From July 1 Medicare Locals in what the federal government calls 61 “fragmented regions” are making way for 31 Primary Health Networks (PHNs).

Unlike Medicare Locals, the new PHNs will not be direct service providers unless they can prove “market failure” and acquire resources from the federal government to fill service gaps themselves or through separate service entities.

The National Rural Health Alliance, made up of 37 national organisations including the Country Women’s Association and the Royal Flying Doctor Service, calls the PHNs “facilitators or fund holders”.

This week it urged the government to use “existing data and evidence” in making resources available to PHNs to provide services in areas where “commercially viable enterprises” had proven unsustainable for reasons including small populations.

Canberra-based chief executive officer Gordon Gregory has conveyed the alliance’s concern that delivery of primary care “so urgently needed” by rural people could be delayed if PHNs were asked to collect new data.

He said abundant information was available on “where we are short of services” from an array of researchers and organisations, including Medicare Locals that were required to conduct “needs analysis”.

“If the rural PHNs have to prove, once again, that their areas have major gaps in service delivery, there will be more uncertainty and delays,” Mr Gregory said.

The chief executive officer said uncertainty about the reform process had already proven detrimental to “more remote areas” of Australia, including parts of Western NSW.

He said staff worried about job security had moved away and services had folded in fields such as mental health.

“Such losses have worsened pre-existing service deficits,” said Mr Gregory who declined to identify affected communities.

The federal government is axing Medicare Locals after an independent review found their delivery of health services was “inconsistent” and administration was soaking up 40 per cent of funding.

Federal health minister Sussan Ley reports that the PHNs will be “outcome focussed” and aligned with local health networks to better integrate primary and acute care services.

The federal government has announced the operators of 28 PHNs after a tendering process.

It is yet to appoint the operator of the Western NSW PHN, taking in Lighting Ridge in the north, Grenfell in the south, Coonabarabran in the east and Broken Hill in the west.

The alliance has welcomed the government’s naming of the successful bids and “understands the care being taken” in choosing the rest.

Mr Gregory is confident that the wait in Western NSW will be worth it.

“The various parties who competed as we understand it for the PHN are being encouraged to collaborate,” he said.

“What we hope will happen is they will all be rounded up. It will be a wonderful PHN.”