Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

In continuing my speech on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009, I would like to bring to the attention of the House many of the issues that come under this bill and the areas that will be capped. Not all of these issues concern areas where I believe people are genuinely putting themselves in a position whereby they are overextending doctors or themselves as to medical issues or are perhaps overextending themselves and they do not require these services.

I will look at the issues in respect of those people who have assisted reproductive technology, or ART. In my electoral area covering Wagga Wagga and the Riverina, there was an assisted reproductive technology service in Wagga Wagga that took place in the Wagga day surgery. Our regional area people came in there to assist with the IVF and many other assisted reproductive skills that were provided by a specialist, who set up in Wagga particularly because the day theatre and the day surgery were there. That enabled her to come in and do obstetrics and also practise her passion for assisted reproductive technology, to benefit many couples who were childless and were assisted by IVF and other procedures.

What happened was that when Calvary Hospital, a Catholic run hospital, took over, having bought out the surgery, the theatres and the day hospital, it no longer allowed that type of activity to take place so now all of those in my region have to travel significant distances in order to access assisted reproductive technology, IVF and other assistance to be able to have children. The travel cost to them is absolutely astronomical. Generally, many city people can walk to or get a bus, a train or a ferry or some other form of public transport to a hospital system or to these kinds of facilities and not be personally out of pocket—after paying for bus fares, train fares and other public transport fares—to the degree that my constituents are. When one has got to travel significant distances, you are constantly out of pocket. You might have to stay overnight or to stay two or three nights in order to access these services. If you are staying in a motel it could be extremely expensive.

I think that there is a need to recognise the distance factor and the cost factor for many of those people in rural and regional Australia—and, in my case, in the electorate of Riverina—who simply have to incur costs just to physically get themselves to these services let alone use them. So I am very concerned that this does not cover all assisted reproductive technology services. I think that is simply unfair and quite discriminatory, because it does not recognise how much money, including out-of-pocket expenses, regional mums wishing to be mums and families wishing to be families have to spend in trying to access these in the first place.

I cannot understand the reasons behind all obstetric services not being covered. I understand that it has been reported that, between 2003 and 2008, the fees charged by obstetricians for in-hospital services reduced by six per cent while the fees charged for out-of-hospital services increased by a quite significant percentage. But I do wonder about people in those areas where you cannot get into a hospital. In particular, I am talking about the Wagga Wagga Base Hospital, which is a referral centre for all of our region and beyond. It is just so difficult to get into hospital to obtain any of these services. It is simply not possible to access the hospital service for these services. So do you not have the service at all or do you try to seek it as an out-of-hospital service? Again, I wonder what considerations have been factored in. I wonder where this is actually coming from. If the specialist has come from a city area or an area that has easy access to hospital services et cetera and those services are not being utilised, then maybe I can understand it, but I do wonder, when we are all lumped into one big melting pot and considered as an aggregate or an average, how in such cases we can play a significant part in explaining the issues to rural and regional people. I also wonder how much effect this legislation will have in pushing more and more people into the public hospital system where already you cannot access any of those services in rural and regional areas.

The one area that concerns me the most—and I spoke about this in the three minutes I had to speak on this bill before question time was called on—is cataract surgery. Only one type of cataract surgery is covered under this bill—and for it to be capped is in itself an issue. It is primarily one of those out-of-hospital services in a day surgery. It may be run on a fly-in fly-out basis or by a person that comes in when there is no ophthalmologist available in the regional areas. It might be somewhere out in the Broken Hill area, somewhere up the back of Bourke or somewhere else. Somebody comes in and does a significant caseload because there is no way to get access to an ophthalmologist unless these people come in. Of course it is going to start to blow out when you have people coming in to do significant surgery.

I am not saying that there is nobody who will rob or try to rort the safety net system. Anywhere, in anything you do, there will always be somebody who will do something that they should not be doing. I am not saying at all that that does not happen. I would hate to think that people would think that I was so naive as to think that there is not somewhere some abuse taking place of the safety net. But this bill is using a steel-capped boot to squash an ant. The fact is that some people might be abusing the system to some small degree but, on the other hand, people in rural and regional Australia are affected in the most significant ways. In the most significant ways, they will be the ones that will be affected. Will ophthalmologists think it worth their while to take a day or two or three off work—generally a day and a half or more to travel to many of the outposts in Australia; it could be two days of travel each way—and then a day while they are there to undertake that day surgery? With a significant cap, will these specialist service providers consider that it is worth while for them to take all of this time out of their practice in order to go and run these day surgeries? It concerns me greatly.

