Modest health bill growth belies ‘unsustainable’ claims

Federal Government complaints about unsustainable growth in health spending have been undermined by figures showing its health bill is growing little faster than the pace of inflation.

Australian Institute of Health and Welfare figures show Commonwealth health spending increased by 2.4 per cent to $66.2 billion in 2014-15, compared with a 2.3 per cent rise in underlying inflation over the same period.

State and Territory government spending was even weaker, contracting by 0.4 per cent to $42 billion – the first such decline in a decade.

The results undermine the Government’s case for swingeing cuts in the health budget, which have been based on assertions that public spending on hospitals, GPs and other health services has been out of control.

The AIHW’s Health expenditure Australian 2014-15 report shows, instead, that Federal Government spending has slowed sharply in recent years. 2014-15 was the third year in a row where expenditure growth was below the annual average of 4 per cent.

The figures demonstrate that increasingly the burden of health funding is falling onto the shoulders of patients, either directly through rising out-of-pocket costs or indirectly via rising private health insurance premiums.

Between 2004-05 and 2014-15, the Commonwealth’s share of the nation’s health bill slipped from 43.9 to 41 per cent. Over the same period, the states’ and territories’ share increased from 24 to 26 per cent, for individuals it went from 17.4 to 17.7 per cent and for health funds, from 7.7 to 8.7 per cent.

The cost-shifting was particularly stark in the three years to 2014-15, when a 1.3 percentage point jump in the health insurer’s share coincided with a 2 percentage point plunge in the Federal Government’s share.

The AIHW said this was driven by changes in the Government’s private health insurance rebates that had the effect of cutting its contribution, with insurers (and, more particularly, policyholders) picking up the tab. The development casts attempts to blame the surge in premiums on doctor fees or procedure costs in a different light.

Partly the shift in the Federal Government’s share can be explained by changes in revenue. The Commonwealth’s tax take has been hammered by the global financial crisis and the wind-down of the mining boom, and shrank by 1.5 per cent in 2014-15. By contrast, State and Territory tax collections have been growing at an above-average pace for the past decade. This has meant that while health has been grabbing a greater share of tax revenue at the Federal Government level, at the State and Territory level it has been shrinking.

Overall, the nation’s spending on health increased by 2.8 per cent in 2014-15 to $161.6 billion – well down from the 10-year average growth rate of 4.6 per cent.

However, because of the slowdown in the broader economy, health expenditure as a proportion of GDP actually increased 0.2 of a percentage point to reach 10 per cent of total output for the first time.

This is higher than the developed country median of around 9.1 per cent, but is comparable with countries including New Zealand, Canada, the United Kingdom and Finland, and far below the United States, where health expenditure accounts for 16.6 per cent of GDP.

Per person, Australia spends $6657 on health – ranked 10^th highest among OECD countries but well below the US ($13,266), Switzerland ($9977) and Norway ($8940).

Adrian Rollins

Terms set for GP registrars

The AMA has helped broker an agreement on the terms and conditions for employing GP registrars for 2017-18.

The agreement, between General Practice Registrars Australia (GPRA) and General Practice Supervisors Australia (GPSA), replaces the 2015-16 agreement, which was set in December 2014.

The National Terms and Conditions for the Employment of Registrars (NCTER) 2017-18 has been reached three months earlier than in the past, giving registrars and practices more time to negotiate their employment arrangements for 2017.

It covers GP registrars undertaking Australian GP Training in all general practice terms of training, although those employed in community controlled health workplaces, the Australian Defence Force, or in remediation may be bound by other contractual arrangements.

GPSA Chair, Dr Bruce Willett, said his negotiating team relied heavily on supervisor and training practice feedback to set the terms.

There has been no increase to the base rates nor percentages, due to the existing Medicare freeze, rising costs, and the freeze on training practice subsidies.

GPRA Chair, Dr Jomini Cheong, said that the new agreement provided greater clarity around issues that had previously been open to interpretation.

Both organisations agreed that the NCTER 2017-18 represented the fairest possible outcome for both training practices and registrars, given the current political and economic environment.

The NCTER again requires that registrars be engaged as employees, and allows for percentage payments to be made on a billings or receipts basis not less than every three months.

