Question: Dr Phelps, can I just ask you on another matter what do you think about a decision by certain doctors in Melbourne to withhold treatment from patients who smoke?

Dr Phelps: I think it's a very difficult question. We do have limited health dollars and resources are being rationed whether we like it or not because there are not enough health dollars to go around to meet all of the need and I think what a lot of the doctors are saying is that we need to see a contribution being made by the patients in terms of optimising their chances of doing well out of a surgical procedure, and if patients are continuing to smoke and wanting to have these particular operations, that they will not do as well afterwards, so there has to be a choice made.

Choices are being made very day about which patients will get which services and this is a decision that's being made on the basis of which patients will do better after operation than others and clearly if there is a patient who is continuing to smoke up to the operation and after the operation they will not do as well with certain procedures as others and so those decisions are being made on those clinical grounds.

Question: Where do you think you draw the line though. I mean do you make the same judgements with patients who drink heavily or who use drugs?

Dr Phelps: There are decisions being made all the time about fitness for surgery and you want to be able to optimise a patient's fitness prior to surgery.

Obviously if there is an emergency situation and the patient's life depends on whether they have that operation today, tomorrow or next week, that that operation will be done, but if we're talking about elective surgery you want to be able to optimise that patient's conditions and their chances of recovery with fewer post operative complications. You don't want to put patients in a situation of having to have post operative pneumonia, needing intensive care, having some incident after the operation which could have been averted if the patient has stopped smoking or stopped drinking heavily.

Question: I think I can understand the argument about not smoking after the operation but why is it necessary to put this six months cut off point. Why not at the point of diagnosis say rather than at the point of, you know, some arbitrary date six months in advance of the operation?

Dr Phelps: We're fortunate to have an anaesthetist here with us who assess patients for operation and Michael I'll get you to answer that.

Dr Michael Hodgson: Certainly. It's very fascinating this issue is raised today because 10 years ago I was being interviewed by the media as an AMA President on this very issue of refusal by surgeons to perform elective procedures on patients who refused to have surgery, and they were talking particularly about people who were having major vascular surgery on limbs and they refused, they wouldn't stop smoking pre-operatively.

Interestingly the Minister of health of the day was Neal Blewett, and he came out publicly saying that doctors had the right to refuse to perform services on patients where it was considered a waste of time doing the surgery when they wouldn't comply with the request that they stop smoking. So that's a side issue.

The anaesthetic issue is that to get the benefits from stopping smoking you have to stop smoking for a matter of weeks to months. You can't just stop today and have the anaesthetic tomorrow and have no risk. The risk is still there for weeks to probably a couple of months later.

So from a pure anaesthetic point of view you've got to stop smoking for a period of time before the surgery.

The incidence of post operative pneumonia in somebody who smokes having major surgery is six times that of a non-smoker, and those are figures.

The incidence of people who have major vascular surgery in having poor results from that surgery if they continue to smoke - I can't give you figures but they're poor.

Question: If you like your smokes at the door and … [laughter]

Question: Dr Phelps, on the issue of medical benefits and prescription drugs do you have complete confidence in the way in which Dr Wooldridge is handling the PBS Scheme.

Dr Phelps: I'm on record as saying that we felt that the appointment of a person with strong links to the pharmaceutical industry was unwise and indicated a conflict of interest or at least a potential conflict of interest. We have not changed our position on that point.

I think that revelations of the last 24 hours have only confirmed our opinion that there should not be an industry appointment on the PBAC. It should be not only an independent committee but seen to be an entirely independent committee. The sorts of decisions that are being made by the PBAC are too important to be influenced by anything other than scientific and objective research.

Question: If that's the case then, do you think that Dr Wooldridge should cut Pat Clear loose at this point?

Dr Phelps: Well I'd prefer not to bring individuals into it, but that's actually emerged as a major issue so I think we're going to have to go on record as saying that I think in the best interests of the activities of the PBAC Mr Clear should indicate that he would be prepared to stand aside.

If he doesn't I believe that the Government should act in the best interests of the community and in the best interests of the independence of the PBAC and ask Mr Clear not to be present on the PBAC.

Question: You are making [indistinct] of the Prime Minister today who argued that Mr Clear is only one member on a twelve member board and to argue that his views would hold undue sway over other members is stretching the point a bit.

Dr Phelps: Well I think it's very interesting that almost all of the seasoned and experienced members of the PBAC have either been dismissed or have resigned in protest.

So you don't have on that committee a great deal of corporate memory there now.

We have been contacted by a number of the former members of the committee who, let me tell you, are not dummy spitters by anybody's definition except the Health Minister's.

These people have experienced extreme distress at the proposed appointment and then the confirmation of the appointment of somebody with close links to the pharmaceutical industry and I think that those people's views should have been taken into account and should have been respected.

Question: Could we argue, however, that the beneficiaries here are in fact the Australian public in getting access to state of the art drugs that while are extremely expensive also extremely useful.

Dr Phelps: I have to say that every day of the week there's a new state of the art drug that wants to be listed on the PBS, and while it would be delightful to think that for a very reasonable cost we could have any drug that we wanted on the PBS the reality is that we have to make some choices, and if there are a number of drugs in the one class which do the same things, and they are seen to be equivalent medications the PBAC has to made a decision about how the taxpayer's dollar is to be best spent in terms of clinical indications.

