Many people who need primary health care the most are the ones who face the most barriers to getting it. They may struggle with transportation, money, language or stigma when they try to access services that can help them prevent diseases, treat addictions, cope with mental illnesses, heal injuries and connect with social support. General practice is a vital source of primary care for these vulnerable people.
Not all areas have enough general practitioners to meet their needs, and this is getting worse in rural areas. In the last 24 months we’ve observed general practice owners in towns west of Dubbo in NSW, west of Emerald in Queensland and near Mildura in Victoria either leave or seek to urgently sell.
That’s why some non-profit community care organisations are thinking of purchasing or opening their own general practice services in these underserved areas. However, running a general practice is highly specialised and requires careful planning. So before jumping in, it’s important to build a strong business case for general practice services for vulnerable populations.
Why a business case?
Constructing a business case when developing a new healthcare service enable an examination of the ‘what’ and ‘why’ of the proposed action, defines success criteria, illustrates the financial costs, and provides evidence-based justification for investment for those making the final decision. Furthermore, it generates a workplan with timelines and assigned tasks, as well as recognising any potential risks and how they will be managed or minimised.
Should a feasibility study be included?
A feasibility study is sometimes undertaken before a business case, particularly where a desired model is not clear. This kind of assessment evaluates whether a new service idea would be feasible, and usually compares alternatives. For example, it may compare the idea of a fully bulk billing general practice owned by the entity but operated by a 3rd party; versus a partially bulk billing general practice fully owned and operated by the entity. This is just an example – there would be many alternatives that need to be evaluated for their feasibility.
Once an option is deemed to be feasible and preferable over alternatives, the next step is a business case.
Larter recommends a feasibility study when exploring a concept, or comparing several ideas, followed by a business case if one of the concepts is deemed feasible. However if the idea is already quite concrete and is known to be feasible (e.g. it’s worked elsewhere = proof of concept), one can go straight to a business case.
Building an effective business case from start to finish
Building an effective business case requires the right combination of data, analytical know-how, time, and strategic insight. A well-crafted business case outlines the need for the service; exactly whom it will benefit; explain why it’s important to implement now; demonstrate how it will be viably funded and managed over time; and present evidence that it will likely be successful.
When building a business case for a new primary health care service, start by gathering all relevant data including, but no limited to:
- population demographics
- existing services in the area – i.e. potential competition or partnership
- most relevant Medicare items
- costs e.g. salaries, locum costs.
Once information has been organised into a logical and accessible format, it is ready to be analysed with financial analysis models such as ROI (return on investment) or NPV (net present value). This process enables decision makers to identify areas where additional investments may be necessary, as well as highlight potential opportunities for new revenue streams and cost apportionment to cost centres. It is important that decision makers are briefed and given the opportunity to provide their input.
If the data suggests that a robust business case may not exist, the project can be discontinued. If the business case looks promising, the findings can be used to develop a strategy for implementation that is in line with the organisation’s mission and goals, a budget, and a risk plan.
The advantages and disadvantages of hiring a consultant to create the business case and/or feasibility study
Hiring a consultant to create a business case can be beneficial in many ways. The right consultant adds significant value if they have:
- extensive knowledge and experience in creating business cases and feasibility studies, allowing them to quickly identify key areas of focus that need to be addressed
- access to industry data, research and ideally direct industry experience
- key industry contacts that can be consulted to inform thinking
- knowledge of applicable funding sources, such as Medicare and fee-for-service clinics that sit within general practices e.g. iron infusion clinics
- knowledge gleaned through previous consulting projects with other clients
- the ability to provide unbiased, objective advice.
The main disadvantage of hiring a consultant may be cost, which can be prohibitive for smaller organisations and their budget. There could also be issues if they feel pressured to recommend certain outcomes, or if they are pre-aligned to certain companies – it is important to check that they will be fully objective and impartial. A quality consulting firm will ascertain the organisation’s ability to pay, and will ensure objective and evidence-based advice will be provided.
Larter’s consultants come with expert primary health industry knowledge, and we offer impartial advice because, although we understand a wide variety of products and solutions, we deliberately do not align ourselves with any other private sector company.
Larter Case Studies
Business case for the Royal Flying Doctors Service (Victoria)
RFDS Victoria explored the strategic advantages of acquiring and managing Robinvale District Medical Centre (RDMC) in response to the Centre’s potential closure, with an aim to develop it into a larger, more comprehensive primary care service with multidisciplinary teams. RDMC is a critical part of Robinvale’s health infrastructure, yet was at risk of closing.
To evaluate the feasibility of this, the Board of RFDS Victoria commissioned Larter to create a business case. The case examined the potential of the new service from the perspectives of operations, workforce, finances, infrastructure and innovation. After analysis of the growth potential, a three-year operational plan and budget were mapped out: year one entailed the purchase, year two revolved around reforming existing operations and year three was focused on expanding and innovating. Following the acceptance of the business case, RFDS Victoria proceeded with the purchase.
Feasibility study for a Victorian community health service
A Victorian community health service (CHS) commissioned Larter to explore options to extend their primary and community health services further into general practice. This was attractive due to the Board’s focus on growth, on enhancing access for vulnerable populations, and on preparing for federal primary health reform. We started with a scoping study that explored the benefits and costs of either establishing a greenfield general practice site, or the acquisition of an established practice.
In the first option, we scanned the market of an area the CHS were interested in, and identified a well-established practice for acquisition, with an owner who expressed interest. The site had pathology, pharmacy and radiology nearby and a three-year contract with the lead doctor. The second option explored outsourcing operational management while the CHS owned the practice. Two practices were willing to consider this type of partnership, and the CHS felt that the co-location of their allied health professionals and community nurses in the practice would be highly beneficial for the community as well as helping them meet their targets.
Larter conducted a comparative analysis of the models and recommended the purchase of an existing general practice, plus the establishment a new ‘private’ brand under the CHS banner. A shortlist of practices for approach was supplied in addition to a risk management plan, and an implementation plan.
Supporting those working in the ‘deep end’
A final word… this blog was partially inspired by Dr Tim Senior’s article published in the Medical Republic “Support for GPs working in the ‘deep end’”, itself inspired by the Scottish Deep End Project. The concept of the Deep End refers to those health professionals that choose to work for and with the most deprived populations, and their need for additional support and resources in response to unmet need.
It made us reflect how we at Larter could support those who are working in the ‘deep end’ more often. We could:
- Develop a business case: Larter could assist organisations working in the deep end to develop a strong business case to plan a service or to secure funding from the government or other organisations. Additional funding could be used to provide additional resources, such as mental health support, a link worker for social prescribing, training, or hiring more staff.
- Conduct a needs assessment: Larter could conduct a needs assessment to identify the specific challenges faced by organisations working in the deep end. This assessment could inform the development of targeted solutions that address the unique needs of these practices.
- Provide strategic planning support: Larter could assist deep end organisations in developing strategic plans to address the challenges of working with complex patient populations. This could include identifying opportunities for collaboration with other healthcare providers or developing innovative models of care.
Overall, Larter expertise in business development and strategic planning could be leveraged to support deep end practices and help address the challenges faced by GPs working in these settings.
Contact us if you would like to discuss these ideas more.
Image credit: Midjourney