Economic models for general practice in community health

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Modelling financial scenarios for Plenty Valley Community Health’s general practice clinic (March 2015)


Context: Plenty Valley Community Health provides primary healthcare, social and psychological support services to people of all ages, focusing on the growing outer northern metropolitan area of Melbourne. PVCH promotes healthy lifestyles and healthy communities through accessible and integrated health services, while valuing community input.

Challenge: As part of its commitment to providing integrated healthcare services, PVCH operates a large general practice clinic in Mill Park. The clinic was developed though the Australian Government’s GP Super Clinic Program, in 2011-12.

Larter was engaged by PVCH to undertake economic modelling for the clinic and provide a paper to the Board which included options for the clinic moving into the future.

Response: Larter developed a robust general practice economic modelling spreadsheet enabling Larter and PVCH staff to input different variables and ascertain the impact of various scenarios on the clinic. The modelling included:

  • Income, expenditure and net profit/loss summary
  • Adjustable variables including client throughput, operating hours, MBS billing mix (e.g. standard consultations, chronic illness care plans, mental health care plans, health assessments etc.), staff remuneration rates and EFT (including GPs, allied health, nursing and practice staff), as well as other costs.

Outcome: Following Larter’s presentation on the economic model scenarios, the Board had greater clarity about the current state of the GP Clinic and the future options and was able to confidently make decisions around the clinic.

Contact us to learn more about our expertise in economic modelling and using MBS in the primary health sector.

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I can only recommend the Larter team for their knowledge of our sector and their expertise around the complex funding models and policies that impact on our services.

Their professionalism and capacity to bring in knowledge and strategies from a wide area really enhanced the work they did and gave us more options than we had expected.

They were quick, consultative, knowledgeable and delivered results to my Board that appreciated the policy and funding environment that we work within.

Phillip Bain
(former) Chief Executive Officer, Plenty Valley Community Health Ltd (2015)