The NCTER is a goodwill document that applies because of the agreements in place between the Australian Government and the Regional Training Organisations (RTOs), which require training practices to observe it.

Dr Willett and Dr Cheong thanks the Australian Government, the RTOs, and the AMA for their ongoing support and promotion of the NCTER.

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Device reforms may be too late to prevent premium pain

The Federal Government is coming under pressure to speed up its review of prosthetic prices if consumers are to avoid another painful hike in private health insurance premiums.

Health funds have warned that unless the cost of medical devices on the Prostheses List falls into line with the much lower prices paid by public hospital in the next few weeks, policyholders will continue to pay an extra $150 to $300 on their premiums.

The warning is the latest shot in a tussle underway between insurers, medical device manufacturers and private hospitals other over the cost of prostheses, as documented in a series of articles in The Australian newspaper.

The health funds, increasingly worried about the backlash from consumers over rapidly rising premiums and complex and confusing insurance products, have set their sights on prostheses prices as a key way to contain costs.

They claim that existing pricing arrangements are woefully out of date and force insurers to pay grossly inflated prices for medical devices compared with public hospitals. According to insurers, they are being charged up to $3450 for a coronary stent that costs $1200 in the public system, while a defibrillator costing them $52,000 costs a WA public hospital just $22,555.

Altogether, the funds estimate they could save $800 million by bringing public and private prostheses prices into line, savings they say would be passed on in cheaper premiums for consumers.

But the Medical Technology Association of Australia, which represents medical device manufacturers, has defended the sector against what it considers to be false and misleading claims.

MTAA co-lead Andrea Kunca said the industry rejected accusations of inflated pricing and fully supported the work of a Government working group brought together earlier this year to work through “meaningful solutions” for reform of the Prostheses List.

The Australian has published claims that the MTAA, in concert with private hospital operators, has so far been successful in frustrating attempts by Health Minster Sussan Ley to reform the Prostheses List, and any changes are unlikely to come in time to head off another sharp increase in the health fund premiums next year.

According to The Australian, fierce lobbying by well-connected outfit CapitalHill Advisory on behalf of the MTAA derailed an early attempt by Ms Ley to cut implant prices.

Influential Senator Nick Xenophon has announced he will push for a Senate inquiry into private health insurance and the pricing of medical devices on the Prostheses List, a move welcomed by the MTAA.

“There have been a number of misleading and false claims put in the public arena in regards to the medical device industry,” Ms Kunca said. “A Senate inquiry will allow these false claims to be answered once and for all. From the MTAA’s perspective we look forward to presenting the facts rather than anecdotal misinformation put forward by some.”

Premium crunch time

The health funds have to submit proposals for their 2017 premiums, which have to be approved by the Health Minister and are announced in April, by early November.

Doctors, insurers and the Government fret that another 6.5 per cent premium increase could accelerate the shift among policyholders toward cheaper policies with multiple exclusions and less coverage, or even convince many to ditch private health cover altogether – the insurance industry has cited research that at least 20 per cent of current members would find premiums unaffordable in the next six years.

Ms Ley recently overhauled the membership of the Prostheses Listing Advisory Committee, appointing University of New South Wales Professor of Medicine Terry Campbell as Chair. Professor Campbell’s appointment was a belated replacement of long-serving Chair Professor John Horvath, who left last December to become a strategic adviser at Ramsay Health Care.

The stoush comes against the backdrop of rising dissatisfaction among doctors and consumers with the quality and value for money of private health insurance.

The AMA has been a vocal critic of the proliferation of complex and confusing policies, many with multiple exclusions that leave unsuspecting patients with inadequate cover.

AMA President Dr Michael Gannon has declared the medical profession’s support for Government reforms to improve the value of private health insurance by banning junk public hospital-only policies, standardising terms, mandating minimum levels of cover and preserving community rating.

Dr Gannon said doctors were doing the right thing, with 86 per cent of privately insured medical services charged on a no gap basis, and a further 6.4 per cent involving a known gap.

