Issue 1 / 16 January 2012

THE former director of the Professional Services Review has described Medicare as dysfunctional and called for a comprehensive review of health care delivery and funding in Australia.

In a wide-ranging opinion piece in the MJA, Dr Tony Webber, director of the PSR until August last year, estimated that up to $3 billion was spent inappropriately each year through misuse of the Medicare Benefits Schedule (MBS), the Pharmaceutical Benefits Scheme and the Medicare Safety Net. (1)

Dr Webber was particularly critical of general practice management plans and team care arrangements, saying they had “created opportunities for a bonanza for some practices”.

“Several practices I have reported on have admitted that their corporate owner had a business plan based on a defined number of these items claimed every week, irrespective of clinical need”, he wrote.

Dr Webber had told a recent senate inquiry that he would like the PSR to have a greater role in investigating corporate medicine. (2)

“I can certainly see PSR — and this may be somewhat controversial — having an own-motion ability to investigate scams and unacceptable corporate behaviour, of which I have seen significant examples”, he told the inquiry.

In the MJA article Dr Webber described the Medicare Safety Net as “one of the most poorly thought out pieces of health legislation”, saying it offered opportunities for exploitation by unscrupulous doctors.

Dr Webber told MJA InSight he repeatedly raised many of these concerns with the Department of Health and Ageing when he was director of the PSR but nothing changed.

“It was frustrating. The department would tell you that changes to chronic disease management were underway but nothing ever seemed to happen”, he said.

A spokeswoman for the Department of Health and Ageing said the government had introduced upper limits on benefits paid for certain items under the Medicare Safety Net following a review that identified these items as areas where doctors were using the safety net to raise fees.

However, she said that it would be inappropriate and misleading to extrapolate the practise of the few practitioners seen by the PSR to the entire medical community.

Dr Webber agreed most practitioners practised appropriately, and he had tried to draw doctors’ attention to the problems that existed, such as through medical media.

He called for a major review of health care delivery, saying Australia’s health system had changed substantially since Medicare was introduced.

“A bit like the Deeble review that brought in the original Medibank in 1973, that is the scale of reform that is needed … the whole fee-for-service in private practice needs to be reconsidered, the perverse incentives in the system need to be done away with. The Commonwealth–state divide within health care is dysfunctional at many levels”, he told MJA InSight.

However, AMA president Dr Steve Hambleton said many of the issues Dr Webber raised in the MJA article were audit issues rather than policy matters.  For instance, Dr Hambleton said the move towards structured chronic disease management was positive and achieved beneficial health outcomes for many patients.

“The great majority of doctors do the right thing. You can’t design a system to stop 2% of people misappropriating stuff — but you do need a system which will allow those people to be called to account”, he said.

Dr Hambleton said feedback from the PSR to the profession and the department about any structural problems within the health system could be strengthened.

In another article in the same issue of the MJA, Dr Scott Masters, a GP and senior lecturer in the school of medicine at the University of Queensland, said that Medicare and the PSR give little guidance to GPs on the approved use of MBS item numbers. (3)

Dr Masters, who was audited three times by Medicare Australia, said the PSR was heavy-handed and focused too much on investigating statistical outliers, with fines often running into five or six figures.

Health journalist Ray Moynihan, in the same issue of the MJA, said health authorities had so far found no meaningful mechanism to police the corporate medicine sector. He said it was time to assess “how well the private-for-profit corporate structure sits with the spirit of a publicly funded universal health insurance scheme”. (4)

– Sophie McNamara

1. MJA 2012; 196; 18-19
2. Commonwealth of Australia 2011; Professional Services Review scheme (Hansard) 22 September
3. MJA 2012; 196; 20-21
4. MJA 2012; 196; 15

Posted 16 January 2012

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11 thoughts on “Billions wasted says ex-PSR chief

  1. John Stokes says:

    Tony Webber is spot on particularly about the nearly 100% of states and public hospitals misusing the Medicare system by billing public as well as private patients for outpatients, radiology, pathology and other services. This double dipping and cost shifting has been going on for years and many specialists cooperate and profit from it. The federal department, the AMA and many others know about this but choose to keep quiet for whatever reasons. What the GPs may do is minimal compared to the corporate and specialist misuse of the Medicare system. I agree it is time for an investigation and exposure of the funding anomalies.

