BILLS DIGEST NO. 71, 2016–17              8 March 2017

Health Insurance Amendment (National Rural Health Commissioner) Bill 2017

Amanda Biggs
Social Policy Section

Paula Pyburne
Law and Bills Digest Section

Date introduced:  9 February 2017

House:  House of Representatives

Portfolio:  Health

Commencement: Sections 1–3 on Royal Assent; Schedule 2 on 1 July 2020; Schedules 1 and 3 on the earlier of a day to be fixed by Proclamation or six months after Royal Assent.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at March 2017.

Purpose of the Bill

The purpose of the Health Insurance Amendment (National Rural Health Commissioner) Bill 2017 (the Bill) is to amend the Health Insurance Act 1973 to establish a National Rural Health Commissioner. The Rural Health Commissioner is to provide advice to the relevant Minister on the role of the rural generalist and develop a National Rural Generalist Pathway, and to provide advice on rural health reform as requested. The Rural Health Commissioner will cease operations on 1 July 2020.

The Bill also repeals sections 3GC and 19AD of the Health Insurance Act. Section 3GC established the Medical Training Review Panel, which is no longer required as its functions are being performed by the National Medical Training Advisory Network (NMTAN), a non-statutory authority. Section 19AD requires that regular reports be made to the Minister regarding the operation of Medicare Provider Number legislation. The repeal is intended to reduce the regulatory burden on stakeholders and rural workforce agencies.

Structure of the Bill

The Bill contains three Schedules:

•       Schedule 1 inserts proposed Part VA into the Health Insurance Act to establish the National Rural Health Commissioner, set out the functions of that office, and provide reporting requirements

•       Schedule 2 repeals Part VA on 1 July 2020

•       Schedule 3 amends the Health Insurance Act to abolish the Medical Training Review Panel and to remove the requirement to carry out a review of the operation of the Medicare provider number legislation every five years.

As the provisions in Schedules 1 and 2 of the Bill are unrelated to those in Schedule 3, this Bills Digest deals with the relevant background, policy positions, financial implications and key provisions in Schedules 1 and 2 separately from Schedule 3.

Committee consideration

Selection of Bills Committee

At its meeting of 16 February 2017 the Selection of Bills Committee deferred consideration of the Bill to its next meeting.[1]

Senate Standing Committee for the Scrutiny of Bills

The Standing Committee for the Scrutiny of Bills had no comment on the Bill.[2]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[3]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considers that the Bill does not raise human rights concerns.[4]

Background—Schedules 1 and 2

Rural health

Rural Australians experience poorer health outcomes across a range of health indicators.

According to the Australian Institute of Health and Welfare (AIHW), ‘health outcomes, as exemplified by higher rates of death, tend to be poorer outside major cities’. The main contributors to higher death rates are ‘coronary heart disease, other circulatory diseases, motor vehicle accidents and chronic obstructive pulmonary disease (e.g. emphysema)’. These higher death rates ‘may relate to differences in access to services, risk factors and the regional/remote environment’.[5] According to the AIHW:

•       Australians in remote and very remote areas have mortality rates 1.4 times higher than those living in major cities. Mortality rates for coronary heart disease were between 1.2 and 1.5 times higher in rural and remote areas compared to major cities; and death rates due to diabetes were between 2.5 and four times as high[6]

•       the prevalence of many chronic diseases is higher in regional and rural areas, compared to major cities. Rates of chronic obstructive pulmonary disease (COPD), asthma, diabetes, cardiovascular disease (CVD), cancer and mental health problems are all higher[7]

•       people in rural and remote Australia have higher rates of risk factors including smoking, overweight and obesity, physical inactivity, alcohol consumption and blood pressure, compared to those in major cities[8]

•       people in remote and very remote areas often experience poorer access to health services compared to those living in cities and they may have to travel considerable distances to access services. In particular, the number of employed medical practitioners (including specialists) was lower (253 per 100,000 people) in remote and very remote areas compared to the number in cities (409 per 100,000)[9]

•       the number of GPs per 100,000 population was higher in remote and very remote areas (137 per 100,000) compared to the number in cities (109), but the number of services they provide per person is about half that of major cities[10] and

•       the rate of emergency hospital admissions for surgery is highest for people in very remote areas (22 per 1,000 admissions) and lowest for those in major cities (12 per 1,000).[11]

People in rural and regional areas also tend to have lower use of Medicare funded services and access fewer medicines subsidised under the Pharmaceutical Benefits Scheme (PBS).[12]

Socio-economic factors can compound these disparities. In this National Health Performance Authority report, Healthy Communities: Avoidable deaths and life expectancies in 2009–2011, it was found that across regional areas, the age-standardised rate of potentially avoidable deaths was nine per cent higher in lower income Regional 2 group areas compared to wealthier Regional 1 group areas.[13] But rates of potentially avoidable deaths in rural lower-income communities (Rural 2 group) were more than twice as high as wealthier inner-city suburbs (Metro 1 group).[14]

The association between poorer health status of people in rural areas and lack of access to health services has been broadly acknowledged.

In 2012, evidence provided to the Senate Community Affairs Committee inquiry on The factors affecting the supply of health services and medical professionals in rural areas, linked the distribution of the rural health workforce with poorer health outcomes. The Rural Doctors Association noted:

Australians living in rural and remote areas have much poorer access to local health services, significantly worse health outcomes and a significantly shorter life expectancy than Australians living in metropolitan areas.

