that financial reporting is important in a report like this.
If you’re a member that is interested in a financially stable and successful member organisation, you may have one of the best ones in the country at the moment.
Your revenue is up an impressive 10% to $90.2m (impressive because we’re in a once-in-a-century pandemic hitting college members), profits are up 371% to nearly $7m (best surplus in history), cash at bank is at a record high of $93m (up a whopping 40%), property portfolio value is at a record high thanks to covid at $53.1m (up just over 8%), and the college’s rainy day “surplus fund” got its biggest single injection of nearly $7m to take it to an all-time high of just over $20.2m.
My discomfort arises largely around what isn’t in the report. That and how you continue to treat JobKeeper money.
Let’s start with the JobKeeper money because that seems the most black and white issue to get an answer on.
Why, in a year when the college is making record profits, has spent an additional $4m on its own members doing work for the college, and therefore increased its labour spend overall, does the college think it is OK to keep taking JobKeeper payments? You seem to have had no issues at all keeping staff. You in fact spent more on labour. A lot more.
I refer to your financial results above, to the increase in the number of people you have employed from year to year, your increase of nearly $4m to fund more members working for the college, your record profit (which you call a surplus) and your decision even to store another $7m of surplus in your reserve fund.
In what world do you not give back at least some of JobKeeper to the government based on all these results?
And, in what world do you think that the federal government will take the RACGP seriously as an organisation that is supposed to lobby for more money for its members if it doesn’t give some or all of this JobKeeper back?
In a recent consumer press piece by the Michael West media group exposing many medical colleges for making increased profits while keeping JobKeeper one of the excuses to emerge was that “all the colleges are doing it”.
The other excuse you used when you kept JobKeeper in the previous year, despite not needing it given your profit result then as well, is that times might be tough one day, and you are saving it for that “rainy day”.
In the context of the history of the college, this argument is misleading your members and irresponsible, in my view.
The college has never been so cashed up and so stable in its lifetime. Eight million more in the context that you are claiming you need to keep it is meaningless and damaging to the brand of the college and to GPs.
If the consumer press start running with this story again, as they have in the recent past, don’t you fear that the damage to the GP brand is likely to be far in excess of $8m?
You talk a lot about leadership in your annual report and spend some time reporting on your GP leadership program, which seems like a great initiative. What do you think keeping this much JobKeeper says to your members about leadership?
What logic could there be, greed included (I’m not saying you are greedy, just that even if you were, it wouldn’t excuse how dumb strategically it would be to keep it ), to be keeping any of this money, and I very much doubt that if you surveyed your members in your next census they would think so either.
Do you see any irony with you keeping $8.2m of JobKeeper in a year you are richer than you have ever been when your members told you in a survey you ran in early in your reporting period – your Health of the Nation report that they are very worried about their income? You making a lot more in JobKeeper isn’t going to make them feel better.
In the most financial and mentally stressful year of your members’ lives, do you think retaining JobKeeper, which you do not need to stay financially healthy, is a good play?
There’s an important segue here to my second big issue with this report and all its great numbers, which relates to the findings of your Health of the Nation report, your GP census, and your stated intention at the start of the last presidential term that the college would be listening much more carefully to their members and responding to their needs.
Your new CEO for the period, who is no longer with you for reasons which no one ever made clear, set this dynamic up fairly clearly when he says in his message that “The results of our member census … provided a benchmark to drive significant and visible transformation at the RACGP”. Key word here to remember I think is “visible” (he might have even said “transparent”).
Great, let’s move to the results of that census as you highlight them in your report.
To summarise, your members’ most important expressed desire is for you to advocate for them much better and the first and most important thing they want you to advocate better for is increasing their pay via getting the government to change their current stance on GP funding in the system.
Your members reinforce this message by saying to you that the next most important thing you could do for them as a college is be guided by their views.
To which your CEO has said, yes, good, it’s already starting to be transformational. He actually uses the word “transformational”. That’s got to build a bit of expectation among your members, don’t you think?
