Ms Catherine King (Ballarat, Australian Labor Party, Shadow Minister for Health) Share this | Hansard source

I rise to speak against the government's plan to increase the cost of medicines to all Australians that is represented by the National Health Amendment (Pharmaceutical Benefits) Bill 2014. Before the election the Prime Minister promised that he would be a Prime Minister of no surprises, a Prime Minister who would not cut health, a Prime Minister who promised that there would be no new taxes. The Prime Minister did not tell the truth when he said these things. This is a $1.3 billion hit on Australians because of it.

The bill cannot be seen in isolation. It reflects a package of bad health policy contained within the budget and it is a bill that will do a great deal of harm to the health care system in Australia as well as to the health of millions of Australians. Sadly, that is the case with all of the cuts this government is attempting to make as part of its concerted campaign to get rid of Medicare, replacing it with a privatised two-tier American style health care system.

When it comes to health care Australians are being let down by the most uncompassionate government since federation. They have been let down by the most ineffective health minister Australia has ever had. This $1.3 billion increase in the cost of medicine is but one of the changes in the recent budget that the former vice president of the Australian Medical Association, Professor Geoffrey Dobb, described as setting health care in Australia back more than 50 years. There can be no mistaking that the cuts and new taxes in this budget are the biggest assault on Medicare in more than 30 years.

I will now go into some of the bill's details. From 1 January next year the cost of a general prescription was expected to be $37.70, when factoring in the CPI increases that always occur. At the moment it is $36.90. From 1 January 2015 this government wants to increase the cost of general scripts by $5, in addition to taking the rise in the consumer price index. This will bring the cost of a general script to $42.70, which is more than a 15 per cent increase being introduced with no warning from the government and no sound reason as to why this burden should be placed on sick Australians when the money is not even going back into the PBS.

In addition to this the government wants to increase the cost of prescriptions for concessional patients—that is, patients with a Health Care Card, patients who are on a disability pension, carers, and those in the community who have the least capacity to bear this new cost and who often have the highest need to access multiple medicines. At present, concessional patients pay $6, which was expected to rise to $6.10 from 1 January 2015. Instead, the government wants to increase this cost to $6.90. Again, we are talking about people in the system who have the least capacity to pay.

Along with the changes to the PBS safety net these new taxes are expected to raise the government $1.3 billion over the next four years. That is a $1.3 billion revenue-raising measure coming out of the pockets of people managing chronic conditions, dealing with an episodic illness, and trying to prevent poor health by doing things like quitting smoking, for example. These are costs that are particularly callous, when taken with the government's plans to change the PBS safety nets, which will mean medicines are not only more expensive, but the safety nets that are in place to protect vulnerable patients are further and further away, and move further and further away with each year that these measures are in place.

Australians have relied on the PBS in some form since 1948. It is part of the post-war social compact. The scheme began providing a limited number of life-saving and disease-preventing drugs free to the community. The PBS has evolved into a much broader subsidised scheme that reflects the healthcare challenges of the 21st century—challenges such as the rise in chronic disease and the demand for medicines to treat diabetes, reduce the risk of stroke and manage hypertension. The scheme today still provides access to life-saving drugs and to disease-preventing drugs.

I want to address some of the nonsense that I know we are going to hear from the minister in his summing up and that we hear from the Prime Minister in question time—nonsense that they are using to deflect the anger in the community about this measure—and that is to attack Labor and to attack Labor's previous co-payments in PBS. They will have put it into the speaking notes, so you will hear it again and again from the parrots over there, who seem to be struggling a bit to think for themselves or their constituents when it comes to these issues.

In 1990 a $2.50 co-payment was introduced together—and this is an important point—with the pharmaceutical allowance. It was introduced in the context of substantial breakthroughs in new medicines, pressure being placed on the PBS to list these medicines and a desire by the government to allow better access to preventative medicines that, in the longer term, would keep people out of hospital. The revenue raised by the co-payment was designed to go back into the Pharmaceutical Benefits Scheme. What is very important about this is that, when it was originally introduced by a Labor government, the pharmaceutical allowance provided additional assistance to vulnerable Australians to ensure they were not adversely affected by the co-payment. We were mindful of that.

