The Federal Government must boost investment in general practice and public hospitals if it wants to avoid “a major Medicare headache” at the next election, AMA President Dr Michael Gannon has warned.

As the re-elected Turnbull Government finalises plans to put $6.5 billion of spending cuts, including in health, before the new Parliament, Dr Gannon has called for a change in the Coalition’s mindset away from seeing health as a cost and instead view it as an investment, warning that the Government’s political survival is at stake.

In his inaugural address to the National Press Club, the AMA President said the knife-edge result of the Federal election showed that Australians were “very comfortable with the state being in charge of their health and education” and did not like political parties messing with the system.

“There is no doubt that health was a game-changer in the election. It was very nearly a government-changer, too,” Dr Gannon said. “For many Australians, the health system – doctors, nurses, allied health, hospitals – is called Medicare. They see any threat to Medicare as bad.”

Prime Minister Malcolm Turnbull has acknowledged the political damage the Government inflicted on itself through its plans to introduce a co-payment for GP services and its cuts to public hospital funding, and has already had several meetings with Dr Gannon in an effort to try and improve his Government’s relationship with the medical profession.

But Dr Gannon said that, while the more consultative approach was welcome, it had to result in better policy, reiterating the AMA’s demands for an end to the Medicare rebate freeze, increased funding for public hospitals, the restoration of bulk billing incentives for pathology and diagnostic imaging tests and increased investment in preventive health.

The Government has so far shown no signs of budging on its decision to freeze Medicare rebates until 2020 as it tries to hold health expenditure down.

But Dr Gannon said the policy was a false economy because it was hurting GPs, who were providing the most cost-effective care in the health system. Furthermore, it would result in more patients deferring seeing their family doctor and eventually requiring much more expensive hospital care, and was undermining the goodwill of GPs, which would be needed for the successful implementation of the Health Care Homes initiative.

Just 6 per cent of the Government’s health spending goes on GP services, and Dr Gannon said general practice represented “very, very good value for money”.

But instead of getting support, GPs were being crushed in a “diabolical squeeze” as funding has been held down and cut even as demand for their services has continued to climb.

“GPs are now at breaking point,” the AMA President said. “Unless there is substantial investment in general practice, there is no doubt that the quality of care will start to suffer – and patients will face growing out of pocket costs.”

He warned that patients who are currently bulk billed may face out-of-pocket costs of $20 or more and “without a big re-think on the range of policies that affect general practice, the Government could have another major Medicare headache at the next election”.

Health Care Homes

One of the Government’s boldest reforms is to establish the Health Care Home model of care for patients with chronic illness. Under the plan GPs would, in addition to their current fee-for-service remuneration, be paid to help the chronically ill manage their disease.

Dr Gannon said it was “potentially one of the biggest reforms to Medicare in decades”, and the AMA was keen for it to succeed.

But he warned that it faced major obstacles without a change in approach by Government.

So far, the Government has only committed $21 million for a trial of the concept, none of which will go toward patient care.

Dr Gannon said that asking GP to provide enhanced care without any extra support “simply does not stack up”.

The Government also need to overcome the “significant trust and goodwill deficit” it had with general practitioners.

“Unless the Government restores some goodwill by unravelling the freeze and invests the extra funding that is required for enhanced patient services, GPs will not engage with the trial, and will walk away from this essential reform,” he said.

Prevention better than cure

Dr Gannon used his Press Club speech to intensify the pressure on the health insurance industry, accusing health funds of putting profits before patients and warning of a slide toward US-style managed care if they had their way.

The Government has acted on mounting discontent with the quality of health cover by announcing plans to ban ‘junk’ public hospital-only policies, mandating minimum levels of cover and introducing a simplified rating system for policies.

The AMA President said these were important steps, but the Commonwealth needed to provide much greater support for public hospitals.

In 2014, the Abbott Government controversially walked away from the previous Labor Government’s hospital funding agreement with the states, at a cost of $57 billion over 10 years.

Dr Gannon said public hospitals were “an everyday saviour for Australian families”, but were failing to meet waiting time and treatment targets as “a direct consequence of the Commonwealth’s failure to fund their share”.

He said the States and Territories did not have the revenue base to increase their funding, and the “Commonwealth Government needs to step up”.

To help contain this cost in the long term, Dr Gannon said the Government should lift its investment in preventive health.

He said health literacy levels were low, and every day people were making bad choices about what they ate, drink and did that would have consequences for their own health and for demand for health care.

“Preventive health is not about implementing a ‘nanny state’ or taking away people’s ‘choices’,” Dr Gannon said. “There are not enough public health campaigns and we continue to fund, at tremendous expense, the consequences of failures to prevent chronic health conditions.”

He said the success of action to curb smoking showed what could be achieved, and it was time alcohol was taken out of the ‘too hard’ basket.

In his speech, Dr Gannon also highlighted the urgency for action to improve Indigenous health. He expressed strong support for the Royal Commission into juvenile detention in the Northern Territory, and backed constitutional recognition as a way to “help heal some of the wounds that underlie Indigenous disadvantage”.

 Adrian Rollins