Could you explain to me and your members why then, after getting such clear cut views from your membership, and promising them all that you are a different college now, engaging and listening via new innovative engagement mechanisms such as your “members forum”, the college has not given any serious thought at all in the 164 pages of this important first annual report in this new era to measuring or benchmarking in some way the average income and profitability of their members (and probably their mental wellbeing) and trying to gauge in a meaningful way if any progress has been made by the college on behalf of its members?
All the numbers you publish indicate that you are very busy. They even indicate you are very busy doing various advocate activities per the below breakout.
But in all the representations to government committees and departments and all the reports to government and other healthcare bodies done by your 44 staff in your government policy relations and practice division (cost: well over $5m), in all the meetings in Canberra attended by your staff and elected representatives, in all the honorariums for members doing work for the college to work within the states’ framework and with other important influencing bodies, in all your lobbying and conferencing, and in the literally millions of media mentions in thousands of articles generated by your media and comms team totalling 38 people and costing over $3.5m per year in labour costs alone, there is nothing in the whole annual report benchmarking or measuring the outcome of what your members voted as their most important job for the college.
Why?
In the context of the college being richer than it ever has been, and swimming in so much money and cash that it paid its own members doing work for it an additional $4m in the year, do you or the board feel awkward in any way on behalf of your members?
I’m just spitballing as always, but it doesn’t sound like it from the annual report.
It looks like all your annual reports from the past.
Lots of activities, lots of numbers, a lot more money in the bank, and no measured progress against clearly stated aims.
It’s not unusual in business for companies to be forgiven for not really delivering on their objectives or mission statements if they instead simply rip it up in the financial stakes. It’s a universal human measure of success that can be seductive and comforting (unfortunately).
But for the college to poll their members on what they want from their college and get the results you got, which is to say, please be a strong advocate, and advocate first and foremost for better funding for GPs, and to have so little about it you can’t really report on it, while making so much money in the interim?
It feels like the college isn’t doing what your new (now ex) CEO and current president promised it was going to do and start listening seriously to their members.
How it perceives and engages with its members, and how it perceives and engages with the broader healthcare community, including, but certainly not limited to very important figures in government, doesn’t seem to have shifted much at all.
If you never report on what you commit to doing, people are going to notice soon, I think.
I think your governance setup might be keeping you all in some sort of endless time loop.
Are you seeing this or not?
If you really cared about what government thought (you should) I do not understand why you would shove JobKeeper in their faces so publicly, and most would assert, disrespectfully.
“Yeah, no thanks, sure we took in a lot more money than we told you we would need through JobKeeper to get though covid, but hey, it’s a lot of money and we might need it one day.”
Really?
If you go to number two and three on the list of what members want, guess what: no benchmarking or reporting at all, either.
Can you explain to me and your members why this isn’t just a huge fail on the three most important expressed desires of your members as surveyed by you?
You read this report and you are absolutely dazzled from page one by the reporting of numbers in infographics, charts and tables.
There are more than 100 charts, tables and separate infographic bolded blue numbers in the first 90 pages of the report. And while some of them are great and need to be in your report, as you surely do good work in education and other areas, none relate to your what your members actually asked you for.
Of course there are a lot of examples of numbers which I’m almost certain your members seriously do not give a hoot about but I suspect some of your employees might be a bit proud of working on. Here’s a classic:
What does 6.2m lifetime views on YouTube even mean?
I guess your financial numbers could make a member comfortably feel the place is never going broke again, which is a good thing given the history of the college, but through all 164 pages of the annual report, the most important number, as voted by your members in the college’s own census conducted in April last year – growth in average net income as a result of better advocacy by the college – isn’t anywhere to be seen.
One final, smaller complaint and question.
The complaint is that some (not all, by any means) of your numbers and assertions turn out to be inaccurate.
I ask because if you find just a few statements that are plainly false, or a few silly numbers, you tend to wonder about all the numbers and statements in a report which are not evidence based, referenced or audited, which most of the report is not, excepting for the audited financial statements.