When the pharmaceutical allowance was introduced in 1990 it was $2.50 per week, the equivalent of 52 co-payments per year, which meant that a script per week was covered by the pharmaceutical allowance. Today the pharmaceutical allowance is at $6.20 and applies to eligible income support recipients, including people receiving the sickness allowance, parenting payment for singles under the age pension age, disability support pensioners under 21 with no dependent children; recipients of Abstudy, Newstart allowance, parenting payment partnered, special benefits or widow allowance; or Australians receiving the youth allowance with a temporary illness or medical condition.

It is important to understand that at the time Labor always increased the pharmaceutical allowance in line with increases to the concessional PBS co-payment. This nexus between co-payment increases and the pharmaceutical allowance increases was broken by the Howard government in 1997, when the current Prime Minister was health minister, when the PBS concessional co-payment increased to $3.20 but the pharmaceutical allowance remained at $2.70. That nexus between the co-payment and the pharmaceutical allowance was broken. In 2002 the Howard government again made changes that impacted on disadvantaged, vulnerable patients, tightening the PBS criteria so that a current Medicare card or veterans repatriation card was required to be presented to a dispensing pharmacist in order to obtain the pharmaceutical benefit.

The last time the PBS co-payment was increased in the way we are seeing today was by the Howard government in 2005. In 2005 the Howard government increased the price pensioners pay for medicines from $3.70 to $4.60—a 24 per cent increase. In addition to this, the cost of general scripts rose from $23.10 to $28.60. The pharmaceutical allowance was not increased for concessional patients or people receiving the pharmaceutical allowance at that time.

There is evidence that when these increases were introduced in 2005 pensioners' use of some essential medicines fell by as much as 11 per cent. Reports at the time suggest the biggest drops were in medicines to prevent ulcers, osteoporosis, asthma and dangerous blood clots. Research conducted by the University of Western Australia and presented in 2009 clearly demonstrates that, because of this cost increase by the Howard government, the use of proton pump inhibitors, antipsychotics, statins and antiepileptics all decreased. There is no reason to assume the same will not happen again this time. Pharmacists are already reporting that patients are asking them which of their medicines it will be safe to drop. GPs are expressing concerns that patients, as a result of these changes and the GP tax, will not fill their scripts. Not only are these new costs unprincipled and callous; they will hurt people in a disproportionate way and hurt people who are already struggling to meet their healthcare costs.

The COAG Reform Council report released in June this year found that 8.5 per cent of people given a prescription by their GP delayed or did not fill it due to cost. I note again with some concern that the COAG Reform Council is another victim of this government's cuts, ill-conceived policies and broken promises, and again there is a lack of transparency from this government in being held to account for the impact of the decisions that it is taking. The same COAG Reform Council report also found that up to 13 per cent of people in some parts of the community put off seeing a GP or do not seek medical care due to costs.

As Associate Professor Brian Owler, President of the Australian Medical Association, points out, the government wants to impose new costs at multiple points in the healthcare system, and these are excluded from the Medicare safety net. A patient who is sick and needs tests, repeated GP visits and medication during an episode of illness would face an accumulated financial burden. Overseas experience has shown that this is a significant barrier to care for people in disadvantaged groups. Doctors know that medication noncompliance, including not filling prescriptions, has serious consequences for health care. Research shows that an increase in patient share of medication costs is significantly associated with a decrease in adherence. So it is not merely the Labor Party that is warning of the impact of this callous budget. It is also a warning being sounded by Australia's most senior doctors.

Unlike the government, who has taken these decisions without any consultation with health professionals, Labor does and will listen to the experts. We accept the science. We listen to doctors, nurses, allied health workers, pharmacists, academics and health professionals, and we do take their advice. We take their advice and that is why we will not be supporting these bills.

In his second reading speech, the Minister for Health said that this $1.3 billion hit on sick Australians was necessary to ensure that the PBS grows in a sustainable way. That is simply not true, and the minister knows it. The complete nonsense of the minister's statement is that if the government's actual intention was for the PBS to be growing in a sustainable way and for this measure to be used to assist the PBS then the government would be investing this money directly back into the Pharmaceutical Benefits Scheme. It is not. Instead, the government is putting the money into the Medical Research Future Fund—but the minister refuses to guarantee the government will not shrink from or shirk its responsibilities to continue funding medical research at the same level in future through the NHMRC should it be re-elected.

