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Health spending in frame as beancounters let loose

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Health bureaucrats and agencies are set to come under scrutiny from the Federal Government’s Commission of Audit as it searches for ways to cut back on Commonwealth spending.

While Prime Minister Tony Abbott has promised there will be no overall cuts to the $64 billion health budget, the Commission – headed by Business Council of Australia President Tony Shepherd – is expected to hone in on what it sees as duplication in the administration of health care, with agencies such as the Australian National Preventive Health Agency, the National Health Performance Agency and the Australian Institute of Health and Welfare expected to be in the frame.

If the Audit is sufficiently ambitious, it is likely to also closely examine the role played by the Commonwealth in delivering health care.

In its terms of reference, it has been asked to uncover “areas or programs where Commonwealth involvement is inappropriate”. Combined with the Prime Minister’s assurance that “nothing is off limits”, it opens the way for a thorough dissection of the role the Federal Government plays in the health system.

The Labor Government instituted a series of reforms intended to bring national consistency to the cost of health services by introducing activity based funding. This was supported by a number of agencies setting and affirming quality standards and measuring the delivery of health services.

Health Minister Peter Dutton has said he backs the activity based funding system and values the collection of accurate health care data, raising questions about the extent to which the Commission of Audit can identify areas of duplication that can be axed without compromising the shift toward a uniform national system of funding.

The AMA has already nominated one area – the PBS authority prescription system – where it thinks significant savings can be made.

The Abbott Government’s commitment to sustaining the overall level of health funding has been leant credence by a number of recent announcements that have involved the disbursement of significant funds, including adding 50 new and upgraded medicines to the PBS, streamlining the approvals process for listing medicines on the PBS, and unveiling medical research grants worth more than $500 million.

Adrian Rollins