Amanda Biggs, Social
Medicare was a key election issue with concerns about privatisation, bulk billing incentives and the rebate freeze capturing attention. While these remain pertinent, other issues affecting Medicare and the health system are also likely to come before policy makers in this term of parliament.
Medicare was a high profile issue during the
election—claims that the Government was intending to privatise
the Medicare payments system, the Medicare
rebate freeze and changes
to bulk billing incentives all generated significant debate. The Prime
Minister subsequently ruled
out major changes and committed to Medicare’s full retention. Notwithstanding
this commitment, Medicare and the health system will face a number of
challenges during this term of parliament.
Cost pressures on the Commonwealth
The Australian health system performs comparatively
expectancy is the sixth highest among Organization for Economic Cooperation and Development (OECD) countries. At 8.8
per cent of GDP, Australia's total expenditure on health (including
government and private sources) remains close to the OECD average of 8.9 per
cent. But it is expected to rise. The Intergenerational
Report 2015 forecasts that Commonwealth spending on health is projected to grow
from 4.2 per cent of GDP to 5.5 per cent by 2054–55. This growth will be driven
largely by non-demographic factors: higher incomes (which drive consumption),
health sector wage increases and technological change. This means that keeping health
spending efficient and sustainable over the period will be a key challenge.
Out of pocket costs
While the 2014–15
Budget’s $7 patient co-payment on bulk billed services (with exemptions)
has been abandoned, a $5
co-payment on subsidised medicines remains. Proposals to increase patient
out-of-pocket costs, however, raise concerns that high costs deter people from
seeking needed health care. Patient out-of-pocket costs account for around 20
per cent of overall health expenditure—a rate close to the OECD average,
but considerably higher than New Zealand and the United Kingdom. According to
Bureau of Statistics, nationally around five per cent of people who needed
to see a general practitioner (GP), delayed or did not go due to cost. In some regions
the rate was almost twice as high.
Some argue the effect of the Medicare rebate freeze
introduced in 2013–14 and extended to 2020 in the most recent
Budget, is a ‘co-payment
by stealth’. Doctor groups such as the Australian
Medical Association warn that the freeze is unsustainable and will force
doctors to abandon bulk billing and pass costs on to patients. So far, the national
bulk billing statistics show bulk billing rates for GPs remain high. Nevertheless,
reports of GPs
abandoning bulk billing and patients attending emergency
departments for GP-treatable conditions are emerging.
Parliament’s capacity to overturn the rebate freeze
is limited. It can move to disallow the regulations that
specify the fees for Medicare services. But disallowance
would revive the previous regulation which specifies fees that have themselves
been frozen at the same level. A further complication is that the regulation
itself has a finite life—expiring
after 12 months and 15 sitting days.
Another challenge will be addressing the rise of chronic disease. New
approaches, such as the Health Care Home model as proposed by the Primary
Health Care Advisory Group (see article elsewhere in the Briefing Book),
warrant consideration. A greater emphasis on prevention has also been urged.
One option that has been suggested is a sugar
tax. In 2014, Mexico imposed a tax
on sugary drinks and other countries, including the United Kingdom (UK), have
begun to follow. Early evidence
suggests the Mexican tax has reduced soft drink consumption, but evidence of
impacts on weight is yet to emerge.
Meanwhile, initiatives to improve efficiency and
reduce wastage in the health system continue. The Medicare
Benefits Schedule Review Taskforce is reviewing the 5,700 Medicare funded
services against best clinical practice and removing services for which the
evidence base is poor. The interim
report of this Taskforce recommended the removal of 23 items, with more recommendations
likely by year’s end, when its next
report is due. However, in the current political climate any changes to
Medicare are likely to face considerable scrutiny, particularly proposals for further
Role of private health insurance
Reforms to private health insurance may come before
the Parliament, following the recent
consultation process. Improving consumer value and providing better product
information are likely to be a major focus for the Government. Meanwhile,
insurers will be keenly pursuing policies that address their cost pressures, such
as reforming the pricing
of prostheses. However, proposals for private health insurers to play a
greater role in primary care—such as in chronic
disease management—could be contentious.
Doctor’s groups remain wary,
and some are concerned it could lead to the ‘Americanisation’
of the health system, and the erosion of the Medicare principle of universality.
Unpassed budget measures
Health measures from the 2016–17
Budget will also need to be considered. This includes the proposal
to replace the means-tested Child Dental Benefits Schedule funded through
Medicare, with a new state-run public dental scheme to be established under a
National Partnership Agreement with the states and territories. Legislation
to enact this was introduced in May but lapsed when Parliament was dissolved. In
addition, previously presented but unpassed measures from earlier budgets, such
as the 2014–15 budget proposal for a single Medicare
Safety Net may be re-submitted. This legislation
was introduced in 2015, but lapsed at prorogation.
Rural and regional challenges
Providing accessible and affordable health care to residents
of rural and regional areas remains a high priority for many policy makers.
Many of these areas lack ready access to Medicare funded services as a result
of the distribution
of the medical workforce. The health problems of Aboriginal
and Torres Strait Islander people, who face particular sociodemographic,
cultural and language barriers may also gain greater consideration in the new
Parliament with the election of several Indigenous members and senators.
Improving the care of those with mental illnesses is another
pressing issue. The National
Mental Health Commission proposed the development of a new ‘stepped
care’ model providing a range of help options of varying intensity to match
people’s needs. But mental health reform will be challenging. Questions
have been raised over the role of Primary Health Networks which will commission
mental health services and how these will integrate with other services, with concerns
that some patients may fall through the gaps. In addition, the National
Disability Insurance Scheme trials have raised
concerns in the mental health sector around workforce issues, funding and
the pace of change the sector faces.
It will be important to resolve the future of
public hospital funding after 2020, when the recently signed COAG agreement expires. The Turnbull
Government’s decision to reverse the contentious 2014–15 budget measure that
replaced activity based funding with CPI and population growth as the basis for
hospital funding for the life of the agreement, was welcomed by many. But
future funding arrangements will still need to be agreed between the Australian
Government and the states and territories.
The Parliament passed significant
reforms to Pharmaceutical Benefits Scheme (PBS) pricing in 2015 to coincide
with the signing of the Sixth
Community Pharmacy agreement. While some issues may not be revisited until
the signing of the next agreement in 2020, the listing of new medicines will
continue to impose cost
pressures on the PBS. The review
of pharmacy remuneration and regulation, which is currently underway, may
also reinvigorate debate on issues such as the Pharmacy
Location Rules that regulate where pharmacies can operate.
These, and other health issues, look likely to
feature prominently in the work of the upcoming parliament.
Amanda Biggs, Medicare: a quick guide, Research paper series, 2016–17, Parliamentary Library, Canberra, 2016.
Alex Grove, The Pharmaceutical Benefits Scheme: a quick guide
, Research paper series, 2015–16, Parliamentary Library, Canberra, 2016.
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