Many people living in rural and remote areas are unable to access even the most basic primary care medical services in their local communities, and have to travel significant distances just to see a GP for a basic consultation, or have to wait many weeks to be seen close to where they live.[15]

Furthermore, the Royal Australian College of Physicians argued that the maldistribution of the rural medical workforce carried significant, potentially unsustainable, fiscal costs for both individuals and the medical system:

Rural patients with complex illnesses may need to see multiple specialists, entailing multiple trips to distant urban facilities. The associated cost is tremendous and not sustainable. NSW Health Isolated Patient's Travel and Accommodation Assistance Scheme (IPTAAS), for example, reports the need for an additional $28 million in supplementary funding, over four years. In 2011/12 forecast expenditure is $18 million, a $7 million increase on the previous year.[16]

Medical workforce shortages in rural areas

Background

Until the mid-1990s, government policies on the medical workforce were largely based on a belief that this workforce was in adequate supply. Indeed, a cap was announced in 1995, to restrict medical school intakes, with the intention of avoiding an oversupply of doctors in the future.[17] In September 1996, an Australian Medical Workforce Advisory Council (AMWAC) report indicated that this thinking may have been incorrect. AMWAC concluded that rather than there being an adequate supply of general practitioners (GPs) the GP workforce was in considerable oversupply in the capital cities and other major urban areas of Australia, but in significant undersupply in rural and remote areas.[18] This became known as a maldistribution of the medical workforce.

AMWAC concluded that general practitioner shortages could be alleviated by increasing the number of medical practitioners by a combination of the following:

•       additional Australian general practice trainees

•       use of overseas-trained doctors

•       maximising the workforce participation of existing general practitioners and

•       the introduction of new models of care.[19]

In the early 2000s, the Australian Institute of Health and Welfare (AIHW) health workforce figures seemed to confirm a maldistribution was still occurring. AIHW found that between 2000 and 2004, total medical practitioner supply rose in metropolitan regions, fell in non-metropolitan regions and GP supply had also decreased.[20]

Provider number restrictions

In 1996, the Howard Government introduced legislation and initiatives intended to address the perceived maldistribution of medical practitioners. These initiatives involved:

•       restricting the ability of medical practitioners to provide services eligible for Medicare benefits. Whereas previously the attainment of medical registration alone had enabled medical practitioners to bill Medicare as general practitioners, the Government introduced a policy of restricting new Medicare provider numbers to people who had achieved specialist, (including general practitioner) recognition and

•       placing provider number restrictions on overseas trained doctors (OTDs) to prevent them from accessing Medicare payments unless they gain exemptions from these restrictions. Two sections of the Health Insurance Act impose these restrictions—sections 19AB and 19AA. These were imposed to encourage OTDs to practice in rural and remote areas identified as suffering from medical workforce shortages (described as Districts of Workforce Shortage).[21]

Rural workforce audit (2008)

In 2008, the Department of Health conducted a workforce audit into the supply of doctors, nurses and other health professionals in rural and regional Australia.

The audit found workforce shortages persisting in rural areas. Although the number of full time equivalent (FTE) GPs had increased by 10.9 per cent during the decade from 1996–97 to 2006–07, there was a net decrease in the supply of medical practitioners as the population grew by 13 per cent over the same time.

The audit found that while there had been gains in workforce distribution in rural and remote areas over recent years, due at least in part, to alternative mixes of services and models of service delivery, ‘these have been in a large part due to the increased numbers of overseas trained doctors working in these areas’. It forecast that the supply of medical practitioners ‘will continue to rely upon overseas trained professionals in the immediate and medium term future’.[22]

Current workforce situation

More recent data from the AIHW continues to show maldistribution between rural and urban areas, although there have been improvements in some areas:

•       In 2015, the supply of employed medical practitioners in major cities was 442 fulltime equivalent (FTE) medical practitioners per 100,000 population, compared to 417.2 FTE medical practitioners in 2012, a growth of around six per cent. In 2015 there were 263 FTE medical practitioners in remote/very remote areas, compared to 256.3 in 2012, a growth of around 2.6 per cent[23]

•       The supply of GPs in remote/very remote areas was 135.5 FTE per 100,000 population in 2015, higher than the rate for major cities of 111.6. However, the supply of specialists in major cities was 162.1 FTE, compared to just 34.2 in remote/very remote areas.[24]

An overview of rural health policies

As rural health workforce shortages have gained prominence a number of measures and policies have been implemented to address these shortages. Many aim to encourage medical practitioners to relocate to regional and rural areas, or support training placements in rural communities.

Overseas trained doctors (OTDs)

Current incentives for overseas trained doctors (OTDs) mainly involve refinements to the Howard Government’s 1996 legislation and initiatives intended to address the maldistribution of medical practitioners in Australia.

Australia has become increasingly reliant on the services of OTDs to fill hospital vacancies and to deliver primary care services, particularly in rural and remote areas. While a policy of increasing the numbers of Australian trained doctors is also in place, the effects of this policy on workforce supply will not be felt for several years. More importantly, in the case of medical practitioners, there is no certainty that the required numbers of new graduates will choose to practise in rural and remote areas. This is because there is a constitutional restraint on governments which prevents them from introducing legislation to ‘conscript’ the services of unrestricted Australian medical practitioners to work in certain areas.[25]

In 2008, the Rural Doctors Association of Australia estimated that some 40 per cent of doctors working in rural Australia were OTDs.[26] The number of OTDs, compared with Australian trained doctors, increases with remoteness.

In summary, OTDs have been able to gain exemptions from certain restrictions if they agreed to work in designated districts of workforce shortage (DWS) for a minimum of ten years (referred to as the ‘ten-year moratorium’).[27] If they agreed to this condition they were then able to access Medicare benefits.

