AMA Pre-Budget Submission 2016-17

1 Mar 2016

Commonwealth must not retreat from health responsibility

When the Government appointed Sussan Ley as Health Minister in December 2014, it was her job to take the heat out of the then raging co-payment debate – to consult and to keep things calm.

It worked. A month later, on 15 January 2015, the co-payment was gone – dead, buried, cremated. Or so it seemed.

At the time, the AMA called on the Government to shift its health priorities to chronic disease management, public hospital funding, Commonwealth/State relations, prevention, and medical training.

We stressed to the Government and the community that there was no health funding crisis facing Australia, as claimed by the Government and some commentators.

The foundations of the health system were sound. Health spending was not out of control. Our health system was, and is, the envy of the world.

It is not perfect, but the foundations - the balance between public and private, universality, the defined roles for the Commonwealth and the States, and high standards - lead to long life expectancy and good health outcomes, and continue to underpin a healthy nation.

The problem for the Government was that the damage from the 2014-15 Budget would not go away. The quest for significant savings in the health budget had come to a sudden halt with the demise of the co-payment package.

A change of strategy came in the 2015 Budget with the announcement of the Review of the Medicare Benefits Schedule (MBS) and the Primary Health Care Review.

While welcoming the reviews and offering willing AMA participation, we let it be known from the beginning that the AMA would not support a process that was primarily about cost cutting and Budget savings.

Despite assurances from the Minister, all the rhetoric around the reviews has been about removing items, not introducing new items as well, as had been agreed at the outset.

There was unanimity around building a modern MBS that reflects modern medical practice. That unanimity is now frayed.

Last October, the Minister announced a review of the private health insurance sector. This came after months of inappropriate behaviour by some insurers in their negotiations with private hospitals, and questions being raised about the value of many private health policies, with more services being taken off existing exclusion policies.

Meanwhile, the private health insurers (PHIs) continued pushing for a greater role in primary care.

In November, the Government released its-long delayed response to the mental health review.

This virtually amounted to the Government allocating funding to Primary Health Networks to be distributed to various care providers and services of their choosing at the local level.

There is still scant detail, and only a small number of PHNs operating at an efficient level, so question marks remain over this strategy, especially given the lack of commitment to a key role for GPs.

The worry is that the mental health approach may be a signal for what is to come with the Primary Health Care Review. The proposed hospital benefit plan in the Reform of the Federation Discussion Paper is also a worrying sign.

In the December MYEFO Statement, the Government announced significant cuts to bulk billing incentives for pathology and imaging. This was completely unexpected, and without consultation.

The co-payment had risen from the grave. So, how is the health landscape looking in 2016? We have seen active demonising of doctors in the MBS review process, and a clear plan to cut costs.

We have seen a willingness for PHIs to play a more active role in all areas of the health system – despite inappropriate behaviour and lower value products for patients.

We have seen strong indicators of a Government pursuing a US-style managed care system. And we have seen signs of the Commonwealth retreating from its core responsibilities in funding public hospitals and other health services.

The Government is on a path of funding cuts and shifting costs to patients. This is not good for the Australian health system or the health of Australians.

In this pre-budget submission, the AMA is urging the Government to change tack … before it is too late.

There is an urgent need to put the focus back on the strong foundations of the health system, foundations that have served well for decades, and which have made the Australian health system one of the best in the world, and the health of Australians among the best in the world.

We need a strong balance between the public and private systems, properly funded public hospitals, strong investment in general practice, and a priority put on prevention.

Above all, we need a health system built on modern health policies, not outdated economic policies designed only to improve the bottom line.