Greens' Senators Dissenting Report
1.1 The Bill was introduced into the Parliament as a
private senator's bill by Senator Richard Di Natale on 27 March 2014 and
referred to the Community Affairs (Legislation) Committee as the Greens wanted
to amend the Private Health Insurance Act 2007 (Act) to clarify that
private health insurers may not enter into arrangements with primary care
providers that provide preferential treatment to their insured members.
1.2 Australians rely on an equitable and efficient Medicare
system as a central feature of the Australian health system. However there are
'some worrying signs to indicate that Medicare is under threat' if private
health insurers enter the sphere of primary care by circumventing the ACT.
This has the potential to create two-tiered health care system.[1]
1.3 The trial being undertaken in Queensland by Medibank
Private (GP Access program) has raised concerns within the medical community as
it has the potential to disrupt the relationship that individuals have with
their family GP, and a situation may evolve whereby patients who are Medibank
Private customers, but their GP is not a preferred provider or not part of this
Medibank trial, may be forced to change their doctor in order to secure full
value for their private health insurance cover.
1.4 Several submitters voiced concern about the process
of private health insurers entering into the sphere of primary care and
providing a service that may not be available to those without private
insurance. The three contentious elements of the GP Access Program were
outlined by Senator Di Natale:
Same-day appointments – when members call one of the
participating GP clinics before 10am weekdays they are guaranteed an
appointment for that day. If members call later, the clinic will do their best
to fit them in.
Fee-free consultations – members who show their Medibank card
at a participating clinic or who use the after-hours GP will receive the
consultation fee-free.
After-hours GP home-visits – members in metro areas can
access an after-hours home GP visit within three hours.[2]
1.5 Submissions provided by the Private Health Funds,
Medibank Private and Bupa Australia, highlighted their opposition to the Bill.
The contention by Medibank Private – that the GP Access trial can reduce
‘downstream’ costs and work with GPs in a community setting[3]–
was questioned in every submission not connected to a private insurance fund,
as lacking the evidence base for these claims.
1.6 Dr Tim Woodruff, Vice President of the Doctors Reform
Society, expanded on the inequities that are being established by the GP Access
trial. It is worth summarising Dr Woodruff’s explanation of the impact of the
Medibank trial:
What I would like all the Senators perhaps to do is to
consider if their parents, or their brother or sister, or one of their children
was not in a financial position, for reasons that could be very complicated or
very simple, to afford Medibank Private insurance; whether the Senators would
feel that that person is still just as deserving of access to quality health
care as they themselves. What we have in this proposal, generally, from
Medibank ... is a proposal to improve access for those who are members and who
have private health insurance. That inherently means that those family members
I am talking about of yours that cannot afford it get less care, less access to
care, than you might do. That seems to me inherently unfair and it is against
the principles that Medicare was set up to try and adhere to.
If we are to go down the path of private health insurance,
supporting and intruding into primary health care, what we definitely do not
want, or what I believe we should not want, is for people to not be able to
access as well as others that very important part of the health system. I am
puzzled also by Medibank in their submission suggesting that the argument we
are proposing is that it might create a two-tier health system—is misleading.
It is so straightforward that a two-tiered system if this kind of trial becomes
the norm.[4]
1.7 Dr Brian Owler, President of the Australian Medical
Association (AMA) outlined to the Committee the AMA’s concern that the private
health insurers’ behaviour could create a two-tier health system and noted the
dangers of having a situation where privately insured patients receive
preferential health care treatment in primary care. The AMA President
acknowledged that there are already some areas of speciality in the health
system that operate as a two-tiered health system, but this is not currently
the case in primary care in general practice. However, the arrangements being
initiated by private health funds represent ‘a real danger’ to the current
system:
There are some areas of specialty where we very much have a
two-tiered health system. Currently that is not the case in primary care in
general practice. What we do not want to do is have a system that encourages a
two-tiered system for accessing a GP. Equity of access remains the second
principle that we need to value. I also talked about universality, and that is
something we cherish in the Australian system as well.
The issues that we face—and I am encouraged by the evidence
given by the ADA for outlining the potential—are that we do not want to see a
system where those with private health insurance get access to a GP, while
those who do not private health insurance cannot.