They also have to be satisfied that those state of the art drugs are safe to be used by the Australian public and appropriate to be subsidised by the taxpayer. There are a number of questions that need to be answered before a drug is listed on the PBS.

So I think in fact the community benefits from an independent and objective process and not from any pressure by a commercial vested interest.

Question: Do you believe that the Federal Government has bowed to the international drug industry pressure because of their concerns about the way the PBAC is restraining [indistinct].

Dr Phelps: We are puzzled at the motivation of the government in making this appointment. I couldn't speculate on why they have actually made this particular appointment. It seems to have created more political headaches than it would seem to be worth.

I think there is a definite place for lobbyists from the pharmaceutical industry in being able to put their point to government but not from within the PBAC.

Question: On a related topic here, what do you make of Martin Goddard's accusations that Dr Wooldridge has been touting for Pfizer at the expense of equivalent drugs from other companies?

Dr Phelps: Well I have to say that there really isn't an equivalent drug to at least one of the ones that has been discussed, in fact two - the Aricept and the Celebrex are the two without using the generics - those are the ones you're talking about - there really aren't at this stage appropriate equivalents and I think that the PBAC had to make a decision about whether those drugs were available with subsidy and let me say if you've got a relative who has Alzheimers disease you want to be able to have a medication that will give your relative a chance of not declining in their abilities and without undue expense to the family.

So the PBAC has to face all of those questions, moral, scientific and otherwise in making their objective assessments.

I wouldn't be able to really comment one way or the other on whether those comments have been made on behalf of the drug company or not but I certainly wouldn't be in a position to support those comments at this point.

Question: Would you accept the criticism that is implied at least from Dr Wooldridge that the old advisory board was stuck in its ways, a bit stodgy and as a result not having an … [inaudible]

Dr Phelps: I think that the task of the PBAC is a difficult one. There are enormous pressures on the members of the committee to satisfy government, the public, the drug companies, and they have to be able to make an objective decision based on what they see as the facts on scientific basis and based on clinical imperatives - what drugs are necessary, how much they cost, whether they're affordable to the public.

In terms of whether the committee was stodgy, I think that that is actually an excuse for culling as many members of the committee as was possible.

Back in December the government tried to push through legislation which would have effectively gotten rid of the most experienced members of that committee. In effect that's happened by resignation of members in protest at Mr Clear's appointment.

I think we need to have experience on that committee. I'm saying nothing against the qualifications of the other members of the committee who have now been appointed but I think it will take them a little while to come up to speed.

One thing you can say is that committee will come under scrutiny like it has never seen before.

Question: You say you're perplexed about, puzzled by the appointment of Mr Clear, but what do you make of the Opposition's accusations that there can be really no other explanation than that the Government is in the pocket of the international drug companies?

Dr Phelps: I'd like to see some other explanation, if there is one.

Question: Do you think there could be one?

Question: Do you fear for the PBS itself? That that might be the …

Dr Phelps: I'm concerned that there will be increasing load placed on private health insurance premiums because the drugs that are not listed on the PBS will have to be subsidised by private health insurance.

Now I don't want to see a situation where private health insurance companies start acting like managed care organisations and deciding which drugs they will and will not subsidise for members.

Question: I wondered if I can ask you about the ACCC and MBF. What is your reaction to Mr Fels taking the MBF to task over these advertisements?

Dr Phelps: I think members of health insurance companies need to have all the information possible to understand what they are buying, and what they have purchased.

There's a lot of people have had their insurance for a long period of time and you know, they pay their premiums and they don't really understand until they're in a situation of needing an operation, needing to go into hospital of understanding what they're actually covered for and quite often people have been getting nasty surprises.

What we've been saying, particularly since last July, when we had a big influx of new members was that it was incumbent upon the insurance companies to make sure that there was absolute honesty and absolute clarity in their representations to their members.

Now particularly with attracting new members I think it's vitally important that people understand exactly what the nature of their product is, what they're waiting time will be, what their exclusions might be.

I think it will be up to the courts to decide whether MBF has acted in good faith on this particular issue, but as a broad principle I think fully informed members is the way to go.

Question: So there is a danger is there that accusations of these kind, of this kind, if found to be true by the courts could jeopardise the integrity of the private health insurance system?

Dr Phelps: I think if accusations hypothetically …

Question: Credibility.

Dr Phelps: Yes. I think if hypothetically accusations such as this are found to have been proven then it will be a great impetus for the health insurance companies that their members are fully informed and that there is great clarity in their promotions.

Question: What impact, by the way, if any, do these problems over disclosure or non-disclosure and what people are entitled to or not, what impact does that have on doctors specifically when they're dealing with patients?

Dr Phelps: It's created an enormous amount of paper work. I mean I talk to a lot of my specialist colleagues who say they are spending increasing amounts of time on the phone to insurance companies trying to find out if people are covered or not so that they can give informed financial consent before people have operations.

I mean you've got to understand that when people are proposed for elective or other surgery they're under tremendous stress. I mean they've got to worry about the operation, they've got to worry about what it means for looking after their kids, the family pet, you know, what happens to their finances and so forth, and you know doctors are trying to take some load off patients as much as they can.

We also are committed to providing fully informed financial consent but we can't necessarily stretch that to finding out exactly what the patient's covered for depending what table they're in, and which fund they're in, people need to understand, patients need to understand before they're in that situation exactly what they're going to be covered for and make sure that they have the cover that they need.

But it is having a tremendous administrative impact on specialist practice.

Thanks all very much.