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Against this backdrop, practices are being forced to think more commercially – balancing patient access with financial sustainability, strengthening governance, and positioning themselves for integration, scale or succession in an increasingly sophisticated healthcare market.
Over the past six months, expanded bulk billing incentives and the introduction of the Bulk Billing Practice Incentive Program (BBPIP) have reshaped how general practices assess financial sustainability. Larger practices and corporate groups have moved decisively to adopt the BBPIP, transitioning significant portions of their networks to fully bulk‑billed models where the incentive materially lifts gross revenue per consultation. By contrast, most independent practices are applying the incentive more selectively, using it as a partial offset to rising costs rather than a replacement for private fees.
From an accounting perspective, recent modelling consistently shows that while the incentive improves top‑line revenue, it does not keep pace with wage inflation, rent, and technology costs without utilisation gains.
At the same time, copayments have become more targeted and deliberate. Practices have refined pricing strategies by retaining private fees for longer or more complex consultations, non‑incentivised services and procedural work. Copayments are increasingly viewed as a margin protection mechanism, as well as value add to retain patient loyalty.
We see the primary care market continues to consolidate, with private equity and institutional capital actively targeting scalable, and multidisciplinary primary care platforms. The consolidation is driven by structural pressures from workforce shortages, rising operating costs and policy complexity, which disproportionately affect smaller scale practices.
In this environment, practice valuations have shifted materially from topline revenue and patient numbers, to earnings quality and sustainable recurring revenue. Key value drivers now include contribution margin per consult, clinician retention, and scalability.
Practices that demonstrate strong financial governance, stable GP engagement, and appropriate and economic fee structures are commanding stronger valuation outcomes. Optimising rosters to align GP availability with demand, improving utilisation, and strengthening financial governance are no longer internal management issues, they are central to value creation.
Integrated care is moving from policy aspiration to operational reality. Allied health services already account for over 26 million Medicare‑subsidised attendances annually, and demand continues to rise with chronic disease prevalence and ageing demographics.
Successful practices are evolving beyond simple co‑location toward:
Government and peak body advocacy increasingly supports allied health embedded within general practice, recognising its role in improving outcomes and reducing system fragmentation
The intersection of policy reform, capital, integration and patient expectations is driving a more commercial, sophisticated sector. Practices that understand their numbers, embrace integration and plan strategically for scale or succession will be best positioned to thrive in this new environment.
As specialist advisers to the primary health sector, Grant Thornton experts support practices across the full lifecycle, from initiation through optimisation towards transaction readiness:
The Aged Care Act 2024 has been in place for a month. Touted as a ‘once in a generation change’ to improve protections for consumers, it also seeks to stimulate investment in residential care services and improve care in the home with the new Support at Home Program.
The Federal Court’s $5.8M ACL decision signals a new era for privacy, cybersecurity, and governance in Australia. It reinforces that privacy and cyber obligations start Day 1 of any acquisition, governance failures will be scrutinised, and accountability cannot be outsourced. Boards must ensure robust oversight, deep cyber due diligence, and forensic incident response. With OAIC escalating regulatory enforcement, organisations face heightened legal, financial, and reputational risks.
The health and aged care industry in Australia is complex and there are a range of challenges and opportunities for the banking sector which can be explored in relation to its various sub-sectors.
