Review of Medicare Locals

The review provided independent advice on all aspects of a Medicare Local’s structure, operations and functions, as well as options for future directions.

Page last updated: 12 May 2014

Page last reviewed: 9 July 2015

Word version: Review of Medicare Locals (Word 99 KB)



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This review found that:

  • Patient outcomes can be improved by an organisation that reduces fragmentation of care
  • The role of general practice is paramount
  • A clear vision and purpose is a critical success factor
  • There is opportunity to implement an effective and efficient system of primary health organisations
  • Leverage of Medicare Locals as facilitators and purchasers should be increased
  • Financial performance can be improved.
The review made the following recommendations:
  1. The government should establish organisations tasked to integrate the care of patients across the entire health system in order to improve patient outcomes.
  2. The government should consider calling these organisations Primary Health Organisations (PHOs).
  3. The government should reinforce general practice as the cornerstone of integrated primary health care, to ensure patient care is optimal.
  4. The principles for the establishment of PHOs should include:
    • contestable processes for their establishment;
    • strong skills based regional Boards, each advised by a number of Clinical Councils, responsible for developing and monitoring clinical care pathways, and Community Advisory Committees;
    • flexibility of structure to reflect the differing characteristics of regions;
    • engagement with jurisdictions to develop PHO structures most appropriate for each region;
    • broad and meaningful engagement across the health system, including public, private, Indigenous, aged care and NGO sectors; and
    • clear performance expectations.
  5. PHOs must engage with established local and national clinical bodies.
  6. Government should not fund a national alliance for PHOs.
  7. The government should establish a limited number of high performing regional PHOs whose operational units, comprising pairs of Clinical Councils and Community Advisory Committees, are aligned to LHNs. These organisations would replace and enhance the role of Medicare Locals.
  8. Government should review the current Medicare Locals’ after hours programme to determine how it can be effectively administered. The government should also consider how PHOs, once they are fully established, would be best able to administer a range of additional Commonwealth funded programmes.
  9. PHOs should only provide services where there is demonstrable market failure, significant economies of scale or absence of services.
  10. PHO performance indicators should reflect outcomes that are aligned with national priorities and contribute to a broader primary health care data strategy.