In July 2010, ‘scaling’ of the ten-year moratorium was introduced. This provides time reduction incentives to reduce the moratorium restriction period.[28]

Rural workforce programs

Over the years, a range of rural workforce programs have been introduced to help address workforce shortages. These include among others, the General Practice Rural Incentives Program, Rural Relocation Incentive Grants, Rural Procedural Grants Program, the Remote Vocational Training Scheme, the National Rural Locum program, Bonded Medical Placements, the Rural Australia Medical Undergraduate Scholarship (RAMUS) Scheme, the John Flynn Placement Program, and rural clinical schools, of which there are now 17.[29]

In December 2015, the Coalition Government announced an overhaul of clinical training through the development of an Integrated Rural Training Pipeline intended to ‘develop an integrated prevocational, postgraduate medical training pathway in rural and regional areas’.[30] This includes the establishment of:

•       a Rural Junior Doctor Training Innovation Fund to ‘be targeted at rural-based interns to enable them to spend some of their training year in rural general practice, building on the rural training networks for junior doctors that are funded by the states and territories’

•       up to 30 regional training hubs in locations with existing rural training sites, to ‘enable students to continue rural training past university into postgraduate medical training’ and

•       100 new rural training places in the Specialist Training Programme.[31]

Telehealth services, whereby consultations with specialists can take place remotely, have been subsidised under Medicare since July 2011.[32] Patients in eligible areas are able to access specialist video consultations.[33]

Despite these programs and initiatives, people in rural areas continue to experience poorer health outcomes.

Rural Generalist model

Unlike most other medical specialties, there is no nationally endorsed professional definition of a rural generalist. At the World Summit on Rural Generalist Medicine in Cairns in 2014, the following definition was adopted:

We define Rural Generalist Medicine as the provision of a broad scope of medical care by a doctor in the rural context that encompasses the following:

•        Comprehensive primary care for individuals, families and communities

•        Hospital in-patient care and/or related secondary medical care in the institutional, home or ambulatory setting

•        Emergency care

•        Extended and evolving service in one or more areas of focused cognitive and/or procedural practice as required to sustain needed health services locally among a network of colleagues

•        A population health approach that is relevant to the community

•        Working as part of a multi-professional and multi-disciplinary team of colleagues, both local and distant, to provide services within a ‘system of care’ that is aligned and responsive to community needs. [34]

Broadly then, a rural generalist is usually a GP who works in both community-based primary care and acute care settings and who has specialist skills typically in obstetrics, anaesthetics and/or surgery.[35] Although specialised services such as obstetrics and anaesthetics were once routinely delivered by rural GPs, these have become less common in the face of increasing medical specialisation and the preference to deliver more specialised services in larger centres.[36]

The rural generalist model was extensively analysed in a systematic review conducted in 2007.[37] The review outlined the origins of the rural generalist in Australia prior to the introduction of Medicare:

Prior to the emergence of differential rebates and the growth of the federal funding through Medibank and Medicare it was not uncommon for general surgeons, obstetricians and physicians in rural areas to serve as community primary carers in partnership, or in some cases competition, with general practitioners. Similarly, rural general practitioners often worked as anaesthetists, colleagues and assistants to rural specialists. Thus, rural communities produced medical alliances and a scope of practice that was unique to the environment and driven by the community need and the skills, competencies and interests of their practitioners rather than their collegiate or professional affiliations.[38]

The review noted that out of necessity, ‘primary care practitioners in rural areas of Australia, Canada and the United States of America (USA) perform a greater range of procedures, provide more medically complex care, undertake work in the hospital as well as the community setting, and are able to practice obstetrics’.[39]

The review noted the Rural Generalist model developed by Queensland Health which had the following characteristics:

1.               Hospital-based and community-based primary medical practice

2.               Hospital-based secondary medical practice

              a.              In at least one specialist medical discipline (usually but not necessarily limited to obstetrics, anaesthetics and surgery)

              b.              Without supervision by a specialist medical practitioner in the relevant discipline

3.               And possibly, hospital and community-based public health practice—particularly in remote and Indigenous communities.[40]

While safety and quality issues were cited in the review as partly explaining the reduction in procedural practice by rural generalists the review notes ‘there are other structural barriers to the delivery of generalist services including the growth of ‘fly-in, fly-out’ specialist services, improved retrieval services, role delineation of hospitals, rising medical indemnity costs and litigious populations.’[41]

Overall, the 2007 review concluded that ‘[t]he generalist model is a practical and cost effective means of meeting the comprehensive health needs of rural and remote communities which have lower population densities’. Furthermore, that ‘[a]rticulated “generalist” pathways in training within hospital and community sectors, provides a solution to the skills shortages in rural and remote communities’.[42]

In 2012, the Senate Community Affairs Committee inquiry into issues affecting the supply of medical professionals in rural and regional areas discussed the potential role of rural generalists as a means of addressing gaps in specialist services in rural areas.

A number of submitters to the Senate inquiry supported increasing the number of rural generalists to address the maldistribution of the medical workforce. The Rural Doctors Association of Australia (RDAA) observed:

... we have lost the concept of generalism in medicine as being a vital thing ... We simply cannot afford to have an ever-increasing superspecialisation, because it is going to cost the government and it is going to cost the taxpayer too much. At the end of the day, we have to start putting some investment into people who can do basic things very, very well in a comprehensive sense.[43]

Although several stakeholders pointed to the success of the rural generalist pathway developed by Queensland Health, the Royal Australian College of GPs (RACGP) warned:

State-based medical workforce initiatives (e.g. Queensland Health Rural Generalist Program) are working as deterrents to the recruitment and retention of rural general practitioners...with perceived success in Queensland due to lucrative salaries which cannot be matched by private practice. It should also be noted that the term 'rural generalist' represents a state jurisdictional term and is not a recognised specialty by the Australian Medical Council.[44]

The Australian College of Rural and Remote Medicine (ACRMM) defended the Queensland rural generalist program:

I do not really want to comment on another college's approach or what they have said but I can only talk about what we have seen and the fact that the rural generalist program and generalist medicine is now very much on the agenda within other states. We have a successful model now that addresses what the real workforce needs are within rural and remote communities. Hence, we would like to see that extended into general specialists within it. Those are the skills that are missing out of the area, too, so we have a challenge with that. The strength of it is that it is local training. As I said in my opening, it is about a totally different approach to workforce, wherein there is benefit to the community and the doctor providing the services out there.[45]