The fact is that the PBS is growing in a sustainable way. In fact, recent budget updates have shown that the PBS is growing at a slower rate than it was expected to do and that it is sustainable. The government's budget papers show that. It is no accident that this has happened. It has occurred because of measures Labor took in government to make the PBS sustainable, which were measures opposed and campaigned against by those opposite. We did that without punishing patients. The PBS price disclosure reforms, overseen by Labor during two terms in government, have ensured that the PBS is sustainable and have delivered billions of dollars in savings. At the moment, the government spends around $9 billion per year on the Pharmaceutical Benefits Scheme. Accelerated price disclosure, something I know that those opposite campaigned against, has slowed the real rate of PBS growth and put the PBS on a sustainable footing.

In Labor's last budget, these were changes that were expected to deliver more than $1.8 billion in savings. Taking the package announced in 2007 to 2017-18, the savings are closer to $20 billion. These are savings that this government should be using to ensure that the new drugs of the future and life-saving drugs—for example, Kalydeco—are listed as quickly as possible once they have been recommended by the Pharmaceutical Benefits Advisory Committee. But that is not what we are seeing from this government. Consistent with its approach to governing so far, especially when it comes to health, this government is saying to patients, 'You pay more. That's what we want you to do.' This is regardless of their capacity to pay and whether they are a pensioner, a student or someone on a very low income with a number of dependent children. This government simply does not care—it has no compassion. Because it has no compassion, it is saying, 'You pay for these things. You pay for your own health care.' That is what it is doing in these budget measures.

In government, Labor did use the savings delivered through the PBS reforms to ensure that new drugs were listed on the PBS as soon as they were recommended by PBAC. We did so without gutting Medicare and without forcing Australians who could not afford it to pay for more for their medicines. Labor cannot support this inequitable bill, particularly when it is taken with the government's plans to change the PBS safety nets. What this government is trying to do with this bill is consistent with what it is trying to do across the health system. It picks Medicare apart at the seams and seeks to privatise health care in Australia, creating a two-tiered American-style health system and transferring more and more costs directly onto patients.

If this government had any compassion, it would at least consider exempting the most vulnerable Australians from some of its harshest measures, but it will not even consider that. At present, the PBS safety net threshold for general patients is at $1,421. Once the PBS safety net is reached, general patients only pay $6 for each prescription. For concessional patients, the PBS safety net is $360. Concessional patients pay no additional out-of-pocket costs for medicines once the safety net is reached. PBS safety net family arrangements also apply, whereby a family can combine PBS amounts, which can mean that at present families meet the safety net much sooner. For the PBS safety net's purposes, a family comprises a couple legally married and not separated, a couple in a de facto relationship, with or without dependent children, or a single person with dependent children. This bill proposes to increase the PBS safety net by 10 per cent plus annual CPI indexation on 1 January each year from 2015 to 2018. From 1 January 2019, the government states that only CPI indexation will apply. But it is fair to be sceptical of the government's promise here when it has broken every single promise it made when it comes to health care.

In addition to increasing the PBS safety net for general patients, this bill proposes to increase the PBS safety net for concessional patients. The bill proposes to increase the concessional PBS safety net by two prescriptions each year from 1 January 2015 to 2018, making it harder and harder for patients to reach that safety net. That means not only that medicine becomes more expensive for the most vulnerable who are at their most vulnerable—because that is what the safety net is in fact there for, to protect Australians who are in very vulnerable situations, who have expensive medications and who are often on multiple medications—but also that the safety net is going to get further and further away and more difficult for them to ever reach.

