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CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Health Legislation Amendment Bill (No. 3)
2000
Date Introduced: 31 May 2000
House: House of Representatives
Portfolio: Health and Aged Care
Commencement: On Royal Assent, except:
-
- Schedule 1 (outreach services) commences on a day fixed by
Proclamation, or 6 months after Royal Assent if no day is fixed by
Proclamation;
-
- Schedule 3 (Lifetime Health Cover amendments) commences on 1
July 2000, when the National Health Amendment (Lifetime Health
Cover) Act 1999 is due to commence.
The main purpose
of the Bill is to enable the private health insurance industry to
fund outreach services as an alternative to in-hospital care for
admitted patients.
The Bill also makes minor amendments to the
National Health Act 1953 which:
-
- protect health insurance funds from legal proceedings if they
disclose patient information to a hospital or day hospital so that
the facility may provide the patient with informed financial
consent, and
-
- clarify certain definitions in the Lifetime Health Cover
rules.
For some time, public hospitals have been able
to provide post-acute care in patients' homes. Initially, this
occurred on an ad hoc basis and was funded either by tied
Commonwealth grants to the States, or directly from State
governments to specific hospitals.(1)
In 1997, the Minister for Health and Family
Services, Dr Wooldridge, outlined a general vision for the changing
role of hospitals in the health system. He stated:
Hospitals in the future will coordinate and
provide many forms of care to people who are not in hospital, while
continuing their vital role in complex acute surgery, research
teaching and other necessary inpatient services - but the need for
acute inpatient care will not be as large as it is
today.(2)
Dr Wooldridge listed a number of flexible
alternatives to traditional hospital services, which would allow
for 'a continuum of care covering the person's entire period of
illness.' These included day surgery, step-down facilities
(allowing patients to move out of a hospital ward into hotel-style
accommodation for post-surgery care), pre-admission clinics and
'hospital in the home' programs.(3) The Australian
Health Care Agreements between the Government and public hospitals,
which commenced in July 1998, allow Commonwealth funding to be used
not only for hospital care, but also for these types of health
services.(4)
Hospital in the home programs (or outreach
services) can provide an extensive range of services, including
intravenous antibiotic therapy, chemotherapy and anti-coagulant
therapy. Advantages claimed for the initiative include:
-
- patients can be treated in familiar surroundings (this is
particularly important for elderly people and children)
-
- a decreased risk of infection (as it is established that longer
stays in hospital increase the risk of infection)
-
- lower costs to hospitals and private health insurance funds,
and
-
- freeing up hospital beds for acutely ill
patients.(5)
Currently, private health insurance funds can
only pay benefits from hospital cover tables for admitted patients.
This means that funds can only offer outreach services to members
who have both hospital and ancillary cover, not members with
hospital cover only.(6) As a result, some private
hospital patients may remain in hospital longer than necessary,
simply to take advantage of insurance coverage.(7)
Further limitations are that ancillary health care services cannot
be re-insured with a health benefits reinsurance trust
fund,(8) and that Medicare benefits are not available to
the attending doctor under ancillary cover
tables.(9)
On 1 November 1999, the Parliamentary Secretary
for the Minister for Health and Aged Care, Senator Tambling,
launched a trial of the 'Hospital In The Home' program. This
involves private sector trials to transfer selected patients home
for a part of the normal period of hospital stay, while still being
covered under their private health insurance. Six trials were
conducted across a range of health care services, including
psychiatric, rehabilitation, post-operative and palliative
care,(10) and involved six health insurance
funds.(11) The Explanatory Memorandum reports that the
outcomes and feedback from these trials to date has been positive,
although the National Evaluation has yet to be
completed.(12)
The Bill extends the definition of 'hospital
treatment' in the National Health Act 1953 to include
specific outreach services at particular hospitals which are
approved by the Minister. This will allow private health funds to
pay benefits for outreach services from private hospital insurance,
and to reinsure themselves in respect of the provision of such
services. The background to the other amendments proposed in the
Bill is discussed in the Main Provisions section.
Outreach services
Proposed section 5C extends the
meaning of 'hospital treatment' to include outreach services
provided by or on behalf of a hospital or day hospital. This will
apply throughout the National Health Act 1953 and the
Health Insurance Act 1973 with the exception of:
-
- subsection 5B(3) of the Health Insurance Act 1973
-
- section 67 of the National Health Act
1953,(13) and
-
- Division 5A of Part VI of the National Health Act
1953.
Subsection 5B of the Health Insurance Act
1973 provides that persons on low incomes may be declared
'disadvantaged persons'. Such a declaration may cover periods of
hospital treatment prior to the application for a declaration, if
the person was on a low income prior to the hospital treatment.