Overall, the Senate Committee report supported the rural generalist pathway model adopted by Queensland, and rejected arguments it acted as a deterrent to recruitment:

On evidence received, both in written submissions and orally, the committee is not convinced by the argument from the RACGP that the Queensland program is a long term deterrent to the retention and recruitment of rural general practitioners. The program is now training an additional 50 new graduates per year and is committed and funded to do so over the next five years.[46]

The Committee went on to recommend:

… that the Commonwealth place on the agenda of the Council of Australian Governments' Standing Council on Health an item involving consideration of the expansion of rural generalist programs. It further recommends that, as part of that agenda item, the Council consider an evaluation of the Queensland Health Generalist Program and whether it should be rolled out in other jurisdictions.[47]

Workforce issues were subsequently discussed at the Standing Council on Health meeting in November 2012, and agreement was reached on the use of more innovative approaches to dealing with workforce shortages. However, no specific action on progressing a national rural generalist pathway was reported.[48]

Instead, most jurisdictions have developed their own training programs for rural generalists.[49] For example, the NSW Rural Generalist Training Program (RGTP) requires GP trainees to undertake a year of hospital practice or general practice, a year of advanced skills training and two years of support to consolidate advanced skills while training in community general practice or other approved training posts. Advanced training in either obstetrics, anaesthetics, palliative care, mental health or a combination of obstetrics and emergency medicine is offered.[50]

This variation in training pathway models has been raised as an issue by the ACRRM:

The variation between state/territory pathway models indicates an important role for national coordination. A major challenge for implantation is the surge of medical graduates that will be seeking access to training posts in the forthcoming years.[51]

To meet future challenges, the ACRRM has called for ‘[a] nationally streamlined, rural training and educational pathway’ for rural generalists. This would involve integrating existing programs. The ACRRM has proposed ‘an officer of the Commonwealth Department of Health vested with responsibility for national integration of the pathway. They would ensure portability of qualifications, and alignment with overall workforce planning’.[52]

During the 2016 Federal election, the Coalition committed to appointing a National Rural Health Commissioner who would develop a National Rural Generalist pathway to address rural health workforce issues.[53] Funding of $4.4 million for the Commissioner was committed at the Mid-Year Economic and Fiscal Outlook (MYEFO) 2016 in December 2016.[54]

Policy position of non-government parties/independents

The policy positions of the non-government parties in relation to Schedule 1 and 2 of the Bill have yet to emerge. However, during the 2016 Federal election the Greens indicated they would advocate for the development and funding of a National Rural Generalist Framework, encompassing:

•       mechanisms to promote and sustain rural general practices

•       strategies for rural recruitment and retention, and other workforce development measures

•       a National Rural Generalist Training Program to ensure that the next generations of rural doctors are equipped with the necessary education, training and skills to prepare them for rural medical practice.[55]

The policy positions of cross bench members and Senators are also unknown at the time of writing this Bills Digest.

Position of major interest groups

As noted above, the proposal for a rural generalist pathway as considered by the 2012 Senate inquiry was supported by a number of stakeholders, including the Australian College of Rural and Remote Medicine (ACRRM) and the Rural Doctors Association of Australia (RDAA). However, the Royal Australian College of General Practitioners (RACGP) warned that the Rural Generalist training pathway adopted by Queensland Health was deterring the recruitment and retention of rural GPs.

Commentary in relation to this Bill has been generally positive. For example, the RDAA said it ‘strongly welcomed’ the announcement of legislation establishing the National Rural Health Commissioner particularly citing the Minister’s statement that 'appropriate remuneration for Rural Generalists, recognising their extra skills and longer working hours, will also be under consideration’.[56] Rather than the limited term proposed in this Bill, the RDAA has called for a fixed term appointment of between four to six years. As the Bill repeals the legislation relating to the National Rural Health Commissioner on 1 July 2020, this would not be possible if the Bill is passed without amendment.

The ACRRM also welcomed the legislation, saying that ‘this statutory office holder position under the Health Insurance Act offers ongoing sustained attention to health and health services in rural and remote communities’. They were also ‘pleased’ that the National Rural Generalist Pathway which they had been advocating over a number of years ‘has been given a high priority’.[57]

In a statement at the time the appointment of a National Rural Health Commissioner was announced, the RACGP said it ‘warmly welcomed’ both the appointment of a National Rural Health Commissioner and the ‘commitment to pursue a National Rural Generalist Training Pathway’. The RACGP called for ‘all political parties to support the appointment of an Independent Rural Health Commissioner.’ But perhaps reflecting its comments to the Senate inquiry, it stated that ‘[d]efining the terms of reference and outcome measures are critical to success of this proposal.’[58]

Financial implications

The Explanatory Memorandum (EM) estimates the cost of establishing the National Rural Health Commissioner at $4.4 million over four years (to June 2020).[59]

Key issues and provisions

Establishing the role

Item 1 of the Bill inserts proposed Part VA—National Rural Health Commissioner into the Health Insurance Act 1973 to establish the National Rural Health Commissioner[60] (the Commissioner) for the period from the commencement of the relevant provisions of the Bill until 1 July 2020 when proposed Part VA will be automatically abolished.[61]

Functions of the Commissioner

The primary function of the Commissioner is to give advice to the Minister responsible for rural health including:

•       defining what it means to be a rural generalist

•       developing a National Rural Generalist Pathway and

•       advising on matters relating to rural health reform, as requested by the Minister.[62]

The Minister may, by notifiable instrument,[63] give written directions to the Commissioner about the performance of his, or her, functions. In that case the Commissioner must comply with the direction.[64]

