Distressed GP owners fight rent-control deal

3 minute read

Corporates "rubbing their hands" in anticipation as pathology rent controls threaten GP-practice owners


GP-practice owners are fighting back against government interference in pathology rents, saying it is unconstitutional, anti-small business and could be the last straw for practices squeezed by the Medicare rebate freeze.

In a pre-election agreement with Pathology Australia to control how much rent GPs can charge pathology labs for collection centres at their premises, the government was bowing to big corporate interests at the expense of doctor-owned businesses, RACGP President Frank Jones said.

“It is a backroom deal between the government and the major corporates, and it really is a major issue for general practice, “ Dr Jones said, referring to the pathology industry body dominated by the Sonic Healthcare group companies.

Dr Jones said the deal was a serious threat to the viability of practices that relied on the rental income to cope with the Medicare rebate freeze, which has been extended to 2020.

“We believe it is unconstitutional,” he said, adding the RACGP was taking legal advice to mount a challenge.

Several hundred practice-owner doctors came together earlier this week – more than 50 in Perth and up to 300 from across the country joining in via a webinar – to discuss the threat and a plan of action.

“They are angry and insulted,” Dr Jones said.

“If you are a bulk-billing general practice and relying on that rental, then it’s going to be really hard to maintain quality service for patients.

“There will be flow-on effects on quality and on staffing levels. Also, from a GP owner’s perspective, you potentially could be earning less than your assistants. And then what is the point of being a practice owner?”

Corporate clinics would be “rubbing their hands together” in anticipation of buying out distressed owners.

“Does Australia want a corporate-run general practice system with all that means – profit-driven companies running general practice? Practice owners are angry about this.”

The RACGP disputed the pathology labs’ complaints that dramatic rent increases by greedy landlords were hurting their margins.

“They say otherwise, but we know the expenses they pay on rental have not increased in the past five years. It’s only about 6% of their costs. So really they are crying poor. They claim it’s gone up, but our figures suggest otherwise,” Dr Jones said.

According to a recent news report, the Health Department advised the health minister’s office that it could not justify a proposed media statement that a regulatory breakdown had “allowed landlords to drive up rents”.

Documents obtained by The Australian under freedom of information provisions revealed that the department said it was unable to back up claims of “strong concerns” about pathology rents because a roundtable group of stakeholders had not reported back.

Doctors are incensed that rent controls will effectively transfer millions of dollars to corporate-run labs from general practice, after GPs were hit in the May budget with an extension of the Medicare rebate freeze.

The agreement, finalised one week into the 3 July election campaign, instantly shut down Pathology Australia’s noisy criticisms of the Coalition policy to remove pathology bulk-billing incentives.

Pathology Australia’s Don’t Kill Bulk Bill campaign, which had gathered 600,000 signatures opposing the policy, was dropped abruptly, with an agreement that the incentives would remain until a new regime for rent control was put in place.

A Health Department spokeswoman said a new regulation was in the process of being drawn up and should be ready for introduction in January.

However, Health Minister Sussan Ley in August backed away from one central element of the deal, to impose a moratorium on new collection centre leases, saying it was not necessary.


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