“This means that less than 8 per cent of privately insured patients are charged fees that exceed that paid by their private health insurance,” the AMA President told the National Press Club in August. “Put simply, the majority of doctors and hospitals understand the impact of gaps on patients and are doing the right thing by them.”

He said that because of these, doctors were deeply unimpressed with the behaviour of some insurers, “particularly the biggest and most profitable ones”, in putting profits ahead of the interests of patients.

Dr Gannon said that if such actions, including aggressive negotiations with private hospitals and attacks on the professionalism of doctors, continued unchecked “we will inevitably see US-style managed care arrangements in place in Australia”.

Adrian Rollins

Govt adviser calls for public hospitals to be ‘contestable’

Mortality rates and treatment outcomes for individual hospitals and medical practitioners could be made publicly available and patients given a choice of hospital and specialist under Productivity Commission proposals to improve the quality and accessibility of health services.

In the preliminary findings of a review initiated by Treasurer Scott Morrison into options for increased competition and consumer choice in the $300 billion human services sector, the Commission has proposed increased information disclosure by hospitals and practitioners and greater contestability between services.

“Greater competition, contestability and informed user choice could improve outcomes in many human services,” the PC said. “Well-designed reform, underpinned by strong government stewardship, could improve the quality of services, increase access…and help people have a greater say over the services they use and who provides them.”

Mr Morrison said he had ordered the review to improve the efficiency and cost effectiveness of human services.

But Opposition leader Bill Shorten, reprising Labor’s scare campaign during the Federal election on the privatisation of Medicare, said he feared it would be used to justify the wholesale handover of human services to the private sector.

“We’ve all seen this move before,” Mr Shorten said. “When Malcolm Turnbull and the Liberal Party start talking about changing human services it means that poor people get it in the neck.”

The Commission said that not all human services were amenable to increased competition, contestability and choice, but identified public hospitals and palliative care services among six priority areas targeted for reform.

While Australian public hospitals performed well by international standards, “there is scope to improve”, the PC said, including by matching domestic best practice and publicly disclosing more information.

“Public patients are often given little or no choice over who treats them or where. Overseas experience indicates that, when hospital patients are able to plan services in advance and access useful information to compare providers (doctors and hospitals), user choice can lead to improved service quality and efficiency,” the PC said.

It said that any reforms to boost user choice would have to be supported by “user-oriented information”, and suggested the English model in which increased choice is offered at the point where GPs refer patients to a specialist.

The Commission said experience in England had shown that patients given a choice of hospital and consultant-led team sought out better performing providers, and hospitals in locations where competition was most intense recorded the biggest improvements in service quality.

In order to exercise their choice, patients had access to web-based information enabling them to compare providers according to waiting times and mortality rates, and could use an online booking service.

The enormous variety of Australia’s public hospitals, including big differences in the populations they serve, workforce arrangements and characteristics and the complexity of their links to the rest of the health system, militate against like-for-like competition – something the Commission admitted.

If such issues or political considerations made fostering direct competition unfeasible, the Commission instead suggested exerting pressure for improved performance by making the position of senior hospital managers more precarious.

“There have been difficulties in the past commissioning non-government providers, and lessons from these attempts should not be forgotten,” it said. “As a result, it may be more feasible to implement contestability as a more transparent mechanism to replace an underperforming public hospital’s management team (or board of the local health network) rather than switch to a non-government provider.”

The Commission said State and Territory governments could also take a more contestable approach to commissioning services when renegotiating service agreements with local health networks.

On palliative care, the PC lamented that a dearth of comprehensive, publicly available national data hampered accountability and helped drive big differences in the quality and range of services available.

It said there was little evidence that low quality providers were being held to account.

The PC acknowledged that the “emotionally taxing and psychologically distressing” environment in which a person was approaching the end of their life militated against making choices about palliative care.

“Taboos about discussing death can prevent this from happening,” the Commission said. “Patients often rely on medical professionals to initiate conversations about palliative care, many of whom are inadequately trained about, and intimidated by, holding such conversations.”

Notwithstanding such challenges, the PC argued that introducing greater competition, contestability and user choice in palliative care would improve outcomes and reduce current substantial variation in the quality of, and access to, services in different areas of the country.

