The case for and against urgent care clinics (so far)

Repeatedly blagging the media, the public and a growing chorus of experts over any evidence base to support a near $1bn investment in UCCs is wearing thin.

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On spec urgent care clinics (UCCs) seem like a good idea.  

Create a regional network of “in-between centres” that provide a level of care between what you might get at a GP practice and what you can get at the low-acuity end of an ED. Give them extended hours to create an alternative option for the public to going to an ED, especially when GPs aren’t open, which is usually after about 5pm. 

For advocates, there are plenty of overseas countries already practising a model that looks similar to what we seem to be attempting – New Zealand, Israel and Canada in particular – where the data suggests they are reducing pressure on hospitals and patient populations who can get significantly stressed about access to such services. 

But between a good idea and pointing to some overseas countries that seem to be doing the same thing with success, and the reality of what is actually happening in Australia, or might yet still happen, there is quite a bit of complexity, and unfortunately, a lot of politics. 

Politics triumphed over the complexity this week, and it’s starting to become a worry. 

This week when our federal health minister was asked perhaps the most pertinent question he should be asked when doing a press conference announcing new UCCs, at one of these new centres on the south coast of NSW – “do you think you should do what a lot of experts are saying and wait for more data and evidence of value before continue to charge ahead on the idea?” – he blagged it. 

ABC Illawarra journalist Melinda James asked Mark Butler, very cleverly and pointedly, “are you saying that you’re satisfied with the data you’ve seen that has not yet been made publicly available, that these urgent care centres are doing what they’re intended to do and are worth the money?”  

In this simple question, James was calling out the whole program for it biggest issue. 

This was Butler’s chance to reassure everyone that, although there is no publicly available evidence or data to support a close to $1 billion investment in one of our most serious and persistent system and patient problems, it was definitively on its way, would likely be available within “x” timeframe, and maybe even, the preliminary data looks okay. 

But this is what Butler said: 

“They’re operating even better than I’d hoped. They’re incredibly popular.  

“I take the point from the RACGP and the Grattan Institute – this is a new model of care for Australia. 

“It’s very common in other countries to have something that sits somewhere between a standard general practice on the one hand, and a fully equipped hospital on the other. 

“It’s going to be independently evaluated. But there’s a huge demand out there, including from state governments. 

“All of the premiers … were very keen for an expansion of this service because they know it’s relieving pressure on their pretty heavily burdened hospital systems.” 

The overall message here seems to be, don’t worry about the data everyone, patients love it, it’s working in other countries, and somehow, without any data, the states reckon it’s working a treat as well.  

So full steam ahead. 

Possibly the most worrying part of the answer was “It’s going to be independently evaluated”. 

Que? 

That isn’t being done as we speak, and we won’t be seeing it soon. 

The big problem we have here is that in a vacuum of no independently conducted evaluation – and there is a very good argument to suggest that any work paid for and commissioned by the federal government in the context of how they are treating this program from a political perspective, is not really going to be independent – anyone can say and do what they want.  

Many are and it’s not just the politicians spouting concepts and ideas like they’re hard data but lack any supporting evidence base.  

At least the RACGP and AMA do prosecute the argument that as a completely new idea and model in a healthcare system like no other in the world – yes, not like any of those countries the advocates point to and say “look it works there so it will work here” – we need an independent evaluation and evidence that UCCs are truly doing what people say they do, or, at least, want them to do. 

But that might be because the RACGP and AMA just don’t like UCCs because they see them as largely unfair competition to any nearby GPs by GP corporates, and possibly much worse. 

Perhaps they see UCCs as a stealth attempt at subsidising a failing bulk-billing paradigm via a form of block funding – outside Medicare fee-for-service in lump grants – for selected GP corporate groups.  

The RACGP and AMA suspect one reason the government might be building UCCs so fast is an attempt to drive a wedge between the public and practices that do not bulk bill. 

Both arguments might turn out to be valid. 

But exactly like the arguments being made by the federal government that suggest the UCCs are working, without an evidence base, the AMA and the RACGP also have no evidence for what they are suggesting might be happening. 

It’s getting very messy and within that mess it feels like the actual system and patient objectives might be starting to get lost. 

