COVID crisis forces closure of charity co-op medical clinic

Charities say they are struggling with the uncertainty around the future of government support payments                 

A Canberra charity-run medical clinic is shutting down due to COVID-related financial pressures, as fears mount over the ability for charities to survive the ongoing pandemic.       

The National Health Co-op (NHC) revealed this week it will close its Charnwood medical clinic at the end of July.   

The not-for-profit, member-owned cooperative provides bulk billing for a GP or allied health professional of choice to its members – delivering around 186,000 bulk billed appointments a year.

NHC CEO Alison Wright said shutting one of its clinics was needed to strengthen the co-op’s financial health during the COVID-19 pandemic.

“COVID-19 has placed the NHC under considerable strain and we have made the difficult decision to close our Charnwood clinic at the end of this month as part of strategic financial health measures so we can sustain these uncertain times,” Wright said.

“Job Keeper has been a critical component in maintaining services however immediate expenses in PPE orders, costs to improve ICT, very little rent relief and intermittent variations in patient attendances have proved a perfect storm for the organisation.”

Wright told Pro Bono News that as a NFP organisation, the NHC was without the significant cash reserves needed to withstand a downfall in patient appointments.   

She said she hoped that the NHC’s clinic closure did not foreshadow a raft of charities around the country shutting down due to the pressures of COVID. 

But she was “absolutely certain” that charities and the whole NFP sector were really struggling.

“I’m hearing from other charities that they are doing it really tough. Not all landlords can provide rent relief,” she said.

“The uncertainty around if JobKeeper will be extended post-October is tough, and the charity sector will definitely suffer should JobKeeper not continue.” 

Extending JobKeeper has been a common refrain across the sector, with the Charities Crisis Cabinet calling for the payment to be phased out over a six to 12-month period. 

The cabinet also said a one-off Charities Transformation Fund was needed to help NFPs transition to the new realities of operating online, restructuring their organisation and investing in the capability of staff. 

The NHC has already been in touch with the federal and ACT governments around the difficulties it is facing.

Wright said it was important the dialogue continued between the charity sector and government.

But she said there was no catch-all solution for every charity. 

“We’re talking about different sectors and different services. But we play a really important role in the fabric of our society,” she said. 

“And I think more and more we need to make sure that the services that not for profits are providing – especially when it speaks to the health of our community – continue during the pandemic.”

The Business Council of Co-operatives and Mutuals (BCCM) has noted the additional difficulties that co-ops face surviving the pandemic.

BCCM CEO Melina Morrison told Pro Bono News that as a cooperative, the NHC relied on servicing members to sustain the enterprise.

“It does not rely on grants or block funding, thereby alleviating the strain on public expenditure,” Morrison said.

“It does not operate via donations, alleviating the contest for charitable giving in the health sector.”

But Morrison noted that while the pandemic was outside of the cooperative’s control, co-ops did have options for accessing capital that were not available to charities.

“[This includes] hybrid forms of capital which can be used to replenish reserves and to provide for working capital to invest in new operating models such as digital health,” she said.

“Unfortunately there is a lack of parity of guidance for cooperatives on raising capital with other business models.

“There is no regulatory guidance for cooperatives for capital raising or other matters. National guidance is required to boost confidence in the sector and clarify processes and standards.”