To achieve this, though, “would require careful design to ensure that the interests of patients and their families are well served. Special measures for consumer protection may be needed”.

Indeed, even where reform ushered in greater competition and contestability, the PC said the unique nature of human services meant the Government would need to maintain strong oversight.

“Government stewardship is critical,” the agency said. “This includes ensuring human services meet standards of quality, suitability and accessibility, giving people the support they need to make choices, ensuring the appropriate consumer safeguards are in place, and encouraging and adopting ongoing improvements to service provision.”

Other priority areas of human services nominated by the Commission for increased competition and contestability included public dental services, social housing, services in remote Indigenous communities and grant-based family and community services.

Among those areas assessed for reform but not identified as a priority by the PC at this stage were general practice, primary health networks (PHNs), mental health services, community health services and child and family health services.

The preliminary report is open for submissions until 27 October, and the Commission is due to deliver its final report by October 2017.

Adrian Rollins

Medicare claims shopped around

Fears that patients will face increased delays in receiving reimbursements from Medicare under plans to close shopfronts and consolidate processing centres have been dismissed by the Federal Government.

Department of Human Services staff told the Sunday Herald Sun that the Government planned to shut Medicare shopfront services, with all claims to be processed in one of 17 centres operating nationwide.

They warned this was likely to cause a blow-out in the time taken to reimburse patients.

But Human Services Minister Alan Tudge told Fairfax Media rejected the claim and said most patients would not detect any change, adding that the vast majority of claims were undertaken online.

“There has been a huge reduction in demand for face-to-face claiming so we are consolidating back-of-house processing work to ensure we provide high quality, consistent services,” the Minister said. “Some 96 per cent of all Medicare claims are lodged electronically.”

Mr Tudge said that even with the consolidation of shopfront services undertaken in recent years, most people would be able to find one within a few kilometres of where they lived.

But Labor seized on the Sunday Herald Sun report, claiming the changes would make it harder for patients to make a claim, and force them to wait longer for their rebate.

Shadow Health Minister Catherine King said the changes would not only make it harder for patients, particularly the elderly, but paved the way for the potential privatisation of Medicare – an suggestion vehemently rejected by Mr Tudge.

“Every single aspect of Medicare which is currently operated by Government will continue to be operated by Government, including the processing of the Medicare rebate,” he said.

Adrian Rollins

Cancer registry privacy fears

The AMA has raised concerns sensitive patient information will be in the hands of a for-profit operator following the Federal Government’s decision to award a $220 million contract to Telstra to build and operate a national cancer screening register.

The AMA has told a Senate Committee inquiring into the decision that although it did not have any in-principle objection to outsourcing clinical registries, it was worried by Telstra Health’s lack of experience in the field, and the implications of giving a profit-making enterprise access to commercially valuable and highly sensitive personal information.

“Telstra Health does not have direct previous experience in operating registries of this kind,” the AMA said in a submission to the Senate Standing Committee on Community Affairs.

Under the Government’s plan, data from nine separate cancer screening registers will be consolidated into a single National Cancer Screening Register containing the bowel and cervical cancer screening records of all participating Australians. Information on the register will be used to support the expansion of bowel cancer screening to cover almost 10 million people, and cervical screening for 1.4 million women.

The AMA said it would be “more comfortable” if the registry, which will contain sensitive information about a person’s cancer risk, medical procedures and health status, was in commercially disinterested hands.

“Given the potential commercial value of the data contained in the register, the AMA would be more comfortable with it being operated by Government, a tertiary institution, or not-for-profit entity that has little interest in how the data in the register might otherwise be used,” it said. “This would go a long way to allaying concerns about the secondary use of data for commercial reasons.”

The AMA’s concerns were echoed by health policy expert Professor Lesley Russell, of the Menzies Centre for Health Policy.

“Telstra Health will have the ability to access data from the Australian Immunisation Register, from the Australian Institute of Health and Welfare, and from Medicare claims, and the registers will be integrated with GPs, specialists and pathology laboratories,” Professor Russell said in a submission t the Senate Committee.

“Will the Australian population be comfortable with the fact that a for-profit business knows whether they have had a full or partial hysterectomy, if they are at risk of bowel cancer…and when they last had a colonoscopy?

