New Economy Journal

40-year old Healthcare Social Enterprise Converts to Co-op

The Young Person’s Issue

Volume 1, Issue 5

August 5, 2019

By - Oliver Mispelhorn

Piece length: 721 words

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How is this New Economy? Community control of community services makes a lot of sense and leads to positive outcomes on numerous fronts. This article discusses the recent decision of a community service - Interchange General Practice - to facilitate formal control for the community regarding its operations.

Oliver Mispelhorn reports on Interchange General Practice’s recent conversion to a co-operative. Thanks to Paul Hartigan, the Co-op’s Project Manager (for want of a better title), for taking the time to talk to us.

Interchange has existed as a private general practice in central Canberra for 40 years, run for the last 20 by Clara Hartigan (wife of Paul).The practice is well known in Canberra for servicing disadvantaged sections of the community, such as people with chronic illnesses, drug and alcohol dependencies, refugees, and the homeless.

Primarily servicing this clientele presents two central difficulties. One is that most patients require a lot of time; the other is that most of them have limited financial resources and need to be bulk billed. The Medicare rebate has been frozen for many years now, and so has not kept up with the rising cost of living. Many bulk-billing practices in Australia compensate for lower fees by seeing increasing numbers of patients per hour. Interchange, however, aims to provide high quality care, and so only sees about two to three patients an hour, putting them under pressure financially.

In 2018, Interchange won a $500,000 grant from the ACT Government to set up a practice in Tuggeranong, in the south of Canberra, predominantly bulk billing. This prompted them to move their practice from Civic. At the same time, they decided that it was time Interchange converted to a co-op, having long considered the change and seeing the co-op model as better suited to the practice.

As a member-owned cooperative, Interchange charges an annual membership fee of $60 for people carrying a healthcare card, and $120 for those without one. These fees help to cover the expenses associated with administering the practice, and allow Interchange to continue offering high quality services to a largely disadvantaged clientele. Interchange is a non-distributing cooperative, which means that any operating surplus is reinvested into the practice to improve the services that it offers. It is also registered as a charity. There are no restrictions on who can become a member; the only requirement is a Medicare card.

Receiving a grant from the ACT government will help Interchange to overcome the problem many co-ops face in raising enough capital for establishment.There are also a number of advantages to its conversion to a co-operative. Healthcare is a labour-intensive industry, which is well suited to the co-op model. And being a non-distributing co-op, members are not expecting a financial return from their membership.

Despite these advantages, Interchange has faced some challenges in its conversion. They’ve had to adopt the Co-operative National Law constitution (or “rules”), and adapt these rules to their own particular kind of organisation. They’ve had to consider the legal framework on the responsibilities of being a co-op. They’ve had to appoint a board, hold a formation meeting, and have the board members and the co-op’s rules approved by the registrar of co-ops. However, although it has been a lot of work, Paul Hartigan, the Co-op’s Project Manager, considers it to have been reasonably plain sailing. What made it easier is that, as opposed to starting a new practice, Interchange already has doctors who have their own groups of patients, which gets them off to a flying start. They expect to have between 15-20,000 consultations in their first year of operating as a co-op.

For Paul, the advantage of Interchange being a co-op is that it will allow them to continue providing the standard of service they’ve been providing for 40 years, and to continue servicing marginal and disadvantaged groups; people who exist on the fringe of society. He does not see attracting enough patients as being an issue. To Paul, many people complain that bulk-billing clinics do not provide adequate services. People are rushed through and do not have their issues properly addressed. He expects that people who’ve had that experience are likely to come to Interchange for better quality service.

Screen Shot - Internchange website

Screen grab from Interchange’s website

 

Other than the National Health Co-op, based in Canberra, and the Westgate Health Co-op, based in Melbourne, Paul is not aware of any other primary healthcare co-ops currently operating in Australia. However, he considers the model to be viable for other practices that are aiming to operate in a similar way to Interchange; practices seeing a lot of disadvantaged clients, and who are bulk-billing the majority of their patients.

Interchange Co-op expects to open on August 11, 2019. It will start accepting memberships two weeks before that, on July 29.

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