News Coronavirus pandemic leaves hundreds of medical practices on verge of collapse

Coronavirus pandemic leaves hundreds of medical practices on verge of collapse

People are thought to have been reluctant to visit their GP for fear of getting sick or overburdening the system. Photo: ABC News
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Hundreds of medical practices are on the verge of collapse because of a fall in the number of visits due to the coronavirus pandemic, according to data collected by the Royal College of General Practitioners.

A survey of 1000 GPs and practices shows that nearly half are not sure whether they will still be operating in six months’ time.

A third of the practices reported a drop in income of more than 30 per cent in May, when compared with the same month last year.

People are thought to have been reluctant to visit their GP during the pandemic for fear of getting sick or overburdening the system.

‘Some afternoons with no bookings’

Dr Bernard Shiu has been borrowing money to keep his practice running. Photo: ABC News

Bernard Shiu owns a small but busy general practice in Geelong.

As fear around the COVID-19 pandemic increased, patients suddenly stopped coming.

“There are days that some of our GPs actually have no bookings for the whole afternoon,” Dr Shiu told 7.30.

He is now going into debt, using bank overdrafts to pay staff wages and electricity, to keep his practice afloat, but he knows it is not sustainable.

“The financial situation is still quite worrying,” Dr Shiu said.

“[In] the month of May we have dropped significantly and at least over 30 per cent of our income is lost.

“So we are struggling. I have lost many nights of sleep, for sure.”

‘Worst in three decades’

David Dahm says he has never seen the medical industry in a worse state. Photo: ABC News

Accountant David Dahm provides business advice for hundreds of GP practices around the country.

He is concerned by what he has seen.

“This has been the worst I have seen in three decades in this industry,” he told 7.30.

“And it is something that urgently must be addressed.”

He said the decline in revenue meant many practices were, at best, probably only just breaking even.

“Most practices and businesses generally have fixed overheads of nearly 85 per cent of the total overheads,” he said.

“So if you get a 20 per cent drop, you’ve pretty much got a practice that is breaking even and possibly insolvent.”

Mr Dahm fears the worst may still be yet to come.

“I believe that up to 10 per cent of practices may be facing closure,” he said.

“It’s already happening.

“JobKeeper is keeping people, it’s giving everybody a false sense of security.

“But when you take that away, I think the numbers become quite alarming.”

Medicare rebate too low, GP says

Dr Maria Boulton says a low Medicare rebate has added to the problems facing medical practices. Photo: ABC News

Brisbane GP and practice owner Maria Boulton has also been struggling to make ends meet.

Like Dr Shui, her practice’s revenue has tumbled by a third since the COVID-19 pandemic began.

“I have certainly never seen it this bad,” she told 7.30.

“I’ve been a GP for 16 years. I have been employed as a contractor and as an owner, and COVID has certainly put a lot of businesses in the financial stress zone.”

But there were already problems before the pandemic hit.

Dr Boulton’s biggest complaint is that the government’s Medicare rebate is too low.

“The rebates haven’t gone up much at all for the last two decades,” she told 7.30.

“It hasn’t kept up with inflation and it hasn’t kept up with the increased costs in rent, insurance.”

At the same time, GPs say the introduction of compulsory bulk billing for some telehealth consultations means doctors are receiving less money for each patient.

Dr Boulton, who is one of the directors of the Australian GP Alliance, believes that policy is not a financially viable business model for her practice.

“My clinic is mixed billing,” she said.

“So, basically, when a patient walks in for us to see them, Medicare rebates half of the consult, and then we charge a small gap.

“The reason why we do that is that if we didn’t, we would have to see a patient every five minutes to keep our doors open.

“Five minutes isn’t long enough for me to diagnose someone and manage them properly, focus on preventive care, focus on all their mental health issues. And it’s really putting a lot of clinics into financial distress.”

‘Whole industry under threat’

Doctors say a lack of proper funding threatens the viability of the industry. Photo: ABC News

Dr Boulton is worried about what the financial squeeze means for the long-term viability of the industry and the health of the country in general.

“The whole industry is under threat because if general practice suffers, then what happens is that the hospitals become inundated,” she said.

Mr Dahm shares her concern.

“I cannot see any option for doctors’ fees not to go up,” he said.

“If the patient numbers do not increase, there is no other option but to do that, or to fold or merge your practice with another practice.

“Patients are going to start finding that they’re going to have less access to care if there are fewer practitioners out there, because it’s just not sustainable.”

In a statement to 7.30 Health Minister Greg Hunt said the government had allocated a billion dollars to support GPs, including increasing bulk billing incentives for concessional patients

But Dr Shiu does not think that funding has been enough to provide adequate health care to make sure Australians are healthy.

“We have not been able to do that to the quality that we want because of lack of funding, even before COVID-19,” he said.

“This situation has not been good to start off with and then COVID-19 just made it worse.

“It is a desperate situation at the moment.”