“Will GPs, specialists and diagnostic labs be happy that Telstra Health can, at least potentially, scrutinise their diagnoses and treatment?”

Privacy Commission Timothy Pilgrim said the centralisation of such sensitive information in a database that can be accessed from many points posed “a number of security and privacy risks”, and suggested the operation of the register be subject to additional requirements under the Privacy Act.

But Telstra Health said it was “uniquely placed” to provide the register, with the size, scale and expertise to ensure its secure and successful operation.

It said Telstra already manages “extremely sensitive” data for hospitals, financial institutions and Government, and all information contained in the register would be hosted in Australia and controlled by the Government.

“Telstra will build and operate the Register in accordance with strict data security requirements determined by the Australian Government. These are the same requirements that would apply to any Australian Government or not-for-profit agency.”

Concerns have also been raised about how Telstra Health was awarded the job, and what might happen to the register and the data it contains when the five-year contract expires.

Telstra said it won the contract following an open tender, but the AMA is among those complaining the process has been opaque.

“There has been a lack of transparency around the process for awarding this contract,” it said. “The awarding of such a contract to an entity that has hitherto had no direct role in establishing or operating a register of this kind sets a challenging and potentially troublesome precedent.”

Professor Russell said the basis on which Telstra won the contract over other applicants had not been disclosed, and the Government had not explained why other entities such as the Department of Human Services, the AIHW and Cancer Australia had not been considered for the work.

“What happens when the Telstra Health contract expires in five years’ time – will it automatically be renewed, will it be up for competitive bids? How will this contestability affect the continuity, ongoing resources and work needed for the registers?” she asked.

Shadow Health Minister Catherine King said “clearly there are questions that need to be answered about handing these records to a for-profit company with no experience in this area”.

“This is sensitive, personal information about people’s health – we need to get it right,” she said.

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Medicare data breach prompts law change

The Federal Government has moved to tighten privacy laws after doctor provider numbers were disclosed in a breach of security around Medicare and Pharmaceutical Benefit Scheme data.

Attorney-General George Brandis has announced plans to amend the Privacy Act to make it a criminal offence to re-identify de-identified Government data following a discovery that encrypted MBS and PBS data published by the Health Department had been compromised.

The Department was alerted to the worrying security lapse by Melbourne University Department of Computing and Information researcher Dr Vanessa Teague, who found she was able to decrypt some service provider ID numbers in a dataset being used by her and several of her colleagues. She immediately alerted the Department.

In a statement, the Department said no patient information had been compromised in the incident.

“The dataset does not include names and addresses of service providers, and no patient information was identified,” the Department said. “However, as a result of the potential to extract some doctor and other service provider ID numbers, the Department of Health immediately removed the dataset from the website to ensure the security and integrity of the data is maintained.”

The security breach has come as a Senate inquiry hears concerns about data security surrounding the decision to award Telstra Health $220 million contract to design and operate the National Cancer Screening Registry, and follows the collapse of Australian Bureau of Statistics systems on census night.

The AMA said that although the data security breach was concerning, it should not result in governments withholding data.

The Association said that although it was paramount that personal information be properly secured and protected, it was important that de-identified and encrypted data be made available by Government to help inform research and the analysis of health information.

Senator Brandis reassured that the Government remained committed to making valuable data publicly available.

“The publication of major datasets is an important part of twenty-first century government providing a great benefit to the community,” the Attorney-General said. “It enables…policymakers, researchers and other interested persons to take full advantage of the opportunities that new technology creates to improve research and policy outcomes.”

But Senator Brandis said that advances in technology had meant that methods used in the past to de-identify data “may become susceptible to re-identification in the future”.

Under his proposed changes to the Privacy Act, it would be a criminal offence to re-identify de-identified Government data, encourage someone else to do it, or to publish or communicate such data.

The Health Department said it was conducting a “full, independent audit” of the process followed in compiling, reviewing and publishing the data, and promised that “this dataset will only be restored when concerns about its potential vulnerabilities are resolved”.

The Office of the Australian Information Commission is undertaking a separate investigation.

