Chapter 3
Government healthcare policy and sector responses
Introduction
3.1
Since the 2014-15 Budget, government policy regarding general practice
has changed five times:
-
May 2014 – the 2014-15 Budget introduced the $7 co-payment on GP
visits, diagnostic imaging and pathology, as well as a pause on indexation of
some MBS fees.
-
December 2014 – the then Health Minister, the Hon Peter Dutton MP
announced that the $7 co-payment has been dropped. In its place the government
introduced a package of reforms: reduction of the MBS rebate for short
consultation times; a $5 co-payment with certain carve outs; and a four
year extension of the previously announced indexation freeze out across all
specialist and GP services under the MBS.[1]
-
January 2015 – after a concerted campaign from GPs and health
consumers, the newly appointed Health Minister, the Hon Sussan Ley MP dropped
the short consultations policy and the $5 co-payment policy. The indexation
freeze remained in place and the Minister announced her intention to consult
with GPs and other stakeholders 'in order to come up with sensible options to
deliver appropriate Medicare reforms'.[2]
The Minister said consultations would include the need to 'insert a price
signal of a modest co-payment into the health system for those who have the
capacity to pay'.[3]
-
March 2015 – while the Health Minister's consultations continued
with little available information, primary healthcare stakeholders voice
concern over the lack of detail of government policy direction prior to the
2015 Budget. The Health Minister announced that the $5 co-payment 'has been
taken off the table' as it lacks broad support. But the Minister argued that
expenditure on Medicare is unsustainable and 'to ensure we protect Medicare for
the long‑term, the Government would be proceeding with its pause on
indexation of Medicare rebates for GP and non-GP items'.[4]
During her press conference to abandon the co-payment, Minister Ley indicated
ongoing interest in a price signal: 'It's definitely good policy to put the
right price and value signals in health to make sure that number one people
value the service they get from doctors...and also that they make that modest
contribution according to their capacity to pay, and those who can pay a bit
more are asked to pay a bit more. It's really that simple.'[5]
-
May 2015 – the 2015-16 Budget introduced a broad ranging review of
MBS items, major cuts to Flexible Funding programs, maintained the MBS
indexation freeze and confirmed $57 billion cuts to public hospitals in the
medium term.
3.2
The changes in government policy have been uppermost in the public
debate about primary healthcare in Australia. This chapter provides a record of
the public debate, as facilitated by the committee's many hearings and
roundtable discussions, alongside the government's policy changes.
3.3
The chapter is divided into sections which reflect the policy
announcements and major developments: May 2014, December 2014, January 2015,
and March 2015. Chapter 4 examines the 2015-16 Budget health measures, with
particular focus on those measures which effect primary healthcare and general
practice.
3.4
As noted elsewhere in this report, due to the fluid and uncertain nature
of the government's policy priorities for primary healthcare and general
practice, the committee has decided not to make recommendations as part of this
interim report. For this same reason the following record of the government's
decisions and ensuing public debate is highly necessary.
May 2014: the 2014-15 Budget
3.5
The first patient co-payment policy was introduced in the 2014-15
Budget. The patient co-payments (comprising the $7 co-payment for GP visits,
out of hospital pathology and diagnostic imaging) were raised as a key issue at
every one of the committee's 15 hearings in the second half of 2014. The policy
drew strong and consistent criticism across the health sector. The committee's
first interim report, tabled on 2 December 2014,[6]
examined the co-payment policy, amongst other issues arising from the 2014-15 Budget.
3.6
In examining the criticisms of the co-payment policy the committee also
undertook to continue to monitor this issue.[7]
3.7
The committee noted that it was 'deeply concerned by the substantial
body of evidence it has received regarding the negative effects of the
government's proposed patient co-payments'. Further, 'more than 100 submitters
and countless witnesses have expressed consistent and overwhelming opposition
to the proposed $7 co-payments'. The committee recommended that 'the government
should immediately abandon its plan to implement the $7 co-payments'.[8]
3.8
Further discussion on the $7 co-payment can be found in the committee's
first interim report.
