cohealth Board Faces Potential Government Takeover After Damning Report
An independent review has recommended the board of community health provider cohealth be replaced by a state administrator, citing widespread financial mismanagement and governance failures. The report, released by the federal government, urges Victorian Health Minister Harriet Shing to issue a formal final warning to cohealth or initiate a government takeover.
"The review panel found that cohealth's executive management hid rising deficits from the board until February 2024 using reassuring language in formal paperwork."
Report co-author Stephen Duckett highlighted 'serious deficiencies' in governance, culture, management, and reporting, alongside a total breakdown in community relationships. The review was commissioned after cohealth announced closures of primary care and counselling services at Kensington, Fitzroy, and Collingwood sites due to a funding shortfall—closures that would have affected over 12,000 patients reliant on bulk-billing services.
Key findings include:
- Corporate overhead costs are significantly higher than the 10-30% norm in comparable community health programs.
- Executive management concealed rising deficits from the board until early 2024.
- A "total breakdown" in community relationships was identified.
Ministerial Response and Funding Context
Victorian Health Minister Harriet Shing said she is carefully considering the findings and expects cohealth to demonstrate integrity, transparency, and accountability. She noted the state government provided $68 million to cohealth last year.
Clinical and Community Impact
Royal Australian College of General Practitioners Victoria Chair Dr Anita Munoz said the report demonstrates that the Medicare Benefits Scheme is failing vulnerable populations, underscoring the systemic pressures on community health providers.
cohealth's Apology and Path Forward
In response, cohealth apologized for the trauma and distress experienced by clients, staff, and the community, and accepted that governance needs improvement.
Recommendations for Reform
- Transition cohealth to a trial federal grant model.
- Reconsider the redevelopment of the Collingwood site.
- The federal government has already provided $3 million in emergency funding in two installments.