Adrian Rollins

[Department of Error] Department of Error

Bagot KL, Cadilhac DA, Hand PJ, Vu M, Bladin CF. Telemedicine expedites access to optimal acute stroke care. Lancet 2016; 388: 757–58—the conflict of interest statement of this Correspondence piece (published Aug 20, 2016) should have stated “KLB, DAC, MV, and CFB report grants from The Windemere Foundation, The State Government of Victoria: Department of Business and Innovation and Department of Health, Commonwealth Government: Health and Hospitals Fund, and Telstra. KLB, DAC, MV, and CFB report non-financial support from Monash University, Ambulance Victoria, National Stroke Foundation, and Loddon Mallee Rural Health Alliance.

[Correspondence] China’s challenges in promoting physical activity and fitness

In June, 2016, the Chinese Government released a National Fitness Plan (2016–20) aiming to increase physical activity and improve overall population fitness.1 The plan addresses the urgent need to promote population-level health, which is increasingly adversely affected by the unprecedented economic development in the world’s most populous country.

GPs win an ePIP breather

Medical practices being pushed to the financial brink by the Medicare rebate freeze and other Government cuts have won a partial reprieve after Health Minister Sussan Ley pushed back the deadline on shared health summary uploads to early next year.

In a breakthrough following intense lobbying by the AMA, Ms Ley has advised GPs will be given until 31 January 2017 to comply with new rules that require practices to upload shared health summaries (SHS) for at least 0.5 per cent of patients every quarter to remain eligible for the Practice Incentive Program Digital Health Incentive.

AMA President Dr Michael Gannon, who has raised the issue at a several meetings with the Minister, said the decision was “very welcome”.

“GPs are already under significant financial pressure from the Medicare rebate freeze and other funding cuts, and the last thing they needed was to also lose vital PIP incentive payments,” he said.

The Government originally required practices to comply with the new eligibility criteria from May this year, but the AMA warned at the time that this would be unworkable for many practices and risked undermining the goodwill of GPs which was essential to making the My Health Record system a success.

In June, the AMA called for a moratorium on the new rules after a survey it conducted found that just 24 per cent of practices considered themselves able to comply, while almost 40 per cent said they would not be able to and 36 per cent were unsure.

Government figures show that in the first three months of operation, 1500 practices failed to meet their SHS upload target and 69 practices withdrew from the scheme altogether.

Dr Gannon said failure to comply had the potential to deliver a heavy financial blow to practices already under substantial financial pressure.

“If the Government had not relaxed its approach, close to a third of previously eligible general practices faced losing significant financial support,” the AMA President said. “In many cases, practices would have been more than $20,000 worse off. With so many already close to breaking point, this could have been disastrous.”

The Minister’s decision follows a resolution passed by the AMA Federal Council in August calling for a moratorium on the new upload requirements and urging the Government to investigate the reasons why so many practices were struggling to comply.

The Federal Council said the Government should get the Practice Incentive Program Advisory Group (PIPAG) to conduct the review and provide recommendations on what could be done to improve practice compliance.

Dr Gannon said the episode highlighted the importance of the Government heeding the views and advice of general practitioners and their representatives.

The Government had pushed ahead with its SHS requirements against the advice of all the GP groups sitting on PIPAG, and the AMA President said in future it should ensure that any changes to the PIP Digital Health Incentive were based on the Advisory Group’s advice.

Dr Gannon said the medical profession strongly supported the Government’s My Health Record, and the Minister’s decision to extend the SHS requirement deadline would help shore up the goodwill of GPs to support its successful implementation.

“It is pleasing that the Minister has recognised the concerns that have been consistently raised by the profession, and this decision provides some breathing space for practices,” Dr Gannon said.

“With adequate time, education, and support, many of the affected 1500 general practices may well begin to genuinely engage with the My Health Record, and eventually champion it.

“But it is important that the Government continues to review the implementation of the PIP Digital Health Incentive in consultation with PIPAG.

“We need to know why practices failed to comply, and ensure that any of these issues are addressed before the end of January deadline. If a large number of practices still cannot comply by the new deadline, we may still need to revisit the policy.”

Adrian Rollins