December 2014: short consultation times,
$5 co-payment and indexation freeze
$7 co-payment dropped
3.9
On 9 December 2014, the Prime Minister, the Hon Tony Abbott MP, and the
former Minister for Health the Hon Peter Dutton MP, announced that 'the $7
Medicare co-payment measure announced in the 2014-15 Budget will no longer
proceed'.[9]
Instead, the government committed to introduce a new package of changes to
Medicare largely through regulation. This package included:
-
a $20 reduction in the Medicare rebate for short GP consultations
of less than 10 minutes;
-
a $5 reduction in the Medicare rebate for non-concessional
patients (the $5 co‑payment); and
-
a four year freeze on the indexation of Medicare fees for all
services provided by GPs, medical specialists, allied health practitioners,
optometrists and others until July 2018.[10]
3.10
In their joint press conference, the Prime Minister and the former
Health Minister estimated that each element of the new package of changes
amounted to around $1 billion. According to the Prime Minister, the overall
savings projection for the new package of changes would be around $3.5 billion
over the forward estimates.[11]
The original $7 co-payment was expected to achieve a similar savings figure. As
with the $7 co-payment, the savings from the new package of changes would go
into the Medical Research Future Fund.[12]
Changes to short GP consultation
times
3.11
The MBS currently defines four levels of consultation type (Levels A to
D) and sets a rebate to each level. Writing in The Conversation shortly
after the 9 December 2014 announcement, Dr Duckett noted that a majority of
consultations are under 20 minutes and so fall within Level B, which attracts a
$37.05 rebate.[13]
The change proposed by the government would have put a minimum time limit on
Level B consultations of 10 minutes.[14]
As a result, any consultation under 10 minutes would then attract a Level A
rebate of $16.95. Dr Duckett described the effect of the change to
consultation times:
This change will dramatically reduce the rebate for those
shorter consultations, from $37.05 to...$16.95 for general patients. Again it is
highly likely that GPs will pass on $20+ gap to patients. The $5 co-payment has
quickly morphed into a $25 one.[15]
3.12
The former Health Minister stated that the reduced rebate for short
consultations would:
...ensure that Medicare expenditure more accurately reflects
the time a GP spends with a patient. It encourages a shift away from 'six
minute medicine' so that appropriate, comprehensive care is better rewarded
over patient throughput.'[16]
3.13
At the press conference announcing the new package of Medicare changes, the
former Health Minister elaborated on the meaning of 'six minute medicine'. The
Minister argued that the rebate change for short consultations would encourage
GPs not to 'churn people through':
The only other point that I'd make is about seven out of 10
non‑concessional patients at the moment, so seven out of 10 people
without a pension or a concession card, are bulkbilled and this is the element
around the six-minute medicine. We think the change in the way in which the
[Level] A and B can be charged, so having a minimum of 10 minutes before they
can charge for a level B consultation, that that will concentrate a lot of the
doctor's effort on those who are most in need of help, those with chronic
diseases. It will skew the finances, if you like, when the doctors are
considering this, towards spending more quality time with patients as opposed
to just churning people through, so there are a number of benefits out of what
we propose.[17]
3.14
According to data collected by the University of Sydney's Family
Medicine Research Centre, approximately one-quarter of all consultations billed
to Medicare in 2013-14 lasted less than 10 minutes.[18]
3.15
The Prime Minister estimated that the rebate change for short
consultations would create savings 'in the order of $1 billion'.[19]
Regulations were formalised by the former Health Minister in mid-December 2014
which would have brought the short consultations change into effect on 19
January 2015.
$5 co-payment
3.16
The revised co-payment announced in December 2014 reversed several
unpopular aspects of the original version. Unlike the $7 co-payment policy, the
new $5 co-payment would not apply to diagnostic imagining and pathology
services.[20]
In response to criticisms about the disproportionate impact of the $7
co-payment on disadvantaged groups, the revised $5 co-payment would not
apply to the following vulnerable groups:
-
Pensioners
-
Concession card holders
-
Children under 16 years of age
-
Veterans for services funded through the Department of Veterans'
Affairs
-
Attendances at residential aged care facilities
-
GP mental health plans
-
GP management plans[21]
3.17
In announcing the new policy, the former Health Minister argued that
without the $5 rebate reduction and the $5 co‑payment, Medicare
would become unsustainable:
Medicare will not survive in the long term without changes to
make it sustainable...
In the last year alone, 275 million services were provided
free to patients. That’s three out of every four Medicare services being bulk
billed.
These changes will contribute more than $3 billion to the Medical
Research Future Fund which will fund the research needed to find cures to the
health problems of today.[22]
3.18
The practical effect of the policy would have been to reduce Medicare
funding for GP services, unless individual GPs chose to pass on the cost to
non-concessional patients, an estimated 70 per cent of whom are normally bulk
billed:
Currently, 70 per cent of non-concessional patients are bulk
billed. For doctors who choose to continue to bulk bill non-concessional
patients, they will receive $5 less for eligible services.[23]
3.19
In their press conference of 9 December 2014, both the former Health
Minister and the Prime Minister stated that the co-payment, if passed onto
patients, would be no more than five dollars. For example, the Prime Minister
explained:
...this is a question for the doctors and what we're saying to
the doctors is for adults who aren't on concession cards we don't think it's
unreasonable for you to charge a co-payment and what we want to do by
legislation is enable them to directly claim the rebate, provided the
co-payment they charge for that particular class of patients is $5 or less.[24]
3.20
The assertions by the government that GPs would have a choice as to
whether to pass on the $5 co-payment, and that the co-payment would only amount
to five dollars were widely criticised. The government's argument that
non-concessional patients should be easily able to afford a co-payment has also
drawn substantial criticism.
Government's extended indexation
freeze
3.21
Mentioned almost in passing at the 9 December 2014 press conference was
a further measure aimed at reducing Medicare funding. The Prime Minister
briefly added at the end of his description of the consultation time changes
and the $5 co‑payment, that the government would extend the freeze
on indexation of Medicare rebates over the forward estimates.[25]
3.22
In practical effect, this measure means the freezing of Medicare fees
for services provided by all GPs, medical specialists, allied health
practitioners, optometrists and others at the current level until 2018.[26]
Justification for the government's extended indexation freeze can be found in a
factsheet produced by the Department of Health in December 2014:
The previous Government, in the 2013-14 Budget, announced a
pausing of indexation of rebates – changing the indexation period from November
to July each year. In the 2014-15 Budget, the Government paused specialist
rebates for two years which commenced on 1 July 2014.
