Health Department admits truth on bulk billing

Federal Government claims that bulk billing rates are at a record high have been undermined by the Health Department’s admission that less than two-thirds of patients have all their GP visits bulk billed.

In an answer to a question on notice on 2 December, the Department confirmed that just 64.7 per cent of patients had all of their GP visits bulk billed in 2015-16 and almost 20 per cent were left out-of-pocket up to half the time they saw their family doctor.

The results, as first reported by Medical Observer, belie claims by Health Minister Sussan Ley that bulk billing remains at record high levels.

Last month the Minister seized on official figures showing that 85.4 per cent of GP services were bulk billed in the September quarter, up almost 1 percentage point from a year earlier, as evidence of the Government’s investment in Medicare.

But the figure is a measure of the number of services bulk billed, as opposed to the number of doctor visits, which many consider to be a more meaningful indicator of patient costs and access to care.

The AMA has warned that the Government’s Medicare rebate freeze is putting medical practices under intense financial pressure, forcing them to cut back on bulk billing or abandon it all together, increasing costs for their patients and driving concerns that people who are ill will increasingly put off seeing their doctor, putting their health at risk and increasing the cost of treatment when they eventually seek care.

These concerns have been leant weight by a separate answer to a question on notice in which the Department confirmed the average patient contribution jumped 5.4 per cent in inflated-adjusted terms in 2015-16, the biggest increase in three years.

In the past decade, Government figures show, patient out-of-pocket costs have grown by an average 5.6 per cent a year in real terms, and AMA President Dr Michael Gannon said they were now above the average among advanced economies.

In the September quarter alone, out-of-pocket costs surged 4.5 per cent to reach an average of $34.61.

Dr Gannon said this showed that the Medicare rebate was falling increasingly behind the real cost of providing health care, and underlined the inadequacy of the Government’s investment in primary health care.

The Government has frozen Medicare rebates until 2020, but is coming under mounting pressure from doctors and patients to scrap the measure and substantially boost its contribution to the cost of care.

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Hep C cure’s $1bn price tag

The Federal Government has spent almost $1 billion on drugs in the first four months of its campaign to eliminate hepatitis C, reinforcing estimates that it will ultimately cost taxpayers $3 billion to cure chronic sufferers.

Figures compiled by Australian Prescriber show that since the hepatitis C treatments sofosbuvir and ledipasvir were listed on the Pharmaceutical Benefits Schedule in March, the Government has paid out $942.8 million on 43,900 prescriptions for the drugs, at an average cost of almost $21,500 per script.

Sofosbuvir has been hailed as a “game-changing” medicine that can cure hepatitis C in as little as 12 weeks, but the cost for most individuals is prohibitive – $110,000 for a course of treatment.

But following its listing on the PBS, chronic hepatitis C sufferers can get for as little as $6.20 a prescription.

Health Minister Sussan Ley has linked the subsidisation of the hepatitis C treatments to $650 million in savings from the controversial axing of bulk billing incentives for pathology and diagnostic imaging services.

“These two new hepatitis C medicines have come on to the market and rocketed into the number one position on the list of top drugs by cost to the Government,” Australian Prescriber medical editor Dr John Dowden said. “They were only approved in March, and in the four months to June have cost the Government almost $1 billion for 43,000 prescriptions.”

While the hepatitis C treatments grabbed the crown as the most costly drugs for 2015-16, the most common medicines prescribed were statins and proton pump inhibitors.

Altogether, more than 14 million prescriptions where issued for the statins atorvastatin and rosuvastatin last financial year, while almost 6.9 million were written for the proton pump inhibitor esomeprazole.

The next most commonly prescribed drug was the painkiller paracetamol (5.05 million prescriptions), followed by the reflux medication pantoprazole (4.7 million), the blood pressure drug perindopril (4.05 million) and the diabetes medicine metformin (3.57 million).

While hepatitis C treatments have grabbed a big slice of the Commonwealth’s medicine’s budget, other expensive treatments for leukaemia, multiple sclerosis, arthritis and eye disease are also grabbing a hefty share.

The anti-inflammatory biologic adalimunab, a drug used to treat rheumatic and psoriatic arthritis, Crohn’s disease and chronic psoriasis, has been supplanted at the top of the expenditure table by ledipasvir and sofosbuvir, but still cost the taxpayer almost $334 million last financial year.