  2. Concerned Doctor (and taxpaying citizen) says:

    Incentive payments lend themselves to abuse, but then the actual Medicare payments, particularly for GP consultations are extremely parsimonious, and there is a great disincentive for GPs to spend more time with their patients. (Witness that poor lady in NSW who keeps on getting flogged because although she only sees about 3000 patients a year, her average consultation length is considered way above the “Medicare average”.)
    However, the biggest unnecessary cost in Medicare is the huge bureaucracy that needs to be supported and paid for over and above the cost of any medical care provided. Australia also has the highest rate of “worried well” in the world – the patients who don’t really have anything wrong with them but feel like a day off work and getting various innocent lumps, bumps and symptoms checked out. Would these people not think twice about wasting their GP’s time if they were paying for the consultation themselves?
    Of course, when there is nothing obviously wrong with the patient, the poor GP then has to investigate to make sure they really aren’t missing anything, and so a slew of unnecessary blood and radiological investigations ensues.
    What is really the greatest waste of Medicare funds in order of total cost? – a few unscrupulous doctors who are prepared to use the rules (set up by Medicare itself) to their advantage, or the huge bureaucratic mess that swallows huge amounts of funding and spews out very little real benefit.

  3. Dr Horst Herb says:

    While Webber might be spot on with regards to a few isolated issues, he totally misses the bigger picture.
    1) there is compelling evidence that public health systems where cost is no barrier to access necessary health care perform far better in terms of cost as well as outcome compared to private systems
    2) the main issue with the Australian health system is the discriminatory micro-management of doctors by health bureaucrats, eg, through the MBS schedule. It stands to reason that more bureaucracy, more regulations, and more micro-management will not solve but further exacerbate the problem.

  4. John (GP-anaesthetist) says:

    The misuse of incentive payments is not limited to “corporate” practices. There is demonstrable misuse across medical practice including Aboriginal Health Services. In addition, where doctors are paid for each transaction, complex incentives schemes and expensive medicine will result. There is little reason why ALL doctors should not be paid an adequate salary commensurate with their expertise and training, according to their scope of service and proficiency.

  5. David Freeman says:

    Surprise surprise! Medicare is being rorted! Bulk billing constitutes an open invitation to the unscrupulous. Want more money? Add a few items to the vouchers. As simple as that.

  6. Jan says:

    Perhaps Medicare should audit the large super clinics re their billing practices. With patients saying they have 5 minute consults item 3 should be the most used item number not 23. This may represent quite a saving. Obviously patients have to use these facilities as smaller clinics cannot stay open 24/7, but if one of our patients goes in an emergency situation I would query how they can bill CDM item numbers.

  7. Chris Cantor says:

    Incentives are the way to corrupt medicine and one only needs to look to the UK for results. Why do we insist on copying other nations’ disasters? Also why did Medicare ever allow middle men and the corporatisation of general practice? Some years back one bulk billing practice would try and block myself as a specialist from discussing cases with their GPs until I put my foot down – no item number of course. I wonder if others have had this experience?

  8. Sue Ieraci says:

    The reality of national health systems around the world is that only the nationalised systems provide any semblance of equity of access to the entire population (remote and indigenous populations being the exceptions). In the US, it is possible for a middle class family to become bankrupt on the basis of health care bills. None of us in Australia faces that type of risk. None of us has to remain in a particular place of employment on the basis of the health insurance offered. True, not all incentive payments are fully effective, and some corporate practices make maximum use of the income – just like all areas of life. Not time yet, in my veiw, to throw Medicare out with the bathwater.

  9. disillusioned says:

    General practice is not the only field of medicine having a fine old time with the Medicare public purse. Perhaps we should look closely at the indications for, and outcomes of operations like arthroscopy (of any joint); also treatment of BCCs, for which excision with flap or graft is more likely to help pay the kids’ private school fees than simply writing a prescription. I am becoming increasingly convinced that too many Australian doctors practice Medicare-based rather than evidence-based medicine.

  10. Ray T says:

    Sue Ieraci, I agree the NHS is more equitable, but that may be at the cost to all in rationing good health care.

    I recall an article in the Spectator in February 2008 written by a journalist who discovered his mother, when she was diagnosed as having bowel CA in the UK, had only a 30% 5-year survival prospect while those diagnosed in the US averaged a 70% likelihood. He researched the reason and concluded it was due to earlier diagnosis by the earlier use of CT and MRI scanning in the US. NHS regulations in the UK restrict the use of such scans until “X-ray showed signs that warranted the extra expenditure”.

  11. Sue Ieraci says:

    Ray T – that may well be true in that single area. To assess the cost-effectiveness of an entire health system would require a much wider-based view however – for example, maternal and child health, diabetes care, and so much more. It is clear, for example, that Australian women have much better access to good basic maternity care than their US counterparts.

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