Rebates for Medicare-eligible consultations and procedures
performed by GPs, specialists, allied health professionals, nurse
practitioners, midwives and dental surgeons will now be paused until 1 July
2018 to ensure Medicare remains sustainable.
Pathology and diagnostic imaging are not currently indexed
and therefore not affected by this measure.[27]
3.23
The 2013-14 Budget had introduced the MBS short-term indexation measure
as a means of realignment of the indexation with the financial year:
The Government will realign the indexation of Medicare
Benefits Schedule (MBS) fees to the financial year in line with many other
Government programs. MBS fees, which are currently indexed on 1 November each
year, will be indexed on 1 July each year. The next indexation date will be 1
July 2014. This measure will result in savings of $664.4 million over four years.[28]
3.24
The Prime Minister stated that the three measures announced—the $20
reduced rebate for short consultation times, the $5 rebate cut/$5 co-payment,
and the extended indexation freeze—amounted to a saving of around one billion
dollars each over the forward estimates.[29]
This was, the Prime Minister advised, a collective saving of around
$3.5 billion in comparison to the $3.6 billion anticipated from the
measures in the 2014‑15 Budget.
3.25
Department of Health figures released through a Freedom of Information
request by The Australian show that the extension of the indexation
freeze announced in December 2014 would have a $1.3 billion impact on Medicare
rebates for GP services. This would partially account for the increase in
savings from the 2014-15 Budget to MYEFO in December 2014.[30]
Stakeholder criticisms
3.26
The proposed change to short consultations were strongly criticised by
peak health groups such as the AMA, RACGP, Consumers Health Forum of Australia,
and other health advocates. The criticisms raised included:
-
the government's lack of consultation about the proposed changes;
-
the absences of evidence linking short consultation times with
poor quality healthcare practices; and
-
the significant negative impacts that would flow from the
changes.
No consultation
3.27
The committee heard that the government developed the proposed Medicare
changes without consultation with the health sector or consumer groups. For
example Associate Professor Owler told the committee that the announcement of
the short consultations policy came as a 'complete surprise' to the AMA:
I think co-payment mark 1 and co-payment mark 2 were both
instances where the announcements were made without any consultation with the
medical profession. The announcements in the budget, I have to say, were a
complete surprise...
Regarding co-payment mark 2, again we found out 20 minutes
before the announcement was made. In fact, I was in the United States in
Chicago, in my hotel room, when the phone rang from the minister stating that
these were the changes about to be made. But there was absolutely no
consultation with the AMA. I understand you will hear from other groups as
well. I suspect no-one else had any consultation about the impact of those
changes.[31]
3.28
Similarly, Dr Jones, President of the RACGP, was not informed until just
before the Government announced the proposed changes to Medicare:
...we think that what we need to do is be able to advise
government on the implications of policy changes. Their policies seemingly have
been made on the run, with no consultation. Like my colleague Professor Owler,
I also received a phone call about half an hour before the announcements were
made. There was no consultation with our college or our members whatsoever.[32]
3.29
The concerns about the lack of consultation were also expressed by
members of the GP panel who appeared before the committee. Sole-practitioner Dr
Richard Terry of the Whitebridge Medical Centre in Newcastle, NSW, told the
committee:
The total number of GPs in Australia, as far as I can see, is
about 43,000. It is interesting that the RACGP, who presented here earlier
today, say they have a membership of 28,000 GPs and, by their own admission,
they are an educational body. That leaves at least 15,000 GPs in the community.
Essentially, taking both of those numbers into account, there are 43,000
grassroots GPs who represent thousands of patients who have not been consulted
on these healthcare changes.[33]
3.30
Officials from the Department of Health however claimed that this was
the government's typical approach to Budget measures:
Between the May announcement and the December announcement
there was significant consultation—again, as has been said in these
hearings—with a whole range, and we have a significant number of people we
consulted with. Those consultations raised a number of issues and concerns with
that proposal from the May budget and raised a number of areas that they had
particular concerns with. We did not consult specifically on the actual budget
measures that were then announced in December, but we were informed by those
consultations.[34]
No evidence base
3.31
As outlined previously, the government's justification for proposing the
short consultations policy was to avoid the problem of 'six minute medicine'.
However, medical experts that appeared at the committee's public hearing argued
that there is no evidence to support the government's assertions.
3.32
For instance the Australian Health Care Reform Alliance (AHCRA)
criticised the unsubstantiated link the government had made been short
consultations and poor practices:
Addressing ‘six-minute medicine’ is not an unreasonable
strategy if directed at poor quality practice only (six minutes may be totally
appropriate for some brief consultations). Short consultations do not
necessarily mean poor quality. However change needs a carefully planned
approach, based on evidence and consultation with GPs and consumers, not used
as a post-hoc rationale for previously determined budget cut.[35]
3.33
The RACGP also criticised the lack of evidence base:
...the evidence that time based consultations improve quality
is relatively poor. It is not good but there is some evidence. In our modelling
for government—this is one of the discussions we wish to have with them—we wish
to remodel the [current consultation level] system. We have some ideas and we
have done some financial modelling as well. Tagged on to that—very
importantly—is improving the quality of care.
