Health - Primary care and prevention

Budget Review 2010-11 Index

Budget 2010–11: Health

Primary care and prevention

Amanda Biggs

In the lead up to this year’s Budget, major announcements around primary health care and prevention were made by the Government in the context of winning the  support of the state premiers for its national health reform agenda—A National Health and Hospitals Network. This included a proposal to take over funding for all primary health care services, including those currently provided by the states and territories.[1]

This Budget sees the Government moving to realise these reforms with significant funding allocated to primary health care and prevention initiatives, the establishment of new primary care organisations to be known as Medicare Locals and the release of the first National Primary Health Care Strategy. In summary, the major allocations include:

  • $290.5 million to establish a new network of primary health care organisations, to be known as Medicare Locals, to coordinate and connect health services
  • $126.3 million to improve access to local after hours services
  • the introduction of $449.2 million in payments to general practices to manage and care for diabetes patients in the community, if the patient voluntarily enrols with that practice[2]
  • $390.3 million in grants to general practices to help them employ more practice nurses
  • $355.2 million to expand the number of General Practitioner (GP) super clinics and upgrade existing general practice infrastructure
  • $494.5 million to increase the number of GP training places and more training rotations for junior doctors and
  • $54 million for a comprehensive Australian Health Survey.[3]

Additional funding was also announced for the prevention of chronic diseases: $50 million to tackle binge drinking, $195.2 million to encourage participation in sport and physical activity and $27.8 million to fund an anti-smoking campaign. The excise on tobacco will be lifted. It is expected to generate nearly $5 billion in additional revenue to be directed into funding hospitals and health services and, in a global first, plain packaging of tobacco products will be mandated.

Stakeholder responses

Although responses to these measures have been largely positive, criticisms of particular elements have emerged—the most well-known being the tobacco industry’s opposition to the plain packaging proposal.[4] The proposal to create Medicare Locals, essentially re-branded and expanded Divisions of General Practice, has been generally well received, although how these independent legal entities would work with the proposed independent Local Hospital Networks and other health professionals and organisations, remains unclear.[5]

Another measure that may provoke debate as it represents a shift towards fund holding—long opposed by some in the medical profession—are the proposals around personalised care for patients with diabetes. The proposal is to give GPs block grants (on average $1200) for each voluntarily enrolled patient with diabetes, to manage and coordinate all their health care needs. If the person stays healthy and remains out of hospital the GP could then receive up to $10 800 in additional payments.[6]

Recent reports to Government have recommended exploring such fund holding options, as well as the voluntary enrolment of patients with chronic conditions.[7] The Government points to the high numbers of hospital admissions that could be avoided if patients with diabetes received more coordinated and integrated care in the community. But many issues remain unclear; for example, would the GP be the sole fund holder for payments for other diabetes health services such as allied health services, and what role would Medicare Locals  have in managing these or in coordinating care. Nor is it clear how perverse incentives, such as GPs ‘cherry picking’ healthier patients, could be fully avoided. It also remains possible that GPs could charge patients gap fees if the available funds run out.[8] If fully implemented so as to include other chronic diseases, this scheme would be a major shift in Medicare arrangements as it ‘introduces a whole new system of medical care’, something that has also been noted by the Government.[9]

The Australian Medical Association (AMA) has been critical of this scheme and an apparent lack of consultation over its development.[10] On the other hand, Diabetes Australia has welcomed the new funding model.[11]

Budget proposals for the prevention of chronic illnesses—such as the tobacco excise, anti-smoking campaign funds and funding to address binge drinking—have been broadly welcomed by public health advocates. But the failure to adopt other recommendations of the Preventative Health Taskforce, such as bans on alcohol advertising during broadcasts of sporting events and restrictions on junk food advertising, has led some to question whether the Government’s commitment to prevention can withstand the interests of powerful lobby groups.[12]

[1].    Australian Government, A National Health and Hospitals Network: further investments in Australia’s health, Commonwealth of Australia, Canberra, 2010, viewed 14 May 2010,

[2].    A similar scheme for veterans with chronic conditions, managed through the Department of Veterans Affairs, was also announced in this Budget.

[3].    The budget figures in this brief have been taken from the following document unless otherwise sourced: Australian Government, Budget measures: budget paper no. 2: 2010–11, Commonwealth of Australia, Canberra, 2010.

[4].    For a discussion on the tobacco excise increase, refer to the brief by Dr Matthew Thomas; for a discussion of the workforce initiatives affecting primary care, refer to the brief by Dr Rhonda Jolly.

[5].    For example, some doctors expressed concern that Medicare Locals could undermine their independence. See, A Cresswell, ‘Doctors slam Medicare Locals’, The Australian, 13 May 2010, p. 7, viewed 13 May 2010,;query=Id%3A%22media%2Fpressclp%2FWROW6%22

[6].    A National Health and Hospitals Network: further investments in Australia’s health, op. cit, p. 49.

[7].    K Rudd (Prime Minister), N Roxon (Minister for Health), $436 million to take pressure off our hospitals by delivering personalised care for diabetics, media release, 31 March 2010, viewed 14 May 2010,;query=Id%3A%22media%2Fpressrel%2FKEEW6%22

[8].    P Smith, ‘The end of fee-for-service?’ Australian Doctor, 9 April 2010, p. 3, viewed 14 May 2010,;query=Id%3A%22library%2Fjrnart%2FAXFW6%22

[9].    Andrew Pesce, President of the Australian Medical Association, quoted in A Kollmorgen, ‘Behind the diabetes scheme’, Medical Observer, 23 April 2010, p. 19, viewed 14 May 2010,;query=Id%3A%22library%2Fjrnart%2F98JW6%22; also K Rudd and N Roxon, op cit.

[10]. Australian Medical Association, Policy on the run will disadvantage people with diabetes, media release, 31 March 2010, viewed 14 May 2010,  

[11]. Diabetes Australia, New funding for personalised care for people with diabetes, media release, 31 March 2010, viewed 14 May 2010,

[12]. M Metherell, ‘Labor fails to tackle alcohol and junk food giants’, The Age, 13 May 2010, p. 3, viewed 13 May 2010,;query=Id%3A%22media%2Fpressclp%2F8SOW6%22