In carrying out those functions the Commissioner must consult with health professionals in regional, rural and remote areas, with the states and territories, and with other rural health stakeholders who the Commissioner considers appropriate.[65] In addition, the Commissioner must consider appropriate remuneration, and ways to improve access to training, for rural generalists.[66] The Secretary of the Department may enter into an arrangement with the Commissioner for the services of APS employees in the Department to be made available to provide assistance to the Commissioner in carrying out his, or her, functions.[67]

Reporting requirements

The Bill contains reporting requirements. The Commissioner must prepare and give to the Minister:

•       a draft report setting out the Commissioner’s draft advice and recommendations in relation to his, or her functions, no later than six months before the deadline for the final report or any earlier day specified by the Minister and

•       a final report setting out the Commissioner’s final advice and recommendations, no later than 30 June 2020 or any earlier day specified by the Minister.[68]

The Commissioner may request an extension of time in which to deliver the draft report. In that case, the Minister may extend the deadline by up to two weeks.[69] However, there is no provision in the Bill for the Minister to extend the deadline for the final report.

In addition to preparing the draft report and final report which are described above, the Commissioner must, within three months after the end of each calendar year, prepare and give to the Minister, for presentation to the Parliament, a report about the Commissioner’s activities during the previous calendar year.[70] The Minister may, by notifiable instrument, give written directions to the Commissioner about the matters to be included in the annual report. The Commissioner must comply with such a direction.[71]

Importantly, whilst the Commissioner’s annual report is to be presented to the Parliament, there is no equivalent requirement that either the draft report or the final report be presented to the Parliament.

Terms and conditions of appointment

The terms and conditions of appointment for the Commissioner may be summarised as follows:

•       the Minister appoints the Commissioner, by written instrument, on a full-time basis or a part-time basis for a maximum period of two years (with the possibility of reappointment)[72]

•       the Commissioner must be a person with experience in rural health[73]

•       the Commissioner’s remuneration is to be determined by the Remuneration Tribunal[74]—or, in the absence of such determination, in accordance with a legislative instrument made by the Minister prescribing the relevant remuneration and allowances.[75]

The Minister may terminate the appointment of the Commissioner for a range of reasons including:

•       for misbehaviour or if the Commissioner is unable to perform the duties of his, or her, office because of physical or mental incapacity[76]

•       if the Commissioner becomes bankrupt or takes certain specified actions in relation to his or her creditors[77]

•       if the Commissioner is appointed on a full-time basis—the Commissioner is absent, except on leave of absence, for 14 consecutive days or for 28 days in any 12 months; or if the Commissioner engages, except with the Minister’s approval, in paid work outside the duties of his or her office[78]

•       if the Commissioner is appointed on a part-time basis—the Commissioner engages in paid work that, in the Minister’s opinion, conflicts or could conflict with the proper performance of his or her duties[79]

•       the Commissioner fails, without reasonable excuse, to disclose to the Minister details of any direct or indirect pecuniary interests that the Commissioner has, or acquires, which conflict or could conflict with the proper performance of the Commissioner’s functions.[80]

Background—Schedule 3

Medicare Provider Number legislation and the Medical Training Review Panel (MTRP)

In 1996 changes were made to the Health Insurance Act that affected training arrangements for newly graduated doctors, through the insertion of sections 19AA, 3GA and 3GC.[81] These provisions have become collectively known as the ‘Medicare provider number legislation’, and were designed to address a number of medical workforce issues: 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.[82]

To address concerns and secure passage of the legislation the government inserted a sunset clause (subsequently repealed in 2001), and the establishment of the Medical Training Review Panel (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 table in Parliament a report detailing the operation of the Medicare provider number legislation every two years. Within three months of the tabling of this report the MTRP is required to convene a meeting to discuss the report.

In 2007, the interval between these biennial reviews was extended to five years. Four reviews have been conducted: 1999 (mid-term review), 2003, 2005, and 2010. The review scheduled for 2015 was not conducted because legislation repealing the requirement to conduct the review was before the Parliament and was expected to pass. However, Parliament was prorogued before passage was secured.[83]

Of the reviews that have been completed under section 19AD, stakeholder engagement has been high.[84]

The Explanatory Memorandum to the Bill justifies the repeal of section 19AD in part by claiming that previous reviews ‘have not identified any anomalies, unintended consequences or points of contention with the quality standards governing access to the Medicare Benefits Schedule’.[85] Nevertheless, the 2010 review made some 25 recommendations across a range of areas, with four of these relating to amending legislation and a number of others revising regulations. Significantly, the 2010 review found that a number of recommendations from the previous review conducted in 2005 had not been implemented, ‘and there is little information to explain why the recommendations were not actioned’.[86]

The 2010 review received 37 electronic submissions, six formal submissions, and two stakeholder forums were held, demonstrating significant stakeholder engagement.[87] Notably, the review included a recommendation that the Department of Health ‘establish a mechanism that allows regular industry input into operational issues in order to identify and address any problems in delivering services under the programs, rather than wait for the five-year review of the Medicare Provider Number legislation’.[88] This recommendation was subsequently discussed at the Special Meeting of the Medical Training Review Panel which was held on 20 April 2011.[89] Representatives from the Australian Medical Association (AMA) supported the recommendation in principle, but also expressed concern that it might lead to the discontinuation of the five-yearly reviews. Dr Michael Bonning of the AMA commented:

We agree with and support this recommendation in-principle but we want this group to be conscious of the fact that this could provide a rationale for discontinuing of any further reviews and that given this body's strong support for the role of both itself, the MTRP and the five yearly reviews that is noted in the proceedings here and that this review process remains the peak process for providing updates and scrutiny for ongoing workforce programs.[90]