We have a proposal whereby the items of service would be
reframed, if you like, and it would encourage longer consultations and
disincentivise superficial consultations. Tagged onto that—very importantly—are
payments for practitioners to provide quality care, for practices to be able to
enable practitioners to do that, and, thirdly, reflecting the complexity of the
local demography. We have modelling along those lines. So I think that we do
have some potential solutions (a) to improve the health of the population,
which is by far the most important thing, and (b) to help this government out
of the dilemma that it is in.[36]
3.34
According to several witnesses the lack of policy rationale and the
rapid changes from one policy to the next demonstrated the ad hoc nature of the
government's policy development process. For instance Dr Duckett told the committee:
We had the unusual situation which I do not think I have seen
in health policy in this country of three health policies in less than a month,
which suggests that policy is being made on the run. As I said earlier, we do
need to look at [the effectiveness of] primary care in general practice and we
do need to think about whether the current arrangements are right for the
future. That is not something that can be done in a two-week period.[37]
3.35
Furthermore, the AMA explained that the policy changes appeared to be
ideologically-driven fiscal measures rather than policies to improve health
outcomes:
I have also said publicly that one of the reasons we are in
this mess in the first place is that the changes that were flagged were always
designed as fiscal measures, they were never viewed through the prism of health
policy and I think that has been the failing of both sets of policies.[38]
...whoever is in government or whoever is Prime Minister needs
to consult with the profession and go away from being driven only by personal
assertions and ideology and get back to looking at evidence and data. As I said
before, the ideology that has driven most of these proposals has ended up
becoming the natural enemy of common sense, moderation and logic. We need to
get back to talking about good health policy and map out a program of how we
are actually going to make our healthcare system better not only for general
practice but across the board and to make Australians healthier and safer as
well.[39]
3.36
Health Department officials were not able to explain to committee the
health outcomes that could be expected from the proposed changes to Medicare:
Health outcomes are a very difficult thing, because there are
so many elements that impact it.
...we cannot say one thing versus another thing will affect
health outcomes. There are a lot of things, including a person's individual
decisions, as to what will happen with health. So it is very difficult to ever
have a broad comment as to what the health outcomes are, and we do not tend to,
as a result, make comment as to what we anticipate a health outcome will be. We
anticipate what we are looking for, which is improved health through whatever
the policy might be covering at the time.[40]
Unprecedented protests by GPs
3.37
Despite the announcements being made in the lead up to the busy
Christmas period and the proposed implementation date being in the midst of
most Australians annual summer holiday, health sector advocates reported an
unprecedented reaction from medical professionals and patients. The RACGP
launched a campaign called You've been targeted to publicise its
concerns throughout GP practices.[41]
In early January 2015, the AMA announced plans for rallies to be held in
capital cities for GPs and others to protest against the proposed changes,
including the short consultation time changes.[42]
3.38
Perhaps the most vocal response was generated by the RACGP's You've
been targeted campaign:
The government's changes in December [2014] lead to an
unprecedented protest from GPs. Thousands of GPs contacted the RACGP with
concerns regarding the changes and requested advice on how to implement them.
Nearly 47,000 patients, GPs and other medical specialists signed our petition
to the health minister. Others wrote to their MPs and displayed posters in
their waiting rooms informing their patients of the impending changes. We do
not often mount campaigns. We are an academic college. But this situation
warranted an immediate response.[43]
3.39
The response from the AMA's membership was also resounding:
...the amount of feedback that we [the AMA] had on that
initiative in particular exceeded the feedback that we have had on just about
anything else. I think a lot of people felt very insulted, particularly
experienced GPs, who were saying, 'We can provide quality care in eight or nine
minutes.' The issue is not whether it is 10 minutes or above.[44]
January 2015: short consultation times dropped
Short consultations policy dropped
four days before implementation
3.40
The proposed $20 reduction of the Medicare rebate for short GP
consultations was to have begun by regulation on 19 January 2015. However due
to the significant grassroots pressure from GPs[45]
and health consumers, as well as concerted advocacy from the AMA, the RACGP and
other health organisations, on 15 January 2015 the newly appointed Health
Minister, the Hon Sussan Ley MP announced that the planned changes would not be
implemented.[46]
3.41
Minister Ley said that 'the Government is responding to concerns that
have been raised about the new Medicare measure' by not commencing the changes
to short GP consultation times. Instead the Minister announced that the
government would undertake:
...wide ranging consultation on the ground with doctors and the
community across the country in order to come up with sensible options to
deliver appropriate Medicare reforms.[47]
3.42
At the same time the new Health Minister confirmed the government’s
intention to press ahead with the $5 co-payment:
We must insert a price signal of a modest co-payment into the
health system for those who have the capacity to pay.[48]
3.43
The Minister's announcement to withdraw the proposed changes to short
consultation rebate structures was welcomed by GP representative bodies such as
the AMA,[49]
Rural Doctors Association of Australia (RDAA)[50]
and the RACGP.[51]
In particular, groups welcomed the consultation with government which had been
missing from the formulation of the previous policies. Associate Professor
Owler, said he looked forward to the opportunity to work with the government on
any future changes to Medicare:
We are very pleased that the changes to the [short
consultation] rebates have been taken off the table. This was really essential
if we were going to move ahead with having a proper consultation and discussion
about the sustainability of Medicare and making our health system better for
patients but also more sustainable in the longer term.[52]
3.44
Of the package of reforms announced on 9 December 2014 the short
consultations policy attracted the majority of criticism, due to its planned
implementation in January 2015. However with the announcement on 15 January
2015 that the short consultation changes had been dropped, attention then
focused specifically on the $5 co‑payment and the extended
indexation freeze. These measures too were roundly criticised.
