The State Government’s high-profile $5.9 million plan to reduce pressure on the public hospital system by establishing after-hours clinics has been left $400,000 in the red following the collapse of General Practice Divisions of Western Australia Ltd, jus
The State Government’s high-profile $5.9 million plan to reduce pressure on the public hospital system by establishing after-hours clinics has been left $400,000 in the red following the collapse of General Practice Divisions of Western Australia Ltd, just three months after it was appointed to run the project.
A spokesman for WA Health Minister Jim McGinty said the Government remained committed to the after-hours project despite the financial failure of GPDWA, largely as a result of infighting among doctors it represented because the government-funded outlets were competing with their own practices.
Creditors’ claims of about $1.8 million are expected by the liquidators of GPDWA, which was created in 1998 to manage State and Federal government funds on behalf of Western Australia’s general medical practitioners, grouped into 14 geographically distinct divisions.
In May, Mr McGinty and Federal Health Minister Tony Abbott announced that GPDWA had entered into a contract with the WA Health Department to run after-hours bulk billing clinics at four public hospitals.
The State has at risk a further $135,000 relating to previous arrangements with the company.
GPDWA was put into liquidation on August 5 owing creditors about $1.8 million.
The WA Government committed $5.9 million to fund the after-hours clinics until 2005-06. A further $200,000 came from the Commonwealth.
The two after-hours clinics GPDWA operated, at Fremantle and Royal Perth hospitals, are currently being run by the GP divisions in those areas. Those contracts expire in October.
The other two clinics, at Joondalup and Rockingham hospitals, are yet to open.
Chairman of the Australian Medical Association’s council of general practice, Richard Cheung, said the divisions that took over the clinic contracts were not happy with them and wanted a number of key conditions changed – chiefly the requirement to bulk bill.
“The clinics also need to be sensitive to the needs of the area,” Dr Cheung said.
“In Joondalup they’ve had a private after-hours clinic that has run successfully for several years. In Rockingham we have a number of after-hours clinics so why set one up in competition to them?”
A spokesman for Mr McGinty said the Government was negotiating with the GP divisions to take over all of the clinics.
He said the Joondalup after-hours clinic was due to open in the next two weeks and the clinic planned for Rockingham was expected to open within a month.
GPDWA was put into administration on July 9, one month after an acrimonious extraordinary general meeting that resulted in its entire board being spilled.
The after-hours clinic contract sparked the EGM because the doctors that GPDWA represented were unhappy their umbrella body was entering into an arrangement to run Government-funded competition.
The new board that took over GPDWA after the EGM, chaired by Dr Roly Butt, sent the organisation’s CEO Cobie Rudd on leave and undertook an investigation of the organisation’s finances.
That investigation led the new board to believe the body may have been trading while insolvent and PPB partners Simon Read and Mel Ashton were appointed administrators and, subsequently, liquidators.
Mr Read said the organisation could face claims from creditors of up to $2 million.
“It only has half a million dollars in assets so we could be facing a $1.5 million shortfall,” he said.
To date the largest claim is from Dr Rudd, who is seeking $760,000 for unfair dismissal and breach of contract.
Mr Read said besides Dr Rudd’s claim, the Western Australian Government was also seeking more than $500,000 from GPDWA.