The MTRP was established in 1997 to monitor and report on medical education and training in Australia. In 2009 a review was undertaken, which ‘re-affirmed the important role that the MTRP plays, both as a forum bringing together key stakeholders in medical education and training and also as an advisory group informing work in relation to medical education and training in Australia’.[91] Members, which are appointed by Ministerial Determination, include the Medical Deans of Australia and New Zealand, specialist medical colleges, the Australian Medical Students Association, the Confederation of Postgraduate Medical Education Councils, the Australian Medical Association Council of Doctors-in-Training, the Australian General Practice Network, the Rural Doctors Association of Australia, the Australian Salaried Medical Officers federation, the Australian General Practice Training, state and territory health departments and the Commonwealth government.[92]

In 2012, Health Workforce 2025: Doctors, nurses and midwives was published by Health Workforce Australia (HWA).[93] This report contained detailed modelling on workforce supply, demand and training. In response, the National Medical Training Advisory Network (NMTAN) was established within HWA to improve the coordination of medical education and training nationally. When HWA was closed in 2014, its health workforce activities including the NMTAN moved to the Department of Health. An overlap between the work of the MTRP and NMTAN was identified in October 2014, and it was jointly agreed by members of both MTRP and the NMTAN that the MTRP could cease and the NMTAN would take on the production of its annual report on medical education and training.[94]

The MRTP’s 19th report on medical training in Australia was released in May 2016, and was prepared with oversight from the NMTAN.[95]

History of the provisions

In 2015, legislation to repeal sections 3GC and 19AD passed the House of Representatives, but failed to pass the Senate before Parliament was prorogued.[96] The schedules repealing these two sections were contained in the Omnibus Repeal Day (Spring 2015) Bill 2015. This Bill was subsequently referred to the Senate Finance and Public Administration Legislation Committee on 26 November 2015, which reported on 3 February 2016.[97] The report did not include any specific discussion on the repeal of sections 3GC and 19AD, nor did stakeholders make submissions.

Policy position of non-government parties/independents

The policy positions of non-government parties and cross bench members and Senators in relation to the provisions in Schedule 3, are not known at the time of writing.

Position of major interest groups

At this stage, no commentary in relation to the repeal of sections 3GC and 19AD has been identified. However, given the high stakeholder engagement in past reviews of the Medicare Provider Number legislation, which included support for the review process, it is anticipated that as Parliamentary debate progresses, stakeholder comment on the repeal of section 19AD is likely to emerge.

Financial implications

According to the EM there are no costs or savings associated with the repeal of section 3GC, but small unspecified regulatory savings are forecast from the repeal of section 19AD. Given the repeal of section 19AD is partly justified in the EM on the grounds that it is ‘resource intensive’, the lack of identified savings from its repeal is of interest. If savings are to be realised, then it would be helpful to policy makers to have this detail in advance of the Parliamentary debate. For example, savings from no longer engaging an independent reviewer to conduct a review should be quantifiable.[98]

Key issues and provisions

The Medicare provider number legislation consists primarily of sections 19AA, 3GA and 3GC of the Health Insurance Act. It was inserted into the Health Insurance Act in 1996 by the Health Insurance Amendment Act (No. 2) 1996 which introduced, amongst other things, the requirement for medical graduates to complete postgraduate education in order to gain access to Medicare benefits. This affects both overseas and Australian trained doctors.

As explained above, when section 19AA was introduced in 1996 by the Howard Government, a number of groups in the medical workforce perceived this to be a risk to the future employment opportunities of the then doctors in training.[99] A ‘sunset clause’, providing that the restricted access to Medicare benefits only applied to services rendered before 1 January 2002, was included ‘as a safeguard which ensured the legislation would be revoked automatically unless it was demonstrated to Parliament that there were no significant adverse impacts on affected doctors’.[100]

The mid-term review of the legislation conducted in 1999 found the legislation was working well, and the initial fears of affected doctors had not eventuated.[101] The review report recommended the sunset clause be repealed. In 2001, the Health Insurance Act was amended by the Health Legislation Amendment (Medical Practitioners’ Qualifications and Other Measures) Act 2001 which removed the sunset clause, and included a requirement under section 19AD that the operations of the legislation be reviewed on a biennial basis.[102]

This was subsequently amended by the Health Insurance Amendment (Provider Number Review) Act 2007 so that the review process would be undertaken every five years.[103]

According to the Explanatory Memorandum to the originating Bill:

The review process takes nine months to complete and requires significant staffing resources from the Department of Health and Ageing. With continuing wide acceptance of the legislation, the need to conduct a review biennially is no longer critical.[104]

Related parts of the Health Insurance Act are sections 3GA and 3GC. Section 3GA allowed for the creation of a Register of Approved Placements which enables doctors subject to section 19AA to provide professional services while undertaking training towards Fellowship. Section 3GC of the Health Insurance Act allowed for the creation of the Medical Training Review Panel whose functions include preparing reports on the numbers of practitioners enrolled in courses and programs, and the types and availability of those courses and programs.[105]

Key provisions

Items 1 and 2 in Schedule 3 to the Bill repeal sections 3GC and 19AD respectively.

Concluding comments

This Bill delivers on an election commitment to establish a National Rural Health Commissioner who would be tasked with consulting with relevant stakeholders to improve rural health and to develop a National Rural Generalist training pathway. The function of the Commissioner is advisory and time-limited to 1 July 2020. The provisions in the Bill around the establishment of the Commissioner and his, or her, role are supported by a number of rural stakeholder groups.

The Bill also repeals section 3GC of the Health Insurance Act, which would abolish the Medical Training Review Panel (MTRP), and section 19AD which would remove the requirement to conduct regular reviews of the Medicare Provider Number legislation. These provisions are unrelated to the establishment of the National Rural Health Commissioner. Stakeholder views around these provisions have yet to emerge. However, the abolition of the MTRP has been supported by members of the MTRP and the National Medical Training Advisory Network (NMTAN) which will take on its reporting functions.

Reviews of the Medicare Provider Number Legislation in the past have attracted high levels of stakeholder engagement, so stakeholder interest in this provision may yet emerge.

