Medicare
Amanda
Biggs
The Government is proposing a number of changes to Medicare in
this budget. These are explained by the Government in terms of
efforts to modernise and ensure the future sustainability of
Medicare. These changes include capping some payments under the
safety net, adjusting the schedule fee for some Medicare services
and increasing bulk billing incentives for pathology and
imaging.
From 1 January 2010, the Government will introduce a
‘cap’ on Extended Medicare Safety Net (EMSN) payments
for certain Medicare items with ‘excessive fees’.
Safety net payments to be capped include: all assisted reproductive
technology (or IVF) items, obstetric services including some
ultrasound services, treatments for varicose veins, certain eye
injection treatments, hair transplants and cataract
surgery.[1] At the
same time, the Government will increase the Medicare schedule fee
for obstetric items with the intention of providing some financial
relief to patients, particularly those in rural and regional areas.
In 2007, the cost of the EMSN was $414.1 million; these reforms are
expected to result in net savings of $451.6 million over four
years.[2]
The Medicare safety net is intended to protect patients from
high out-of-pocket medical costs. In the lead-up to the 2007
federal election, Labor committed to retain the EMSN, and has
repeated this commitment on a number of occasions since.[3]
The current safety net arrangements include the original
Medicare safety net—which covers the difference between the
Medicare benefit paid and the schedule fee for out-of-hospital
services—and the EMSN, which was introduced in 2004. Under
the EMSN patients are reimbursed 80 per cent of their out-of-pocket
costs for out-of-hospital Medicare services, once annual personal
expenditure reaches a certain threshold. The current thresholds are
set at: $555.70 for families in receipt of the Family Tax Benefit
Part A and concession card holders, and $1111.60 for all others
(indexed annually).
While EMSN payments have provided many with financial relief
from significant out-of-pocket medical costs, a recent review of
the EMSN cites evidence that those in greatest financial need may
be missing out, and that some doctors have been charging excessive
fees.[4] Concerns
over the cost of the safety net and the charging of excessive fees
by some doctors have been raised previously.[5] In 2005, the former Howard government
raised the safety net thresholds in response to the high cost of
the safety net.[6]
Some have welcomed the proposed changes to the EMSN, including
Prue Power from the Australian Healthcare & Hospitals
Association, and Robert Wells from the ANU who describes the
changes as addressing ‘some of the outrageous rorts’
under the current safety net.[7] Others are worried the measure will undermine the
affordability of certain services. Dr Andrew Pesce from the
national body representing obstetricians and gynaecologists has
expressed concern that capping the EMSN will adversely affect the
affordability of private obstetric services and force women back
into the public hospital system, ‘which is already crowded
and under pressure’.[8] The proposed changes affecting assisted reproductive
technology services have prompted some, such as AMA President Dr
Rosanna Capolingua, to express concern that assisted reproductive
services may become unaffordable, except for the ‘most well
off'.[9]
The government is also proposing a series of measures intended
to ‘modernise’ Medicare and improve quality, while also
delivering significant savings. This includes breaking a commitment
made in last year’s budget, to fund MRI scans requested by
GPs, expected to generate $15.3 million in savings, and adjusting a
number of Medicare fees so that less complex procedures attract a
lower fee, expected to generate savings of $153.4 million over four
years.[10] Services
that will attract lower fees include those where improvements in
technology mean procedures can be performed ‘more quickly and
safely’, such as for cataract surgery and coronary
angiography.[11]
In addition, remuneration for certain mental health services
provided under the Better Access to Psychiatrists,
Psychologists and GPs through the Medicare Benefits Schedule
initiative will be dependent on providers continuing professional
development. Allied mental health professionals, such as
psychologists, social workers and occupational therapists who
provide services under the Better Access initiative, will be
ineligible to access Medicare items after June 2011 unless they
have undertaken appropriate mental health training—it is
estimated that 80 per cent have completed this training already.
Those in rural areas will receive a supporting payment of $200 to
undertake the required training. Savings of some $21.4 million over
four years are expected. From July 2009, GPs providing Mental
Health Care Plans will attract lower rebates if they have not
undertaken appropriate mental health training. The Government
intends this measure will encourage GPs to update their skills and
generate savings of $21.7 million over four years.[12]
The reaction to these measures so far has been mixed. The
measure to lower fees for less complex procedures has been welcomed
by some as a ‘genuine reform’ that recognises that some
previously time consuming and complex procedures are now less
so.[13] Others have
criticised the Government for ‘pocketing the savings’
instead of using them to increase rebates for services for mental
and preventive health.[14] It is notable that the Government expects significant
savings from the requirement for training under the Better Access
changes; in order for these savings to be realised, not all
providers can be expected to undertake the appropriate training and
be eligible for the higher rebate.
