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Flagpost is a blog on current issues of interest to members of the Australian Parliament

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Explainer: paying for GP services

This post has been revised on the 21st August 2014. Recently the debate around healthcare has focused on paying for GP services. The proposal for a patient co-payment is one example. Other proposals include capitation, blended payments and managed care. Arguments over the best funding models for primary care may appear to have little relevance for most patients, but how we fund primary care services can impact on the quality of care, as explained in this paper from the Primary Health Care Research & Information Service (PHCRIS). Currently, most primary care services like GP visits are funded through Medicare. GPs receive most of their remuneration through fee-for-service (FFS) payments... Read more...

How much does Medicare cost?

The Treasurer, Mr Hockey said on Channel Seven’s Sunrise program on 21 February 2014, that the cost of Medicare was going to soon rise from $65 billion a year to $75 billion a year. However, the official transcript later clarified this to include other federal health expenditure. Seeing Medicare in the context of these wider figures, it is evident the actual cost of Medicare is considerably lower. According to Budget Paper no. 1 (2013–14) spending on Medicare for the current financial year is estimated to be $19.0 billion and is forecast to grow to $23.6 billion in 2016–17. Medicare is the fourth most expensive program after payments to the states, support for ... Read more...

Evidence around GP co-payments and over servicing

One argument forwarded in support of the recent proposal to impose a co-payment for GP visits is that it has the potential to reduce ‘over servicing’, and therefore overall health costs. Over servicing occurs where an unnecessary medical intervention is provided. Imposing a consumer co-payment on the cost of visiting a doctor will encourage patients to avoid unnecessary visits, thus reducing over servicing and saving the health system money, argue advocates of co-payments. But what is the evidence that over servicing is a problem or that it is being driven by unnecessary consumer demand? Before proceeding, a distinction should be made between the extent of over servicing and th... Read more...

Medicare at 30

Medicare, Australia's universal health insurance scheme marks its 30th anniversary on 1 February 2014. For 30 years Australians have had free public hospital treatment and subsidised medical services; free if the doctor bulk bills. Medicare is part-funded by a 1.5% levy on income tax (which meets around half its cost) and general taxation. In 2012–13, spending on Medicare totalled $18.5 billion. This makes Medicare the third most expensive government program after the Age Pension and family payments. Read more...

Health spending: patients bearing higher costs

Recent reports have highlighted the growing cost of health services and the increasing financial burden on individuals. According to data from the Australian Institute of Health and Welfare (AIHW) Australia spent more than $130 billion on health in 2010–11, or around 9.3% of Gross Domestic Product (GDP). Around 70% of this was spending by Government—the Commonwealth and the states and territories combined, through programs such as Medicare, public hospital services and the Pharmaceutical Benefits Scheme (PBS). But a significant and growing component of health expenditure comes from individuals. Australians paid $24.3 billion out-of-pocket on purchasing health goods and services in 2010–11. ... Read more...

The missing billion? Revisions to health funding not unprecedented

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Is $325 million enough for Tasmania's health care system?

  Last week, after much speculation, the Federal Government announced that it would provide an extra $325 million over four years to Tasmania’s health care system. Previously the Tasmanian Government had announced cuts of up to $500 million over four years to the health care system, commencing from 1 July 2011. Many of these cuts were directed to elective surgery, reduced services and the closure of hospital beds. The most recent Tasmanian budget (May 2012) announced a reduction of the savings target by $120 million. Of the $325 million, only $31.2 million will be directed towards elective surgery with the majority of funding to be spent on better care in the community, improved discharge ... Read more...

Reducing elective surgery waiting times - is more money the answer?

Performance of public hospitals is rarely out of the news. Attention is often focussed on elective surgery waiting times or episodes of poor care. Recently there have been reports of ward closures in Victoria and the Tasmanian government has announced cuts to elective surgery in an attempt to balance the budget. Likewise, funding arrangements for hospitals are guaranteed to generate community debate, with more, not less, funding often proposed as the answer. The most recent COAG Reform Council Progress Report presents a sobering, if not contradictory, view of public hospitals in Australia. This report is a high level examination of implementation of the Government’s reform agenda across a ra... Read more...

What can be done about the growing cost of health care in Australia?

 The sustainability of Australia’s health system is becoming a key concern for Australian governments, along with those in many other advanced economies. But, with growing demand for high quality health care, an ageing population and rapid advances in medical technology, what can be done to keep a lid on health expenditure? This recently published Parliamentary Library Research Paper outlines the key mechanisms the Australian government has to control health care spending, and it proposes some potential options for reform. In a recent speech on the sustainability of the health system, the Finance Minister, Penny Wong, highlighted the problem policymakers now face: health care expenditure is ... Read more...

Health Insurance in Australia: time for a new debate?

  In July 2011 the Government re-introduced its Fairer Private Health Insurance Incentives legislation into the House of Representatives; for an overview of the history of this legislation, see here. The Bills have not yet been debated. The key changes proposed by this legislation are: a means-test on tax-funded rebates for private health insurance (PHI) for those on incomes above a specified threshold, and; a higher Medicare Levy Surcharge for people on high incomes who choose not to purchase PHI. If passed, the legislation will mean that higher income earners will receive a lower or no tax-funded subsidy when they purchase PHI, and, if they choose not to purchase PHI, they will face high... Read more...