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Government sent back to the drawing board on co-payment

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Any move by the Federal Government to scrap bulk billing incentives as a way to gouge more money out of the health budget has been condemned by AMA President Associate Professor Brian Owler as a “direct attack on the most vulnerable”.

There is speculation the Government is looking to strike a deal with the Palmer United Party to axe Medicare bulk billing incentives as its scrabbles for health savings after admitting defeat and dumping its widely-condemned $7 Medicare co-payment plan last week.

But in a pre-emptive strike, A/Professor Owler publicly called on Health Minister Peter Dutton and PUP leader Clive Palmer to rule out any such deal, and instead engage in considered and well-informed discussion on health policy.

“Scrapping bulk billing incentives would be a direct attack on the most vulnerable people in our communities,” the AMA President said. “It would be a direct attack on children, on the poorest people in our communities, and it would be a direct attack on Indigenous health. That sort of proposal must be ruled out.”

Currently, patients with a concession card or who are younger than 16 years attract a bulk billing of $6.25 in metropolitan areas, and $9.25 in the bush, when they see their GP. For pathology and diagnostic imaging services, the incentive is worth $6 in the city and $9.10 elsewhere.

With more than 82 per cent of GP services bulk billed, and almost 90 per cent of pathology services, it is estimated scrapping the incentive would save the Government at least $632 million a year, though it would mean children and concession card holders would face increased financial barriers in accessing health services.

A/Professor Owler made his call following an extraordinary two weeks in health policy dominated by contradiction, confusion and discontent within the Government’s own ranks about the contentious co-payment policy.

Confusion arose when the Prime Minister’s Office briefed journalists that the Government was dumping the $7 co-payment, only to have this directly contradicted by Treasurer Joe Hockey and Mr Dutton, who insisted the proposal remained very much Government policy.

The incident fed rumours of deepening divides within the senior ranks of the Government and brought incipient discontent among the ministers and Government backbenchers over the way the Prime Minister’s office operated closer to the surface.

The sense of Government disarray deepened last week when it failed to win Senate support for its signature proposal to deregulate university fees.

In the wake of the humiliating defeat, Mr Dutton surrendered his ambitions to introduce the $7 co-payment and admitted the Government would have to substantially recast its health policy.

“It’s clear that there’s not support in the Senate for the current version of the co-payment that we put forward in May’s Budget,” the Health Minister told reporters. “But we continue discussions with the Senators, and we are confident that they will arrive at a compromise position which will help make Medicare sustainable.”
Asked to confirm that the co-payment, in its original form, was dead, the Minister said that, “Well in its current form it is clear that the co-payment doesn’t have the numbers in the Senate. But we have negotiations in train with the independent Senators, and I believe that we can arrive at a compromised position.

“But I’m not going to publicly canvass those options and those discussions.”

The uncertainty is fuelling concerns that the Government will, either through negotiations with cross-bench senators or by regulation, make changes to Medicare that will hurt patients and rip money out of the health system.

“We saw last week the discussions around the co-payment,” A/Professor Owler said. “Is it dead? Is it alive? Is it just resting? What I’m very concerned about is reports that there was a deal done between the Government and Clive Palmer to actually scrap bulk billing incentives.”


“Clearly, the Government is deeply divided on what is a poorly designed policy measure, which affects general practice, pathology and radiology services,” the AMA President said.

He said the AMA had developed an alternative proposal for a $6.15 co-payment backed by protections and safeguards for the most vulnerable so that only those who could afford it would be required to pay, and “I have advised the Government that I remain willing to talk to them about that proposal or other options that provide support for vulnerable patients, and that invests in general practices”.

As part of its campaign against the Government’s co-payment model, the AMA has urged its members to visit the Doctors4Health website (http://doctors4health.com.au/), which they can use to send a message to their local MP expressing their concerns about the co-payment.

As of late last work, more than 4000 messages had been sent to MPs as part of the campaign.

The AMA President said it was time for the Government to ditch its fiscally-driven approach to health policy and turn the discussion to policies that would improve health and the long-term sustainability of the health system.

“We need to have a much clearer discussion about health policy in this country,” he said. “We need to stop talking about co-payments and go back to the drawing board, and start from scratch, and have a proper discussion about how we’re actually going to engage in prevention, chronic disease management, and how we’re going to keep the Australian community healthy.”

University fee deregulation

While the future direction of health policy remains very uncertain, the prospects for aspiring medical students are a little clearer after the Government’s proposal to deregulate university fees was rejected by the Senate.

The AMA had warned the policy could push the cost of a medical degree up to $250,000, potentially deterring many students who had the ability but not the financial resources to take on such a hefty debt.

After losing the Senate vote, Education Minister Christopher Pyne made amendments including reducing the interest on accumulated debt from the government bond rate to the consumer price index and stipulating that domestic students must face lower fees than their overseas counterparts.

But the PUP senators and independent Senator Jacqui Lambie, who were instrumental in having the original legislation voted down, indicated that they remained opposed to the legislation despite the amendments, giving the Government little hope of securing its passage.

Medical Research Future Fund

The apparent abandonment by the Government of its $7 co-payment plan has sparked concerns about the $20 billion Medical Research Future Fund.

But A/Professor Owler said this was a furphy because the money raised from the $7 co-payment was never going to go to the Fund.

Instead, under the Government’s model, the $3.5 billion that would flow into the Fund’s coffers was to have come from the $5 cut to Medicare rebates that was a central part of the co-payment model.

“The co-payment does not actually fund the Medical Research Future Fun,” the AMA President said. “What funds the Medical Research Future Fund is actually a cut to the Medicare rebate of five dollars. That is the cut that actually provides $3.5 billion over four years, about five billion or so over the six years.”

A/Professor Owler said the AMA supported the MRFF, but not the way it was to be partly funded by “taking money out of the pockets of patients going to the doctor in primary health care and putting it into tertiary-level research”.

Adrian Rollins