Victoria’s primary care clinics face funding cuts in budget crisis

Victoria’s priority primary care clinics are bracing for state government funding cuts that operators have warned will slash opening hours or make the model unsustainable, putting more pressure on swamped hospitals.

The Age on Wednesday also revealed that the Royal Children’s Hospital was making up to 15 staff redundant in mental health.

Health services have separately been scrambling for savings to meet the Health Department’s proposed budgets as the government tries to control debt.

Former Victorian and NSW premiers Daniel Andrews and Dominic Perrottet joined forces in 2022 to announce primary care clinics.Credit: Justin McManus

Cutbacks are also reaching the state’s much-touted priority primary care clinics, which former Victorian premier Daniel Andrews and former NSW premier Dominic Perrottet jointly announced in 2022 as key planks of their re-election pitches after COVID-19 smashed the health system.

Twenty-nine clinics have opened in Victoria to take pressure off emergency departments, which have had an influx of patients who cannot access the dwindling number of bulk-billing GPs. Hospitals are funded by the states, while GPs are a federal government responsibility.

Three sources in the health sector, who did not have approval to speak publicly or spoke anonymously because they were fearful of repercussions, confirmed the clinics were bracing for cutbacks.

Providers were told in June that they could lose between 14 and 25 per cent of their funding, one operator told The Age. When providers said this was not viable, the state instead inked two-month contracts on existing funding levels.

Clinics do not yet know what their ongoing funding looks like but are expecting cuts when the two-month contracts expire in August.

The operators warned opening hours would have to be reduced, again, after cuts last year.

“We are risking [priority primary care clinics] being unable to do their jobs,” one operator said. “There comes a point where it’s simply not sustainable.”

Two operators also pointed out that reduced hours would make it more difficult to retain staff in the competitive sector and could lead to closures.

Health Department secretary Euan Wallace said in May that 7000 patients visited the clinics each day in Victoria. Data to November 2023 showed 53 per cent of patients would have gone to emergency departments if the clinics were unavailable.

The department has reviewed the clinics but is yet to make its findings public.

A parliamentary committee found the clinics reduced the number of emergency presentations, but it was not clear the model was sustainable because of a shortage of GPs.

“It is unclear to the committee how [the Health Department] is fulfilling PPCC staffing needs and how sustainable the model is,” the committee said.

It cited advice from the Australian Medical Association that patients with lower levels of urgency were managed quickly and easily at emergency departments. The association has said the most significant issue was chronic underfunding of GPs, reducing access to help over time, and increasing the level of care required down the track.

A spokeswoman from the health department said the clinics’ numbers spoke for themselves, with 444,766 Victorians receiving accessible care while taking pressure off busy hospitals.

“We know [the clinics] are making a real difference in the community and there are no plans to reduce hours or cut back services in Victoria with funding negotiations currently underway with the Commonwealth,” she said late Wednesday.

Health Minister Mary-Anne Thomas.Credit: Justin McManus

A key issue for the clinics is their cost per service. In the ACT, similar facilities have cost nearly $200 an appointment.

Royal Australian College of General Practitioners Victoria deputy chair Bindia Sethi said cost pressures in the ACT were concerning.

“We’re waiting to see an evaluation of Victoria’s urgent care centres, and releasing that will either reassure people the same isn’t happening in Victoria, or give a clearer indication of the cost versus the benefit,” she said.

The state budget included $34.4 million to extend funding for another 12 months.

Federal Labor also campaigned on funding urgent care clinics in 2022 and expanded funding in the May budget. The Albanese government now funded 10 of the 29 services in Victoria, the state’s Health Minister Mary-Anne Thomas said in May.

The health system has been facing widespread budget constraints. The Age last week revealed that Northern Health and Western Health had implemented hiring freezes to control spending.

On Wednesday, The Age further revealed that RCH proposed to make six programs and teams redundant in its mental health department.

This includes a team focused on early intervention for children and adolescents with behavioural challenges. In a letter explaining the proposal, the hospital acknowledged this could move demand elsewhere and increase referrals to community mental health services.

Health and Community Services Union state secretary Paul Healey said staffing freezes and potential redundancies would threaten the quality of mental healthcare.

“At a time when demand for mental health services is soaring, cutting staff is not just short-sighted – it’s dangerous,” he said.

A hospital spokesperson said services were regularly reviewed to ensure they were in line with the Health Department’s funding priorities.

“The proposed changes to RCH Mental Health will not impact frontline services,” they said. “The proposed changes impact historic programs that no longer align with the focus of Victoria’s broader mental health system.”

The changes were separate to the government’s “budget action plan” that the department is negotiating with health services.

When asked about the mental health cuts, a government spokesperson said this year’s budget had invested $20 billion into hospitals.

“Our mental health investment this year alone is almost $3 billion, which is almost double the budget before the [Mental Health] Royal Commission,” they said.

“Only Labor invests in our health system. The only political party that cuts and closes hospitals is the Liberal Party.”

In the state budget, the government committed an additional $8.8 billion in upfront funding to hospitals over the next four years. This was part of a new funding model under which health services have been told they will not have their finances topped up if they go into debt, as has been the case in previous financial years.

Opposition health spokeswoman Georgie Crozier said cuts would have flow-on effects.

“The government’s savage funding cuts are going to put more pressure on our emergency departments and emergency services, and that will have a negative [effect on] good patient outcomes,” she said.

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