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Abstract

• GPs working together in groups, with a corporate body providing the organisational framework, is an inevitable outcome of healthcare system changes.
  
• Divisions of General Practice — regional corporations owned and operated solely by local GPs — should be seen as the logical alternative to the non-regional, for-profit, often publicly listed corporations.
  
• The divisional model combines economies of scale and organisation with clinical and practice autonomy and a regional focus, as well as an emphasis on patient values, quality of care, and equity of access.
  
• The Hunter Urban Division of General Practice is exploring the possibility of a Division-based general practice cooperative.

In the Australian healthcare system, particularly in general practice, major structural change occurs about every 30 years.¹ The move to corporatisation, which has been evolving slowly for the past 10 years or so, is clearly the next major structural change.

GPs, as the entry point into the healthcare system, are the most important part of the change process — their corporatisation completes the process for medical practitioners. General practice responses to these changes will determine the final form and outcome for the health system as a whole and, most importantly, the type and availability of care that patients can expect in the future.

GPs working together in large groups, with a corporate body providing the organisational framework, is an inevitable outcome of healthcare system changes² and part of an international trend.³ The factors influencing these changes include:

• A shift away from hospital-based to community-based care;

• Increased use of health teams in the community (eg, as part of the Enhanced Primary Care package);

• Greater use of drug treatments;

• An emphasis on population-based activity (eg, General Practice Immunisation Incentives scheme);^1,4

• Increased accountability for outcomes;

• Efficiencies resulting from improved management techniques; and

• Renewed interest by government and non-government groups in integrating health funding.²

In Australia, an additional factor has been pressure on the financial viability of general practice, particularly in capital cities.

Divisions as corporations

Most GPs have participated in a form of corporatisation since 1 August 1992, when the Commonwealth Government funded the pilot group of 10 Divisions of General Practice. Over the next two years, more than 120 Divisions were formed covering most of Australia.¹ These regionally based, GP-owned, patient- and community-focused, not-for-profit corporate entities afforded an opportunity to further develop general practice corporate activity, but this opportunity was not grasped by governments for the next seven years. Indeed, this policy vacuum allowed the emergence of "for-profit" general practice corporate groups and should be seen as a public health policy failure.

"Divisional corporate model" versus "for-profit corporate model"

If a corporate approach to general practice is accepted as inevitable, then Divisions of General Practice — regional corporations owned and operated solely by local GPs — should be seen as the logical alternative to the non-regional, for-profit, often publicly listed corporations.

If general practice is a private-sector activity, why not allow market forces to play their role and let the most efficient corporations, regardless of structure and ownership, dominate the field? The real question is: Can the for-profit, publicly listed corporations meet the challenges integral to the ethical and value systems of the GP-patient relationship?

Overall, I do not believe that the for-profit corporation model sits well with individual and community-based healthcare or that the conflict-of-interest issues can be satisfactorily overcome using this model. There are a number of clear advantages to patients, doctors and to the health system of a divisional corporate model approach.

Ethical issues

The basic tenet of the GP-patient relationship is that the GP has the patient's best interests in mind.⁵ Although all GPs experience ethical tensions, those working for publicly owned corporations (as opposed to a divisional corporate model) may not be able to reconcile their own and their patients' values with the demands of the corporation's shareholders. The primary responsibility of corporations is to their shareholders. GPs may be induced to put corporate profits before the interests of their patients.

Practice structure

A clear distinction between a divisional model and a publicly owned corporate model is that the divisional model seeks to retain and build on the strengths of the current diverse practice structure, with its equally diverse operational types. It emphasises the autonomous operation of each practice, which makes its own business and clinical decisions within an overarching supportive divisional framework. A publicly owned corporation has to take control of individual practices and make them fit into the broader corporate strategy.

Clinical and practice autonomy

The ability of GPs to act independently for their patients' benefit must be preserved in corporatised general practice.⁶ A divisional model's overarching corporate goals and structures would respect, strengthen and reward individual practices. For a practice or GP to forgo any autonomy, there would have to be a clear benefit for both the GP and his or her patients. The divisional regional approach meets the needs of individual GP shareholders, both practice owners and employees.