$5 co-payment remains
3.45
The short consultation times policy had gone, however the healthcare
community remained concerned about the government's continued imposition of a
price signal. After the 15 January 2015 announcement, stakeholder attention
focused on demonstrating to the government the detrimental effects of the $5
co-payment and continued indexation freeze.
3.46
While initial stakeholder comments had welcomed the dropping of the
$7 co‑payment, there was disappointment that the government had
seemed not to have listened to the concerns raised about co-payments and the
deleterious effects of a price signal on health outcomes. The RACGP, for
example made this statement on 9 December 2014:
The RACGP is pleased the Government has listened to the
profession and the community and compromised on its proposed $7 co-payment
model.
We are disappointed the Government has proposed a $5 cut in
Medicare rebates for standard GP consults.[53]
3.47
Further, peak groups argued that the government's single-minded focus on
“budget repair” had created policies which will damage Australia’s primary
healthcare system. Associate Professor Owler told the committee:
I think the proposals that have been made, as I have said,
have all been fiscal. They have all been about saving money. No-one would
introduce those measures if they were to look at the impacts through the prism
of health. I think one of the most disappointing things over the past 12 months
is that we have just had no health policy developed in this country. We need to
get back to talking about how we are going to make the health system better. I
am pleased that the new minister appears to be embarking on that process, but I
think it has been a disappointing 12 months from that perspective.[54]
3.48
The AHCRA submission gave a similar summation of the government's
proposed Medicare reforms:
-
Lack of policy framework: The proposal is not based on any
overall articulated and coherent health policy, analysis or framework from the
Government. It appears to have been developed solely to save the Government
money with no clear rationale why this area of health spending was targeted and
not other more wasteful ones...
- Lack of transparency: the moves have been made with little regard
for or consultation with the practitioners or consumers as to the impact on the
effectiveness and delivery of care.[55]
Disadvantaging vulnerable groups
3.49
In addition to these criticisms, stakeholders felt that, despite making
concessions to disadvantaged groups such as pensioners, concession card holders
and children (see paragraph 3.16), the government was refusing to take into
account the effect of a price signal on other vulnerable groups, which also
faced difficulties accessing primary healthcare such as:
-
those in rural health settings;
-
people with a mental health condition;
-
Indigenous Australians;
-
residents of aged care facilities;
-
women with specific health concerns;
-
the chronically ill;
-
those in the LGBTI community; and
-
people with a disability.
3.50
Witnesses at the committee's public hearings argued that a price signal
on healthcare access unfairly targeted vulnerable groups as these people would
be least able to afford additional out-of-pocket costs. Stakeholders argued
that such a policy undermined the principle on which Medicare was based:
universality of access to healthcare.
3.51
Dr Anne-marie Boxall, Senior Policy Adviser with the National Rural
Health Alliance argued that universality—a key aspect of Australia's Medicare
system—has been lost in the current healthcare funding debate:
We have been talking a lot about the impact on patients of
the potential changes, which is right, but the potential changes also have a
big impact on our health system if they are implemented. One of those is that
threat to universality. High bulk-billing rates have been pursued by both sides
of government for a long time, and there is a reason for that. It is because it
essentially functions as a safety net. Whilst some people may be able to afford
to pay more, and they do, through the taxation system, bulk-billing is seen as
a universal benefit. So if we are undermining a system and scaling back bulk‑billing
and making it a targeted system, we then need to be very sure that the safety
nets we have in place are effective, and that is something that we are not
entirely sure about at the moment, and we have evidence that people are falling
through the safety nets.[56]
3.52
The Consumers Health Forum of Australia agreed that any further pressure
on GPs would result in a drop in bulk billing and access to primary healthcare
for non‑concession card holders. Its CEO, Mr Adam Stankevicius argued:
And it will be patients who will suffer, as many doctors will
have no option but to demand the $5 from patients. It will be the chronically
ill, families and the elderly not covered by concessions, who will be hit
hardest. While pensioners and other concession patients, children and veterans
may still be covered by bulk billing, the squeeze on doctors' income could well
see a dramatic downturn in their ability to continue bulk billing which
currently benefits more than 80 per cent of cases.[57]
3.53
Despite the concessions included in the revised co-payment policy (see
paragraph 3.16), criticisms from other groups focused on concerns that the new
co‑payment would continue to create a barrier to access to primary
healthcare. Some groups, such as National Aboriginal Community Controlled
Health Organisation (NACCHO), believed that it would force community health
organisations and GPs to carry the cost of the co‑payment so as to ensure
access to healthcare, particularly for those with chronic illnesses:
...the majority of Aboriginal Community Controlled Health
Services, whose overriding purpose was to encourage Aboriginal people through
their doors, would choose to absorb the discretionary $5 co-payment.
“Aboriginal Community Controlled Health Services are making
the biggest gains against the closing the gap targets – helping Aboriginal
people to live longer and healthier,” Mr Cooke said.
