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Budget 2018: who are the winners in health?


The federal budget was a mixed bag for the health sector, but it delivered significant wins for aged care, rural health and medical research.

Treasurer Scott Morrison announced $1.6 billion over four years to allow 14,000 more elderly Australians to continue living in their home with extra in-home care places. This follows the 6,000 extra places already announced in December. However, given that there are more than 100,000 people on the waiting list for in-home care, the new places are “welcome, but are a drop in the ocean”, according to Associate Professor Helen Dickinson of the Public Research Group at UNSW.

Morrison also announced a $146 million plan to improve access to aged care service in rural areas and $83 million to support mental health services in residential care.

Meanwhile, an $83.3 million rural health strategy aims to place more doctors and healthcare professionals in rural areas, and includes a project to train an extra 100 GPs for work in rural areas.

The other big winner in terms of funding is medical research. The government has allocated $1.3 billion over ten years for a National Health and Medical Industry Growth Plan, including $500 for genomics research.

Here are some other health takeaways from the 2018 Budget:

  • No rise in the Medicare levy

An $8 billion rise in the Medicare levy to fund the NDIS had been originally pencilled in, but Scott Morrison backed away from the plan last month.

  • Fewer IMGs allowed to work in Australia

The government will allow 200 fewer international medical graduates into the country than previously planned, capping the yearly intake at 2,100 new IMGs. The government says this will save money, as Australian junior doctors who will take the place of the IMGs are paid at a lower rate.

IMGs will also be hit by a reduction in MBS fees paid to them, in order to fund a network of new rural medical schools in the Murray-Darling basin.

  • Extra money for PBS listings

The government is providing an additional $2.4 billion for new PBS listings and there will also be several new Medicare rebate numbers. These include a $400 rebate for prostate MRI, which urologists have been calling for for some time. There will also be a $114 rebate for 3D breast cancer scans. Around $700 million has been budgeted for the breast cancer drug ribociclib and the spinal muscular atrophy treatment nusinersen will also be subsidised for the first time.

On the other hand, there will no longer be rebates for MRI knee scans for patients over 55, for some sleep studies, or for spinal fusion to treat chronic low back pain.

  • Extra money for WA hospitals

Western Australian hospitals will get a $180 million funding boost, which will be directed to the Joondalup health campus, an expansion for the Osborne Park Hospital and the refurbishment of Royal Perth Hospital.

But there will be no new money for public hospitals in other states.

  • Free whooping cough vaccines for mums

The pertussis vaccine will be added to the National Immunisation Schedule for all expectant mothers, a measure expected to cost around $40 million.

  • Funds for Flying Doctors mental health outreach

The government will provide $84 million in funding to provide mental health nurses for remote and rural areas.

  • New funds for rare diseases

An extra $240 million will be allocated for clinical trials for rare cancers, rare diseases and diseases with unmet needs.

  • Measures to encourage use of generic drugs

New prescription software will enable prescribing of generics by default, with doctors having to manually override the system if they want to prescribe a branded drug. The measure is expected to shave $335 million from the budget.

What the budget means for healthcare

Medical bodies have lined up to welcome new health measures announced in the 2017 budget this week, as the government seems determined to put its “Mediscare” problems behind it.

AMA President Michael Gannon said that with the new measures, notably the lifting of the freeze on Medicare patient rebates, the government has begun to win back the goodwill it lost with its disastrous 2014 health budget.

“Lifting the Medicare rebate freeze is overdue, but we welcome it,” Dr Gannon said.

Much the same message came from the RACGP, which described the lifting of the freeze as “the first step towards a commitment to reinvesting in preventative health”.

RACGP President Dr Bastian Seidel said the college was also pleased that the Medicare Benefits Review had been extended and that the government was committing to funding practice-based research networks.

The RACP also fell into line, welcoming the end of the rebate freeze as “a good outcome for the Australian health system as it will better support patients in accessing the care they need”.

The government has said it will be spending an extra $1billion on health in the next financial year compared with the previous one. Below are some of the key changes related to healthcare announced on Tuesday:

Medicare Rebate unfrozen

The government has announced an end to the freeze on indexing Medicare rebates, but it will be done slowly and in stages.

The rebate will be indexed from July 2018 for GP consultations and specialist attendances, and then from July 2019 for specialist procedures and allied health services. Payments for diagnostic imaging services will be indexed from July 2020 for the first time in 16 years.

These measures have been costed at around $1 billion over four years.

Medicare levy raised

Medicare levy will be increased by 0.5% to 2.5%, in a measure that should raise $8.3 billion for the government over four years. Low-income earners will continue to be exempt, with the threshold for the levy raised to incomes of $21,655 and over.

Medicare Guarantee Fund to be set up

The government will legislate for a Medicare Guarantee Fund to ensure funding for Medicare rebates and the PBS. Proceeds from the 0.5% increase in the Medicare levy will be paid into the fund, once NDIS funding costs are deducted. Some income tax revenue will also be diverted into the fund.

Cheaper medicines on the PBS

An overhaul of the Pharmaceutical Benefits Scheme will make an extra $1.2 billion available for new medicines, the government has said.

It said it has reached agreements with Medicines Australia, the Pharmacy Guild and Generic and Biosimilar Medicines Australia to bring down costs of some medicines.

This would include drugs such Entresto (Sacubitril/Valsartan) for chronic heart failure, which will now be PBS listed at a cost of $515 million.

A five-year agreement with Medicines Australia will also boost prescribing of generics and biosimilars, with savings of $1.3 billion.

More money for mental health

Mental health is a big winner in the budget, with the government committing to a range of mental health and preventive health services and strategies.

This includes $80 million for services to people with severe mental illness but who don’t qualify for NDIS or who haven’t yet transitioned to it. It will cover people with severe eating disorders, schizophrenia and severe post-natal depression.

And it also includes $9.1 million to improve access to psychologists for people in remote and rural areas via telehealth services.

Suicide prevention gets $11.1 million, with a particular focus on locations with high suicide rates. That includes money to build fences, barriers and lighting at notorious suicide spots, plus extra funding for Lifeline.

There’s also $15 million over two years for research into mental health, including funding for the Black Dog and Thompson Institutes.


Commonwealth funding to states and territories for hospitals is set to increase by $2.8 billion, including $736 million for hospital services in Tasmania.