Lyndoch Living says primary care building sale won't affect healthcare

Acting chief executive officer Jill Davidson said while the building would hopefully be sold, Lyndoch's medical practice was definitely not being sold.

"It will be business as usual for Lyndoch Living," Ms Davidson said.

One of the key rationales for building the centre was to have doctors working next door to the aged care facility. Ms Davidson insisted the sale wouldn't change that.

"It is very important to have doctors in this location. That is, having doctors within easy access of the aged care facility," she said.

"The sale of the building will not impact the residency of the doctors. We will be working closely with all interested parties to ensure that there is a leasing arrangement that ensures the medical practice remains in the building."

Ms Davidson didn't say how Lyndoch would ensure the new owner couldn't eject the doctors. The proposed arrangement would also appear to rule out a private healthcare provider buying the building.

Lyndoch had to borrow $11 million to finance construction of the building, a debt that's almost certainly become a millstone as interest rates have rocketed from historic lows. The choice to tie up millions of dollars of its cash reserves in a capital project has also coincided with Lyndoch's net assets plunging $10 million in two years.

But when the organisation announced it was selling the building on October 16 - less than a year after it opened - board chair Sue Cassidy spoke glowingly of the decision to build it.

"The development of the primary health care building has been an exceptional contribution to the primary care and business sector in Warrnambool and beyond," Ms Cassidy said.

Expressions of interest on the building will close Thursday, November 23 at 2pm.

The healthcare business also faces headwinds associated with a new interpretation of payroll tax laws removing an exemption applying to doctors working in medical clinics, as well as the increasingly critical shortage of GPs in the regions.

The State Revenue Office released a ruling in late August that said medical practitioners like GPs were operating as "common law employees" of their medical clinics, which meant the medical clinics were liable to pay payroll tax for them.

In Victoria some medical practices have already started receiving bills, with one practice owner suddenly finding himself liable for $800,000 in taxes.

Ms Davidson didn't say whether Lyndoch had started restructuring its medical practice to comply with the new interpretation, but noted it would have to pay up if it received a bill from the revenue office.

She said the changes wouldn't prompt Lyndoch to sell its medical practice.

"The business of providing health care won't change but I think it is common knowledge that many medical practice groups have already lifted their prices to account for payroll tax," she said.

At the same time, the medical practice stands to lose several of its 14 GPs by the end of 2023. Ms Davidson said Lyndoch was "in a recruitment campaign phase for GPs and registrars" to fill the gaps.

"It is business as usual to be searching for more doctors especially in rural areas. We will face the same situation as all other states across the country - a shortage of GPs to fill the need," she said.

Ms Davidson said Lyndoch's pivot over the past 12 months to focus on its "core business" of aged care was bearing fruit. The occupancy rate across its services has hit 95 per cent and its hostel and nursing home meet every national aged care standard.

Crucially, the organisation has also weaned itself off a reliance on agency nursing and care staff, having attracted sufficient permanent employees to maintain its roster.

"Lyndoch has not relied on agency staff since May this year as we have had a consistent flow of highly trained staff being employed at Lyndoch across both the residential and community sector," Ms Davidson said.