Business KPIs for GPS

Here are the slides from the August 15 webinar. Members can download the PowerPoint version using the link below.

 

The PowerPoint slides are available here

 

AGPA newsletter 14 June 2018

Dear Practice Owners,

Pathology Rent Update

This is hot off the press.

I attended a meeting at the Department of Health (DoH) chaired by the First Assistant Secretary (FAS) in the Provider Benefits Integrity Division this week. The meeting was in regard to pathology rent and collection.

The Department has commissioned a review of Collection Centres and rent and presented their data yesterday. Unfortunately they didn’t want to release the data and wouldn’t allow pictures to be taken of the slides/handout. There were some fascinating graphs.

As you are all aware the only reason the Government has got involved in this space is due to the furore at the last election around pathology rent. As a result they are now following through on the letter regarding the Red Book that almost everyone received last month. The Department wants to ensure greater compliance going forward.

When I asked directly about the Department apparently attempting to curtail rent received by lessees in the market, it was very clearly stated that they are in no way trying to control the market or trying to control prices within that market. “Willing buyer, willing seller” was what the FAS said.

Some of the data that I found interesting.

There were more than 1500 collection centres whose pathology revenue was less than the rent they were paying. The Department seemed perplexed that a pathology company would continue a relationship like this and were looking for explanations.

The strongest correlations to the amount of rent being paid were:

  1. It being a new pathology collection centre.
  2. The number of referring doctors and MBS claims.

As you would expect.

The next three cases are particular behaviours that the DOH is concerned about.

  • There were 50 cases of collection centres that had never collected any pathology specimens since opening. After the collection centre had been opened the referring doctor had changed his/her referral pattern to send specimens to the company now paying them rent.
    This is probably specialists doing a lot of biopsies in theatre, and the pathology company is securing their histology source. This looks like inducement and the DOH is very keen to stamp this out.
  • There were 100 cases of practices having a collection centre open from path company A but they were still sending all of their pathology to path company A but at the previous collection centre. ie rent is being paid for a collection centre within a practice but no collection is occurring at that centre.

 

  • There were 300 cases of a collection centre opening within a practice and the pathology referral pattern showed a doubling of the amount of pathology ordered by practitioners within that practice after the collection centre opened.

 

Next steps from DoH

 

From here the DoH will send letters asking the pathology companies to volunteer information about what is happening. They will also ask the pathology companies for the lessee’s details so that they may write to them as well. They are going to be asking about the behaviours stated above. This will probably occur over the next 4-8 weeks.

 

However, the Department will also be writing to practice owners who are making high rents independent of behaviour. They will be looking at the rent paid by collection centres within a postcode and if you are 20% higher than the average for that suburb you will probably receive a letter. This will be based on the rent per square metre.

They will be sending out a letter asking for information in regard to this. The FAS was asked about what information they will be seeking. He didn’t have any clear indication at that time.

If you receive a letter in the next 2-3 months I think a very reasonable reply will be to explain the process of how your rent was determined. e.g. by taking it out to tender and inviting a response from the various pathology companies. Then you have clear evidence of ‘willing buyer, willing seller’ and as per the FAS statement, they are not interested in intervening within the marketplace.

 

If you are a practice with behaviour similar to the cases mentioned above, you are going to be having some very difficult discussions with the DoH.

 

 

 

What is “market rent” for co-located pathology collection centres?

 

Central to pathology rental debate is the definition of “market rents”.

 

Currently this is defined by the price agreed to by a willing buyer and willing seller. However, we are engaged in an ongoing battle to ensure that this definition doesn’t change to a strict definition based on the rent paid per square metre by the practice itself.

 

To achieve this, we need your help to compile a national database of rents being paid for co-located pathology collections centres.

 

This will allow AGPA to proactively highlight the wide range of pathology rents that may be considered normal in the free market, and how this may or may not correlate with the square metreage formulas presented in the Red Book.

 

As practice owners it will allow you to determine whether you are an outlier in terms of absolute rent, rent per FTE GP, rent per square metre or rent per square metre when compared to other practices. It will also provide a basis for rebuttal if you become the target of any future compliance action.

 

As Board members we have begun to enter our own pathology rental data into this database and the results are already both surprising and illuminating. Please join us by anonymously entering your own data via this link https://bit.ly/2KRf4M7

 

To optimise the accuracy of the database, please pass this link onto other practice owners who are not AGPA members and encourage them to also contribute. Please do not post this link to online forums other than RACGP/ACRRM/GPDU where it may be able to be viewed by non-GPs.