“Many Aboriginal people do not fit in the exemption
categories but still have low disposable incomes and can ill-afford to pay
extra for their often complex medical needs and repeat appointments.[58]
3.54
Professor Andrew Bonney, University of Wollongong, agreed that improving
access to primary healthcare is vital:
The premise of the price signal is that people are
unnecessarily seeking health care and that it was for trivial reasons and
therefore it was a waste of the taxpayer's money. We know health-policy-wise
that the things that improve overall health outcomes are four components of
primary care. The first is access to care, and following on from that, once
they are in the primary care system, is continuity, comprehensiveness and
coordination...
We are in a small town, and we are under-doctored, so my
waiting time is two or three weeks, or longer. And to try to improve access,
because we are dealing with so much chronic disease, we have an hour walk-in
clinic in the morning. So, if there is an acute problem, you can just turn up
and we will see you... [W]ithin that walk-in clinic, the people turning up just
for things like, 'I'm a bit worried about this, Doc' included two patients who
had lost sight in an eye because of diabetic haemorrhages and a fellow who had
a lump in his groin, which turned out to be lymphoma... [H]aving a walk-in
clinic so that people can access care when they need to means that people with
very significant, serious things can have those picked up and dealt with
quickly. Now, if we had just standard appointments at standard rates, I am not
quite sure when those folk would have turned up. But by improving access to
care—because patients do not understand sometimes when they truly are ill—you
can prevent an awful lot of grief and mortality down the track...
[A]bout 10 per cent of my patients are Aboriginal. Those folk
do it very tough, and a co-payment for my Aboriginal patients would
significantly restrict their access to our care. And I know just from
prescribing and medication that the Close the Gap incentive, such that
Aboriginal patients do not have a co-payment for their medications, has made a
huge difference.[59]
3.55
Ms Jennifer Johnson, Chief Executive Officer of the RDAA explained that
putting a price signal on healthcare access would impact severely on rural
communities. She noted that not all non-concessional patients were necessarily
able to afford a co-payment:
We have already stated that a co-payment—a price signal, for
example—will probably impact more severely on rural doctors and rural
communities. We know that rural patients are far more reluctant to seek medical
assistance. That is for a number of reasons—one of which is access. Most times,
they obviously have to travel much further to see a GP. We know that economic
and social circumstances are quite often poor, and particularly economic
situations. In rural communities that might not necessarily be reflected in
eligibility for, for example, healthcare cards. So quite often in farming
communities you will have people who are asset rich, for example, but cash
poor.[60]
3.56
Despite the government's assurance that vulnerable groups would be
exempt from the co-payment, peak groups like the AMA argued that all health
consumers will be affected because the changes force GPs to pass on the
additional costs:
Even if the Government abandons the rebate cut for shorter
consultations, the AMA President warned other changes, including a $5 cut to
Medicare rebates for general patients from 1 July and a freeze on Medicare
rebate indexation through to mid-2018, amounted to an attack on general
practice that would inevitably lead to increased out-of-pocket expenses for
patients and undermine health care.
[Associate Professor Brian Owler] said the policies were
likely to lead to higher health costs in the long-term, as patients deterred by
increased expenses put off seeing their doctor. Eventually, as their health deteriorates,
they will need more intensive and expensive treatment, possibly even
hospitalisation.
“Primary health care is provided primarily by practitioners
who practice in a small business setting,” A/Prof Owler said in his letter to
Mr Abbott.
“These practices will not be able to absorb the cuts your
Government has made to the Medicare rebate. Costs will be passed on to
patients. Some will be able to make these payments but many will not. These
costs may deter many patients from seeking early treatment.”[61]
March 2015: $5 co-payment dropped, non-indexation retained
3.57
On 3 March 2015, recognising that 'it is clear the proposal for an
optional $5 co‑payment does not have broad support' the Health
Minister announced that:
The measure, including the proposed $5 reduction to the
Medicare rebate, will therefore no longer proceed and has been taken off the
table...[62]
3.58
During the Minister's press conference she confirmed a 'pause on
indexation of Medicare rebates for GP and non-GP items while we work with the
profession to develop future policies.'[63]
3.59
The Minister confirmed that the government is committed to introducing a
price signal into the Medicare system:
...it's definitely good policy to put the right price and value
signals in health to make sure that number one, people value the service that
they get from doctors...and also that they make that modest contribution
according to their capacity to pay and those that can pay a bit more are asked
to pay a bit more. It's really that simple.[64]
3.60
The Minister's announcement was welcomed by stakeholders. The RACGP, for
example, had called for a six-month moratorium on further policy announcements
and the establishment of a 'GP health reform advisory committee consisting of
the Government, patients and GP representatives to guide informed
consultations'.[65]
The RACGP implored the government to conduct a constructive discussion with all
stakeholders as the best way to:
...inform the development of a sustainable and efficient
healthcare system that meets the needs of all Australians, now and into the
future.
At the very least, we believe a structured review of all
time-based and content-based consultation item numbers would work towards
ensuring the long-term sustainability and quality of general practice patient
services.[66]
3.61
Several other organisations supported the call for a six month
moratorium including: the RDAA;[67]
the National Rural Health Alliance;[68]
the PHAA;[69]
the ACEM;[70]
and Dr Stephen Duckett, Director, Health Program, Grattan Institute.[71]
Others, such as Dr Fiona van Leeuwen, Vice Chair of the HGPA told the committee
that the government needed to work collaboratively with general practice:
...we urge against any further erosion of what is an essential
part of the Australian healthcare system—that is, general practice. We urge
against proceeding with both the GP co-payment and the freeze on MBS rebates.
