A government report into a PHN has raised conflict of interest concerns over how it’s using Commonwealth funds.
A government report into the WentWest Primary Health Network has raised concerns about its use of Commonwealth funds.
It has found that by establishing a separate GP clinic, Healthicare, WentWest created a conflict of interest contrary to the PHN’s intended role.
The Department of Health, Disability and Ageing engaged specialist advisory firm McGrathNicol to review the PHN. The consultants were tasked with determining how well the PHN complied with its performance and financial management obligations under the funding agreements.
The report highlighted that the PHN had good financial management, a comprehensive and robust commissioning cycle, and mature and well-documented governance and cybersecurity arrangements.
However, when it came to Healthicare, the report had a few things to say.
“Healthicare was established as a subsidiary of WentWest to provide an expanded range of primary care services to a population area in Western Sydney with high health needs and service gaps, and to support local primary care practitioners to better meet the needs of patients with complex health and social welfare issues,” the report said.
Located in the Blacktown Exercise, Sports and Technology Hub, it’s described as an innovative GP-led, multidisciplinary model. According to its website, it was created as a local initiative in partnership with Mt Druitt Medical Practitioners Association (MDMPA) and supported by WentWest.
However, the review highlighted that some aspects of WentWest’s investment in Healthicare raised concerns.
The funding used to establish Healthicare was from an ‘Unencumbered Funds’ account belonging to WentWest, the report said.
“These funds include surpluses generated from operating efficiencies. McGrathNicol sought to understand the sources of funding and respective expenditures in relation to Healthicare to the extent possible, noting some limitations to the availability of data,” the reviewers wrote.
They highlighted that this raised issues about how government funding was used.
“In particular, we found WentWest’s definition, recording and use of ‘Unencumbered Funds’ to be potentially not in accordance with the Commonwealth’s funding arrangements,” they wrote.
The report highlighted that WentWest admitted a potential conflict of interest between the two entities and acknowledged that only a complete separation of the two would remove this conflict.
The report made three recommendations:
- That WentWest re-evaluate its practices regarding accumulation and use of ‘Unencumbered Funds’ and ensure it does not include Commonwealth funding.
- That WentWest refine its financial management and record-keeping practices. Well maintained records would facilitate easy access of documents and retention of corporate knowledge in the event of staff turnover.
- That WentWest reassess its practices regarding reporting of unspent funds through the annual audited acquittals.
When asked for a comment, WentWest Chief Executive, Andrew Newton told TMR.
“Healthicare operates as a registered not-for-profit entity with an independent board of directors and management team.
“It arose from extensive consultation with local general practitioners and other health professionals, as well as local government and business leaders to provide essential free services to Western Sydney’s most vulnerable residents. Healthicare appreciates the ongoing partnership of these stakeholders, particularly Blacktown City Council.
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“Western Sydney has just one general practitioner for every 903 residents, yet local people have high rates of chronic conditions requiring dedicated multidisciplinary (MDT) health care. Blacktown residents have the highest rates of potentially preventable hospitalisations for angina, diabetes and chronic obstructive pulmonary disease – all of which require targeted multidisciplinary management.
“Healthicare provides integrated MDT care with services such as general practitioners, allied health and practice nurses and links patients with other essential services.”
Mr Newton said the Healthicare approach “aligns with key national strategies including Strengthening Medicare which aims to build coordinated care teams to deliver high-quality continuity of care to address people’s health needs”.
“Healthicare is also well positioned to deliver emerging government policy such as the Thriving Kids Policy. Western Sydney has a higher childhood developmental vulnerability than the NSW average which may be addressed by Healthicare’s team-based, early intervention partnership approach,” he concluded.
