Small medical centres and independent GPs are at greatest risk from the federal government's review of which doctor services will be covered by Medicare, the chief of one of Australia's largest medical providers says.
Primary Health Care chief executive Peter Gregg said the ongoing review of the Medical Benefits Schedule (MBS) - begun in 2015 - is hurting practitioners and proposed changes will hit independent GPs the hardest.
"If the MBS review continues that is squeezing healthcare practitioners ... it's squeezing us. Now, we have the added advantage of scale and efficiency which helps us absorb some of that - smaller practices do not," Mr Gregg said on Wednesday as his business posted a 41.3 per cent drop in full-year profit to $74.9 million..
Primary says its revenue rose 3.6 per cent to $1.637 billion for the 12 months to June 30 but profit took a hit from a flat performance from its medical centres as it struggled to hire enough doctors.
The company was now focusing on luring more GPs to fill its growing number of medical centres, Mr Gregg said.
"It'll come down though, I think, to our ability to attract different doctors to what we have had before because what we are offering is a much more flexible contract," Mr Gregg said.
The company has changed its contracts so doctors no longer have to remain with Primary for five years when signing up to work in its medical centres.
Uncertainty around health policy and pressure from the Medicare rebate freeze had also affected revenue, Mr Gregg said.
But in his opinion bulk billing, at least in some form, is here to stay.
"There will always be bulk billing, there will always be a need for bulk billing. The question is ... who should be bulk billed and who shouldn't be bulk billed?" Mr Gregg said.
Primary's loss was offset by cost saving measures including closing eight smaller imaging sites, cutting staff and selling off some non-core assets, including its medical software business MedicalDirector, while reducing debt from $1.2 billion to $816 million.
Mr Gregg said comparing the year-on-year result was hard as the business was undergoing a significant change to its structure.
"The benefits of these changes are beginning to flow through and we are encouraged by the momentum we are seeing as we transition the business," Mr Gregg said.
Primary's share price was up 10 cents, or 2.44 per cent at $4.19 by market close on Wednesday.
The company's final dividend fell 4.6 cents to 6.4 cents.
PRIMARY'S PROFIT SLUMPS
* Net profit down 41.3 pct to $74.9m
* Revenue up 3.6 pct to $1.637bn
* Final dividend down 4.6 cents to 6.4 cents, fully franked
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