We know that the arrangement between IPN and Medibank Private
may work in a small setting, where you have one insurer and one group of
practices, particularly where those practices are under-subscribed. But, if you
have a very busy practice with more patients than you can deal with or you have
multiple insurers and engaging in the same arrangement, what you will end up
with is a situation where you have to have private health insurance to get that
appointment. The only way that those practices are going to be able to
guarantee and fill their requirements to the insurer is to see those patients
more quickly and patients without private health insurance cannot get access at
all. I think that is a real danger of the current arrangement.[5]
1.8 Dr Woodruff also supported the position that the
involvement of private health funds in primary care could herald the advent of
a two-tier health system. Dr Woodruff questioned the fairness of the Medibank
GP Access program and noted that an individual who is a member of Medibank
Private will get a different and better service than someone who is not:
Those members who have Medibank Private cover will get
fee-free consultations, same day appointments and after-hours GP home visits.
That is not what other people get. That is two-tiered.[6]
1.9 The Australian Dental Association (ADA) submitted
that dental service delivery is being permanently and adversely affected by the
private health insurance (PHI) industry because they are already dictating both
the provider and the type of care:
The PHI industry, through the terms of their policies and
discriminatory rebate practices, seeks to dictate the provider and the nature
of treatment received by Australian dental patients. The dentist is best placed
to advise Australians on their oral health care, yet this is a role which the
PHI industry is increasingly assuming and this is adversely impacting on the
quality of care being delivered.[7]
1.10 In testimony before the Committee, the ADA expanded on
how patient care is already being undermined by private insurance funds and
gave examples of how this is happening. The ADA noted that this situation is
contrary to the Act. The general overview of the situation confronting some
dental patients is summarised in this evidence:
The ADA has examples where patients referred to specialists,
for instance, for treatment are being advised by private health insurers' staff
to see a different dentist because there will be a less out-of-pocket expense,
and they are being asked to see people who are not specialists but, in fact,
their provider's preferred general practitioners. The Private Health Insurance
Act, in section 172.5, where it refers to agreements with medical
practitioners, states:
If a private health insurer enters into an agreement with
a medical practitioner for the provision of treatment to persons insured by the
insurer, the agreement must not limit the medical practitioner's professional
freedom, within the scope of accepted clinical practice, to identify and
provide appropriate treatments.
We see what is happening as being contrary to that.
Individuals paying for private health insurance and requiring health care have
a right to choose where it is provided and by whom. They should not be
penalised for their choice. The private health insurer arrangements with
dentists are providing cheaper treatment to their members but it is resulting
in a two-tiered system, even for those very same people that hold private
health cover.[8]
1.11 Mr Boyd-Boland and Mrs Erving from the ADA expressed
concerns that private health funds entering into preferred provider
arrangements could undermine continuity of care and penalise individual for
their choice of health practitioner. The ADA further noted their concerns
about directing private health insurers directing their members to particular
providers.[9]
1.12 The ADA further added that some dentists who may apply
to be part of a preferred provider scheme are being denied access because there
are already sufficient practitioners in that region.
Mrs Irving: If I could just add to that, one of the
things that we are seeing happening in dentistry is that, even if you are a
dentist in that region and you apply to become part of the scheme, you are
getting knocked back, because they have already got enough providers in the
area. So you do not even have the option to become part of the group if you
want to become part of the group. So they are also controlling who can get in.
It then becomes a real problem if you are in an area where you do not have
access to any other provider. If your provider is not allowed in, you are going
to pay those higher rebates, even though you have paid the same premium for
that policy.[10]
1.13 Mr Rod Wellington, Chief Executive Officer, Services
for Australian Rural and Remote Allied Health (SARRAH), agreed that this Bill
is needed to ensure access and equity in Australia’s health care system and
that the equitable Medicare system would be diminished if private health
insurers are involved in primary care:
SARRAH strongly supports the bill. The key recommendations we
wish to emphasise to this committee for inclusion into your report are that the
government acknowledge that access to health care is a fundamental human right
for every Australian, irrespective of where they live; acknowledge that private
insurers involvement in the provision of primary health care may diminish the
universal Medicare system and adversely impact on equitable access by disadvantaged
groups to primary health care services; and respond to the need for greater
integrated health services to ensure the consumers are able to benefit from the
health system at an early stage, potentially avoiding the need for more
expensive tertiary-level care.[11]
1.14 Both ACOSS and SARRAH outlined to the Committee their
research showing that a Medicare system, with a single pricing mechanism, acts
as controller of health costs. A change that benefits only privately insured
customers could actually see GP costs increase for many people, especially
those on lower incomes. ACOSS pointed out that people on low incomes have a
disproportionate burden of poor health and that they are dropping out of
private cover as costs rise.[12]
Ms Vassarotti explained the consequences of allowing a new system what gave
some people better access to after-hours care and guaranteed bulk-billing:
Ms Vassarotti: As referenced in my opening
statement, primary health care is the gateway to health services in Australia.
