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FOR close to 30 years, Dr Ken Lambert and Dr John McQualter have provided medical care to the West Wallsend community via their small general practice on Carrington Street.
But shrinking profit margins, increasing complexity of practice, and the inability to expand are among the reasons the doctors decided to close their doors on Friday.
They will amalgamate with a larger practice in Wallsend.
Their relocation comes as a growing number of smaller general practices in the Hunter have been pushed to close or merge with larger organisations to survive.
"It's the corner shop versus the supermarket analogy," Dr McQualter said.
The move will leave West Wallsend without a dedicated GP, but Dr Lambert and Dr McQualter said it had become "economically unviable" for them to continue.
They had twice lodged development applications to Lake Macquarie City Council to extend the premises in a bid to boost their profitability, reduce overheads and offer more medical services for the community. Once in 2006, and again in 2016.
"We knew that unless we grew into a bigger practice, that our practice would eventually wither on the vine," Dr Lambert said.
They hoped that growing the health facility would help them attract and retain some of the "excellent" GP registrars they have trained.
But because the practice was in a heritage and commercial district, the costs to expand the site escalated "out of control".
"I estimate we spent over $250,000 from 2006 until we gave up in 2019. For nothing happening. For no outcome," Dr Lambert said.
"With the two failed DAs, all the compliance, architects fees, heritage restrictions and other reports we had to get done, we spent so much trying to get it through the council, and at the end of the day, we had an unaffordable building."
Dr McQualter said accountancy advice suggested they would need eight or more consulting rooms to justify such a project.
"I would be working full time to the age of 70 to pay it off," he said.
They felt their proposed development in West Wallsend had been treated the same as a commercial development in a high traffic area like Charlestown.
"We feel very sad about being faced with having to move out of this community," Dr Lambert said. "It is going to have an impact on this community, particularly the pharmacy that is here. They won't have a local general practice. There is a whole lot of ramifications, and it is another blow to the West Wallsend business district."
Dr McQualter said the bigger companies operated on a business plan that minimised overheads and grouped GPs into 10-plus medical centres.
"With economies of scale and integration of allied medical services such as pathology and radiology, they are profitable concerns," he said. "In our small business - five GPs, four registered nurses and seven support staff - one small incident, such as a workers compensation claim, sends us into a tail spin. You have to be versed in industrial law, manage staff, balance the books. A couple of adverse events have left me stunned and wishing I could leave that work to someone else."
Government policy had also played a role, including the six-year Medicare rebate freeze.
"We are a low socio-economic area, we bulk bill the vast majority of our patients," Dr Lambert said. "It has just squashed our margins. It is forcing small practices to the wall financially."
Dr McQualter added that the reclassification of the Distribution Priority Areas had also "knocked" about $5 off the Medicare fees charged to bulk billed concession card holders.
"That must be close to 50 per cent of our patients," he said. "That occurred in 2019, then we had COVID. It was a factor in our viability. One can suffer many stresses if remunerated fairly."
Dr Lambert said it was the end of an era.
"We are shifting into a new paradigm where the large medical centre is probably the only reasonable way forward," he said.
Dr Lambert had taken five months off to care for his wife, radio personality Jill Emberson, before her death in 2019.
"Jill being unwell showed me just how vulnerable it is being a small practice owner when those unexpected and terrible life events happen," he said. "Not only was I not making an income, I was actually going backwards, because I still had bills to pay here at the practice. The other side of the coin was that John had to do the whole practice management by himself during that time."
Dr Lambert and Dr McQualter had mixed emotions about the closure of the practice, which was established in 1993.
"I am disappointed, I feel sad for the community. It also means a number of our staff have had to find work," Dr Lambert said.
"But it is also a great relief to not have that burden of responsibility on my shoulders."
IN THE NEWS:
Dr Fiona Van Leeuwen, chair of the Hunter GP Association, said COVID-19 had been challenging and even overwhelming for many small businesses.
"For general practices, the challenges have unfortunately occurred on a background of years of frozen MBS rebates and the recent reduction of the bulk-billing incentive payment in our region," she said.
"The latter alone has removed 7.5 million healthcare dollars from our region.
"The effect of this is reduced health services being provided to our most disadvantaged, seen in lower bulk-billing rates, practice closures, and practice mergers."
The Hunter GP Association is calling on the Federal Government to support the disadvantaged and vulnerable elderly and young in the lower Hunter by restoring general practice funding in our region, starting with the reversal of the reduced bulk-billing incentive payment.
A Lake Macquarie City Council spokesperson said initial development plans for the West Wallsend Medical Centre had been amended due to mandated requirements relating to the heritage conservation area, stormwater treatment, parking space dimensions, access ways, and compliance with the building code.
"Development in West Wallsend is guided by the West Wallsend/Holmesville Heritage Area Plan," she said.