Top 10 drugs by cost

Medicine	Cost (A$)
Sofosbuvir and ledipasvir	570 730 056
Sofosbuvir	372 094 623
Adalimunab	335 857 859
Ranibizumab	241 256 012
Aflibercept	231 194 036
Esomeprazole	170 554 177
Etanercept	166 538 773
Trastuzumab	157 134 211
Fluticasone & Salmeterol	148 878 399
Insulin Glargine	146 202 125

Source: Australian Prescriber

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National frameworks about Aboriginal and Torres Strait Islander people

This report provides an overview of 10 national frameworks, both current and historical, that describe Aboriginal and Torres Strait Islander people and/or services provided to them. Each framework is described according to a set of 8 topics: the reason for its development; its purpose; underpinning elements; reporting protocols; consultation processes; review processes; structure; and inclusion of Aboriginal and Torres Strait Islander principles. The project was undertaken to inform the development of health frameworks by providing a summary of the topics and issues considered by existing frameworks and the processes involved in creating them.

Healthy Futures—Aboriginal Community Controlled Health Services Report Card 2016

This report card provides information from about 140 Aboriginal Community Controlled Health Services (ACCHS) providing care to Aboriginal and Torres Strait Islander Australians. During 2014–15 these services saw about 275,000 Indigenous clients who received almost 2.5 million episodes of care.About 228,700 Indigenous Australians were regular clients of ACCHSs, where they received maternal and child health services, chronic disease risk factor prevention, and management services. This report card shows rises in the proportion of clients receiving appropriate processes of care for 10 of the 16 relevant indicators.

AMA, Govt hold talks on ‘more balanced’ approach to pathology rents

AMA President Dr Michael Gannon met with Health Minister Sussan Ley in Canberra on 24 November to discuss the Government’s proposal to change the definition of market value for pathology collection centre leases.

Dr Gannon told the Minister that the AMA was prepared to work with the Government to try and come up with a more balanced policy approach that genuinely targeted inappropriate rental arrangements and did not interfere with legitimate commercial arrangements.

The AMA President also highlighted that the Government’s proposed changes had significant implications for existing leases that had been entered into freely, and on the basis of which financial commitments have been made by practices.

The discussion followed a meeting of the AMA Federal Council which reiterated its support for prohibited practices laws, but recommended significant changes to the Government’s election policy.

The Federal Council stressed the need for a more a targeted approach that focused on inducements to refer, consistent with the original intent of the prohibited practices laws, and that pathology referrals should be solely based on the quality of services, as opposed to commercial relationships.

Federal Council resolved to support the right of medical practices to negotiate collection centre leases freely with pathology providers, provided rents were not linked to a stream of referrals and that any new definition of market value must not adversely affect those medical practices that were acting ethically when entering into leasing arrangements.

The Council stated that reasonable transition arrangements would need to accompany any changes, and the Government would need to develop an appropriate educational strategy to ensure requesters and providers were aware of their obligations under existing prohibited practices laws and ensure that these and any future laws were properly administered and enforced.

Responding to allegations of sham leasing arrangements, Federal Council agreed that the Government needed to work with stakeholders to establish whether these could be sustained and, if so, develop measures to address them with urgency.

The AMA Federal Council also expressed its disappointment in successive Federal Governments for their failure to adequately fund patient access to medical care, including the prolonged freeze on Medicare rebate indexation, which increasingly threatened the viability of pathology, general practice and other specialist services.

During his meeting with the Minister, Dr Gannon welcomed her advice that the Government would not proceed with its planned 1 January 2017 commencement date, and the Minister’s commitment to allowing more time for consultation with general practice and pathology practice over the definition of market value and what transition arrangements might be needed. In this regard, the Minister stated that the Department of Health would be expected to work closely with the AMA as it developed further advice to Government.

Worrying MBS changes could be more than skin deep

The AMA has voiced strong concerns about significant changes the Federal Government has made to the Medicare Benefit Schedule without the input of clinicians.

As part of the Government’s 2016 Budget repair plans, the Health Department has used the outcomes of a recent Skin Services review to implement a number of changes to the MBS, including axing 48 skin service items and replacing them with 28 new items recommended by the Medical Services Advisory Committee (MSAC).

Separate to this, an internal decision was made by the Department, without consultation, to reclassify a number of items into a new “banding”. These changes effect the clinical setting in which services can be delivered in order to be still eligible for private health insurance rebates.