This is where we can ensure that we get the best health outcomes. It is our
belief that the Australian community has entered into a compact around ensuring
that everybody has access to appropriate health care when they need it,
independently of their ability to pay. In the end it will cost the economy and
the community less if we give access to that service to the whole community and
to people who need that kind of service, rather than to those who are
privileged enough to pay for it.[13]
Threat to Medicare
1.15 The CHF submission noted that the Medibank trial does
not uphold the intention of the Private Health Insurance Act 2007 and
expressed concerns about the legal basis of its trial. CHF expressed their
broad concern about the involvement of private health insurers in the provision
of primary health care as this has the ‘potential to diminish the universality
of Medicare and undermine equitable access to primary care’. CHF submitted:
CHF has significant concerns with the Medibank trial and its
potential to undermine the principles of universality enshrined in Medicare, by
increasing barriers to primary care for those who are uninsured. Accordingly,
we support the Bill.[14]
1.16 The Doctors Reform Society also supported the
Bill and highlighted their concerns that the Medicare system is under ‘direct
threat’ from the intrusion of private health funds in primary care. They
submitted that further premium rises would result and coverage decrease:
... such changes are likely also to be detrimental to those who
can afford private health insurance now. If such insurance covers primary
health care, premiums must rise, making coverage less accessible to middle and
low income earners and less appealing to low users of medical services. They
will drop their cover, which in turn will lead to further premium rises.
We already have health insurance for primary health care. It
is called Medicare. It can and should be improved but adding an extra layer of
private health insurance will be more expensive and lead to greater inequity.[15]
1.17 The Australian Council of Social Service (ACOSS)
concurred that the Medibank trail would undermine Medicare and would establish
a preferential system for some individuals:
The key concern that ACOSS has with this trial is that it
begins to create in primary healthcare a system where there is preferential
service to Medibank Private members over patients trying to access the services
of participating GPs. This fundamentally undermines a principle of
Medicare—that everyone should have access to high-quality healthcare
independent of their ability to pay or their ability to afford private health
insurance.[16]
PHI rationale questionable
1.18 Medibank Private conceded that Healthcare costs as a
proportion of GDP have been relatively stable over 10 years and that
Commonwealth expenditure has decreased; while health insurance premiums have
risen up two to three times above the Consumer Price Index.[17]
1.19 The AMA President, Professor Owler, expressed the
Associations concerns about the ‘backdoor approach’ being pursued by the
private health insurers and that it will lead to the ‘slippery slope’ of
managed care, which the AMA cautioned against:
If we have these backdoor approaches circumventing
legislation and coming up with these one-off arrangements we will go down the
slippery slope of managed care. Anyone who thinks that managed care is not the
endgame of some of the private health insurers needs to open their eyes,
because that is clearly the endgame. You can call it whatever you want—you can
call it a 'payer-centred healthcare system'—but at the end of the day that is
what managed care is.[18]
1.20 The view expressed by the Australian Dental
Association is that the rationale behind the trails of private health insurers
is to maximise their profit and manage the care of customers by limiting the
amounts they pay out for services. Mrs Irving began be outlining how private
health funds already refuse to pay for some services and then Mr Boyd-Boland
expanded on the interference in clinical practice:
Mrs Irving: They are also refusing to pay
rebates now on some treatments. They are now trying to say, 'That service
should be provided only by a specialist so we are not going to pay the rebate
on that.' In dentistry all dentists can perform all types of treatment; there
are no restrictions, as there are in medicine. They are actually restricting
patients' rebates on the basis of their own views rather than what is actually
good clinical practice.
Mr Boyd-Boland: Behind these arrangements there are
business rules and it is very difficult to delve into those business rules.