Coupled with this legislation, I understand that there will be further legislation coming into this House on cataract surgery itself. We have not seen this legislation yet, but I am led to believe, from a good source, that further legislation will be coming into the House severely cutting ophthalmology and cataract surgery. I cannot understand it. I am going to read from an email that I have received from one ophthalmologist in my electorate. Ophthalmologists are few and far between, let me tell you, and are very hard to come by. It is very hard to attract an ophthalmologist out into country Australia as it is. With this cap, and with the measures soon to be introduced into the House, it is going to be nigh on impossible for there to be ophthalmology services for rural and regional people, let alone for those people who live out in the wider expenses of Central Australia, in Broken Hill and other places. This ophthalmologist says that he is writing to make me aware that the government is intending to cut the rebate for cataract surgery by 50 per cent. He is not talking about this Medicare safety net but, coupled with the Medicare safety net, it is a big hit. He says:

Their justification for doing this apparently is because they believe it is too quick and easy to perform and basically, not worth the money.

Let me tell you, those people who had cataracts and had to have cataract surgery and are now free of cataracts think it is worth the money. If you lived like that you would soon find out whether it was worth the money. He goes on:

Having taken four years of specific eye surgical training to master the procedure on top of a medical degree and 3-6 years of hospital residency coupled to the fact that community expectations are for 100% success rates and the stress associated with the procedure is somewhat akin to defusing a bomb through a microscope, we would beg to differ. One wonders if when it is time for—

the Prime Minister—

Kevin Rudd or—

the minister—

Ms Roxon to have their cataract done, whether they will trot down to the local public hospital to sign up to have the junior eye registrar do the procedure or whether they’ll seek out the most competent and experienced surgeon in town.

He goes on to say:

The schedule fee for cataract surgery was around $800 in the early 1980s. The Government halved it back then and again cut it by around 30% in 1996. Now they want to cut it in half again. So in late 2009 the fee will be about half what it was over 25 years ago in face dollar terms and allowing for inflation, this puts a real dollar value of about an eighth of what it was back then. In all that time our profession has succeeded in making the procedure quicker but also safer and with a faster recovery time and better visual results. We use a lot more high tech equipment now but this makes the procedure more complex, more technically difficult and takes much longer to master, as any training registrar will testify.

Basically this ophthalmologist goes on to talk about the public hospital system and why these out-of-hospital cataract operations have expanded. He says it is because you cannot get theatre time in the hospital. In the public hospital system in rural and regional Australia you cannot get theatre time, so of course they are going to be doing more in day surgeries. He says:

Up until about six months ago—

that is the end of last year—

things were going well for our patients. A privately insured patient would get done with no out of pocket expense from me as I accepted ‘no-gap’ payments from the funds for my surgery. A patient electing to go public would wait about three months to get done at Wagga Base Hospital. If a non-insured patient wanted to go private, the all-up cost would be around $1800 out of pocket, $1100 of which went to the private hospital and the rest split between surgeon and anaesthetist. Since then—

and I am talking specifically about the Greater Southern Area Health Service, which has—

… cut our theatre lists back to 3 per month and never seem to have a dedicated theatre for emergencies, so that the lists we do get are sometimes cancelled for an emergency caesar, trauma case etc. As a result, my public waiting list has now blown out to eleven months and some of my colleagues have longer waits. The worst thing is that the wait list grows by about two months, every month.

So this obviously increases the interest and need for people to get their cataracts done outside the hospital system. I was trying to point to whether there is a recognition of the factors that show why there has been more private surgery and why more of these are being done out of hospital. You can see why when you factor in all of the issues and the challenges we are trying to meet in rural and regional areas. He goes on:

This will now cost uninsured patients an extra $312 because of the fee cutback—

on top of the increases that the hospitals have now applied and—

… hospital charges for uninsured cataract cases are now $1300 for pensioners and a whopping $2075 for non-pensioners.