Though the development of new MBS skin item numbers arose from constructive engagement between the Department and medical profession stakeholders, there was no discussion of the banding of items under the Private Health Insurance Act.

It is not surprising then that, in absence of advice from the medical profession, the changes to banding classification are now having a deleterious effect on patient care.

The banding classification disadvantages patients, in particular children and patients with complex medical needs who may require these procedures to be carried out in the hospital setting. Under the new banding classifications, these items are no longer indicated for hospital stay unless a written certification is carried out, which is still no guarantee of complete insurance coverage.

The harm caused by these changes has been magnified by the Department’s decision to announce them just days before they were due to come into effect on 1 November, seriously undermining informed financial consent. In many cases, patients had already been scheduled for procedures, including the excision of malignant melanomas which, after 1 November, were no longer automatically eligible for private health coverage when carried out in a private hospital setting.

In some instances, MBS rebates have also been reduced, resulting in many patients now being potentially out-of-pocket.

These changes, and the manner in which they were undertaken, do not instil confidence in the current MBS Taskforce reviews, which follow a similar process.

Alarm bells are ringing because it seems that clinical input is not being taken into account when the final policy decisions are made.

Hopefully this past process will not be replicated in the future MBS Taskforce Review work, as it would drive a wedge between the Government, doctors and their patients by undermining the collaborative decision making required to deliver an efficient and sustainable health system.

The AMA has consistently sought that MBS clinical committees and working groups conduct a complete review. To that end, the Government needs to address how they will accurately link clinician recommendations to implementation throughout the MBS Taskforce reviews – in each and every tranche.

AMA President Dr Michael Gannon has already written to the Minister for Health calling for a rollback of the problematic banding determinations relating to skin items, while also reinforcing the need for transparency and collaboration with medical profession before further substantive changes to the MBS are made.

The AMA’s support for the MBS Taskforce reviews continues to be contingent upon our concerns, and those of our colleagues, being addressed.

The AMA is urging members, together with the medical colleges, associations and societies to keep the Government accountable by highlighting the key principles considered necessary to enable complete reviews. This includes:

seeking reassurance that the reviews will not have unintended consequences for patients;
being vigilant in shaping the clinical narrative and review framework to ensure the reviews do no negatively impact clinician scope of practice;
engaging clinical committees and working groups in translating their findings to policy design; and
supporting the clinicians who are directly involved in the review.

The AMA will continue to influence the MBS reviews through meetings with the Minister, in public commentary, and in more direct engagement with the Health Department.

A forum of the AMA and the colleges, associations and societies is planned for the first quarter of 2017 to provide stakeholders with an update and policy direction regarding the MBS reviews.

Eliisa Fok, AMA Policy Officer

Better Cardiac Care measures for Aboriginal and Torres Strait Islander people: second national report 2016

This is the second national report on the 21 Better Cardiac Care measures for Aboriginal and Torres Strait Islander people, with updated data available to report on 11 measures. For some of the measures, a better or similar rate for Indigenous Australians compared with non-Indigenous Australians was apparent, while on other measures, higher rates of ill health and death from cardiac conditions and lower rates of in-hospital treatment services among Indigenous Australians were evident. A number of measures suggested improvements for Indigenous Australians over time; examples include a decline in the death rate due to cardiac conditions and an increase in the proportion who received an MBS health assessment.

Improving safety and quality of public hospital services – a case of less $$ to do more?

A key focus for Health Financing and Economics Committee (HFE) is the pricing and funding of public hospitals.

This work includes monitoring public hospital funding through the federal Budget and public hospital expenditure as reported by the Australian Institute of Health and Welfare.

HFE also takes a close interest in hospital pricing through the operation of Activity Based Funding (ABF) and the National Efficient Price (NEP), managed by the Independent Hospital Pricing Authority (IHPA). Each year, IHPA publishes a consultation paper to inform the Pricing Framework of ABF and the NEP to apply for the following financial year.

The AMA has a direct and significant interest in the Pricing Framework for public hospital services as a critical element in the overall functioning of our hospital system.

The major new element in the proposed Pricing Framework for 2017-18 relates to options for incorporating safety and quality into the pricing and funding of public hospital services.

For 2017-18, IHPA has been directed by Federal, State and Territory governments to undertake specific work to integrate quality and safety into hospital pricing and funding. IHPA has been tasked to advise on pricing and funding options for sentinel events, preventable hospital acquired conditions, and avoidable hospital readmissions.

