A copy of the final draft report has found its way into TMR’s mailbox. We read it so you don’t have to.
An independent review of Cohealth – leaked anonymously to The Medical Republic and Health Services Daily – reveals poor governance and oversight, poor use of the model of care, a complicated client base and inadequate MBS funding all contributed to the community care hub’s troubles.
A final draft report of the review, dated 3 March 2026 and marked “draft confidential”, recently found its way into TMR’s office.
Although the report omits the executive summary and final recommendations, it includes over 100 pages of damning conclusions, analysis, and commentary about the embattled health services and the community health model in general.
Written by Professor Stephen Duckett, Dr John Furler and Ms Jane Seeber, the report highlighted the problem in a nutshell:
“What we will show in this Report is that there are four factors that determine the viability of GP services run by Cohealth and like organisations. Two are external, or exogenous – the client base, and the MBS funding model; two are internal, or endogenous – the Cohealth model(s) of care, and governance,” the report said.
Inadequate governance and oversight
There is evidence in the review that there had been financial concerns for many years at Cohealth.
“Across all periods reviewed, salary expenses exceeded the total income with salary costs representing between 121% to 130% of total income.
“This continued shortfall indicates that all clinics have not generated sufficient revenue to meet salary obligations at any point during the review period,” the report said.
However, despite this significant shortfall, the report found that the first mention of clinic deficits was in June 2023. It wasn’t reported consistently to the board until 2024.
“In the period from July 2023, the Board received multiple reports from management which, in relatively reassuring language, identified problems with the clinics but asserted that management action was underway,” the report said.
The Board did not ask management to provide additional financial reports or regular reporting on the services causing the worsening cash position.
“It is difficult to see how the Board could effectively manage the financial risks of a large organisation operating in deficit without consistent, detailed, and regular reporting on the performance of the services driving the deficit.
“What information they received about under-performing services was largely in narrative form and rarely in consistent formats which would allow for comparison month-to-month,” the report found.
“In fact, it should have been evident to the Board at the time that management’s actions were not effective since there was no turnaround in performance.”
The Board also refused to effectively analyse and manage the risks associated with closing GP services, the report said.
“It is obvious in retrospect that Cohealth did not manage oversight of financial risks well.”
Poor management and inadequate oversight of clinics
Furthermore, the report highlighted how Cohealth’s oversight of the GP clinics was fragmented, with little coordination and poorly communicated attempts to address issues.
There were few attempts to engage GPs in change management. Doctors highlighted that they weren’t asked on ways to optimise income or improve viability. Although there were annual GP meetings with middle and senior management, their suggestions were never acted on.
Even when comprehensive reviews were conducted, there was no evidence of action plans, accountability, or performance management.
“Cohealth reported to us that it chose to embed the review actions in existing operational, planning, management, and governance structures,” the report authors wrote.
“Nevertheless, it seems most recommendations have had little practical impact.”
In addition, the report found there was no single model of care across the clinics, with each doing their own thing and no ongoing or systematic sharing of lessons between the clinics.
While this was reported in a 2014 review as a potential strength, in 2022 it was recommended there be greater consistency and coherence across the site, both in lead GP roles and nursing roles.
“A number of GPs commented that it was unclear why, if Footscray was viable and is to remain open, there had not been open discussion about how to learn from the local model of care at Footscray and implement that more widely across all Cohealth clinics,” the report said.
The authors wrote that in their view, this account of financial management, communication and accountability of GP services showed that Cohealth:
- “Was not ‘effectively managed at all times’ as it did not have effective documented staffing and organisational structures, business systems and processes and business planning and reporting”; and
- “Did not have ‘effective financial management at all times’ in that it did not maintain effective ‘financial … reporting frameworks”.
“Cohealth was therefore not meeting the management and financial management performance standard for community health services,” the report found.
Restoring faith
The review noted that there were poor risk mitigation strategies around the closure of GP clinics.
“There was no comprehensive strategy to mitigate the impact of closures on clients,” said the report.
“Transition challenges were addressed with an optimistic and simplistic plan with limited connection to the local realities or the clinical requirements of primary medical care provision.
“The confidence that Cohealth clients would find alternative services in the area was not only unfounded, but contrary to Cohealth’s own current and previous rhetoric.”
Many submissions highlighted that there were no services for the Cohealth clients to transition to.
“A simple search of the Healthdirect website reveals that there are no other fully bulk-billing practices in Collingwood (postcode 3066), Fitzroy (3065), or Kensington (3031) that are taking new patients.
“Cohealth’s suggestion that patients could transition easily, is disingenuous and shows a lack of good planning and thinking about the consequences of the closures.”
Furthermore, how these closures were communicated to staff and clients was highly criticised.
“There can be no doubt that the very name of ‘Cohealth’ has now become closely associated (at least in Collingwood, Fitzroy and Kensington) with an organisation which is no longer respected or held in the previous high regard of its community,” one submission said.
