Monique Ryan (Kooyong, Independent) Share this | Hansard source

Today I'm really pleased to speak about the Health Insurance Amendment (Professional Services Review Scheme) Bill 2023. This bill implements changes arising from the recommendations of the Philip review, an independent review of Medicare integrity and compliance conducted by Dr Pradeep Philip of Deloitte Access Economics.

The review was undertaken at the request of the current Minister for Health and Aged Care, with its purpose being to focus on the payment system of the Medicare Benefits Schedule, the MBS. The five terms of reference for the review of the MBS were, broadly, to look at high-level ways of reducing fraudulent behaviour; integrity risks around payment and claiming channels; non-compliant or overservicing risks; ways of improving the Practitioner Review Program and Professional Services Review functions; and a review of the Health Insurance Act to identify potential improvements to strengthen both compliance and penalties for fraud and inappropriate practice. Importantly and alarmingly, the Philip review concluded that, in relation to our current Medicare system, legislation, governance, systems, processes and tools are currently not fit for purpose, and that without significant attention they will result in significant levels of fraud. These governance failures are real and they are concerning. Unsurprisingly, the recommendations arising from Dr Philips's review were wide ranging, but they can be categorised into four broad areas: governance and structure; operational processes; modernising technology; and strengthening legislation. These are all very important recommendations, but today's bill addresses only a small fraction of them.

Firstly, this bill removes the requirement for the Australian Medical Association, the AMA, to agree to the appointment of the Director of Professional Services Review, the PSR. This recommendation was made on the basis that the current arrangement is inconsistent with public expectations regarding the independence of the Professional Services Review. The Philip review recommended removing this veto power because of the breadth of health professionals whose members are now potentially susceptible to review by the PSR. The fact is that a veto power from the AMA—a single professional body—no longer reflects the fact that there are a wide range of professionals who could potentially be referred to the PSR. The review described this veto as an anachronism which has never been exercised and considered that its removal could bring about a measurable enhancement to the perception of the PSR by the sector, and it could remove perceived conflicts of interest. I have to note that, recently, I met with the Consumers Health Forum of Australia, which noted that there's also no consumer representative on the PSR. Despite the clear advantages and documented impacts on health and on medical research, consumer involvement is often undercooked in our government administration structures. I believe the addition of a consumer representative to the PSR would add an additional, important voice. It would give comfort to patients and their families that the issues considered by the PSR include their perspectives, and that those perspectives inform the PSR's responses.

The bill also amends consultation requirements for appointing other statutory office holders of the PSR to enable consultation with relevant peak bodies directly, rather than via the AMA. That seems entirely appropriate. It makes no sense that an external advisory body—a peak body of medical professionals, of doctors—can exercise any other veto power or effect over other office holders of the PSR. The bill establishes a new statutory office of Associate Director of the PSR, who will assist with managing conflicts of interest and workload pressures. That associate director will have the same functions and powers as the director in reviewing inappropriate practice but will not have a role in administering the PSR agency. To streamline the audit process, the bill removes the requirement for the chief executive of Medicare to consult with relevant professional bodies prior to issuing a notice to provide documents. This will ensure clear and accountable natural justice to the regulated entity under investigation without the unnecessary involvement of a non-regulated entity.

It has to be said that these amendments to the bill, worthy though they are, are relatively confined. They're very modest when viewed in the context of the very wide-ranging recommendations set out in the Philip review. Indeed, Dr Philip sets out a 10-year plan for ongoing, continuous improvement initiatives and activities within the Medicare Benefits Schedule. Whilst we can look forward to this ambitious reform agenda being addressed in future policy development and legislation, rather than concentrating on each of those recommendations and the journey towards widespread Medicare reform, our focus should be on the broader conclusion drawn by Dr Philip: that the governance of Medicare, as the minister has said and as the member for Dobell has already told us, is out of date, and Medicare is in its worst shape in its 40-year history. Dr Philip said:

As the health system has evolved, governance … is now inadequate, running the risk of piecemeal approaches to compliance and fraud and no holistic understanding of major trends … in the nature of healthcare delivery.

This is deeply disturbing. A sound and well-functioning compliance and integrity system is critical for all Australians. We have to give Australians trust in the Medicare system and, by extension, our health system.

We also have to ask ourselves, 'What does integrity in our health system look like?' As we've seen in recent days, trust in the integrity of our governments and the system of our government is taking a battering, day by day, month by month. The report released last week by the Australian National Audit Office, the ANAO, into the $2 billion Community Health and Hospitals Program wasn't just scathing; it was utterly damning. The point of that ANAO audit was to assess the effectiveness of administration and compliance within the grants and rules of the CHHP. The audit found that executive oversight and risk and fraud management in that scheme were deeply deficient. Only two of 171 programs in the CHHP were highly suitable.

The health department was found to have repeatedly fallen short of ethical requirements and to have repeatedly and deliberately breached guidelines in disbursing taxpayers' funds. In some cases, the department administered grants that it first found out about from ministerial press releases. More than a billion dollars of taxpayers' money was allocated from what was essentially a ministerial slush fund. We only found out about it after the fact—five years later, after the money was gone. This is why I am deeply concerned about the Philip review's 10-year time line for administrative change. We need stronger mechanisms now. We need stronger legislative mechanisms to ensure that substandard funding allocations and deliberate breaches of the Medicare system are prevented, not identified five years after the fact. And, when those breaches do occur, as they inevitably will, they should be identified quickly and bad actors penalised accordingly.

The practices illuminated in the ANAO's report and, to a lesser but still concerning extent, in the Philip review have had the unfortunate effect of eroding public confidence in our healthcare system. Somewhere along the line, some people who work for our Commonwealth have forgotten that the Commonwealth must use and manage all of our public resources properly. 'Properly' in this context means efficient, effective, economic and ethical use of taxpayers' money. When we see that in this light, we have to ensure that the executive oversight, risk and forward management of our Medicare system does not fail as it clearly has for the CHHP grants program.

Trust in government is at an all-time low. We have to do what we can to restore it. Our Medicare system is world class. It supports the health of every Australian, but it needs world-class governance and oversight to keep it strong and to make sure that it is fit for purpose. Dr Philip makes the observation that the overwhelming majority of health practitioners are well-meaning and ethical people who are concerned primarily for the health and welfare of their patients. I could not agree more. But the system that they inhabit and in which they work is no longer fit for purpose. We have to have a system that's not reliant solely on the goodwill and altruism of health professionals to properly manage our public resources and meet the needs of the Australian people. Our Medicare system desperately needs to adapt to changing health needs and health services delivery. Australians deserve to be able to trust in Medicare. Our young and future generations have to be assured that it will be there for them.

Sunlight is the best medicine, and we need it now to ensure that our Medicare system and our health system more broadly remain an international exemplar for what modern health care should look like. I commend this bill to the House.

See this speech in context