Outside of the $1 billion in investment in something we have no clue is doing what we are told it is doing, there are a lot of reasons to expedite a truly independent and thorough examination of what is actually going on. 

UCCs might actually be a good thing. They might be a good thing in ways we don’t even understand yet. 

Maybe block funding general practice to do more bulk billing in certain socioeconomic areas, creating more competition in those areas, will turn out to be good in some respects. 

At least the argument the RACGP and AMA have that some big corporates (often private equity-owned corporates) are being artificially funded to compete with non-corporate GPs in order to put downward pressure on non-bulk-billing practices in certain regions, doesn’t really need a lot independent evaluation to prove.  

You just need to look at where a UCC is and what practices are around it. 

This is happening to some extent, almost certainly. 

But what the RACGP and AMA want isn’t necessarily what patients want. 

If you talk to any of the corporates who are running these UCCs, unsurprisingly, they are going to give you some data off the books which confirms what Butler told that South Coast ABC journalist. That patients really like UCCs. 

But what’s not to love if you’re a patient?  

UCCs are free and increasingly, overtly so, and they’re easily accessible after hours.  

Of course, patients love UCCs. 

So, Butler, anecdotally at least, isn’t lying when he says UCCs are “popular”. It’s just that being “popular” isn’t the stated reason for UCCs existing.  

Being popular of course, is great in a political context, which almost certainly means more blurred lines in this program. 

The other thing a UCC operator will tell you is that they employ a lot of GPs in a UCC. The numbers I’ve heard quoted are significant. 

So, what is the RACGP and AMA complaining about? Patients love them, they do make after-hours access to care much better where they exist and they employ lots of GPs. 

There may not be a simple answer to this. But one thing we are probably witnessing is the RACGP and the AMA making an overt stance against corporate GPs. 

Corporate GPs represent somewhere between 20% and 30% of all general practice, depending on your definition of a corporate, which means that the RACGP is essentially coming out against the companies that provide work for – we are not going to say employ, of course, in these dark payroll tax times – about a third of their constituents. 

Unquestionably, the corporates that have secured UCC contracts are doing well out of them. 

ForHealth, which was previously Healius Medical Centres, and before that, Primary Health Care, has 31 contracts so far of the initial 80 centres proposed – there are another 29 being proposed now, so we are going to assume that ForHealth might end up with about 40. 

It’s not easy to tell because ForHealth is owned by Private Equity (who pride themselves on being private) but it looks as if the UCC part of the ForHealth business may have meaningfully changed the value of that business when it goes up for sale.  

Until UCCs came along, ForHealth, which was acquired by PE in mid-2020 for $500 million, seemed to be struggling to do what PE does and improve value enough within five or so years to flip the business for a decent multiple of what they acquired it for (two times is a standard base they aim for but sometimes things go much better). 

When they acquired the Healius Medical Centres, $500 million looked like a pretty big price given how many legacy issues the business had with ageing doctors, staff morale, business structures and doctor contracts, technology, and most acutely, potential payroll tax liabilities. 

But today, the market talks about ForHealth like it might actually be flipped for a decent premium. 

Did UCCs create that turnaround in the company’s fortunes?  

Here’s a thesis for how they may have: 

• Revenue-wise, if you look at the 31 they have and the potential 40 they may end up with, it’s quite a bit of additional money coming into the coffers – maybe up to $80 million per year, over three year contracts. And that’s just the block funding and contract with DoHAC. Never mind what they earn when people start swiping their Medicare cards. 

• Cost-wise, a lot of the UCCs are in existing ForHealth centres that have geared up for work that isn’t really that different from what many of their existing centres offer, so the margin on their contracts is likely to be good. 

• If you accept that UCCs are popular then surely where ForHealth has a co-located UCCs with a normal ForHealth GP centre, there is likely to be a halo effect for that GP component of the centre, bringing in even more business. 

• Essentially Mark Butler is chief cheerleader for ForHealth centres, which isn’t a bad way to market yourself across Australia – have you noticed just how many times Butler makes a UCC or general GP announcement and there is a ForHealth logo in the background (we have the stats on this for next week’s story next week, and it’s a lot). 

• The way UCCs are being spun politically at the moment, any good salesperson wanting to flip ForHealth is easily going to be able to make an argument that their current three-year set of contracts will be renewed because this thing is “popular” so it’s all just going to get bigger and bigger. 