“Instead it is now associated with an organisation which is not trusted by either the community or its staff and one which is seen as unconnected to local communities and intent on expansion into non-community health activities.”
There was no engagement with formal client/community groups before the closure decision was made, nor any canvassing of options.
The review found an overwhelming majority of submissions that mentioned “community need”.
The report noted that clients valued the services highly. The services were seen as essential, culturally appropriate, and responsive to vulnerable populations.
“The strong positive sentiment patients/clients reported toward the services themselves probably was a major contributing factor toward their dissatisfaction with the decision to close the services,” the report found.
“What is obvious is that Cohealth needs to reinvigorate its relationships with its local communities and establish robust community and patient engagement processes,” the report said.
A complicated client base
It’s well known that the Cohealth client mix often faces complex circumstances and health challenges. As Cohealth’s submission to the review stated:
“Compared with national data, Cohealth’s client population includes a high prevalence of chronic disease, multi-morbidity and mental health conditions, which are known to drive higher service utilisation and require coordinated longitudinal care.”
The report flagged three factors that stood out: higher rates of chronic mental health conditions, refugee status, and homelessness. They also found that almost 40% of Cohealth clients are at urgent or high risk of hospitalisation.
The authors found that Cohealth had a distinct billing pattern, with fewer standard (Level B) consultations compared to both peers and private general practices.
They found that, unlike other Victorian community health services and private general practice services, the standard pattern of care for most Cohealth clients was a 20-25 minute visit.
“While the longer consultation length is likely in part related to the high levels of clinical complexity and social disadvantage noted above, the remarkable homogeneity of visit length is consistent with a hypothesis that visit length is driven to a significant extent by booking schedules or GP preference rather than patient need,” the report found.
However, the report also found that not all longer consultations were due to client-related factors such as multi-morbidity or the need for interpreters.
Some were also due to weaknesses in multidisciplinary care which saw GPs performing tasks that other health professionals could have easily performed.
Examples were given of GPs spending their time dealing with patients’ energy bills, accompanying a patient to a pathology appointment or dealing with mental health issues because out-of-pocket psychology costs were unaffordable to the patient.
“Seen from another angle, however, these stories can also be seen as failures of service provision (lack of appropriate members of the team), failures of funding design, or failures of internal communication and team functioning,” the report said.
“The net result is that GPs are doing work that could be done by others. As the GP remuneration is significantly higher than for other staff, this is inefficient,” the report said.
MBS rebates and the Medicare model
A key argument from Cohealth was to focus on the MBS funding model. The review reported that the Cohealth chief executive officer, Nicole Bartholomeusz visited Canberra a number of times to lobby for change in the MBS, with limited apparent impact.
“Many submissions argued that the Medicare Benefits Schedule is not well suited to dealing with the client base that Cohealth (and other community health services) deal with. We will show that this is partly true,” the report said.
The review analysed potential MBS billing items but concluded that there wasn’t much more MBS revenue that Cohealth could claim.
The authors also highlighted that Cohealth is eligible for Workforce Incentive Payments (Practice Stream) to support employment of nurses and allied health staff, but the existing Commonwealth rules don’t currently facilitate funding of all types of professionals who can contribute to the care of patients seen by Cohealth.
Instead, the report highlighted that Cohealth could be an ideal testing ground for new approaches to primary care, such as an expanded role for paramedics or nurses/nurse practitioners.
It also flagged that Medicare wasn’t meeting the needs of the type of clients who use Cohealth, a large proportion of whom are impacted by socio-economic drivers of ill health.
“To the extent that meeting these needs requires a medical response, Medicare is not a good vehicle. It was designed in an era where Australia was more homogeneous culturally, with an epidemiological profile of more acute, episodic illness,” the report stated.
But the authors said that a medical-centric response was probably not ideal.
“The direction of national policy is to enable a better response, a person-centric one, involving a multidisciplinary team where all work to their top scope of practice and bring a range of skills to bear to assist and treat the patient,” the report said.
The report admitted that Cohealth’s problems could partly be to do with problems with Medicare.
“But Cohealth has not utilised the resources it has effectively,” they wrote.
“Cohealth receives ‘Community Health’ funding from the Victorian government and it could have, within certain constraints, mobilised some of that to help address the complex health care needs of its client base through enhanced models of multidisciplinary team care.
“It also could have more effectively used funding available under chronic disease management plans or mental health plans to supplement its multidisciplinary teams,” the report stated.
In order to move on, while the reviewers said there doesn’t necessarily need to be a return to a community-elected board, but there does need to be strategies developed to ensure effective community engagement.
“What we are saying is that Cohealth needs to acknowledge the trauma to patients, community more widely, and also staff that has characterised the last few months. The way forward has to build on that acknowledgement to chart a new, engaged, future based on a new relationship with the communities it serves, and its staff.”