'Hospital treatment' will not include outreach services. No policy
explanation is provided as to why disadvantaged persons who have
received outreach services will not be covered, whereas those who
have received services in hospitals will.
Division 5A of Part VI of the National
Health Act 1953 contains a procedure by which the Minister may
determine that benefits are no longer payable in respect of certain
treatments provided at particular hospitals and day hospitals, if
the standard of treatment is unacceptable. This Division will not
apply to outreach services. It is not clear why substandard
treatment provided by hospitals and day hospitals will be tolerated
where it occurs in people's homes, but not where it occurs within
the hospital building.
The Bill also expands the definition of
'patient' of a day hospital to include a person who receives
outreach services provided by or on behalf of the day hospital
(item 3 of Schedule 1).
The Minister may make a written determination
that certain outreach services provided by a specific hospital or
day hospital are approved for private hospital insurance purposes
(proposed section 5D). Only those outreach
services that the Minister has approved are eligible to be covered
under private hospital insurance. No criteria are specified by
reference to which the Minister must make his or her determination.
The Explanatory Memorandum states that administrative guidelines
will be established to help in determining whether to approve an
outreach service. Approved outreach services would need to be:
-
- safe
-
- sound clinical practice
-
- accepted by all levels of the profession
-
- beneficial for the patients, and
-
- able to demonstrate cost efficiencies.(14)
The determination must specify the period for
which it is in force (proposed subsection 5D(2)).
A determination may be disallowed by the Parliament under s 46A of
the Acts Interpretation Act 1901 (proposed
subsection 5D(3)).
The Bill also makes related amendments to ensure
that hospital purchaser-provider agreements and practitioner
agreements(15) extend beyond services provided at a
hospital or day hospital, to include outreach services provided at
home (items 5 and 6 of Schedule 1).
Disclosure of information
Immunity from civil or criminal liability for
breach of a duty of confidence already exists for:
-
- the disclosure of certain case mix information under a hospital
purchaser-provider agreement, because the disclosure is required by
law, and
-
- the disclosure of information by a hospital or day hospital if
the information is needed to assess whether or not to make payments
of private health insurance.(16)
The Bill creates an additional immunity from
liability for disclosure necessary for a hospital or day hospital
to provide a private patient with information about the amount he
or she will be liable to pay for hospital treatment
(proposed subsection 73G(2A) of the National
Health Act 1953). The immunity only covers disclosure made by
a health fund to a hospital or day hospital with which the health
fund has a hospital purchaser-provider agreement. It only applies
to disclosures made on or after Royal Assent to the Bill
(section 4).
Lifetime Health Cover
Lifetime Health Cover will come into effect on 1
July 2000 as part of the National Health Act 1953 and will
require health funds to charge different premiums depending on the
age at which people take out health insurance. People who join a
health funds after the age of 30 will be required to pay a 2%
additional premium for every year that they remain uninsured.
The Lifetime Health Cover rules operate on the
definition of 'adult beneficiary', that is, a person with private
hospital insurance. Currently, a person cannot be an 'adult
beneficiary' if he or she is under 31 years of age and dependent on
a person who contributes to private hospital insurance. This would
exclude dependent children, but also a dependent spouse under 31
years of age. The Bill amends the definitions of 'adult
beneficiary' and 'hospital cover' so that a dependent spouse
(including a de facto spouse)(17) under 31 years of age
is not excluded from being an adult beneficiary in his or her own
right (items 1 and 2 of Schedule 3).
Refugees who enter Australia after 1 January
2000 have 12 months after becoming eligible for Medicare to take
out private hospital insurance without being subject to any
additional premium under the Lifetime Health Cover
rules.(18) The Bill amends the description of the class
of visa granted to a refugee before entering Australia
(item 3 of Schedule 3).
The introduction of 'Hospital In The Home'
programs or outreach services for patients with private hospital
insurance has the potential to significantly improve the quality of
care and efficiency of the provision of health services. For
example, it has recently been reported that some drugs commonly
used in palliative care are not subsidised by the Government under
the Pharmaceutical Benefits Scheme. Such drugs are provided free to
hospital patients, but can cost up to $600 a week for home-based
patients.(19) Accordingly, a number of patients choose
hospital-based care as they are unable to afford the cost of these
drugs. The coverage of home-based palliative care under private
hospital insurance could allow terminal patients to receive
appropriate medication at home rather than in a hospital.
