Issue 1 / 19 January 2015

THIS year will be a critical time for federally funded health care in Australia and many of us are wondering which direction we will take.

Will we see the dismantling of Medicare and health care services as we know them, or the rebuilding and restructuring of both the system of care and the way we finance it, to better meet the needs of all Australians?

In its first year, the Abbott government has torn down and cast aside policies and programs of the previous government and commitments it made in election mode. Central to these is the undermining of the financial base for acute care services, by the clawback of an estimated $50 billion over the next decade from the National Health Reform payments to the states and territories and the abandonment of activity-based hospital funding.

Primary care is central to a sustainable health care system but the government clumsily undermines this, initially by attempting to add patient copayments to medical consultations and increase copayments for prescription medicines. The resulting public backlash saw a change of direction at the end of last year, with the government announcing the Medicare copayments would be replaced by a $5-cut to the rebate for general practice consultations, together with changes to time requirements for level B consultations and a six year pause in fee indexation. In the face of continued vehement opposition, the government has now said it will go back to the drawing board in a more consultative mode.

The reasons given in support of changes to Medicare are confusing and incompatible: price signals, contributions to meeting unsustainable costs and financing medical research.

The highly regressive nature of these changes and other non-health Budget measures will hit the poor hardest. Social inequalities in health will rise and health status will fall.

The conversion of Medicare Locals to Primary Care Networks, estimated to cost $112 million, was not supported by a compelling policy argument. The abolition of the Australian National Preventive Health Agency, Health Workforce Australia and General Practice Education and Training will be keenly felt.

Most egregiously, net savings of $534 million have been taken from Indigenous programs, and the transfer of Indigenous affairs to the Department of Prime Minister and Cabinet in the name of “rationalisation” has seen a real loss of momentum that further diminishes chances of meeting Closing the Gap targets.

Australia must make 2015 the year to move back to a more measured approach to health care, doing the hard yards of policy development, consultation and careful implementation.

The federal government needs to rebuild its approach to health and health care based on strong partnerships with the Council of Australian Governments, health professionals, communities and the public. Its agenda must put consumers at the centre of the health care system, and it must demonstrate a willingness to make long-term, evidence-based investments that will deliver better health outcomes, greater productivity and sustainable health care costs.

There is no shortage of collated evidence and expert advice available to the government to use in developing policy. Conversations with political insiders or those whose self-interests dominate are no substitutes for thinking, debating and developing policy.

A raft of reports and reviews are available to aid the government in this important work covering mental health services, after-hours care and much more.

Independent groups have begun work on identifying opportunities for disinvestment from low-value procedures and for implementing an Australian version of the Choosing Wisely program.

The work of the National Health and Hospitals Reform Council, the National Primary Health Care Reference Group and the National Preventative Health Task Force is also there to be critiqued and used, not cast side.

There is a strong case for health policy reform in Australia. Our high international ranking for life expectancy hides a multitude of problems, including years lost needlessly to disability, growing health disparities in some population groups, a health workforce that does not reflect current and future needs in its make-up and distribution, outdated reimbursement methods, and a failure to direct spending to where it is most needed and can achieve the best value.

Savings in health expenditure are possible, but knowledge and hard work are required to find and realise them.

Health care systems, while complex, must be flexible, innovative, responsive to evaluation and benchmarking and efficient.

Australia has many internationally recognised experts in key health policy disciplines just waiting for a call from the Minister for Health to contribute their expertise to rebuilding, reforming and delivering better health for all Australians.


Professor Lesley Russell is an adjunct associate professor at the Menzies Centre for Health Policy at the University of Sydney.

Professor Stephen Leeder is the editor-in-chief of the MJA and emeritus professor of public health and community medicine at the University of Sydney.


Thanks to Professor Bruce Armstrong for his comments and insights.


Jane McCredie is on leave.

6 thoughts on “Lesley Russell

  1. Dr Louis Fenelon says:

    There are 2 issues here. The first is that no private doctor has any compulsory commitment to Medicare and the item numbers it arbitrarily allocates and removes. The second is the groundswell driving public health to overwhelm and ultimately take over private care, starting with primary care.