Here are just few examples of some of your numbers or statements being wrong:
Medicine Today is a peer-reviewed privately owned Australian GP journal that has been operating in Australia for nearly 50 years, if you count its change of owners and name over the years (it was once Modern Medicine). It’s pretty hard to imagine someone just forgot it existed. How the college can make this claim given the long history of this very small but smart competitor is fairly surprising, and misleading in my view.
By the way, in syndicated readership research, in which all the publishers agree to participate in a single survey of readers, and which has been going for 35 years, Medicine Today gets a readership of 70% and the AJGP only gets 56%. Oops. That makes this statement look a little off.
In this instance I’m not going to dispute that somehow the RACGP got this result in a net promoter survey. But I am going to suggest that if they did, they may have gotten their methodology wrong. I say this because net promoter of the RACGP has been measured independently externally, twice in the past 3½ years using the right methodology and an independent list of GP college members exceeding about 700 in each survey. The scores in each survey were -50 and -17 respectively, so far from +35 that I smell a possible rat or at the very least a survey gremlin. The good news is that the college score is on the improve a lot between the two surveys done externally by an independent group. I guess.
Annual reports, especially for not for profits like the college, are hugely important mechanisms to communicate with members important detail on performance and progress, and the first annual report after an organisation has made substantive promises of change to its shareholders or members is a critically important report to get right.
Do you think that given your substantive promises to listen and change and engage members more that this report is honest to those admirable new goals for the college?
We put the three main points in this letter to the college before publication for a response – here it is in full:
Statement attributed to an RACGP spokesperson
- JobKeeper
Qualifying for JobKeeper payments, along with an extended period of cautious financial management and a senior manager wage freeze, saved jobs. We would not have otherwise been able to keep our full national team working to support Australia’s GPs through the COVID-19 pandemic when they were needed most.
We expect the pandemic to continue to impact operations in the coming years, and given the JobKeeper scheme has ended, reserves are likely to be drawn on to maintain stability amid ongoing outbreaks. The Board-approved reserve fund has been specifically established to help us weather very uncertain times. This will better enable us to navigate unexpected shocks, as we continue to put in place long-term post-COVID-19 strategies.
For the 2020-21 financial year, the profit from operating activities was just over $5.9 million, with a total surplus after tax of just over $6.9 million. In terms of assets, we are holding more than $93 million in cash and cash equivalents. While this is a substantial increase from the last financial year, it is not the case that we have money available to us to spend freely because the college has contract liabilities and services to fulfill. Almost $90 million of that amount is collected upfront as of 30 June. It relates to funds we have received either from members or the Government which we will pay out across the year for goods and services the RACGP is committed to delivering. This includes $37 million in grant funding for multi-year contractual commitments and $29 million in annual membership dues collected in advance for membership services performed throughout the coming year. So, it is not the case that we have money available to us to spend freely because the college has contract liabilities and services to fulfill. Our people are the cornerstone to meeting our commitments and this is why the JobKeeper income support was so crucial in helping the college steady operations through the uncertainty of the last financial year.
- Addressing your members’ needs as per your census results and other new engagement mechanisms you have introduced
The RACGP Census results were shared with members in April 2021, several months before the end of the financial or reporting year in question. We are working to deliver on what our members identified as their priorities, including advocating for better funding for general practice. We are keeping members updated regularly on the outcomes of the actions we’re taking, including via the engageGP forums which were introduced in direct response to member feedback via the census.
- Certain figures and claims in your annual report are erroneous and could be seen to be misleading
Medicine Today is written by doctors for GPs and selected specialists, whereas AJGP is aimed solely and specifically at specialist general practitioners.
Our NPS rating of 35 refers to the rating received by members who made direct contact with our National Member Services Centre in the past financial year and responded to a satisfaction survey after their contact. A total of 1,711 surveys were completed with an NPS of 35 and Customer Satisfaction score of 7.9.