However, the introduction of the amendments will
not guarantee the availability of alternative services to
in-hospital services. Whether alternative services are offered will
depend on the hospital establishing suitable programs that receive
ministerial approval. The Explanatory Memorandum contains the only
indication of the criteria the Minister might apply in making such
determinations. These suggested guidelines include
cost-effectiveness. It may be that certain services that could
appropriately be provided at home will not be available if they are
not cost-effective. By way of illustration, a trial (under the
public health system) for the home treatment of children suffering
cystic fibrosis and diabetes at the Royal Children's Hospital in
Brisbane was recently discontinued after 18 months, despite being
well patronised and enthusiastically received, as it was not
cost-effective.(20)
-
- Senator Herron, Speech on second reading of the Health
Legislation (Private Health Insurance Reform) Amendment Bill 1994
and Private Health Insurance Complaints Levy Bill 1994, Senate
Hansard, p. 214, 10 May 1995.
- Dr Wooldridge, Minister for Health and Family Services,
Press Release, 18 November 1997.
- Dr Wooldridge, Minister for Health and Family Services,
Press Release, 18 November 1997.
- Dr Wooldridge, Minister for Health and Family Services,
Press Release, 18 November 1997. See also Dr Nelson,
Speech on second reading of the Health Legislation Amendment
(Health Care Agreements) Bill 1998, House of Representatives
Hansard, p. 1570, 25 March 1998.
- See generally Dr Wooldridge, Minister for Health and Family
Services, Press Release, 18 November 1997; Explanatory
Memorandum to the Health Legislation Amendment Bill (No. 3)
2000, pp. 5-6.
- Dr Wooldridge, Minister for Health and Aged Care, Speech on
second reading of the Health Legislation Amendment Bill (No 3)
2000, House of Representatives Hansard, p. 15695, 31 May
2000.
- See Explanatory Memorandum to the Health Legislation
Amendment Bill (No. 3) 2000, p. 3.
- Reinsurance of private hospital cover supports community rating
of health insurance by spreading the burden of insuring high-risk
members.
- See generally Dr Wooldridge, Minister for Health and Aged Care,
Speech on second reading of the Health Legislation Amendment Bill
(No. 3) 2000, House of Representatives Hansard, p. 15695,
31 May 2000, Explanatory Memorandum to the Health
Legislation Amendment Bill (No. 3) 2000, p. 3-4.
- The trials being conducted are: the Hospital-to-Home Trial at
Ashford Community Hospital in Adelaide, the Domiciliary Palliative
Care Program at St Francis Xavier Cabrini Private Hospital,
Melbourne, the South Australian Psychiatric Patient Trial operated
by the Adelaide Clinic, Kahlyn Private Hospital and Fullarton
Private Hospital, the Victorian Rehabilitation Patient Trial
operated by the Cedar Court Health South Rehabilitation Hospital,
the Victorian Private Psychiatric Early Discharge Trial operated by
the Albert Road Clinic, Dandenong Pinelodge Clinic, Delmont Private
Hospital and the Melbourne Clinic Private Hospital, and the Epworth
Hospital-in-the-Home Pilot Project. Benefits are payable for these
trials under National Health Regulations 1954, Schedule 3.
- Participating funds are MBF, Medibank Private, the South
Australian Police Employees Fund, IOR Health, Mutual Community and
AXA Australia. See Senator Tambling, Parliamentary Secretary for
the Minister for Health and Aged Care, Press Release, 1
November 1999.
- Explanatory Memorandum to the Health Legislation
Amendment Bill (No. 3) 2000, p. 7.
- This section provides that only registered funds can provide
health insurance for hospital treatment and ancillary health
benefits. The existing definition of 'hospital treatment', not
extended to outreach services, is preferred for this requirement.
Retaining the narrow definition of hospital treatment will not
affect the quality of services provided, as both health funds which
provide hospital treatment and those which provide ancillary
benefits are required to be registered.
- Explanatory Memorandum to the Health Legislation
Amendment Bill (No. 3) 2000, p. 12.
15 In general terms, these are agreements under
which a health fund contracts to pay the hospital or medical
practitioner directly, in satisfaction of all or most of a
patient's liability.
- Subsections 73G(1) and (2) of the National Health Act
1953.
- Subsection 4(1) of the National Health Act 1953.
- Paragraph 5(1)(c) of Schedule 2 of the National Health Act
1953.
- Button, Victoria 'Drug costs force terminally ill into public
hospitals', The Age, 21 February 2000.
- Sands, Judy 'Home treatment axed', The Courier-Mail,
29 April 2000.
Katrine Del Villar
23 June 2000
Bills Digest Service
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ISSN 1328-8091
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