He talks about how much there will be out-of-pocket charges for insured patients et cetera. The problem we have is, I think, that there has been no thought given to how to address rogue issues. (Time expired)

Julie Owens (Parramatta, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009. It is an extremely important bill for the sustainability of the extended Medicare safety net. The purpose of the extended Medicare safety net is to protect patients from high out-of-pocket medical costs for out-of-hospital medical services such as GP and specialist services. Relative to the total health budget it is quite a small component but is an incredibly important one.

While most people face out-of-pocket costs of less than $50 a year, some members of the community face significant medical bills for out-of-hospital services. In 2007, around seven per cent of individuals had out-of-pocket costs of over $300 per year—add those up for families. And in 2007, 11,000 Australians incurred out-of-pocket costs of more than $2,000 each. The number of people with these very high out-of-pocket costs initially fell after the Howard government introduced the EMSN in 2004 but rose very quickly again shortly after that and have been rising since.

The benefits are highly concentrated in certain types of services. In 2007, over 30 per cent of all EMSN benefits helped fund obstetric services and 22 per cent went towards assisted reproductive services. The EMSN has more than doubled the amount of Commonwealth funding going towards these two professional groups. Only eight per cent of the EMSN benefits went towards the funding of general practice consultations. There is also an extremely effective program at directing assistance to cancer patients relative to other patients with high healthcare needs. Given that over 50 per cent of EMSN payments go towards people for obstetric services, assisted reproductive services and chronic illnesses, you can see how incredibly important a program it is. It is incredibly important that it is sustainable over the long term so that we can continue to provide assistance to people with the greatest need.

It is a relatively new program. It was introduced by the Howard government in 2004 to tackle high out-of-pocket costs for medical services. Under the EMSN, patients are reimbursed 80 per cent of their out-of-pocket costs for all out-of-hospital Medicare services once annual personal expenditure on these reaches a certain threshold, which was indexed annually. Prior to the introduction of the extended safety net in 2004, there was a limit on the amount of government contribution for services. That was done through the Medicare schedule fee. In fact, for the first eight or nine years of the Howard government, contributions to this area were capped by those Medicare schedule fees. But in 2004, that cap was removed and instead 80 per cent of out-of-pocket costs or out-of-hospital services were paid no matter how much the doctor charged. You would expect that, if you removed the cap in that way, there would be some doctors and specialists who would increase their fees or who would think: ‘Okay, I can increase my fee by 50 per cent, or 80 per cent or whatever, and it will still be paid by the 80 per cent contribution for out-of-pocket costs.’ Some did and costs started to rise, and between 2007 and 2008 they rose 30 per cent.

That rise in the spending on EMSN benefits has not been matched by a drop in patients’ out-of-pocket costs. In fact, since the introduction there have been concerns that the EMSN may lead providers to increase fees and thereby dilute the potential benefits to patients. Since the introduction of the EMSN, average fees have increased by around 4.2 per cent per year, excluding general practice and pathology, which have been fairly stable. This increase is over and above the rate of inflation and it is estimated that the EMSN is responsible for 70 per cent of the increase. It was directly responsible for a 2.9 per cent increase in fees each year. It becomes a question of whether the taxpayer should pick up the increase in fees by the specialists.

The rise in costs was also of concern to the Howard government. In fact, in 2005, just one year after the scheme was introduced, concerns were such about the charging of excessive fees by some doctors that the government raised the safety net expenditure threshold so as to reduce the number of people who would qualify for the EMSN and rein in costs. They did not consider capping again at that stage but they did raise the threshold, which meant that people had to spend more of their own money before becoming eligible. It reduced access to the scheme. The original thresholds were set at $300 for concession card holders and FTBA recipients, and $700 for all others. Those were increased to $500 and $1,000 in 2005. After indexation, the thresholds now sit at $555.70 for concession card holders and people who receive family tax benefit part A and $1,111.60 for all other singles and families. But costs still continue to rise. Consistent with the fact that people in affluent areas incur more out-of-pocket costs, it was found that some 55 per cent of EMSN benefits is distributed to the top quintile of Australia’s most socioeconomically advantaged areas, whereas the least advantaged quintile receives less than 3.5 per cent. That is, 55 per cent for the top quintile and 3.5 per cent for the lowest.

