Bills Digest no. 113 2006–07
Health Insurance Amendment (Provider Number Review) Bill
2007
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Financial implications
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Health Insurance Amendment (Provider
Number Review) Bill 2007
Date introduced:
March 1, 2007
House: Representatives
Portfolio: Health and Ageing
Commencement:
On Royal
Assent
The Bill
proposes to amend section 19AD of the Health Insurance Act
1973 that relates to reviewing the operation of the Medicare
provider number arrangements. The bill proposes to extend the
interval of review from two to five years.
In 1996 major changes to the Health
Insurance Act 1973 affecting training arrangements for newly
graduated doctors were introduced, through the insertion of
sections 19AA, 3GA and 3GC. These changes, collectively known as
the Medicare provider number legislation, were designed to address
a number of medical workforce issues as outlined in the second
reading speech: firstly, to ensure the quality of newly graduated
doctors; secondly to deal with medical workforce distribution
problems (and a perceived oversupply); and thirdly to reduce growth
pressures on Medicare.(1)
The Medicare provider number legislation
restricts access to Medicare benefits to doctors who have completed
a placement, or are enrolled in, an approved vocational training
program; effectively severing the automatic link between medical
registration and access to Medicare benefits. Section 3GC
specifically established the Medical Training Review Panel (MTRP)
to monitor and examine the demand and supply of medical training
opportunities. The changes restricting access to Medicare benefits
were particularly controversial at the time because of concerns
that employment opportunities for new doctors would be harmed.
To address concerns and secure passage of the
legislation the government agreed to a number of additional
measures. These included the insertion of a sunset clause as a
safeguard (subsequently repealed in 2001), the establishment of the
MTRP to collect data on postgraduate training and report annually,
and under Section 19AD the biennial tabling of a review of the
Medicare provider number legislation. This requires the Minister to
place before Parliament a report detailing the operation of the
Medicare provider number legislation by 31 December every two
years. Within three months of the tabling of this report the MTRP
is also required to convene a meeting to discuss the report (the
Minutes from this meeting are also tabled).
To date three reviews of the Medicare provider
number legislation have been undertaken, commencing with a mid term
review in 1999, then biennial reviews in 2003 and 2005. The next
scheduled biennial review is due to be completed in December this
year.
This Bill proposes to extend the interval
between these reviews from two to five years.
As noted above, in addition to the biennial
reviews, the Act also requires that the body responsible for
monitoring the supply and demand for medical training places, the
MTRP, convenes a meeting to discuss the findings of the review. The
most recent of these meetings was held in February
2006.(2)
The Bill also proposes to align the frequency
of these meetings in line with the proposed five year interval.
The relevance and value of the review reports
are discussed below.
Generally the review process has been well
supported by stakeholders, the review reports have been well
received, and many of the recommendations acted upon, arguably
improving the operation of the legislation.(3) The
contentious environment in which the first review was undertaken
has been largely supplanted by a more cooperative and positive
one.(4)
The reviews, which have all been undertaken by
former NSW state Minister the Honourable Ron Phillips, have
attracted considerable interest and input from stakeholders. The
first mid term review in 1999 attracted 15 written submissions,
this grew to 41 submissions in 2003, but declined to 24 submissions
in 2005. Significantly, stakeholders have expressed their
continuing support for the operation of the Medicare provider
number legislation in each of the review reports. Furthermore, the
reviews have found no evidence that the Medicare provider number
legislation exacerbates workforce shortages, despite early
concerns.
In total the reviews made 38 recommendations.
This has resulted in numerous improvements to the quality of
vocational training, including: the removal of the original sunset
clause, the establishment of the General Practice Education and
Training Program (GPET) to manage the general practice vocational
training program, more funding for training for Rural Locum Relief
Program (RLRP) and improvements in data collection.
Each review report presents analysis of key
issues and includes substantial data on vocational training places
and background on the Medicare provider number legislation.
For the first time the 2005 review assessed
the level of support for the review process itself. It found
unanimous support for the continuation of the Biennial Review
process itself, but noted there were a range of views on the
preferred frequency of the reviews.(5) Some stakeholders
considered the biennial reviews too frequent, arguing that it was
difficult to properly evaluate the implementation of
recommendations made in previous reviews in a two year interval;
consequently they favoured extending the review period to a three
year interval. Others held the view that a longer review interval
period would slow down the implementation of changes, and so
favoured retention of the two year cycle.
Notably, the review made no argument in
support of a five year interval, as proposed by this Bill. Rather,
it noted strong stakeholder support for the biennial review process
in the lead up to an expected increase in medical graduates from
2008. In fact, stakeholders shared the view that the biennial
review would become even more relevant in 2007 and
2009.(6)
The MTRP is also required to convene a meeting
to discuss the findings of the review. This gives stakeholders a
further opportunity to voice their views on recommendations and
comment on the review process. Under these amendments the frequency
of these meetings will also be reduced, arguably reducing further
the level of consultation.
