Health Co-op to Serve Australia

Following its success in the ACT, the National Health Co-op has announced plans for a national expansion, and experts say the business model could address some of the challenges facing Australia’s healthcare system.

CEO of National Health Co-op Adrian Watts told Pro Bono Australia News the business has been “fantastically successful”.

It started six years ago with one GP and one nurse, and now it has more than 27 full-time GPs.

“We’re about to open up our eighth clinic in the next couple of weeks and we have over 33,000 members who get their health services from us, so that’s around 10 per cent of the ACT population,” Watts said.

He said there was a real need in Australia for more access to affordable, accessible healthcare, which is why the cooperative is expanding.

“We’ve been reached out to by a great number of communities from across the country telling us that they either can’t get in and see a GP in a reasonable time period, or can’t afford to be able to go and see a GP and so don’t go and see a GP when they really should be,” he said.

“We really see that the community through cooperatives, and particularly the model we’ve set up, has got a real ability to be able to break down some of those barriers and provide more access to affordable healthcare.”  

The immediate plan is to extend the health co-op to regions surrounding Canberra, then to fringes in other capital cities and eventually into regional areas.

“We’ll be expanding north of Canberra into Yass, and to the south of Canberra, so an hour in either direction, south of Canberra is Cooma,” Watts said.

“We’re in strong discussions with a town in South Australia, just north of Adelaide, we expect to be opening there in the next 12 months.

“We’re in strong conversations with half a dozen towns located across a few different states and territories as well, and I’d expect that at least three of those would be on our build list within the next 18 months.

“We have looked at every state and territory capital, and it’s often not the city centre itself that we plan to be in, but more so on the outskirts and on the fringes where you find higher amounts of government housing, lower-socioeconomic areas, and it’s those areas we’d be targeting in the first instance when we move into other states and territories, and then from there absolutely the plan is to be going into more regional areas.”

He said one of the largest problems in those areas is that they are underserviced by GPs with no long-term solution, despite incentives to encourage them to work in regional communities.  

“Sure, we might enforce, as a country, trying to get our new graduates to make sure they spend time in regional communities and so on, and what we find is people might go and do their time out in rural Australia but then want to move back to the big city, back to a life that they might have been more used to,” he said.

“Our aim is to counter that loss. Having the cooperative business model, it’s the patients, the members who own the business, the onus is really on the members of the business to welcome a new GP into the town and make them part of that community because they want them there for the long term, and we really think this model will provide that.”

Watts also said it was the only model that allows every dollar to be reinvested back into healthcare to make GPs, as well as other services, more affordable.    

“If we were a private business and having to return money back to investors, well there’s money that’s come into the healthcare system and it goes right out the door, it doesn’t get reinvested back into healthcare,” he said.

“The beauty of this model is that every dollar that we earn goes back into healthcare services, and there’s no other model like it, really, for Australia.

“What is really important is we keep on reinvesting in other services, and not just GP services but a range of allied health services that people wouldn’t otherwise be able to afford or access, and we’ve been able to do that by employing a wide range of allied health service practitioners within all of our practices.”

Professor Tim Mazzarol, who specialises in entrepreneurship, innovation and small business management at the University of Western Australia, said there was a “definite need for this type of service”.

“What’s clear is the government’s are looking to remove themselves as much as they can, within whatever’s politically acceptable, from that space,” Mazzarol said.

“I would think there could be a room for this type of cooperative. It’s evident from my review of the way the health system’s working, costs are rising, governments… are struggling to fund their systems.

“Every cooperative has to have a purpose, a reason to exist, because the services are not available in that area because nobody wants to provide them – the government won’t do it or the government’s pulled out or the hospital’s been shut, private providers don’t see there’s enough money in it for them.

“It’s usually designed around that. If it works out as a success, it will only be a success if a lot of people take it up and become members and patronise it, and then it has to generate a return for itself to keep going. It has to charge something in the transaction arrangements.

“At the end of the day, cooperative business models can be quite helpful for solving problems of this kind. There’s lots of examples of them doing that in areas like this around the world, in also providing housing… and then also providing things like water and energy.”

However, he said cooperatives couldn’t solve everything. He said they could struggle between their social purpose and competing with profit-driven businesses.  

“They can do quite a bit, but they’re not the universal panacea. They serve a purpose where there is a gap, what some call a market failure, and they’re only going to survive if what they offer, that purpose for which they were set up, continues to be there,” he said.

“The problem is the market and government is focused on for-profit type of model with pricing the only determinant, and they [cooperatives] can’t always be the cheapest because there’s a tradeoff between choice and cost.

“If I’ve got to deliver services to the regional communities, that might be more expensive than delivering them into a place like Sydney.

“[If] the pricing doesn’t work they often move away if they can, if there’s an alternative.

“But what happens then is [it] leaves a big hole in the market, and the investor-owned firms will simply put whatever prices they like on it. So there’s really nowhere to go except charitable models or the government. And the government is signalling they’re not in a position where they want to do this anymore.”  

But Watts is predicting that the cooperative model will only grow in significance, and said Australians were tired of the government and private-sector dynamic.

“Cooperatives have been here since the early days of foundation in Australia, and absolutely there’s a lot more awareness over the last decade, saying the unique part of what cooperatives can do, it really brings back communities together about achieving purposes,” he said.

“Instead of, as a nation, I think over the last 30 years or so, we spend a lot of time waiting for government to solve things and then we move into a period where we’ve always looked to having businesses to come in and step up, yep let’s get a privately-owned business to come in and solve things.

“I think people are a lot more aware now that we can actually solve these things as communities, really as viable entities that can operate sustainably for the long term and with only one outcome, being a service in the community for whatever that cooperative might be doing.

“So it’s a truly brilliant model that Australia is definitely going to grow with cooperatives across this country across the next couple of decades.”