Experimenting with General Practice

Australia’s health system, as it currently stands, is unsustainable.

Treasury forecasts predict health care will consume all of State revenues by 2046;1private health insurance premiums are going up by 4 to 6% each year, and hospital costs at 6 to 8%.2 More than a fifth of our population will be older than 65 by 2046 and chronic disease costs will increase by two to fourfold, depending on the condition.3 

If we invest in primary care we can create more time for prevention, deliver more services in the community or at home before going to hospital, and activate patients more in their self-care. These are all evidenced-based interventions that can improve patient and health system outcomes. 

But in Australia, general practice receives only 7% of total health funding,4 even though it can influence much more in terms of patient outcomes and costs in other parts of the system. 

Limitations with Medicare funding over time have reduced the capacity and incentive for innovation, even though the wider health system could benefit.


A new movement called value-based healthcare is gaining traction abroad. The philosophy behind this is designing healthcare to focus on value, rather than volume. 

By building models of care that chronic disease patients need in order to keep them healthy, happy, and, where possible, out of the costly hospital system, we can improve the sustainability of our health system over the long term. 

I’m a GP with an interest in chronic disease management and population health. As part of this new movement, I’m part of a trial of a new model of general practice to see whether more investment can deliver better patient and health system outcomes.

Over the past decade, my experience has been analysing and testing new models of care for government and health insurers. For the federal government, I ran a consortium of 23 companies to build and test a new diabetes model of care for 8,000 patients (Diabetes Care Project) and for health insurers, I built a new chronic disease service, called Care Complete, which now services more than 20,000 patients nationally.

Lessons from these programs were two-fold. Firstly, government and hospital payers can provide resources to clinicians, but only quality-focused GPs tend to take them up, therefore resulting in significant selection bias and limited improvement potential.

Secondly, the fragmentation across so many different governments, health insurers and funding silos makes it hard to provide GPs with a singular model that applies to all of their patients. 


To see if we can do better, funding has been raised from philanthropists to set up a social experiment called Osana. If we build a value-based, chronic disease-focused primary care service at scale, will it deliver better patient and health system outcomes? 

Many GPs have the belief that if they had more funding, or were able to spend more time with patients, or could get patients to focus more on prevention and lifestyle modification, or if they integrated better with other clinicians and health services, then we would get better health outcomes. 

Osana’s hypothesis is exactly that. If we invest more to deliver a model that patients need, rather than be constrained by current funding mechanisms, then patients and the health system will benefit over the long run.

To do this, we scoured the world for successful examples, interviewed key players from those systems, engaged with government and health insurers locally, and recruited a group of like-minded clinicians to develop a new approach to general practice. 

This new model – this experiment  – will be tested courtesy of a handful of clinics in underserviced areas across Sydney, and evaluated by external university partners. 

The clinics will not be financially viable during the test phase, but they can be long term if we can demonstrate reduced hospital admissions and attract case management payments from hospital payers (State Government and health insurers).

The model we will be testing involves:

• Team – Each GP has a clinical and non-clinical helper. Nurses and allied health manage chronic disease pathways and conduct case reviews with visiting specialists. Health assistants handle paperwork, schedule appointments and do home visits.

• Activation – Patients attend regular education sessions, coaching and group activities to build greater health literacy, more appropriate health-seeking behaviour and better support networks.

• Convenience – Each clinic has a bus to help transport patients if they need it, and we can provide consults via by video, messaging or phone.

• Prevention – Patients all get a care plan and GPs spend more time with patients to sort out their issues and prevent de-conditioning. The emphasis is on being proactive, not just reactive to when patients turn up.  

• Funding – All staff are salaried, including GPs. Funding will come from Medicare, patient membership fees, private sector donations and hospital payers (State governments and private insurers).

We hope this may be a good alternative, or addition, to the Health Care Homes policy.

Dr Kevin Cheng, FRACGP, MBA, is founder of Osana


1. One in Four Lives Telehealth Report

2. Private Healthcare Australia


4. AIHW Australia’s Health