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Managed care is health fund endgame: Owler


US-style managed care was “clearly the endgame” for private health insurers pushing for a greater role in the provision of primary care, AMA President Associate Professor Brian Owler has warned.

Giving evidence to a Senate committee inquiry, A/Professor Owler accused Medibank Private of circumventing laws prohibiting insurers from providing cover for Medicare services and seeking to secure preferential access to GP care for its members.

“Anyone who thinks that managed care is not the endgame of some of the private health insurers needs to open their eyes, because that is clearly the endgame,” he told the Community Affairs Legislation Committee at a hearing on 20 August.

Earlier, the inquiry heard details of a deal between Medibank Private and 26 GP clinics and 145 GPs in south-east Queensland under which the fund’s members a guaranteed to be bulk billed, get a same-day GP appointment if they call before 10am and get after-hours GP visits with a maximum waiting time of three hours. In exchange, Medibank contributes to practice administration costs.

Other funds are looking at similar arrangements. Insurer NIB is about to pilot a program under which GPs would be compensated for providing services such as disease management, home-based care and advance care plans for its members, while HCF said it was watching the Medibank trial with interest.

In testimony to the Committee, Medibank’s Manager of Government and Regulatory Affairs, James Connors, denied its arrangement, known as GP Access, compromised the universality of Medicare.

“There is no agreement between us and the doctors that provide the GP Access service to provide preferential access,” Mr Connors said.

But A/Professor Owler dismissed the insurer’s denials, and told the inquiry GP Access had “basically been set up to circumvent the legislation”.

“It is a commercial arrangement,” he said. “[Medibank are] paying an administrative fee to the practice for their patients to be seen without an extra charge, and with priority appointments.

“It is circumventing the legislation and basically allows the private health insurer to cover the gap or any private billing that takes place in general practice.”

The AMA President said the arrangement was unacceptable because “if you rolled that out with multiple insurers and multiple practices, then you would have real problems with equity of access, and those without private health insurance would not get access”.

Hi warnings were backed by officials from the Australian Dental Association, who cautioned that clinical autonomy would be undermined if health funds were allowed to continue to enter into preferred provider arrangements.

ADA Chief Executive Robert Boyd-Boland said dentists routinely dealt with the private health insurance industry, and much could be learned from their experiences.

He told the Senate Committee that, in their relentless search for increased profits, many health funds sought to limit patient choice of dentist; impose restrictive business rules and policies that seek to dictate the nature of treatment allowed; increase out-of-pocket expenses; and artificially inflate the cost of services from non-preferred providers.

GP Access is just one of a number of initiatives taken by Medibank to expand its range of operations and commercial offerings, though the corporation has denied any suggestion of a link between these activities and the fund’s looming privatisation.

But A/Professor Owler said the insurer was working towards instituting managed care arrangements to bolster its bottom line.

“We have Medibank Private entering into arrangements to circumvent legislation with a particular GP group; we have this extension into chronic disease management; we have the Medibank Defence Solutions in the contract with the defence forces, and we have Medibank Private actually introducing, unilaterally, a program where they have a pre-approval process for what they have said are procedures that have a cosmetic component,” he said.

Greens Senator Richard Di Natale has proposed amendments the Private Health Insurance Act that would effectively block private insurers from being involved in the provision of GP services, and A/Professor Owler said the AMA supported the intent of the law change.

He told the Committee that although the AMA thought there might be a role for private funds in primary care, it would only be to provide targeted funding for chronic disease management and prevention services for the 4 per cent of patients who were regularly showing up in hospital.

But the Federal Government is yet to respond to the medical profession’s concerns, and Health Minister Peter Dutton has instead flagged interest in greater private sector involvement in the provision of primary care.

The Health Minister said it was “crazy” that often the first insurers knew about the health of their members was when they received a claim for hospital services.

“I think it is perfectly sensible for insurers who desire to be involved in process earlier to invest money in a preventive way, to perhaps help people going to see a paediatrician, a dietician or a psychologist about lifestyle and ways they can improve their health outcomes,” Mr Dutton said. “That ultimately results in savings for the taxpayers, for the insurer, but better health outcomes for the insured.”

He said the trials being conducted by Medibank Private were a promising sign of what might be done.

“If we have got a willing doctor, a willing insurer, a willing patient, I think we should give the trials the benefit of time and experience, to see what recommendations come out of that, because if we can keep people out of hospital, out of emergency departments, out of ambulances at two o’clock in the morning, then that is much better for patients, and much better for the Australian taxpayer as well.”

Adrian Rollins