Pathology and diagnostic imaging
The Government is also proposing reforms in the pathology and
diagnostic imaging sector, where government outlays on benefits
have grown strongly.[15] Measures proposed in this budget include introducing
bulk billing incentives for pathology and diagnostic imaging,
costing $948.4 million over four years, to be partly funded through
savings of around $763.4 million by lowering the collection
fees—the fee paid for collecting pathology specimens—
paid to pathology providers. In response, some pathologists have
indicated they will increase patient co-payments to recover the
loss in revenue from lower collection fees.[16]
In other reforms, the Government will introduce regular reviews
of new Medicare Benefits Schedule (MBS) items; ensure patients can
obtain pathology and diagnostic services from any accredited
provider, rather than the one specified by their referring doctor;
review funding arrangements for pathology and diagnostic imaging
and consider the need for structural reform; educate referring
clinicians on appropriate referring practices for pathology and
diagnostic imaging; and, review diagnostic and imaging items listed
on the Medicare Benefits Schedule.[17]
[1]. For
full details of item numbers affected, see Department of Health and
Ageing, ‘Changes to the extended Medicare Safety Net’,
Fact sheet, viewed 19 May 2009,
http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/News-20090518-Extended-Medicare-Safety-Net_amendment
[2]. Net
savings for obstetric services are estimated to be $193.7 million,
while savings for items with excessive fees are estimated to be
$257.9 million. Australian Government, Budget measures: budget
paper no. 2: 2009–10, Commonwealth of Australia,
Canberra, 2009, p. 290, viewed 13 May 2009,
http://www.aph.gov.au/budget/2009-10/content/bp2/download/bp2_expense.pdf
[3]. See
for example, K Rudd and N Roxon, Rudd Labor Government to
retain Medicare Safety Net, media release, Canberra, 22
September 2007, viewed 13 May 2009,
http://pandora.nla.gov.au/pan/22093/20071124-0102/www.alp.org.au/media/0907/mshealoo220.html;
N Roxon, ‘Look beyond the election: speech to the Annual
Australian Health Insurance Association conference’,
Melbourne, 10 October 2007, viewed 14 May 2009,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FLHKO6%22
[4].
Centre for Health Economics Research and Evaluation (CHERE),
Extended Medicare safety net: review report 2009: a report by
the Centre for Health Economics Research and
Evaluation, report prepared for the Department of Health and
Ageing, University of Technology Sydney, Sydney, 2009, p. vi,
viewed 13 May 2009,
http://www.health.gov.au/internet/main/publishing.nsf/Content/Review_%20Extended_Medicare_Safety_Net/$File/ExtendedMedicareSafetyNetReview.pdf
[5]. A
Pratt and L Buckmaster, ‘The health budget: a framework for
sustainability?’, Implications: budget
2005–06, Parliamentary Library, Canberra, June 2005,
viewed 15 May 2009,
http://libiis1/Library_Services/Implications/2005-06/HealthBudget.htm
[6]. T
Abbott (Minister for Health and Ageing), Health budget
2005–06—health budget responsible and sustainable,
media release, Canberra, 10 May 2005, viewed 15 May 2009,
http://www.health.gov.au/internet/budget/publishing.nsf/Content/health-budget2005-hbudget-hmedia01.htm
[7]. R
Wells (Director Australian Primary Health Care Research Institute
and the Menzies Centre for Health Policy), Policy expert
welcomes health reform, media release, Canberra, 13 May 2009;
P Power (Executive Director AHHA), Mixed fortunes for
hospitals, media release, Canberra, 12 May 2009.
[8]. N
Miller, ‘Mothers hit by $550 birth hike,’ The
age, 14 May 2009, p. 1, viewed 14 May 2009,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1WJT6%22
[9].
Australian Medical Association (AMA), This is no health budget
for a recession, media release, Canberra, 12 May 2009.
Although partly funded by Medicare, assisted reproductive
technology services in Australia are provided through private
clinics.
[10]. Australian
Government, Budget measures: budget paper no. 2:
2008–09, Commonwealth of Australia, Canberra, 2008, p.
237.
[11]. Budget
paper no. 2: 2009–10, pp. 295–296.
[12]. Budget
paper no. 2: 2009–10, p. 288.
[13]. R Wells.
[14]. A Cresswell,
‘Roxon a Robin Hood? No way’, Australian, 13
May 2009, p. 9.
[15]. For example,
the Auditor General reported that from 2000–01 to
2006–07, the number of pathology services increased
from 62.1 million to 87.5
million per year and Australian
Government outlays/pathology benefits increased from $1.2 billion
to $1.7 billion per year (an average annual
growth rate of 7 per cent). See,
Auditor General, Administration of the Pathology Quality and
Outlays Memorandum of Understanding, Audit report no. 34,
2007–08 Performance Audit, Australian National Audit Office,
Canberra, 2008, p. 37.
[16]. J Breusch and N
Ahmed, ‘Drip feed for moribund body’, Australian
financial review, 14 May 2009, p. 22, viewed 14 May 2009,
http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressclp%2F1VJT6%22
[17]. N Roxon
(Minister for Health and Ageing), More support for bulk billing
pathology and diagnostic imaging tests, media release,
Canberra, 12 May 2009, viewed 14 May 2009,
http://www.health.gov.au/internet/budget/publishing.nsf/Content/budget2009-hmedia14.htm;
N Roxon (Minister for Health and Ageing) and L Tanner
(Minister for Finance and Deregulation), Increasing competition
in pathology and diagnostic imaging, media release, Canberra,
12 May 2009, viewed 14 May 2009,
http://www.health.gov.au/internet/budget/publishing.nsf/Content/budget2009-hmedia15.htm
Back to top