In rural areas costs have not increased in the same way. Over time, average out-of-pocket costs increased most in major cities, although the median in the major cities was quite stable, which suggests that the higher out-of-pocket costs in major cities are faced by those at the upper end of the distribution. Interestingly enough, over time the difference between the average and the medium is actually increasing, showing that the difference between the highest-charging specialist and the average-charging specialist has increased dramatically.

We know a lot about the nature of the rising costs because there has been extensive review of the program, with a report coming down in 2009. As required under the Health Legislation Amendment (Medicare) Act 2004, a review was taken of the operation, effectiveness and implication of the safety net. That was conducted by the Centre for Health Economics Research and Evaluation at the University of Technology in Sydney. The report noted that the safety net has helped patients who have very high costs and has reduced out-of-pocket costs for some patients with cancer, but it clearly showed that there were major concerns in areas such as obstetrics and assisted reproductive technology, including IVF. Fifty per cent of the safety net benefits are paid in those two areas. Medicare benefits have more than doubled for both these groups since the safety net was introduced. A significant proportion of the increase in expenditure is because of the increases in fees charged.

There is also a substantial difference between in-hospital and out-of-hospital fees. Between 2003 and 2008, the fees charged by obstetricians for in-hospital services reduced by six per cent while the fees charged for out-of-hospital services increased by 267 per cent. That is an extraordinary difference in changes in fees over a relatively short period of five years. Similarly, the fees charged for assisted reproductive technology services fell by nine per cent for in-hospital services and rose by 62 per cent for out-of-hospital services. This indicates that some doctors have been taking advantage of the safety net as their fees for out-of-hospital services have increased far in excess of the fees that they are charging in hospitals.

The report also showed that, while EMSN payments have provided many with financial relief from significant out-of-pocket medical costs, those in the greatest financial need may be missing out on the benefits. The review found that, for every EMSN benefit dollar that is paid to a patient, 78 per cent went towards meeting the doctor’s higher fees rather than reducing the patient’s out-of-pocket costs. Further, those who have benefited most from affordable services have tended to be in the wealthier areas as they are in a better position to access the more expensive specialist services in the first place.

One would expect that costs would rise over four years, but rises have been extraordinary in some areas and quite modest in others. There is also, as I said, the substantial difference between in-hospital and out-of-hospital fees, with extreme variations in fees charged by specialists for the same services. The purpose of this amendment is to ensure that taxpayers’ money goes to reduce the out-of-pocket expenses for the benefit of patients and not to inflate the fees of some specialists in some circumstances. The consequences of fee rises are felt not just by those accessing the extended Medicare safety net but also by people who have not qualified for the safety net and also face those higher costs. This amendment allows the Minister for Health and Ageing to determine the maximum benefit that would be paid under the safety net through a legislative instrument to allow for parliamentary scrutiny. The report identified six areas of particular concern where fees have risen in an irregular way and well above others. Those six specific areas are obstetrics; assisted reproductive technology, including IVF; some cataract operations; some hair transplants; varicose vein treatment; and several procedures involving the injection of a therapeutic substance into the eye. These areas have more than doubled since the safety net was introduced and, disturbingly, this increase is directly accounted for by increases in the fees charged by specialists.

In cases such as these, particularly when 50 per cent of the costs associated with this extended Medicare safety net program go to areas such as reproductive health, there was always considerable controversy with any change that was made. We have already heard from the members of the opposition today stories of great pain and grief and joy of people undergoing IVF treatment in recent years under the current laws. We have already heard some of those. We have heard stories of hospitals in regional areas where departments have shut down or had their funds cut back. That particular issue, of course, is not related to this particular bill, but I would like to cover two particular areas—the cataract area and assisted reproductive technology—because I know that they are areas where it is very easy to frighten people who are already very fearful about what the future might hold for them.

