Issue 19 / 25 May 2015

THE 2015 federal Budget is getting a much better reception than last year’s model, with opinion polls showing it has given the government a popularity boost.

But the health announcements in the Budget have received a much cooler response, due mainly to the lingering effects of the freeze on Medicare patient rebates, which will stay in place until 2018.
Winter is coming. For doctors and patients, it could be a very long one.

The big problem with this year’s health budget is that the small target approach has been completely overshadowed by last year’s devastating blows to the heart of the health system — the copayment, now gone, the massive cuts to public hospital funding and, of course, the rebate freeze.

No amount of nips and tucks can hide the lingering negative impacts on health from the 2014 Budget, but the 2015 Budget cannot pass without comment.

Making the Review of the Medicare Benefits Schedule the centrepiece of this Budget was not a good start because it was overshadowed by the government’s push to find Budget savings, and it got worse.

Mystery surrounds the full detail of cuts to so-called “health flexible funds”, and speculation suggests cuts to these programs would have an impact on many smaller health groups.

The AMA and others have expressed concerns, but there have been no answers and no information.

Flexible funds cover programs across public health, chronic disease, drug strategy, pathology, diagnostic imaging services and radiation oncology, primary care financing, rural health services, research and workforce.

All up, it’s around $1 billion in cuts. Some of the individual amounts may seem small, but to small organisations these are significant cuts.

There have also been cuts of nearly $150 million to general practice from changes to the child health checks, apparently because of “duplication”. It is not clear where the so-called duplication occurs. Such a change would have been better dealt with as part of the MBS Review, rather than as a hastily conceived Budget saving measure.

The government does, however, deserve credit for some elements of its Budget.

The AMA acknowledged a range of other measures, including the e-health changes, headlined by the myHealth Record that will give all patients a record, with an option to opt out.

There was also a national mental health plan process; support for the National Critical Care and Trauma Response Centre; funding for Aboriginal Community Controlled Health Organisations; organ donation programs; and the strategy on the drug ice.

These are small gains, and are welcome, but they got little recognition due to the big ticket items that will continue to burden medical practices and hospitals, and disadvantage patients.

The freeze on Medicare patient rebates will cause a similar headache for the government as the copayment. GPs are not happy and patients will pay more for their care.

The states and territories are now becoming aware that the cuts to their public hospital funding will have a major impact on their own budgets. This topic will be on the agenda at the Council of Australian Governments meeting in July.

Having to deal with a succession of cuts and the prospect of more ahead, the AMA was amazed when the government announced $20 million funding for a new medical school in Western Australia. This came without warning or consultation.

It is bad policy. We do not need a new medical school. It is not a good use of valuable health dollars. We need training places — a much better investment.

To further add to the disquiet, the government then announced increased funding in the new community pharmacy agreement. This announcement came with plans to extend the primary care role of pharmacists, raising the question of whether they will have access to Medicare rebates.

We think the government has its priorities wrong — more funding for pharmacy over 5 years, and a rebate freeze for doctors and patients for the next 3 years. This does not make sense when quality primary care provided by GPs is the most cost-effective part of the health system.

It looks like a long winter ahead indeed — a winter of discontent.

The AMA is currently in discussions the government on these issues in an effort to improve the forecast.

Associate Professor Brian Owler is the federal president of the AMA.


Do you support the federal government's decision to fund a new medical school in Western Australia?
  • No – there are already too many graduates (73%, 114 Votes)
  • Maybe – if training positions are assured (15%, 23 Votes)
  • Yes – it will provide more equitable access (12%, 19 Votes)

Total Voters: 156

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2 thoughts on “Brian Owler: Budget of discontent

  1. Prof. Emeritus Errol John Maguire AM,RFD,FRACS says:

    I have given up on Brian Owler’s comments.If Australia is to continue to run up debt at the present rate we are in for some cold times I agree. Perhaps the AMA President should stand back from his ?Labor Party views which are making the water very muddy indeed. Comments that I hear from friends go something like this, “Isn’t it awful that patients are going to die because of the present Government”, “I am sad that the doctors will go broke”, “How will we get to see a doctor at the overcrowed public hospital”, “The tables are too expensive” etc., etc.I have been around for a long time now and heard it all before. At least when Tony Abbot was Health Minister he was approachable and helped me in positions that I held with the Royal Australasian College of Surgeons. I have worked in public hospital positions as a service not for largess. Why in Queensland do we have to have Julia Gillard at the AMA Cloudland Dinner?Prof. Emeritus Errol Maguire AM,RFD.     

  2. judith o'malley-ford says:

    and they could save millions, if not billions  by abolishing the e-health system, which is rubbish.

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