Limit the damage with regard to both financial and human currency. Instead, use
our collective knowledge and experience to help to begin to craft a health
system that can improve the patient experience and improve the health of all
Australians. We want your help to rebuild the trust. Please let us use this
opportunity to take the first step towards working in partnership with
grassroots general practice for a health system that will meet both the
healthcare needs and the financial challenges of Australia for generations to
come.[72]
Health Minister's consultations continue
3.62
In January 2015, when the planned $20 cut to rebates for short
consultations was dropped, the Minister gave an undertaking that she would
conduct 'wide ranging consultation on the ground with doctors and the community
across the country'.[73]
3.63
According to the Minister the consultations would be guided by four
principles:
-
We must protect Medicare for the long term
-
We must ensure bulk billing remains for vulnerable and
concessional patients
-
We must maintain high quality care and treatment for all
Australians
-
We must insert a price signal of a modest co-payment into the
health system for those who have the capacity to pay[74]
3.64
The Minister's announcement was well received by many peak groups. The
AMA and the RACGP both welcomed the removal of the short consultation policy[75]
and stated their willingness to work with the government on its planned
consultations.
3.65
Although no details were made available through the Department of
Health's website about the consultations, peak groups such as the AMA and the
RACGP had meetings with the Minister. During a round of consultations with GPs
in Albury and Wodonga, Minister Ley told The Border Mail that the
timeframe for the consultations was quite restricted:
Ms Ley said the timetable for consultations was constrained
by the May budget and changes scheduled to come into effect in July.
“We’re talking weeks here, not months,” she said.[76]
3.66
Dr Jones, President of the RACGP, told the committee that his
understanding was that the consultations would be quite short:
While I have had brief discussions with the minister since
she took charge...I understand that consultation will end in a couple of weeks,
and this is simply not enough time to analyse and identify the serious
implications of these changes and will likely result in more budget measures
that damage the most effective part of Australia's health system.[77]
Minister conducting consultations
3.67
Information regarding the consultations announced by the Health Minister
has been limited and largely available only via the media.[78]
3.68
The committee sought details from the Department of Health regarding the
consultation process, asking for example whether there was a plan for the
consultations and a time limit. Ms Kirsty Faichney, Acting First Assistant
Secretary of the Medical Benefits Division advised that the consultations were
being conducted by the Minister and organised through the Minister's office:
...the minister is undertaking consultation. I understand her
office has provided advice, and we sought it as well when we heard the comment
regarding the time limit. We are not aware of any time limit with regard to the
consultations... At the moment the minister is meeting directly with GPs. She is
meeting directly with the peak bodies, literally one-on-one or in groups. She
is doing forums, she is visiting clinics and she is going to hospitals. I am
trying to think of other ones that have been happening.[79]
3.69
The Department also advised that the Minister's office was setting the
topics for consultation:
[Senator O’Neill]: Could you provide us with the areas of
primary health care that are being consulted on, specifically with regard to
general practice and matters that relate to general practice? Could you also
provide us with a schedule of consultations that are anticipated and ones that
have already occurred and the groups that are to be invited or have been
invited?
Ms Faichney: We can ask the minister's office.
Mr Stuart: We can ask the minister and the minister's office
if they are willing to provide it. We will take that on notice.[80]
3.70
The Department of Health's response to the question on notice regarding
the Minister's consultation was:
The Minister has been travelling the country consulting with
GPs, health works, medical and consumer groups and a range of medical
associations. These consultations are ongoing.[81]
3.71
It appears from the evidence that the Minister's office organised the
consultations with little or no support or interaction with her Department.
3.72
The Department of Health's own previous consultations have left much to
be desired in terms of thoroughness. Ms Faicheny explained that:
Between the May announcement and the December announcement
there was significant consultation... Those consultations raised a number of
issues and concerns with that proposal from the May budget and raised a number
of areas that [stakeholders] had particular concerns with. We did not consult
specifically on the actual budget measures that were then announced in
December, but we were informed by those consultations...[82]
3.73
Ms Faichney then clarified that by 'consultation' the Department meant
'providing information' and 'receiving communications':
I did not say people were consulted; I said there was a range
of information provided, as you well know, including what we all get all the
time, whether it is through media or correspondence to the department or direct
contact to us or to the minister's office. A significant amount of the
information gets provided in those ways, and that gets taken into account. You
would have to ask the government how they then took that into account in making
the decision on 15 January.[83]
Response to Minister's announcement
of 'wider consultations'
3.74
When the consultations were first announced the RACGP President, Dr
Frank R Jones was positive about the opportunity for discussions with
government, saying that the RACGP looked forward to:
...constructive discussion to inform the development of a
sustainable and efficient health system that meets the needs of Australia.[84]
3.75
However, between 15 January 2015 and the committee's hearing on 5
February 2015, the RACGP had discovered that the Minister's consultations would
not be as comprehensive as promised:
The RACGP participated in discussions with the Minister for
Health in late January 2015 as part of United General Practice Australia (UGPA)
and anticipates further discussion with the Minister in February. However, the
Minister for Health has indicated the consultation process is likely to be
completed within the next month.