This is particularly troubling when taken with the evidence from the COAG Reform Council last month that, as I have said, 8.5 per cent of people given a prescription by their GP delayed or did not fill that script due to cost. It is worth considering the circumstances that a pensioner faces because of this bill, particularly in the context of other cuts within the budget and other taxes and impositions that this government proposes. In addition to paying $6.90 for every script, which is a 15 per cent increase over the current cost, pensioners and other Australians with a health-care card will need to find the money for 62 prescriptions before they reach the safety net. That is $427.80 in any one year and it will continue to go up and up, well beyond the rate of inflation every year. By 2018, pensioners and other Australians with a health-care card will need to fill 68 prescriptions before they reach the safety net. In addition to these changes, the government wants some of the most vulnerable Australians to pay a $7 tax every time they go to the doctor to get the script in the first place.

This measure is not means tested. It applies to every Australian and is only capped at 10 visits for some patients. For a single parent with three children, this new tax would be applied 40 times before the cap is reached. For a pensioner couple, it would be applied 20 times before the cap is reached. That is 20 times per year—not 20 times and then you are done; it is 20 times per year that you have to reach that cap. That will mean that pensioners, who are almost all bulk-billed for every visit at present, will be paying at least $7 for every doctor visit up to 10 visits, plus, by 2018, more than 15 per cent more, increasing each year up to 68 scripts before the safety net is reached.

And what of a pensioner or young family who ends up in hospital? We know, of course, from a study from the University of Sydney that the people who will be most adversely affected by these changes are young families and those who are over 65. If people do find themselves in hospital they will find fewer beds and fewer services available, because the Prime Minister is cutting—it is in their own budget papers—more than $50 billion out of the public hospital system. That is the equivalent of cutting one in two hospital beds, one in five doctors and one in three nurses. It is the lowest share of Commonwealth funding for hospitals since the Commonwealth started funding hospitals after World War II.

Such is the absolute arrogance of this government and the Prime Minister and the Minister for Health that they are already advertising that this measure is in place. The Department of Human Services website states:

From 1 January 2015 the Pharmaceutical Benefits Scheme (PBS) co-payment and Safety Net threshold amounts will increase …

There is no caveat, no disclosure that there is in fact this thing called a parliament and this other part of the parliament—not a chamber that I am in—called the Senate and that the measure is required to pass through both of these chambers. The government arrogantly has allowed its own departmental website to state that this measure is already done and dusted, when it knows that it has to negotiate this with the crossbenchers, has to negotiate this with other political parties, some of whom have already indicated that they will not support this proposal. What absolute arrogance from this government, blithely out there saying, with no caveat at all, that this measure will be put in place.

It is the same arrogance the government demonstrated—adding unnecessary angst to those already worried about paying for doctor visits—by announcing on the Medicare hotline that the GP tax would be in place from 1 July 2015. Offices across the country were inundated with people who got that message on the Medicare hotline, and it was left to many of us to reassure people that we would be blocking that measure and that the government had no right to put that on the Medicare website without the caveat that in fact the measure was required to be debated by the parliament.

It is worth also taking some time to look at where this money is going. It is not going back into health care. It is an absolute and utter nonsense if the government is trying to argue that it is. The $1.3 billion the government wants to take from some of the sickest and poorest patients in this country is to go towards the Medical Research Future Fund. We support medical research. We did so in government, and many of the new facilities that are right across the country—millions of dollars to actually allow medical research facilities to have the state-of-the-art labs, state-of-the-art conferencing facilities, capacity to work across sectors with universities, with public hospitals and private hospitals, to do research has come about because of substantial investments that Labor made in medical research facilities. I have visited many of them, and they are fantastic facilities. We are seeing for the first time a substantial increase in the collaborative work that is being done across those sectors in research. So, we support medical research. We supported it in government through record levels of investment in medical research infrastructure and medical research funding, and we especially funded the infrastructure that supports medical research.

To be successful, medical research needs the support not just of those within the healthcare research community and within the health research community or the medical research community or clinicians. It also needs the support of mathematicians, administrators and physicists. The government does not support that role and has cut some $420 million from science programs as well as $80 million from Cooperative Research Centres, six of which are in the health area—from autism to hearing to a range of other really important research initiatives in health. That work is really designed around translational research and getting that research directly into clinical care, how patients experience and actually have better health outcomes.