Regional focus and ownership

GPs are part of the community in which they work, live and send their children to school. Publicly owned corporations, on the other hand, may not be based in the same region, or even the same country, as their corporate general practices. Few shareholders live in or have any commitment to the local region. Patients and communities already have strong feelings about the lack of regional responsibility of large corporate entities (eg, banks and oil companies). The divisional model enhances the capacity for population-based activity and increases the possibilities for enacting public policy. GPs involved in making decisions within the local divisional corporation are able to guarantee that the interests of their patients are also represented at the regional level.

Quality of care

The capacity to provide quality care, a key element of professional general practice,⁴ should not differ according to ownership structure. Several of the Divisions are already leaders in the field of "evidence-based and best practice" treatment,⁷ but publicly owned, general practice corporations have yet to demonstrate their capacity or their commitment in this crucial area.

Equity and access

This is a point of major differentiation between the divisional corporate model and the publicly owned corporate model. The Divisions are committed to offering participation within their structure to all GPs, both owners and employees (as well as to all their patients), regardless of their potential for profit generation. In the publicly owned corporate model, GPs' acceptance may be the result of a selection process, with preference given to those most likely to generate a profit.

Finance and third-party relationships

Improvements in GPs' remuneration and practice finances will require more than increases in individual consultation fees. It will require resource-sharing arrangements with third-party providers (eg, preferred-provider arrangements with pathology laboratories) and government agencies (eg, general practice fundholding). These arrangements must be mutually beneficial (for reasons of efficiency, competition, or public policy). GPs and patients potentially benefit from third-party partnerships as a means of redistributing healthcare resources⁵ (eg, pharmaceutical companies supporting evidence-based drug use by GPs).

The ethical challenge presented by funding relationships between general practice corporations and third parties (eg, pathology services, pharmaceutical companies, and government departments) has yet to be resolved.^5,8 The financial relationships of public corporations are often based on "commercial in confidence" and secrecy, whereas those of the divisional model are transparent and open to public scrutiny.

Conclusions

A Division-based, general practice regional cooperative model appears to be the only corporate option combining the benefits of economies of scale and organisation, but at the same time maintaining congruence with regional patient and community interests, general practice autonomy and public policy imperatives. The experience of the Hunter Urban Division of General Practice in exploring a regional general practice cooperative is shown in the Box.

References

1. Commonwealth Department of Health and Aged Care. General practice in Australia: 2000, Canberra: Office of the Medical Advisor, DHAC, 2000.
2. Commonwealth Department of Health and Aged Care. The Australian Coordinated Care Trials: Interim Technical National Evaluation Report, 1999. Canberra, DHAC, 1999.
3. King J, Wilson M. General practice: building on quality literature review. Melbourne: Monash Institute of Public Health, 2001.
4. Commonwealth Department of Health and Family Services. General Practice: changing the future through partnerships 1998. Report of the General Practice Strategy Review Group. Canberra: DHAC, 1998.
5. Smith D. Reconciling the ethics of general practitioners and third party incentives, part 2, 2001. <http://www.hudgp.org.au/ethics/thirdparty/part2.asp> (accessed June 2001).
6. RACGP corporatisation taskforce. Heywood L (chair). <http://www.racgp.org.au/taskforces/corporatisation/keyissues.htm> (accessed June 2001).
7. Magarey A, Rogers W, Sibthorpe B, et al. Dynamic divisions: a report of the 1997-98 Annual Survey of Divisions. Adelaide: National Information Service, Department of General Practice, Flinders Medical Centre, 1999.
8. Marshall D. Beneficial ownership of Approved Pathology Authorities and medical centres. HIC Forum 2001; Vol 12.

Authors' details

Reprints will not be available from the author. Correspondence:
Dr A Sprogis, Executive Director, Hunter Urban Division of General Practice, PO Box 572, Newcastle, NSW 2300.
drarnAThudgp.org.au

©MJA 2001
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