If the RACGP and GPs in general are angry in any way that the federal government is in some way underwriting a major corporate to get flipped for much better money in the not-too-distant future (which seems to be the case) they would be missing the point quite a bit. 

That ForHealth and its leadership have secured so many contracts and made them work so well for the valuation of their company (if that has actually happened) would just be good business and in some ways, good luck to them. 

The big problem everyone has here is not a corporate creating a lot more value for itself from some government contracts.  

The big problem remains, is this concept working or not? 

If it is working, then being annoyed at ForHealth in any way is a sideshow. If it is working, anyone will be able to argue that the ForHealth money and other money being thrown at other corporates for UCCs is being well spent.  

And if it isn’t working, you still can’t blame ForHealth or any of the other contractors. It wasn’t their idea. 

When the government announced another $227 million in funding in this year’s budget for another 29 UCCs there was a disturbing story in the Guardian which quoted a UCC insider anonymously detailing what everyone is actually worried might be the real problem. 

If you look up what data the government does quote about why UCCs are working you will get this set of numbers: 

• There have been almost 400,000 visits to Medicare UCCs across Australia; 

• Almost one in three visits have been for children under the age of 15; 

• Over a third of visits have been outside of normal working hours; 

• Half of all patients who have presented to UCCs say they would have otherwise gone to an ED. 

A GP working at a UCC told the Guardian that he believed patients felt obliged to tell surveys they were handing out that they would have attended an emergency department because they know that is what the clinics are for. That feels like a pretty safe assumption. 

“More than 50% of patients I see come in for minor stuff that would never have actually gotten them to the hospital’s doors,” the GP told the Guardian.  

“We don’t need new clinics being built but we need to increase access and availability at the clinics that are already there.” 

So, we are already getting anecdotal evidence that the data we are pushing on everyone to justify an aggressive timetable on the UCCs is wrong and a pretty good reason why it might be. 

But the most impactful thing this GP is suggesting is that the reason the UCCs are working is our problem with general practice access, not ED access.  

If that turns out to be true, the reason for the UCC program being sold to us by the government will be fundamentally flawed. 

Which is why so many experts came out soon after the $227 million budget announcement and said we need to stop and get the data before we spend more and more money on something we don’t know is working. 

Possibly one reason why Mr Butler chose to blag it this week was the actual official timetable the government has given us for properly evaluating UCCs. 

Mr Butler does know the timetable his department has for evaluating UCCs, so why didn’t he say it? 

Probably because the timetable is 2026 and it is not specified when in 2026. 

Let’s say, like most of these types of reviews it runs to the end of the due timetable and hits our desks late in 2026.  

That means the government’s plan is to keep rolling out UCCs madly for the next two and a bit years without a skerrick of evidence that they are doing what they are designed to do. 

When and if the government does get that independent evaluation the key measurements it will be looking for, per the Measures of Success plan approved for the project include: 

• UCCs reduce pressure on hospital ED presentations at partner hospitals;  

• There is a change in consumer behaviour over time to use UCCs where available instead of EDs for urgent non-life-threatening conditions; 

• UCCs, PHNs, Healthdirect, jurisdictions and the health ecosystem have established an effective coordinated care option for people with urgent non-life-threatening conditions; 

• UCCs are cost-effective. 

It’s very hard to see how a good consultant (can’t believe I’m saying that) properly briefed can’t get inside all our existing centres and get some of this data out within at least six months. 

It will need to be a properly briefed and completely independent group because sorting out actually what is happening in those UCCs with patients isn’t going to be easy, especially the ones that have co-located GP groups.  

How are they really triaging the patients between their GP component and UCC component? What do you have to do to overcome the bias surveying a patient will likely play to and actually work out if a patient would have ended up in ED? What is happening to practices around one of these clinics in terms of revenue and patient traffic? And so on. 

But let’s just start with this.  

Does anyone see a problem with a measure of success being cost-effectiveness on a $1 billion-plus project when you aren’t going to measure that until the end of the third year of the project? 

I don’t know about you but if the good people at the PE firm behind ForHealth decide to float the company soon, instead of selling it privately, I think I’m going to invest, at least in the short term.