A PHN charity was meant to help struggling GP practices, but a series of stumbles led to DoHAC shutting it down.
A charity set up by the parent company of Western NSW PHN to help GPs at risk of closure was closed down having helped nobody, but not before spending $2 million, it was revealed today.
Aus Doc and Central Western Daily have detailed how around $2.2 million was spent on funding the charity, which was set up by Western Health Alliance Limited (WHAL) in September 2023, despite not having funding approval from the Department of Health and Aged Care, and closed in March 2024.
According to a letter from DoHAC to the WHAL from February 2024, seen by AusDoc, WHAL asked the department for “retrospective approval” for $10.1 million to fund the Priority Red Health Foundation charity for three years.
In the letter, WHAL was told to “cease all activity by the subsidiary” and that funding would not be approved because it breached the PHN’s funding agreement, the AusDoc article said, by repurposing grant funds to set up a subsidiary and by subcontracting GP services.
“‘Given the severity of the situation, the department seeks to work with WHAL to resolve these issues as quickly as possible, noting the department reserves all rights under the funding agreement’,” the letter quoted in AusDoc said.
In a statement on its website, WNSWPHN said:
“Following a review of changing environmental conditions, WHAL charitable subsidiary – Priority Red Health Foundation has ceased trading effective as of 27 March 2024. Where feasible, services will be incorporated into WNSW PHN.”
The Central Western Daily reports that former staff of the foundation told its publisher, ACM:
“Our communities have missed out on all that money that was invested in the foundation … money that could have been spent on them” and “the money could have gone to Aboriginal communities … who are suffering in the region”.
Another staffer is quoted as saying general practices were “financially unviable”.
“We absolutely believed in the initiative that we were trying to achieve … because we were seeing practices closed down on a daily basis. If small country practices close down, it could be the absolute decimation of a whole community.”
ACM sighted a document from 15 February 2024 showing no general practices had received support from the foundation, the Central Western Daily reported.
DoHAC told ACM it had engaged an independent auditor to review the Western NSW Primary Health Network in 2004, which was still being finalised.
In response to Health Services Daily’s queries, Western NSW Primary Health Network said:
“The Priority Red Health Foundation (PRHF) was established with retained earnings of the Western Health Alliance Limited (WHAL).
“WHAL delivers the Western NSW PHN (WNSW PHN) program. PRHF was a subsidiary of WHAL, not the WNSW PHN. The WNSW PHN will not be elaborating on the PRHF’s operational activities.
A spokesperson from the Department of Health and Aged Care told HSD that “Primary Health Networks (PHNs) are independent organisations” and it is “committed to ensuring that PHNs are achieving their objectives, and meeting Government expectations and requirements of their funding agreements under the PHN program.
“The Department manages the performance of PHNs through a Performance and Reporting Framework and Assurance Framework that identifies and addresses non-compliance or performance concerns. As part of the Assurance Framework, the Department supports a rolling program of independent audits of PHNs to review whether they are operating in accordance with their funding agreements and identify areas where they can improve.
“As part of this rolling program of independent audits, Western NSW PHN was audited in 2024, with findings and recommendations of this audit still being finalised. Therefore, it is not appropriate to comment further at this time. The Department is committed to public transparency regarding the PHN program, and PHN audit summaries are made available on the Department’s website once an audit has been reviewed and finalised.
“The Department commissioned an independent Review of the PHN Program Business Model, which will ensure that the PHN program continues to have the right policy frameworks, administrative supports, and governance structures to deliver on Australian Government objectives into the future. The review’s final report is due to be provided to the Department in mid-2025.”