IHPA’s options are set out in its consultation paper on the Pricing Framework 2017-18.

The options involve reducing pricing and funding for services that do not meet safety and quality standards, for example, services that involve a preventable hospital acquired condition. The ‘logic’ appears to be that improved safety and quality will be achieved by imposing financial penalties and reducing hospital funding for poor safety and quality services.

At its October meeting, HFE was briefed by IHPA Chief Executive James Downie on hospital pricing issues and IHPA’s safety and quality options. HFE drew on this discussion to consider and make input to the AMA’s submission on the Pricing Framework.

The AMA has consistently advocated for the appropriate recognition of safety and quality in the ABF and NEP framework.

However, the AMA has significant concerns with how this longstanding gap in the framework is now to be addressed. Any approach that sets out to improve safety and quality by financially penalising hospitals that are already under-resourced to achieve safety and quality standards is misconceived.

Improving the safety and quality of public hospital services requires a framework of positive incentives for the achievement of relevant targets, supported by the full range of quality and safety mechanisms in place and available to public hospital system operators, doctors, nurses and other hospital staff.

These include improvements in data quality and information available to inform clinician practice, whole‑of‑system efforts to deliver improved patient outcomes, and incentives that work to the level of the clinical department to focus efforts and effect change, with local implementation, monitoring and information sharing needed.

An essential pre-condition for all such improvements is adequate funding for public hospitals.

Overall funding for public hospitals under the NEP has been, and continues to be, inadequate. This has direct consequences for the performance of public hospitals in key areas against the targets set by governments, as tracked and reported in the AMA Public Hospital Report Card.

Health Care Homes must be tailored to Indigenous needs

I am continuing the important tradition of chairing the Taskforce on Indigenous Health as AMA President. The taskforce acts to identify and recommend Indigenous health policy strategies for the AMA.

On 8 October 2016, it was my privilege to chair my first meeting of the Taskforce. A number of important issues were discussed, including the AMA’s election priorities relating to Aboriginal and Torres Strait Islander health, the AMA’s support for the establishment of an Academic Health Science Centre in Central Australia, as proposed by Baker IDI Heart and Diabetes Institute and its partners, and the Indigenous health focus of the Medicare Benefits Schedule (MBS) Review.

One issue that was raised as being of particular concern was how the proposed Health Care Homes initiative will affect health care for Aboriginal and Torres Strait Islander peoples. The AMA supports the concept of Health Care Homes – a policy announcement made by the Coalition prior to the 2016 election, and we are pleased that the Australian Government has committed to an extended trial of the concept.

The AMA has concerns about the Health Care Homes model in relation to Indigenous health, and we assert that the specific health needs of Aboriginal and Torres Strait Islander people must be addressed through the scheme.

The concept of the medical home is not new in Australia. For many Australians, their local general practice is already their Health Care Home, and their GP, their primary carer. Patients whose care is well managed and co-ordinated by their GP are likely to have a better quality of life and to make a positive contribution to the economy through improved workforce participation. Health Care Homes should mean more expensive downstream costs can be avoided. Chronic conditions, if treated early and effectively managed, are less likely to result in the patient requiring hospital care for the condition or any complications.

The Health Care Home model has worked overseas and the evidence is of significant reductions in avoidable hospital admissions, emergency department use, and overall costs.

The AMA sees Health Care Homes as potentially one of the biggest reforms to Medicare in decades.

However, we know that, for the Health Care Home model to succeed, the Government needs to engage with and win the support of general practice. We also need to see greater detail about how the Health Care Home model will operate in remote and Indigenous communities.

Indigenous communities face a range of unique health problems and chronic diseases uncommon in our cities. A high turnover of medical practitioners and support services in these areas means continuity of care and follow up treatment can be difficult to maintain.

Trust is a vital component of health care, especially for Aboriginal and Torres Strait Islander peoples, and knowing and trusting a GP is critical in the management of chronic conditions. How the Health Care Home model will deliver consistent, ongoing GP care and management of chronic health conditions is not known, and the AMA has been urging the Government to provide greater details about funding and operation.

There is a degree of anxiety among the Aboriginal Community Controlled Health Organisation (ACCHO) sector that any announcements made by the current Government will result in cuts to Indigenous health. There is a strong view that building up the ACCHO sector is the best model of care for Aboriginal and Torres Strait Islander peoples, particularly as ACCHOs are the preferred provider of Indigenous health services.