 

We look forward to reporting the database data back to you in the coming weeks.

 

 

AGPA Pathology Rents Webinar

 

The AGPA will hold a webinar Pathology Rents – the current state of playon 20 June at 8:30 pm Eastern Australia Time via Zoom Video link (You will need a computer with good internet access, speakers and a microphone).

 

The Webinar format will be based around three 10 minute information sessions

  • The Red Book
  • Recent experience with renegotiating Pathology Rents
  • Legal aspects of rental agreements.

The information sessions will be followed by a Q&A session.

 

Places will be limited and preference is being given to AGPA members. If you would like to attend please register with the AGPA Secretariat (contact details below).

 

Yours sincerely

Dr John Deery

Chair

Australian General Practice Alliance

 

Australian GP Alliance Secretariat

PO Box 241  I  Deakin West   ACT    2600 I  Australia

Tel  + 61 (0) 2 6290 1505 I  Fax + 61 (0) 2 6290 1580 I  M +61 (0) 439 947 190

AGPA@commercemgt.com.au

 

Practice tells of wound-dressing cost

(Comment is invited on this issue)
A GP practice-owner writes:

An issue of concern to our practice is the ability for the PRACTICE to charge a fee for consumables, facility fee etc whilst the GP contracting the services is bulk billing the service. We are currently discussing this with AVANT but have not had an answer. Read more

Why changing the GP model is worth the effort

By Julie Lambert

Sydney GPs shifting to a new integrative care model are reporting better morale, happier patients, and some uncertainty about investment returns. The burden on general practices adopting the “patient-centred medical home” (PCMH) model is a heavy one, according to a new report from the WentWest Primary Health Network. Read more

Train GPs in the Bush for the Bush: Deputy PM

By Michael McCormack*
It’s simply not good enough. That is your first thought when you meet the people affected by Australia’s rural doctor shortage.
The people who travel for hours on country roads or who wait for weeks or even longer just to see a doctor. Those who do their best – who rally local business communities to help, who open their arms to a new recruit and make them welcome – just to make sure the doctor stays. Yet this is the reality in many country communities around Australia. Read more

Funding for general practice and difficult conversations

Editorial: Dr John Deery

I would assume that most practice owners are frustrated with successive governments (importantly both Labor and Liberal) effectively cutting the Medicare rebate for GP consultations through the Medicare rebate freeze. Paradoxically to what you would expect, the freeze on rebates has only pushed the bulk billing rate higher.

My speculation as to why, is that the doctors who predominantly bulk bill are seeing more patients. Either seeing them faster, or just working longer. The doctors who charge aren’t seeing any more patients, hence the ratio of bulk billing to fee paying is increasing. To support my speculation I looked at some basic statistics. The rate of growth for items 23 and 36 is increasing by roughly 50% faster than population growth. You can look up numbers yourself through the Medicare statistics website and the ABS for population growth. Read more

GP Pathology Rent Update: Be alert but not alarmed

Dear Practice Owners

Many of you have now received a letter from the Department of Health titled “Strengthening Compliance – Pathology Approved Collection Centres”. Our assessment at this stage is that whilst we need to remain vigilant to emerging threats to pathology rents, this letter is not an immediate cause for alarm. Read more

Australia comes out well in 11-nation health study

Australia’s health system comes out very well in a recent US study comparing health care system performance in Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. Read more

Welcome to our first newsletter for 2018

Member Communication and Practice Support

As we mentioned in our December newsletter we have been working to try to improve communication and support our members who are spread across the country.

In February we trialled an online interactive seminar (read Webinar you can hold a discussion in) for the Queensland members and some other Queensland practice owners. The topic was Changes to the Cybersecurity Legislation and the Requirements for Reporting Security Breaches. We had a very good presentation from Redfish and a great discussion. Read more

The new pathology duopoly

Primary Health Care and Sonic Healthcare are an oligopoly present investment opportunity, according to an article by Graham Witcomb, an analyst with Intelligent Investor, in The Sydney Morning Herald. He writes that the growth in productivity of Australian pathology has been spectacular. Rebates for pathology have, in real terms, fallen by about 60 per cent since Medicare began in 1984, and yet the businesses delivering these services have done extremely well. Read more