Issue 3 / 19 July 2010

The announcement in April 2010 by the Australian government of its proposed Coordinated Diabetes Care (CDC) scheme (1) has aroused significant debate and hostility within the profession, because valued aspects of the current health system are seen to be threatened by the scheme’s use of patient enrolment, capitation and fund holding.

The CDC scheme, due to start nationally in June 2012 without any prior trial or evaluation period, will be the first in Australian general practice to use any of these principles explicitly.

However, Australian GPs have participated since 1998 in schemes and programs that, while incorporating these elements of funding, (2) have not been promoted or acknowledged as such.

Patient enrolment means that funders of health services recognise one general practice as the patient’s “home” practice. This is usually expressed through the provision of payments for care provided only by that practice.

The Enhanced Primary Care Package, introduced in 1999, includes “chronic disease management items”, for which the Medicare Benefits Schedule states: Items 721-732 should generally be undertaken by the patient’s usual medical practitioner. (3)

The government’s intention to pay for these services only when they are provided by the patient’s “home” practice equates to an unannounced form of patient enrolment.

Capitation systems pay practices fixed amounts periodically to provide care to a defined population of patients.

The Practice Incentives Program, introduced in 1998, creates a pseudo-list of patients as “Standardised Whole Patient Equivalents”, and pays the practice a quarterly amount based on this number.

While the money does not have to be spent directly on providing patient care, it is intended to be used to improve the quality of care for the practice’s patients, and therefore amounts to a form of capitation.

Fund holding enables the GP or practice to direct the spending of a fixed maximum amount to buy services or goods for the patient’s care.

The Allied Health Initiative, introduced in 2004, enables GPs to direct the spending of a maximum annual amount of $294.25 to pay for a range of allied health services for the patient.

This amounts to a form of fund holding.

Australian GPs who participate in one or more of these existing schemes but oppose concepts of patient enrolment, capitation or fund holding may not be aware of the conflict between their beliefs and actions.


Australian Government. A national health and hospitals network: further investments in    Australia’s health. Canberra: Australian Government, 2010: 47-49.

Australian Government Department of Health and Ageing. MBS primary care items.

Australian Government Department of Health and Ageing. Medicare Benefits Schedule – Note A36.

Dr Oliver Frank MBBS, FRACGP, PhD, is a practising GP and lecturer, Discipline of General Practice, School of Population Health and Clinical Practice, University of Adelaide.

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