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[1].              Senate Standing Committee for Selection of Bills, Report, 2, 2017, The Senate, 16 February 2017, p. 3. See also: Selection of Bills Committee, Report, 1, 2017, The Senate, 9 February 2017, p. 4.

[2].              Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, 2017, The Senate, Canberra, 15 February 2017, p. 18.

[3].              The Statement of Compatibility with Human Rights can be found at page 4 of the Explanatory Memorandum to the Bill.

[4].              Parliamentary Joint Committee on Human Rights, Report, 1, 2017, The Senate, Canberra, 16 February 2017, p. 32.

[5].              Australian Institute of Health and Welfare (AIHW), ‘Impact of rurality on health status’ AIHW website.

[6].              AIHW, Australia's health 2016, AIHW, Canberra, 2016, p.248.

[7].              Ibid., p. 249.

[8].              Ibid., p. 250.

[9].              Ibid. Based on weekly hours worked.

[10].              Ibid. Applies to very remote areas.

[11].              Ibid., p. 251.

[12].              AIHW, Australian health expenditure by remoteness, AIHW, Canberra, January 2011, p. 5. The data reports lower expenditure per person in rural and regional areas, reflecting lower utilisation rates.

[13].              National Health Performance Authority (NHPA), Healthy communities: avoidable deaths and life expectancies in 2009–11, NHPA, Canberra, December 2013, p. v.

[14].              Ibid. See also Rural Doctors Association of Australia, Submission to Senate Community Affairs Committee, Inquiry into the factors affecting the supply of health services and medical professionals in rural areas, submission no. 67, 22 December 2011, p. 5.

[15].              Senate Standing Committees on Community Affairs, The factors affecting the supply of health services and medical professions in rural areas, The Senate, August 2012, pp. 16–17.

[16].              Ibid., p. 18.

[17].              B Birrell, ‘Medical manpower: the continuing crisis’, People and Place, vol. 4, no. 3, 1996. Full text article available on request.

[18].              Australian Medical Workforce Advisory Council (AMWAC), The medical workforce in rural and remote Australia, 1996, Sydney.

[19].              Ibid.

[20].              AIHW, Medical labour force 2004, AIHW, Canberra, 20 December 2006, p. vi. The fall in GP supply was due to a fall in hours worked. Actual numbers of GPs increased.

[21].              Health Insurance Amendment Act (No. 2) 1996.

[22].              Department of Health (DoH), ‘6. Key findings’, Report on the audit of health workforce in rural and regional Australia, DoH, Canberra, 2008, ch. 6.

[23].              AIHW, ‘Table 23: employed medical practitioners: FTE per 100,000 population by remoteness area, 2012 to 2015’, Medical workforce 2015: data tables: medical practitioners overview, AIHW, Canberra, Table 23, 2015.

[24].              Ibid., Table 24.

[25].               The Constitution section 51(xxiiiA): Parliament shall, subject to this Constitution, have power to make laws for the peace, order, and good government of the Commonwealth with respect to: the provision of maternity allowances, widows' pensions, child endowment, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not so as to authorize any form of civil conscription), benefits to students and family allowances.

[26].               Rural Doctors Association of Australia, Overseas doctors make valuable contribution to our medical workforce, media release, 31 October 2008.

[27].               Districts of workforce shortage are areas in which the general population’s need for healthcare has not been met. DWS are determined by the Department of Health with reference to the most recently available Medicare statistics. DWS only applies to medical jobs that need to provide services that attract Medicare rebates.

[28].              DoH, ‘Medicare provider number restrictions’, DoH website, 9 April 2014.

[29].              For a list of current programs see DoH, ‘Rural and Regional Health Australia (RRHA) list of programs’, DoH website, 30 June 2016.

[30].              S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2015–16, December 2015, p. 184.

[31].              S Ley (Minister for Health) and F Nash (Minister for Rural Health), Building a health workforce for rural Australia, media release, 15 December 2015.

[32].              DoH, ‘Connecting health services with the future: technology and technical issues for Telehealth’, DoH website, 5 June 2011.

[33].              DoH, ‘MBS Online: Telehealth eligible areas’, DoH website, 20 December 2012.

[34].              Australian College of Rural and Remote Medicine (ACRRM), ‘Rural generalist medicine’, ACRRM webpage, [2015].

[35].              Senate Standing Committees on Community Affairs, The factors affecting the supply of health services and medical professions in rural areas, The Senate, Canberra, August 2012, p. 32. This definition is based on the description provided by Queensland Health.

[36].              Ibid., p. 30.

[37].              D Pashen, R Murray, B Chater, V Sheedy, C White, L Eriksson, S De La Rue, M Du Rietz, The expanding role of the rural generalist in Australia—a systematic review, Australian College of Rural and Remote Medicine, Brisbane, November 2007.

[38].              Ibid., p. 13.

[39].              Ibid.

[40].              Ibid., p. 16.

[41].              Ibid., p. 14.

[42].              D Pashen, et al, The expanding role of the rural generalist in Australia—a systematic review, op. cit., pp. 58–59.

[43].              Senate Standing Committees on Community Affairs, op. cit., p. 30.

[44].              Ibid., p. 33.

[45].              Ibid., pp. 34–35.

[46].              Ibid., p. 37.

[47].              Ibid., p. 38.

[48].              Standing Council on Health (SCoH), Communique, SCoH meeting, Perth, 9 November 2012.

[49].              All jurisdictions except the ACT have developed rural generalist training pathways. See ACCRM, op. cit.

[50].              Health Education Training Institute (HETI), ‘NSW Rural Generalist (Medical) Training Program’, HETI website; HETI, ‘Training pathway’, HETI website.

[51].              ACRRM, The rural way: implementation of a national rural generalist pathway, ACRRM, Brisbane, May 2014, p. 2.

