THE REVIEW OF THE HEALTH LEGISLATION
(PRIVATE HEALTH INSURANCE REFORM) AMENDMENT ACT 1995
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CHAPTER 1 - INTRODUCTION
Terms of reference
1.1 The matter was originally referred to the Committee by the Senate
on 11 May 1995, following passage of the Health Legislation (Private Health
Insurance Reform) Amendment Act 1995, [1]
for inquiry and report on or before 1 July 1996. The full terms of reference
were for the Committee to undertake:
The ongoing monitoring of the implementation and operation of
the Health Legislation (Private Health Insurance Reform) Amendment Act
1995 during the first 12 months after its enactment, with particular
reference to the collection of data under the legislation and its provision
to the Department of Human Services and Health [2]
and the Private Health Insurance Administration Council.
1.2 Following the March 1996 election, the Committee reported to the
Senate on 30 May 1996 that it proposed to continue the inquiry in the
38th Parliament and recommended that the Senate agree to the Committee's
continuation of the inquiry to report by 19 September 1996. The Senate
agreed to the Committee's recommendation. [3]
Conduct of the inquiry
1.3 Major provisions of the Health Legislation (Private Health Insurance
Reform) Amendment Act 1995 (the Reform Act) did not become operative until
October 1995, and consequently the previous Committee only had the opportunity
to undertake preliminary work on the inquiry before the general election
was called in January 1996.
1.4 To assist with this preliminary work the Committee was briefed by
officers from the former Department of Human Services and Health in November
1995 on work that had been performed by the Department, and that which
was currently being undertaken, following the introduction of the Reform
Act. The Committee was also provided with updated information on developments
relating to health insurance matters resulting from other amendments in
the Reform Act.
1.5 Following the Senate's approval to continue with the inquiry, the
Committee invited submissions from all parties involved with, or having
a representative interest in private health insurance. Considerable interest
was expressed in the inquiry with fifty-nine submissions being received,
including many submissions from organisations and individuals who had
made previous representations to the Committee during the course of its
March 1995 inquiry into the Health Legislation (Private Health Insurance
Reform) Amendment Bill 1994.
1.6 Copies of submissions of a non-confidential nature were published
by the Committee as separate volumes. A listing of the organisations and
individuals who made a submission to the Committee's inquiry are listed
in Appendix 1.
1.7 The Committee held two days of public hearings into the inquiry in
Sydney and Canberra on 24 and 25 July 1996 respectively. Witnesses who
gave evidence at the hearings are listed in Appendix 2. A number of additional
papers were tabled at the hearings and further evidence was provided to
the Committee in answer to questions taken on notice following the hearings.
The Committee authorised the publication of this additional information
which has also been tabled in the Senate as a separate volume accompanying
the submissions and transcripts of evidence.
1.8 In conducting the inquiry the Committee decided to focus upon a number
of issues within the general terms of reference, including:
- the degree to which the major aims and objectives of the legislation
have been fulfilled;
- whether concerns raised in debate during the bill's passage have been
vindicated over the period of the legislation's operation;
- issues arising from the operation of the legislation, in particular
the impact and effectiveness of the hospital and medical purchaser-provider
contracts;
- alternative approaches to limiting out-of-pocket expenses for patients
whilst retaining stability in terms of the price of private health insurance.
1.9 Whilst the Committee's task was limited to monitoring the implementation
and operation of the Reform Act during the first 12 months following its
enactment, many organisations took the opportunity of commenting in their
submissions on broader issues relating to private health insurance arrangements
and the delivery of health services generally. The Committee decided that,
as the operation of the Reform Act is inextricably tied into these broader
issues, it would also give due consideration to these issues by dividing
the inquiry into two parts. Firstly, the Committee would report to the
Senate on the more immediate issues concerning the implementation and
operation of the Reform Act. Secondly, the Committee would focus on the
broader issues which were commented upon in submissions and during the
course of the inquiry and report to the Senate before the end of 1996.
1.10 The broader issues to be considered by the Committee in the second
stage of its inquiry include:
- the relevance of the community rating principle in the light of developments
in the health care area;
- the effect of changes in the delivery of health care, including the
fundamental question of public/private health sector mix and recognition
of the shift to shorter hospital stays and to out-patient care, technological
developments in patient care, etc.;
- the need to widen the scope of insurance products which can be offered
to the public; including the adjustment of the product to changing circumstances;
- the extent of regulation surrounding the industry and scope for reduction;
the need to open the industry to greater competition in terms of new
players and new products;
- financing alternatives to the current system, including devising systems:
- to allow and encourage persons to take individual responsibility
for financing of their future health care needs; and
- to address the ageing of the population with subsequent growth
in health care needs; and
- the applicability of alternative health care financing arrangements,
for example, overseas social insurance models.
1.11 To ensure that all those who provided submissions to the inquiry
were given an opportunity to comment on the above issues, the Committee
invited organisations and individuals to provide a supplementary submission
to address these broader issues, or to elaborate on comments made in their
initial submission which may have addressed any or all of these issues.
Acknowledgements
1.12 The Committee expresses its appreciation to those who made submissions,
provided additional material, or gave evidence to the inquiry.
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FOOTNOTES
[1] Act No.41 of 1995; date of Assent: 29 May
1995.
[2] Now the Department of Health and Family
Services (DHFS).
[3] Senate Hansard, 30 May 1996, p.1383.