ACCHOs, like Health Care Homes, need to be built on existing relationships and investment in models that work. The Government must not rush the Health Care Homes trial and, if it is to be successful, it must be adequately funded.

As a model, it has the potential to help close the gaps in health outcomes between Aboriginal and Torres Strait Islanders and non-indigenous Australians. The AMA’s position will be to closely monitor what works and what does not work, and work constructively with Government to ensure the necessary changes are made.

Govt’s dodgy deal with big pathology ‘not the answer’: Gannon

AMA President Dr Michael Gannon has told pathologists that capping pathology collection centre rents is “simply not the answer” to the challenge the sector faces from almost 20 years of frozen Medicare rebates.

In a message to AMA pathologist members, Dr Gannon said the surprise deal struck between the Federal Government and Pathology Australia during the Federal election to impose a rent ceiling was a “poorly targeted” policy that would deliver a massive windfall for the big pathology companies at the expense of medical practices, and did nothing for individual pathologists.

“The Government’s proposal goes too far, interfering with legitimate commercial arrangements that have been entered into by willing parties,” he said. “It will unfairly damage medical practices that have made business decisions based on projected rental streams, including investment in infrastructure and staffing.”

The AMA President said there was no guarantee from Pathology Australia, whose biggest member is Sonic Healthcare (which holds 43 per cent of the market), that any money pathology companies saved by cutting their collection centre rents would be re-invested in pathology services or the pathology workforce.

Instead, the rents deal controversy was overshadowing important issues such as the impact of the near 20-year rebate freeze for pathology services and the need for a much more sustainable funding base, he said.

In striking his deal with Pathology Australia, Prime Minister Malcolm Turnbull blindsided groups including the AMA and the Royal College of Pathologists of Australasia, who had been involved in discussions with the Government earlier this year on ways to improve transparency and strengthen compliance within the existing regulatory framework governing pathology collection centre (ACC) rents.

ACC rents have risen strongly since their deregulation in 2010, and there have been fears of a nexus between leases and the number of pathology tests a practice orders.

But the Health Department has reported in several different forums that it has not detected any such link, and told a roundtable meeting of stakeholders attended by the AMA on 27 April that it had found no evidence that rents were substantially above market value.

Instead, rents are being driven higher by intense competition for market share. Consolidation in the industry has intensified since deregulation, and the two big pathology companies, Sonic and Primary Health Care, between them now hold about 77 per cent of the market – a 12 per cent increase in five years.

Instead of addressing issues around the structure of the industry and how that was affecting competition and rents, Dr Gannon said the Government’s unilateral move to cap rents was simply a “knee jerk reaction” to head-off a politically damaging campaign.

The Government struck the deal in the early days of the Federal election in order to get Pathology Australia to drop its threat to axe the bulk billing of pathology services following the abolition of the pathology bulk billing incentive.

The terms of the agreement were laid out in a Senate Estimates hearing last month by Health Department Deputy Secretary Andrew Stuart, who said the “nature of the deal between the Government and Pathology Australia is to work to bring rents down to a more reasonable level and, at the same time or in some relationship to that, to continue with the Government’s proposal to remove the bulk billing incentive”.

Government Minister Senator Fiona Nash told the Estimates hearing the Coalition had received assurances from the pathology industry that “it is going to keep the bulk billing levels at its rates [and] we are taking it in good faith that that is exactly what they meant, and we expect they will do that”.

Dr Gannon said that in rushing to strike its deal with Pathology Australia, the Government had failed to take into account the consequences for GPs.

The Government’s plan went well beyond the intent of existing laws and gave pathology providers an unfair advantage in commercial negotiations with medical practices, he warned.

His concerns were borne out by the testimony of Mr Stuart, who admitted that the Department had not modelled the likely effect of the pathology rents cap on general practices, particularly when combined with the Medicare rebate freeze.

The senior health official, who made pointed reference to the fact the deal was “a Government negotiation, not a departmental negotiation”, said details of the arrangement, especially regarding its implementation, were still being finalised.

Significantly, the deal leaves the contentious issue of what should be defined as ‘market value’ unresolved – something admitted by Health Department First Assistant Secretary Maria Jolly in her testimony to the Senate committee.

She said how the new arrangement would be introduced was also yet to be determined, including how existing leases would be treated, and how the new deal would relate to the current regime governing prohibited practices.

Adrian Rollins