[52].              Ibid., p. 38.

[53].              F Nash (Minister for Rural Health), ‘Election 2016: coalition to create rural health champion and pathway for rural medical professionals’, media release, 24 June 2016.

[54].              S Morrison (Treasurer) and M Cormann (Minister for Finance), Mid-year economic and fiscal outlook 2016–17, op. cit., p. 173.

[55].              The Australian Greens, ‘Delivering health in the bush: meeting rural health needs’, policy document, no publication date, accessed by the Parliamentary Library 29 June 2016.

[56].              RDAA, Rural Health Commissioner a step closer to becoming reality, media release, 8 February 2017. See also D Gillespie (Assistant Minister for Health); D Gillespie (Assistant Minister for Health), Australia's first national rural health commissioner: the champion of regional and rural health reform, media release, 8 February 2017.

[57].              ACRRM, ‘ACRRM welcomes National Rural Health Commissioner bill introduction’, media release, 8 February 2017.

[58].              RACGP, ‘RACGP strongly supports the appointment of a Rural Health Commissioner’, media release, 24 June 2016.

[59].              Explanatory Memorandum, p. 3.

[60].              Health Insurance Act, proposed section 79AB.

[61].              Item 1 in Schedule 2 to the Bill abolishes proposed Part VA.

[62].              Health Insurance Act, proposed subsection 79AC(1).

[63].              Generally, unlike legislative instruments, notifiable instruments are not subject to Parliamentary scrutiny, nor are they subject to automatic repeal 10 years after registration: Legislation Act 2003, section 7.

[64].              Health Insurance Act, proposed section 79AN.

[65].              Health Insurance Act, proposed paragraphs 79AC(2)(a) and (b).

[66].              Health Insurance Act, proposed paragraph 79AC(2)(c).

[67].              Health Insurance Act, proposed section 79AO.

[68].              Health Insurance Act, proposed subsection 79AC(3).

[69].              Health Insurance Act, proposed subsection 79AC(4).

[70].              Health Insurance Act, proposed section 79AM.

[71].              Health Insurance Act, proposed section 79AN.

[72].              Health Insurance Act, proposed subsections 79AD(1) and (2).

[73].              Health Insurance Act, proposed subsection 79AD(3).

[74].              Health Insurance Act, proposed subsection 79AG(1).

[75].              Health Insurance Act, proposed subsection 79AG(4).

[76].              Health Insurance Act, proposed subsection 79AK(1).

[77].              Health Insurance Act, proposed paragraph 79AK(2)(a).

[78].              Health Insurance Act, proposed paragraphs 79AK(2)(b) and (c) and proposed subsection 79AI(1).

[79].              Health Insurance Act, proposed paragraph 79AK(2)(d) and proposed subsection 79AI(2).

[80].              Health Insurance Act, proposed paragraph 79AK(2)(e) and proposed section 79AL.

[81].              These sections were inserted into the Health Insurance Act by the Health Insurance Amendment Act (No. 2) 1996. For more information see: C Field, Health Insurance Amendment Bill (No. 2) 1996, Bills digest, 47, 1996–97, Parliamentary Library, Canberra, 1996.

[82].              A Biggs, Health Insurance Amendment (Provider Number Review) Bill 2007, Bills digest, 113, 2006–07, Parliamentary Library, Canberra, 2007, p. 2.

[83].              Parliament of Australia, Omnibus Repeal Day (Spring 2015) Bill 2015 homepage, Australian Parliament website. This information was confirmed through personal communication with the Department of Health, 7 March 2017.

[84].              A Biggs, op. cit., p. 3.

[85].              Explanatory Memorandum, p. 2.

[86].              Department of Health and Aging (DoHA), Report on the 2010 review of the Medicare provider number legislation, DoHA, Canberra, December 2010, p. 5.

[87].              Ibid., p. vii.

[88].              Ibid., p. xii.

[89].              Subsection 19AA(2) of the Health Insurance Act specifies that the MTRP must convene within three months a meeting to discuss the report on the review of the Medicare provider number legislation.

[90].              DoH, ‘Special meeting to discuss the Report on the 2010 Review of the Medicare Provider Number Legislation’, DoH, Canberra, November 2012, p. 17.

[91].              DoH, Medical Training Review Panel 19th report, DoH, Canberra, May 2016, p. 16.

[92].              Ibid.

[93].              Originally published as Health Workforce Australia (HWA), Health Workforce 2025 Volume 1 and 2: Doctors, nurses and midwives it was revised and published as Australia's future health workforce—doctors, HWA, August 2014.

[94].              DoH, Medical Training Review Panel 19th report, op. cit., p. 17.

[95].              Ibid.

[96].              Parliament of Australia, Omnibus Repeal Day (Spring 2015) Bill 2015 homepage, Australian Parliament website.

[97].              Senate Finance and Public Administration Legislation Committee, Report: Omnibus Repeal Day (Spring 2015) Bill 2015 [Provisions], February 2016.

[98].              The cost of engaging an independent reviewer for previous reviews was estimated at $80,000. A Biggs, op. cit., p. 5.

[99].              For information see C Field, Health Insurance Amendment Bill (No. 2) 1996, Bills digest, 47, 1996–97, Department of the Parliamentary Library, Canberra, 1996.

[100].              Explanatory Memorandum, Health Insurance Amendment (Provider Number Review) Bill 2007, pp. 1–2

[101].              Ibid., p. 2.

[102].              Parliament of Australia, Health Legislation Amendment (Medical Practitioners Qualifications and Other Measures) Bill 2001 homepage, Australian Parliament website.

[103].              Parliament of Australia, Health Insurance Amendment (Provider Number Review) Bill 2007 homepage, Australian Parliament website.

[104].              Explanatory Memorandum, Health Insurance Amendment (Provider Number Review) Bill 2007, p. 1.

[105].              Ibid., p. 2.