When it comes to cataracts, the changes announced in the budget represent the first time in 13 years that a government has reviewed the payment for cataract surgery. Over the past 13 years there has been significant advancement in the technology used to carry out cataract operations, which means that operations can now be performed faster, with better results and with greater safety for patients. The changes made by the government more accurately reflect the time taken to carry out these procedures, which typically, these days, takes around 20 minutes. For this 20 minutes work the new standard Medicare benefits schedule fee will be $419.85. To put this into context, currently the cataract procedure takes around 20 minutes and has the same fee as the payment made by government for complex skull surgery, which more takes more time to perform and carries a far greater risk for the patient. Ninety-five per cent of cataract procedures are undertaken in hospital.

Assisted reproductive technology is also an area where it is very easy to frighten people who are already afraid that circumstances for them will be worse than they are now. For the vast majority of people undergoing IVF, this will not be the case. On average, patients are charged around $6,000 per IVF cycle, yet some doctors are charging in excess of $10,000 per cycle. Patients who see the specialists who charge around that $6,000 or less will not be worse off under these changes. From 1 January the Medicare items for ART services will also be restructured to better align the items to the phases of treatment involved in the ART cycle. This will help to spread the costs and caps across the treatment cycle to better reflect the cost involved at each stage of the treatment cycle.

At the same time the government is also investing $157.6 million in increasing the Medicare rebates for obstetric services, and $120.5 million on maternity services to improve options for women and support those doctors that do not charge high fees. Those changes have been particularly welcome in my electorate. I have met recently with a number of mums who are planning pregnancies in the next few years who are extremely pleased at the greater range of services that will become available because of those changes.

The government remains committed to the extended Medicare safety net. It is a very important part of health services in this country and incredibly important for people facing quite difficult times in their lives. In 2008, though, expenditure on the safety net was $414 million, 30 per cent more than it was in 2007. Unless we make these changes now and support people in meeting their reasonable out-of-pocket costs, this expenditure will continue to grow rapidly. As a government, we cannot continue to see costs rise because of the rise in excessive fees at the upper end of a few small sections of our medical services. This bill creates a mechanism by which the government can responsibly manage the safety net, and it is extremely important for supporting the sustainability of the safety net so that singles and families can continue to receive this incredibly important assistance with their out-of-pocket costs.

Nicola Roxon (Gellibrand, Australian Labor Party, Minister for Health and Ageing) Share this | Link to this | Hansard source

in reply—In summing up I would like to thank the members for their contributions to the debate on this bill. It gives me great pleasure to follow the member for Parramatta, who canvassed so many health issues for her electorate. This is important to many people in the community, so I appreciate that people have taken the time to speak in the debate.

The Health Insurance Amendment (Extended Medicare Safety Net) Bill amends the Health Insurance Act 1973 to enable the Minister for Health and Ageing to determine by legislative instrument the maximum benefit payable under the extended Medicare safety net for each Medicare benefits schedule item. These changes, made by the government in the budget, ensure that all items currently covered by the safety net remain covered by the safety net and no items will be means tested for eligibility. Importantly, IVF services will remain covered, with no age limits and no limitations on the number of cycles.

Members, including the member for Cook, who have very personal stories and genuine concern about these changes should be assured that all IVF procedures that are currently covered will continue to be covered. There is still, I think, some remaining concern in the community, some confusion, about the speculation compared to the reality that all items will continue to be covered, with no age limits, no limitation on the number of cycles and no means-testing. The change, of course, is a cap on the amount that can be charged—and I will come to that later—but I think that they should address the concerns, genuine as they are, from people like the member for Cook. Cancer services, as well, will not be affected at all by these changes. The changes that we have made are to restrict taxpayer funds being spent on excessive fees that have been charged by some specialists. We are protecting the taxpayers, we are protecting the patients, and we are protecting those doctors who are doing the right thing in charging moderate fees.

A recent independent review of the extended Medicare safety net report, tabled before this debate began, clearly showed that in certain areas, such as obstetrics and IVF, the safety net had been used by specialist doctors to raise their fees knowing that the taxpayer would be called on to cover 80 per cent of the cost of the fee rise. For example, according to this report, between 2003 and 2008 the fees charged by obstetricians for in-hospital services reduced by six per cent while the fees charged for out-of-hospital services increased by a staggering 267 per cent. The report also showed that the safety net is not making some medical services more affordable for some patients—which, of course, was the purpose for which it was originally intended.