When we talked to the Private Health Insurance Ombudsman we had the explanation
that those business rules are not widely published because they are too hard to
follow. If you are going to enter into a contract of insurance, you ought to
know the ins and outs of the whole arrangement that you are entering into. The
fact that these business rules are not readily available or are not readily
understood when you read them, I think is a flaw in the system.
Senator DI NATALE: Let me see if I understand
what you are suggesting. Medicare at the moment is basically a government
insurer. It is very rare for government, for Medicare, to involve themselves in
the day-to-day practice of a GP. A GP will see someone and will charge against
an item number. Provided that Medicare are comfortable that it is within the
range of acceptable practice, it will be funded. The only people who are
investigated are people who look like they might be fraudulently misusing the
system. Are you saying that once you move away from that model and you have
private insurers in this space, they will have a much greater involvement in
the clinical practice—the clinical relationship between a health practitioner
and their patient? Are you saying that they will be making decisions ahead of
the clinical practitioner?
Mr Boyd-Boland: I believe it is their statutory
obligation to maximise the return to shareholders—and that one way to achieve
the maximising of return to shareholders is designing the treatment that will
be provided and providing an incentive to go down a particular treatment plan
path that favours the insurer rather than the health outcome of the patient.
Senator DI NATALE: That is a pretty big
allegation to make.
Mr Boyd-Boland: Yes.
Senator DI NATALE: You also suggest that—
Mr Boyd-Boland: We regularly make that
allegation.[19]
1.21 The evidence from submitters not involved in private
health insurance supported the proposition that individuals who are not
Medibank Private customers would not get the same level of service as Medibank
Private customers. This represents a fundamental shift in primary care.
Currently under Medicare, patients are treated equally, even with the
acknowledgement that there are problems in regional and rural areas in terms of
access.
1.22 It was significant that the Australian Medical
Association (AMA) raised concerns that what is being trialled could
fundamentally change the relationship between doctors and their patients, and
this momentous shift away from Medicare has not been undertaken with the level
of consultation and consideration needed for such a radical alteration to
primary care in Australia:
Prof. Owler: I think people need to understand
that they do want to payer-centred system and we need to make sure that we do
not go down the slippery slope of managed care. If we are going to have changes
in general practice they need to be considered, they need to be with
consultation, they need to have safeguards for the independence of the
doctor-patient relationship and they need to protect equity of access in our
healthcare system.
CHAIR: Thank you. I might just get you to
clarify what your position is on the bill? Are you supportive of the bill or
are you opposing the bill?
Prof. Owler: We support the intent of the bill.[20]
Unintended Consequences
1.23 The Greens agree with the recommendations in the
Chair’s report that the Bill may have some potential unintended consequences
for the wider operation of health initiatives. The wording in the Bill should
be clarified as outlined in the Chair’s report [2.30] and addressed by the
Department of Health; that the Bill:
...may unnecessarily duplicate the current restrictions within
Commonwealth legislation while potentially affecting access to broader health
cover initiatives such as 'hospital-substitute treatment' [for example,
chemotherapy and macular degeneration].
...
Given this risk, the introduction of this Bill may
necessitate a significant review of existing Commonwealth legislation to ensure
that there are no inconsistencies or unintended consequences for [PHF] funding
of clinically appropriate alternatives to hospital treatment, for example,
unintentional restrictions placed on hospital-substitute treatment and/or
programs which aim to manage or prevent chronic disease.[21]
Term 'private health insurance policies' within the Act
1.24 The Greens agree that the term ‘private health
insurance policies’ be changed to ‘complying health insurance policies’ to
ensure that non-residents are not impacted. This is outlined in the Chair’s
report [2.34]:
Proposed new Part 3-7—GP Services of the Bill refers to
*private health insurance policies. Medibank queried whether this term should
read 'complying health insurance policies'.38 At the public hearing,
a representative explained:
It is a small wording impact, but it means that the Bill can
be interpreted as affecting products and services offered to non-residents...To
us, that includes overseas students and overseas visitors who are covered
[byMedibank]. We have about 200,000 or so policy holders with overseas student
cover—students who come to Australia to study and, as a visa requirement, they
have to take out a policy that covers the duration of their visa in
Australia...It is the same with overseas visitors...This Bill would potentially
restrict the types of services that Medibank can offer to those customers[.][22]
Recommendation 1
1.25 The Australian Greens recommend that the Senate
passes the Bill with the suggested amendments
Senator Rachel Siewert Senator
Richard Di Natale
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