Optimising a Medicare-funded service model for mental health

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Community based mental health: A sustainable blended revenue business model.


Client: Camcare is a not-for-profit, community-based organisation that assists people from Boroondara and neighbouring areas who are facing personal hardship or difficult life circumstances. Camcare delivers a range of services including counselling, family services, emergency relief and parent education. Mental health services are a key component of Camcare’s service portfolio. Before the project, Camcare did not have a business model that attracted Medicare benefits to help fund these services.

Challenge: Like many Victorian community service organisations, Camcare was concerned about the sustainability of its sources of funding in the context of ongoing health reform. The project sought to provide a viable and sustainable business model to fund mental health services through the Medicare Benefits Schedule.

Response: Larter worked closely with Camcare to understand the organisation’s strategic priorities, client profile, service mix, staff capabilities and management preferences in relation to a fee-for-service model. Larter prepared a discussion paper that included a business model for Medicare-funded mental health services at Camcare.

The analysis considered critical project governance, financial and operational elements and provided a six-phase implementation plan. The paper also addressed the wide range of decisions that need to be made to inform a business model and recommendations. These include client eligibility, billing policy, method to remunerate providers with rights of private practice, taxation, insurance, service coordination, and establishing and monitoring targets to maximise financial viability i.e. throughput and correct %-split. Larter also provided a three-year financial forecast on a spreadsheet with key variables that can be adjusted by the client.

Outcome: Following Larter’s presentation of the business case and financial modelling to the Camcare board in September 2015, the board resolved to implement the proposed model subject to further internal assessment and the establishment of a project plan with KPIs.

Larter has expertise in helping health organisations attract additional funding to maintain and extend its service offerings, whether through Medicare, other funding schemes or through funding applications.  To learn more about how we can assist, contact Peter Larter, Managing Director at Larter on 1800 527 837 or email larter@larter.com.au.



Image: Flickr Creative Commons Attribution Some rights reserved by Ervins Strauhmanis