We consider this insufficient to adequately consider and
analyse the most effective options for reforming Australia’s complex healthcare
system.[85]
3.76
Dr Duckett summed up the views of several witnesses with his
observations on the progress of the Minister's 'wider consultations' process:
We had the unusual situation which I do not think I have seen
in health policy in this country of three health policies in less than a month,
which suggests that policy is being made on the run. As I said earlier, we do
need to look at primary care in general practice and we do need to think about
whether the current arrangements are right for the future. That is not
something that can be done in a two-week period.[86]
Conclusion of the Minister's
consultations
3.77
On 22 April 2015 the Health Minister announced the outcome of her
consultations, which began in January 2015. The result of the consultations
was:
...overwhelming feedback...[that] Medicare’s structure no longer
efficiently supported patients and practitioners to manage chronic conditions
or the complex interactions between primary and acute care.[87]
3.78
In reporting the outcomes of the Minister's consultations, the media
release noted that the government continues to categorise Medicare funding as
unsustainable. However, the release insists that the government's process in
response to the consultation will not seek savings.[88]
3.79
In comparison to the announcement of the Minister's consultation in
January 2015 (see paragraph 3.63 above), the Minister's media release of 22
April 2015 stated that 'the Government’s consultations did not include a
co-payment policy – or proposal to examine one.'[89]
3.80
The government's response to the findings of the Minister's consultation
are:
-
establishment of the MBS Review Taskforce;
-
establishment of the Primary Health Care Advisory Group; and
-
the government working with clinical leaders, medical
organisations and patient representatives to develop clearer Medicare compliance
rules and benchmarks.[90]
3.81
Each taskforce will report back with priority areas in the later part of
2015.[91]
3.82
Chapter 4 provides a further discussion of the government response and
the establishment of the MBS review as part of examination of the health
measures in the 2015 Budget.
Committee observations
3.83
Associate Professor Owler wrote in March 2015 that health policy
development in Australia has stagnated:
The co-payment has sucked the life out of health policy
development, discussion, and debate. This has not only been detrimental to the
Government, it is also harmful for the practice of medicine and for our patients.[92]
3.84
As this chapter records, it has been difficult for everyone in the
healthcare sector to understand whether or not the current government has a
strategic plan for healthcare reform. Ms Alison Verhoeven, CEO AHHA, summed up
a view that many witnesses had put to the committee over the course of its
public hearings:
It is not clear at all to me that there is a strategic vision
or an articulated policy. What we do see is a compendium of attempts to address
health budgets by measures that are aimed at cutting dollars from the health
budget but then that are often reversed, such as the co-payment, obviously, and
we welcome that reversal. It is indicative of the approach. A policy is put out
into the public domain. It has largely got a funding cut element to it rather
than a strategic objective. It is tested in the public domain and found wanting
and then it is reversed or partly reversed, and then we see another measure put
out into the public domain to be tested. I think that
testing approach is really problematic. We need from the government a very
clear strategic vision articulated so that health stakeholders can respond
appropriately.[93]
3.85
Constant changes in government policy have been uppermost in the public
debate about primary healthcare in Australia. The committee notes that while
the major policy announcements from the government have become less frequent in
recent months, the transparency around consultations and decision making has
not improved. The committee observes a significant gap between the government's
and the healthcare sector's perspective on public consultation and effective
policy development. The committee's view accords with that of the majority of
witnesses being that there is a lack of evidence to indicate careful
consideration or evidence-based policy making.
3.86
Although no further co-payment has been introduced, there appears to be
conflicting comments from the government about its commitment to a price
signal. The Minister for Health began her consultation in January 2015 with one
of her four stated principles as 'we must insert a price signal of a modest
co-payment into the health system for those who have the capacity to pay'.[94]
She re-emphasised the importance the government places on a price signal while
dropping the $5 co-payment in March 2015. But once the consultation was
finished on 22 April 2015, the Minister's media release insisted that 'the
Government’s consultations did not include a co‑payment policy – or
proposal to examine one.'[95]
The committee, in addition to those in the healthcare sector, and health
consumers, wonder which statement in fact reflects government policy.
3.87
The other constant in government health policy, alongside the on
again-off again co-payment, has been the MBS indexation freeze. This policy
has, unlike the co‑payment, endured throughout two budgets and numerous
revised policy announcements. As discussed in Chapter 4, the indexation freeze
has effectively become the price signal the government seems determined to
implement. By being a significant constraint on the revenue for general
practice, the indexation freeze will force general practice to pass on more
costs to patients in order to remain viable. One witness observed that this
shifts 'the odium [of the budget measure] from the government to the GP practice.'[96]
As Chapter 2 outlined, this is the same effect as the co-payment would
have had on general practice.
3.88
At the time of writing, the committee has begun hearings with
stakeholders to determine the effects of the health measures in the
government's 2015-16 Budget. These findings are detailed in Chapter 4 of this
report. From this recent evidence, and the evidence the committee has heard so
far—as detailed in this chapter—the committee is concerned that the government
has failed to heed to the calls of general practice to work with it on positive
reforms to primary healthcare in Australia.
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