One of the reasons for this is that the amount of benefit available through the extended Medicare safety net is unlimited, and some specialists have taken advantage of this arrangement to increase their fees and their incomes, unfortunately with no particular benefit to the patient. The current nature of the safety net means that doctors feel little pressure to moderate their fees. Due to these fee rises for some services some patient out-of-pocket expenses have even increased as a result of the extended Medicare safety net. Unless we act now we will not be able to stop this increasingly silly situation and the extended Medicare safety net will become unsustainable.

In 2008, expenditure on the extended Medicare safety net was $414 million, 30 per cent more than the previous year. In some areas the increase is being driven by increased fees rather than the provision of more services. This bill creates a mechanism for the government to responsibly manage expenditure on the extended Medicare safety net. As part of the 2009-10 budget the government is capping the benefits for some services where there is evidence of large increases in the fees charges, a service where the majority of the extended Medicare safety net benefit is going to doctors rather than to helping patients. The new caps will apply for the following services: obstetrics, assisted reproductive technology, hair transplantation, the injection of a therapeutic substance into an eye, one type of cataract operation and one type of varicose vein treatment.

Some members in the debate have expressed the concern that this measure will increase the cost of obstetric services but I note that as part of this measure the government will also be investing $156.7 million to increase the Medicare rebates for private obstetric services. This means that the changes will allow all mothers who have their babies delivered by a private doctor to receive a standard Medicare rebate that is 30 per cent higher than the current rebate. The government is also investing $120.5 million in a maternity services package. Part of this package will introduce Medicare items for midwifery services and will support greater choice for women—one of the issues touched upon by the member for Parramatta.

The cost of IVF should not increase for most patients. On average, patients are charged around $6,000 per IVF cycle, yet there are some doctors charging in excess of $10,000 per cycle. Patients who see specialists who charge $6,000 or less for a typical IVF cycle will not be worse off under these changes. In relation to the cap on the cataract item, I think that the opposition health spokesperson is confused. The extended Medicare safety net only applies to out-of-hospital services. There is, of course, a separate measure which affects cataracts, to which he may have been referring. While I acknowledge that there is a crossover for a small number of services, 95 per cent of private cataract procedures take place as in-patient services so the extended Medicare safety net does not apply.

I note, also, the closing comments of the opposition spokesperson for health, who offered to work with the government to identify alternative savings. That was a very kind offer in this debate, but we have not had one suggestion from the opposition for any savings in any health related measure, let alone any measure relating to this bill or in this budget debate. We have had no suggestions, no policy proposals—nothing. In fact, all we have had so far is opposition to any of the measures that we have proposed in health. So I do ask where those suggestions are. I would be happy to see them and consider them but they have not been forthcoming to date and I am not intending to hold my breath while I wait for them. I did wonder if the opposition spokesperson was suggesting that the opposition would now be opposing this bill. Of course, the shadow Treasurer clearly stated, following the budget:

We’re not going to block any initiatives other than the private health insurance initiative. So that’s our position. We’re not changing from it.

So I wonder whether the member for Dickson and the member for North Sydney are not in agreement here, because it seems that the shadow minister is raising some sort of issue that might be walking away from the commitment made by the member for North Sydney.

The important point here is that the extended Medicare safety net is a patient benefit. It is not intended to be a mechanism by which doctors can simply increase their incomes. The changes we have made will restrict taxpayer funds from being spent on excessive fees that have been charged by some specialists while protecting those very many doctors who are doing the right thing. Importantly, it will continue to protect patients with high medical costs and protect taxpayers.

The changes in this bill are necessary to assist us in keeping the safety net sustainable and available to all Australians into the future. These changes will allow Australian families to continue to have access to the safety net for IVF services into the future and it will allow access to the safety net by families of cancer patients, who have very high costs that need to be covered in difficult circumstances, and by many other worthy recipients, without this money being unfairly skimmed off by that small number of doctors who are charging excessive fees. The government is determined to put the patient first and foremost in all of our considerations, and we believe that this bill does that.

Question agreed to.

Bill read a second time.