Budget Review 2014–15 Index

Dr Rhonda Jolly and Amanda Biggs

E health

Since the 1990s, e health has been increasingly seen by most developed countries as central to the provision of current and future high quality, patient-centred care. Electronic health records, in turn, are considered the cornerstone of e health development.

In seeking to advance the e health agenda at a national level the Rudd Government allocated $466.7 million specifically for the purpose of creating a personally controlled electronic health record (PCEHR) for Australians who chose to ‘opt in’.[1] The PCEHR has been plagued, however, by development problems and criticised by numerous stakeholders since it was first announced in the 2010–11 Budget.

In Opposition the Coalition also criticised Labor’s approach to the introduction of electronic health records.[2] Hence, soon after it took power in 2013 the new Health Minister, Peter Dutton, announced a review of the PCEHR.[3] The review, chaired by the head of Uniting Care Health Queensland, Richard Royle, was given the task of investigating some of the problems associated with the PCEHR. Of particular interest were issues surrounding clinician and patient useability. The review was also tasked with considering what incentives could be employed to encourage people to register and use the PCEHR system.[4]

The Review reported to Minister Dutton in December 2013 with what the Minister considered was ‘a comprehensive plan’ for the future of electronic health records.[5] The Minister did not publish the report, however, which prompted some stakeholders to apply, unsuccessfully, under freedom of information for its release. The report was released by the Minister on 19 May 2014.[6]

This budget has provided funding of $140.6 million for one year to allow for the continued operation of the PCEHR, while the Government ‘finalises its response’ to the Royle Review.[7] What responses there have been to the budget announcement have been almost indifferent and can be summarised in the response from David More, long-time critic of the manner in which the PCEHR project has been conducted. More wrote that the announcement simply indicated that the Government ‘just couldn’t decide what to do’ about the PCEHR.[8]

Another view was more sympathetic to the dilemmas the Government faces with regards to the PCEHR:

… we are seeing a similar situation to the Coalition’s dilemma with regards to Labor’s National Broadband Network project. No Coalition Government would organically decide to throw half a billion dollars at an electronic health records project. However, as Labor has already spent that money, and as the project has some legs, it appears the Coalition does not yet feel it can cancel it wholesale just yet.[9]

Ovum public sector research director Kevin Noonan was more positive. Noonan noted that although the PCEHR has a troubled past, the Government ‘is still committed to the concept’.[10]

It appears the year’s respite for the PCEHR is intended to give the Government time to decide exactly how that commitment will be refined and transferred into policy directions.

Primary Health Networks

From 1 July 2015, Medicare Locals (ML) will be replaced with a smaller number of larger Primary Health Networks (PHNs).[11] PHNs will establish new clinical councils with general practitioner representation, as well as local consumer advisory committees. Their role will be to improve patient outcomes by improving the coordination of primary care and acute care services across defined geographic areas. The measure is to be funded from existing Departmental resources.

Currently 61 MLs operate, most as incorporated entities.  MLs were established as one of the key reforms under the National Health Reform Agreement (NHRA) in 2011. Their initial focus was to expand GP after hours services.

The Coalition’s election policy included a commitment to review the ML program to ensure funding was being directed to frontline services.[12] Late in the campaign Mr Abbott also pledged none would close.[13] Former Chief Medical Officer John Horvath undertook the review which was provided to Government in March 2014, but not publicly released until the eve of the budget.[14]

The review reported a range of shortcomings with some MLs, but found others performing well. An accompanying audit found no significant financial performance issues. The review was critical of MLs that had not engaged effectively with local stakeholders or had duplicated existing services when developing expanded GP after hours services. It found MLs’ reporting requirements often burdensome and complex and criticised the amount of funding that was being devoted to administration. Patients were confused by the name as shown by repeated attempts to lodge Medicare claims with MLs. However, the review accepted the ongoing need for primary care organisations to support better integrated and coordinated primary care. As well as a name change, the review recommended the number of MLs be reduced and replaced by a smaller number of higher performing regional primary care organisations with clinical councils and community based advisory committees. It also recommended the abolition of the national peak body, the Australian Medicare Locals Alliance (AMLA).

The Government’s budget measure broadly implements the review’s recommendations. Funding for the AMLA will cease on 30 June 2014, and its functions transferred to the Department of Health. Funding for all existing MLs will cease on 30 June 2015. New PHNs will be selected by a competitive tender process with boundaries aligned with those of Local Hospital Networks. PHNs will purchase services but not directly provide services unless there is demonstrable market failure.[15] As there will be fewer PHNs operating, job losses may occur.

A review of GP after hours services will be conducted, although details are not yet forthcoming.

Implementation will require consultation with the states and territories and hospitals, professional bodies and other stakeholder groups.

Reaction to the measure has been mixed. The AMLA describes replacing MLs with PHNs as re-inventing the wheel and a waste of taxpayer’s money.[16] The Australian Healthcare and Hospitals Association cautiously endorsed the review’s recommendations, but warned that ‘it will be critical for the replacement organisations to maintain an appropriate connection’ to their local communities and for responsibility for population level health planning tasks to be clearly assigned.[17] Former Chair of the National Health and Hospitals Reform Commission, and current Dean of Medicine at the University of Notre Dame, Christine Bennett, is reported to support the measure.[18]

Health Flexible Funds

Some $197.1 million in savings over three years will be achieved through pausing indexation of Health Flexible Funds—which provide grants across a range of priority areas—and reducing uncommitted funds from 2015-16.[19] Flexible Funds were established in 2011, when the previous 159 separate grant programs were consolidated into 18 funds; 16 now remain. Among others, these fund grants in chronic disease prevention, communicable disease prevention, substance misuse, primary care, rural health, Aboriginal and Torres Strait Islander health, health system capacity and quality use of diagnostics and therapeutics. Savings will be invested in the proposed Medical Research Future Fund.

Expanded/new commitments

A number of new and expanded commitments were announced in the Budget. Of note is the accelerated expansion of the bowel cancer screening programme at a cost of $95.9 million over four years, to fund biennial screening for all those aged 50 to 74 by 2019–20.[20] Additional funding of $200.0 million over five years is provided for dementia research, and ten new headspace centres (youth-friendly community based mental health services) will be established at a cost of $14.9 million over four years.[21] All were election commitments.

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