Russell Broadbent (McMillan, Liberal Party) Share this | Hansard source

I disagree with the previous speaker's assessment of this bill. The Health Insurance Amendment (Safety Net) Bill 2015 replaces all of the existing Medicare safety net arrangements with a new Medicare safety net. Existing Medicare safety net arrangements include the extended Medicare safety net, the original Medicare safety net and the greatest permissible gap. This is confusing for patients and makes it almost impossible for them to calculate their rebate. However, our whole health system forms a part of the egalitarian nature of this country. These are important reforms so that we can have a sustainable health system for the generations ahead. These changes are important for the sustainability of Medicare. Eighty thousand more people will gain a benefit from the changes in this legislation. The new Medicare safety net is an important structural reform to the Medicare arrangements, addressing known issues, including perverse incentives for medical fee inflation, rigid rules which disadvantage families and poor access for non-concessional single people on low incomes. The current safety net, with three overlapping arrangements and inconsistent benefit caps, are complex and confusing for patients and practitioners.

Two independent reviews showed the extended Medicare safety net, the EMSN, to be structurally flawed. The 2009 review identified that this had led to rapid fee inflation in some Medicare benefit schedules, with considerable leakage of government benefits towards providers' incomes rather than reduced costs for patients. It also highlighted that around 55 per cent of these benefits were going to the top 20 per cent of Australia's most socioeconomically advantaged, with the 20 per cent least advantaged receiving less than 3.5 per cent. The 2011 review showed that capping led to a reduction in safety net expenditure and that this was relatively greater in wealthier areas and major cities.

The current EMSN is regressive, with benefits flowing to patients in higher socioeconomic areas where doctors are choosing to charge higher fees. The EMSN was originally designed to assist patients with high out-of-pocket costs, with safety net benefits intended for the patient. However, the current system threshold and benefit arrangements have facilitated higher charges in specific areas by providing incentives for fee inflation and the shifting of out-of-pocket costs to services that are not EMSN capped—for example, some providers for some services charge a single, high fee for the initial service, and, once the patient has qualified for the EMSN, the patient then receives uncapped reimbursement on the basis of what the provider charges. The introduction of caps across all MBS items is expected to have a moderating effect on these charges.

The member for Wills spoke about oncology, and I will now address that. Based on the current charging behaviour, it is estimated that an additional 1,000 people will receive safety net benefits under the arrangements due to lower thresholds, 800 of whom will be concession card holders. Around 70 per cent of radiation oncology services are bulk-billed, and more than 80 per cent of all services are charged at the scheduled fee or less. This means that a large proportion of patients experience no, or low, out-of-pocket costs for their treatment. The new Medicare safety net is not expected to lead to any reduction in patient care, and a significant proportion of families and individuals who incur out-of-pocket costs for radiation oncology will qualify for the safety net sooner because of the reduced thresholds.

The costs that patients incur for private radiation oncology will depend on the fees charged by the private providers, which include private equity investors that have recently entered the market. About 40 per cent of all radiation oncology services are from private providers. Data shows that between 2004 and 2013 average fees for private radiation oncology patients grew steadily at around 5.2 per cent per annum. From the fourth quarter of 2013 to the fourth quarter of 2014, the average fee for non-bulk-billed services increased by 22.9 per cent. In 2014 the EMSN expenditure for radiation oncology increased by more than 48 per cent—driven by fees, not service volumes. Similar fee inflation was seen in obstetrics and IVF prior to capping of those services in 2010. If charging practices do not change for a standard course of 20 radiotherapy treatments, a patient would see almost no change in their out-of-pocket expenses under the new Medicare safety net arrangements. There have been claims that out-of-pocket costs may triple, but in order for this to happen private providers would have to charge around 2½ times the scheduled fee for a course of treatment.

Most of my constituents would be concerned about how these changes will affect their GP visits, so I will address that as well. The changes will not reduce access to GP primary care. Safety net benefits currently only account for around one per cent of total benefits paid for GP services, as a high proportion of people are bulk-billed. The bulk-billing rate for concession card holders is 91.3 per cent. This means that these people do not have out-of-pocket costs for these services at the moment and will, therefore, be unlikely to be affected by these changes. Most people do not receive safety net benefits for GP services, and those that do are generally from areas where higher fees are charged, such as in higher socioeconomic areas. The lower thresholds under the new arrangements may mean that more people will receive safety net benefits for these services.

The bottom line, from my point of view, is this: these changes will make a difference to how we manage our Medicare program into the future. The current arrangements, which are complex and difficult for both medical professionals and patients to understand, have failed to completely address problems with the program. Some people reach the threshold almost immediately each year due to the unlimited amount of out-of-pocket costs that can be accumulated up to a threshold, and this has provided no further signals to providers about fee restraint. The new Medicare safety net has been carefully designed to respond to issues raised by two independent reviews, which I mentioned before, stakeholders and the public about the impact of provider charging behaviour and out-of-pocket costs faced by singles and families.

The new Medicare safety net will continue to provide an additional benefit to families and singles for out-of-hospital Medicare services once an annual threshold has been reached. The structure of the new Medicare safety net will be more progressive. The thresholds for people without concessions cards will be reduced from $2,000 to $700 for singles and $1,000 for families and from $638.40 to $400 for concession card holders. It is expected that more than 53,000 additional people will receive a safety net benefit under the new arrangements. In particular, 80,500 more concession card holders will receive benefits than under the current arrangements, while the number of non-concessional people receiving benefits will decrease by 27,500.

Unlike the extended Medicare safety net, the amount of out-of-pocket costs per service that counts towards a threshold will have a limit, and the amount of safety net benefits paid per service after the singles or families threshold has been reached will also have a universal limit. This will restrict medical inflation and limit the Commonwealth's exposure while ensuring that more Australians can access safety net benefits. Most importantly, the thresholds to access the new Medicare safety net will be lower than the thresholds for the extended Medicare safety net for most people and more people will receive a safety net benefit. While the average benefit paid will be less, more people will be able to access the benefits than under the current arrangements. This bill will allow the government to continue to support singles and families who have high out-of-pocket costs, while streamlining the Medicare safety net arrangements and contributing to the sustainability of Medicare.

Having said that, Medicare is an important part of the structure of how we look after our society. It has been supported by every government that I have been a part of and by every government that I have been in opposition while they were in government. Medicare is a hot button issue in all our electorates because health care affects every family right across Australia at some time in their lives. These are good changes. They should be supported. I do not understand the Labor Party's opposition to this. They probably would have liked to have introduced it while they were in government. This will be good for Medicare, and what is good for Medicare is good for the people in McMillan. I commend the bill to the House.

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