If a standalone medical research fund to support medical research is to be established it needs to be done properly, and it should never be done on the back of sick people. How uncompassionate can you be that you think it is appropriate to pit sectors of the health system against each other, to pit doctors and people who are caring for sick patients against the medical research community in terms of financing medical research? And how on earth can you think it is a compassionate measure to make, that you would actually think you could do it off the back of sick people?

The government keeps saying over and over again that this is really important to finding a cure for Alzheimer's. I have a particular personal interest in that space. The reason people get diagnosed is that they go to a GP. You are putting a barrier in the way of people accessing a GP to get the diagnosis they need to access the care they need. You do not do that in order to fund medical research. It is bad policy, and it is wrong policy. It is completely wrong policy, and the government should step away from it. If it wants to fund medical research properly it should have a conversation with us about how we do that. The significant report that was undertaken had some hints about that. It did not say you do it off the back of sick people. It did not tell you to do it off the back of sick people and people who are trying to access medicines. It is just plain wrong.

I want to talk a little bit more about the safety net and some of the current concerns from consumer groups. In March this year, for example, the Consumer Health Forum released its report into out-of-pocket expenses, Empty pockets. The Consumer Health Forum represents the interests of Australian health consumers. Its report found:

Increased up-front payments would also present an additional access barrier for people who may have adequate incomes but are experiencing cash-flow problems. Given that periods of illness often coincide with reduced earning capacity and other additional expenses, high upfront costs for unexpected illnesses can impact adversely on people, even when rebates are provided at a later stage. This can lead to people delaying or failing to access the care they need, resulting in the development of more serious health problems (which are often more costly overall to the community).

The Consumer Health Forum report survey found:16 per cent of Australians surveyed reported delaying access to treatment due to cost issues; 29 per cent of Australians reported not accessing dental care in the past year due to cost; 20 per cent of Australians with a chronic condition reported not filling a prescription in the past year due to cost issues; 21 per cent of Australians with a chronic condition reported delaying or avoiding seeking medical treatment due to cost issues; 25 per cent of Australians with a chronic condition reported not having a recommended test or follow-up treatment due to cost issues; and overall 36 per cent of Australians with a chronic condition reported experiencing a cost barrier to care in the past year.

Any changes to the PBS have to be done with the interests of protecting vulnerable Australians in mind and this bill simply does not do that, particularly in the context of all the other cuts and new taxes proposed by this government. If the government was serious about making the PBS sustainable, the $1.3 billion the government hopes to take from sick patients through this bill would, of course, be going back into health care, but it is not. And if the government were serious about making the PBS and the health system more sustainable, it would not be making callous and inequitable changes that are going to cost the health system more in the long run. The government has not considered what the implications of people not complying with their medicinal regime will be or what the cost will be when patients end up in hospital because they could not afford to see their GP and could not afford to fill the prescriptions provided by their doctor.

As I have already outlined, Labor did make changes to the PBS in government to ensure its sustainability. These changes were necessary because there is a pipeline of new drugs that will be coming before PBAC, many of which are likely to be recommended by PBAC, and, after that point should they cost the government more than $20 million per year, the government will make a decision about how they are funded. Very important drugs are coming down the pipeline and that it why Labor moved to ensure that the PBS was sustainable.

This bill does increase the cost of medicines for all Australians. It impacts on the most vulnerable in our system and it is part of the government's efforts to dismantle universal health care as we know it. It represents the government's decision to transfer costs onto every Australian for their health care. It represents higher costs of living for every single Australian, whether they are low-income, middle-income or the most vulnerable in our community. Australians are being let down by those opposite when it comes to our healthcare system. Increasing the cost of medicines, while at the same time charging people a $7 dollar tax every time they visit the doctor and slashing funding to our hospital system, is not the way you reform our healthcare system.

Not only are those opposite making medicines more expensive, they are putting the safety net further out of reach. It is lazy policy. It is just another broken promise from a government who wants to rip Medicare apart at the seams. Labor will not support changes that price Australians out of health care. We will not support this government's unfair slug on sick Australians. We will not support this bill, but we will stand up to the Prime Minister's attack on the most fundamental system we have in this country, and that is the universal system that is Medicare.

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