    The media, AMA, RACGP and everyone with media access ignore both issues. As a private doctor you can bill without Medicare Item Numbers and have nothing to do with the system that insures your patients. What you cannot avoid is the groundswell of politics forcing a struggling public system to involve you in it’s problems. Shining light beaurocrats and political practitioners force untested theories of care on the public who then expect no less from their doctors, whether there are proven outcomes or pathways available.

    The fee for service (presumably an “outdated reimbursement method”) system of primary care Australia had and is having taken from it by non-medical practitioners (those with no patient contact), was proven to be the most cost efficient and effective system of primary care. Outcomes were better than they currently are. Doesn’t matter now, because non-medicos know better; there is no going back and GPs know it is better to punch out documents on the keyboard and receive an up to date reimbursement. Pretty soon we will never touch a patient because someone else who gets “reimbursed” less will do all that.

    Medicine in this country is sick. I am sorry to say that like almost everything I have read in the last 2 months, this article fails to see the wood for the trees. That’s what happens when you don’t look after patients – you just don’t have a clue about anything other than your own agenda.


  2. John Donovan says:

    You say ‘Savings in health expenditure are possible, but knowledge and hard work are required to find and realise them.’

    Not so. Stephen Duckett has for years pointed to the PBS pricing arrangements as an obvious target where adoption of international-level pricing could save billions annually.

    The new Minister has spoken of her wish to save Medicare. I hope she means from the right-wing crazies who seem to be advising the Coalition.

  3. James Kidd says:

    As a general practitioner for 42 years who never bulk billed anyone, never used a provider nor prescriber number I found that the only good point of the original Medibank was that I could bill the pensioner in the same way as everyone else and not use a form. Theonly patients who were not given a bill were drug addicts who found it easy to cash the Medicare cheque so aid their addiction. Looking at the “debate” on rebates I have found no comment that did not contain self interest. The RACGP has for years been telling us that the standard consultation should be ten minutes but when they are given the opportunity , condemnation was on money instead of a measured approach that could have been at least attempted.

    A TV medical commentator hit it on the head when he said the problem of the cost of Medicare was not with the poor, the indigenous but with the demands of those who could afford to pay. Many of my colleagues from day one said Medibank was unsustainable and looking at the system over the years shows what a drag it has been on the economy to the detriment of other welfare initiatives. We were sold a system in the 1970s which was to be free for everyone, even with the restrictions put on it since it costs too much.

    It is reported that we have one of the best health systems in the world. But when we look at the reports of the over investigation and the resultant over treatment we should be looking more at the resultant unnecessary  pain and suffering.

    My approach at least allowed me to do home vists even in those areas wher the patients children accompanied me to be sure I wasn’t mugged.

    There is no free lunch!

  4. Robert Marr says:

    The solution to cost containment in the health sector will require the very detaied skills similar to a microsurgeon to identify medical services that are ineffective and should be removed from the MBS. Also many MBS items overreward some activities and these should be adjusted.

    Unfortunately, the current federal goverment seems to be taking a very crude simplistic ideologically driven attiude to health savings, more like an axe murderer than a surgeon.The simplistic crude policy of introducing a GP copyment or cutting rebates without any evidence of the long tem effect of these polcies is counterproductive and ineffective.

    Australia deserves a sophisticated analysis of what can be done to improve health services and contain costs.

  5. University of Queensland - Central Library says:

    The Russell,/Leeder editorial is spot-on.  The uninformed, hatchet-job approach of Abbott’s goverment to health policy and funding is highly dangerous. The apparent lack of consultation is astounding.  Let’s make sure that one of the results of the back-lash from the events of the last few months is  a broad and deep rethink of the current system, while retaining all its best elements. In such delberations, we must appreciate that a model with separate jurisdictions for policy and funding for primary/ambulatory care and hospital services will never produce rationlised spending across the life course and health service continuum.

  6. GEORGE HAMOR says:

    Profs Russell and Leeder address the clumsy manner in which the current government has attempted to make changes to Health very succintly.

    However it was disappointing that no mention is made of the huge and inefficient bureaucracy driving the system and the potential for savings by rationalising the public service.

    The duplication that occurs with state and federal departments is surely a good place to start to eke out efficiencies.

    It is also a source of amazement that everyone, irrespective of their financial status, potentially pays the same amount for a medical service. 

    The fact that as a nation our health expenditure as a percentage of GDP is about average for first world countries is no reason to think that we cannot do things more efficiently.

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