Both the Explanatory Memorandum and the
Minister s second reading speech note that the proposed amendment
to extend the interval period between reviews from two to five
years, resulted from comments raised in the 2005 review. The
Explanatory Memorandum notes that the amendment is the result of
comments submitted to, and deliberations undertaken at the most
recent biennial review process in 2005 .(7) The Minister
reported in his second reading speech that the frequency of the
review process was questioned with a view to extending the period
between reviews .(8)
The Explanatory Memorandum also notes that the
process occupies significant staffing resources and estimated the
cost of the review process in the vicinity of $180,000. This
financial impact could be reduced by moving to a five year
interval.
As noted above, the 2005 review reported
discussions over the frequency of reviews, and heard a range of
views in response. However, no support for a five year interval was
reported.
Although there is an argument for realising
savings by extending the frequency of the reviews, the scale of
these savings maybe less than the cost estimate of $180,000. This
estimate includes the cost of seconding two senior Departmental
officers for Secretariat duties. While their salaries contributed
to the total cost of the review process, the cost of the salaries
should not be viewed as a potential saving to government if the
review interval is extended. The salaries of the two officers would
have been paid for if they had remained in the department, and will
continue to be paid for regardless of the review interval. So any
savings to government can only be realised by reducing the cost of
engaging the independent reviewer, currently estimated at $80,000
(although this cost may rise in coming years).(9)
Although difficult to quantify, the value of
the review process itself has been demonstrated by the high
engagement and support of stakeholders and the resulting
improvements to the vocational training of doctors. It has also
been noted that there is strong support for the review process.
Nevertheless, many of the originally contentious issues have been
addressed, particularly in the first review; the most recent review
received far fewer submissions than in 2003, perhaps indicating
that there are fewer outstanding critical issues left to
address.
It has been argued that reducing the frequency
of reviews will slow down the implementation of recommendations.
Others argue that the reviews are too frequent to properly
implement improvements. Both views are based on a desire to improve
the quality of the process of review. There is also general
agreement among stakeholders of the importance of reviewing the
legislation in upcoming years, because of expected higher numbers
of medical graduates. In contrast, the main argument in support of
the five year interval is a desire to realise some modest
savings.
The Financial Impact Statement notes that the
cost of the biennial review in 2005 exceeded
$180,000.(10) This cost comprised a consultant s fee of
$80,000 and the cost of the salaries of two senior officers
seconded from the Department. The proposed amendments will reduce
this financial burden, because the cost will be incurred less
frequently. However, as noted above, the scale of this saving is
likely to be less than the cost estimate of $180,000.
Item 1 replaces section
19AD(1) which specifies that the review must be tabled every two
years by 31 December, with a new section which specifies this occur
on 31 December 2010, and subsequently each five year period.
Item 2 removes the reference
in section 19AD(2) specifying the convening of a meeting must occur
within three months of a report being tabled in the specified two
year period, with the requirement that this occur in alignment with
the new section which specifies a five year period.
Concluding comments
Although some modest savings will be realised
by the measures in this Bill, there are grounds for concern that
the extension of the review interval from two to five years will
diminish capacity to review the Medicare legislation.
- Hon. Michael Wooldridge Health Insurance
Amendment Bill (no. 2) 1996: Second Reading House of
Representatives Debates 17/10/96, p. 5799.
- Medical Training Review Panel Special
meeting held on Friday, 24 February 2006 to
discuss the report of the 2005 Biennial Review of the Medicare
provider number legislation: record of proceedings, [Canberra,
Department of Health and Ageing], 2006.
- The reviews have all been undertaken by
former NSW State Minister Ron Phillips. In order the reports are:
Mid-term Review of Provider Number Legislation Canberra,
Department of Health and Aged Care, 1999; Biennial review of
the Medicare Provider Number Legislation Canberra, Department
of Health and Ageing, 2003; Biennial review of the Medicare
Provider Number Legislation Canberra, Department of Health and
Ageing, 2005.
- Mr Ron Phillips the independent consultant
who has conducted all the reviews noted difficulties in conducting
the first review in 1999, describing it as pretty doom and gloom
and hard to handle in an address to the Special meeting held on
Friday 24 February 2006 to discuss the report of the 2005 biennial
review of the Medicare provider number legislation.
- Biennial review of the Medicare Provider
Number Legislation, 2005 op. cit, p. 49.
- Ibid.
- Explanatory Memorandum, p. 1.
- Hon. Tony Abbott, Health insurance amendment
(Provider Number Review) Bill 2007: second reading House of
Representatives Debates 1/3/2007, p. 3.
- Explanatory Memorandum, p. 2.
- Ibid.
Amanda Biggs
13 March 2007
Social Policy Section
Parliamentary Library
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ISSN 1328-8091
© Commonwealth of Australia 2007
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