Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

I rise to speak on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2012. The Extended Medicare Safety Net established by the previous coalition government assists Australians with high out-of-hospital medical expenses. For those who have eligible expenses above the relevant thresholds—$598 for concession card holders and $1,198 for all others—the safety net provides 80 per cent of any additional out-of-pocket costs for the remainder of the calendar year. This is of enormous assistance, especially for families already burdened by rising cost-of-living pressures under this government. The EMSN was one of a suite of measures introduced by the coalition to improve the affordability of health care. The coalition's Strengthening Medicare initiatives increased GP Medicare rebates to 100 per cent of the scheduled fee, provided bulk-billing incentives, increased rebates for GP after-hours attendances and rebates for practice nurse services.

The private health insurance rebates dramatically improved the affordability of health care for millions of Australians through 30, 35 and 40 per cent rebates for respective age groups. Accordingly, we saw a 75 per cent increase in private health insurance coverage. Importantly, there was also a significant Commonwealth investment in public hospitals during this period. According to the Australian Institute of Health and Welfare, Commonwealth government expenditure on public hospitals increased by more than 110 per cent between 1995-96 and 2006-07. So the EMSN was important and was a very important component of a broader strategy to improve the affordability and accessibility of health care for all Australians.

In the lead-up to the 2007 election, Labor claimed it would honour the safety net and the support it provided to families. The then opposition leader Kevin Rudd and shadow health minister Nicola Roxon stated, on 22 September that year:

With about one million people each year receiving some cost relief from the safety net, federal Labor will not put more pressure on family budgets by taking that assistance away.

It only took until the budget of 2009 for Labor to renege on those promises. In that budget, Labor proposed to cut around $610 million from the extended Medicare safety net by capping item numbers for a range of services, including obstetrics, assisted reproductive technology, treatment of varicose veins, the injection of a therapeutic substance into the eye and cataract surgery. The government attempted this cash grab without consultation. The then president of the AMA summed up the concerns of many in this debate about the then minister's 'tendency to use the politics of envy and some vilification'. Instead of a mature and reasoned argument and genuine engagement with affected parties, the minister resorted to just blaming, in her words, 'greedy doctors'. Fortunately, given the composition of the Senate at that time, the coalition was able to achieve some very important concessions for patients.

The government was forced into negotiations with key patient groups and the profession. The coalition's action resulted in an increase in Medicare rebates, increases in the proposed caps and the addition of new items, particularly in relation to IVF. The government's targeting of macular degeneration patients in its original proposals was particularly alarming and ill-conceived. This would have resulted from the capping of item numbers for injections into the eye and was an attempt to shift the cost of treatment from government to vulnerable patients, many on fixed incomes. Macular degeneration is the leading cause of blindness in our country, causing 48 per cent of severe vision loss. It affects one in seven Australians over the age of 50, with the incidence increasing with age. At the time of this proposal, treatment of macular degeneration with Lucentis was only available in a limited number of public hospitals. It was not available at all in New South Wales public hospitals and the patients who could not afford the increased costs may have stopped treatment and risked blindness. Importantly, the coalition was successful in preventing the capping of the item number and providing a reprieve for these vulnerable Australians.

Given Labor had already broken its promise on the EMSN, the coalition also successfully moved an amendment to provide greater scrutiny of any future changes to the caps. It requires that any ministerial determination to change the caps must be provided by resolution of both houses of parliament. Ultimately, the review of the capping arrangements did show that out-of-pocket expenses have increased for patients for those items that have been capped—that is, there has not been a consistent commensurate decrease in doctor's fees. It is important to note that average patient contributions per service have increased by more than 20 per cent since 2006-07. The review specifically found that, for assisted reproductive technology, out-of-pocket costs rose substantially for those women who accessed stimulated cycles. The median out-of-pocket cost for stimulated A cycles increased from $950 in 2009 to $2,000 in 2010. Women who accessed frozen or donated embryo cycles saw out-of-pocket costs increase from $330 to $950 over the same period. Similarly, for obstetrics it was found that out-of-pocket costs increased markedly. For both normal and complex pregnancies the median out-of-pocket costs increased by $1,000 or 50 per cent, whilst the 90th percentile out-of-pocket costs doubled. This vindicates the coalition's position of forcing the government into negotiations to mitigate the impact on patients of some of their original proposals. However, it is only one of many cases where Labor has attempted to raid patients' pockets to bankroll their own fiscal incompetence. This is the practical and direct impact of a government which wastes money. It drives policy in health which is not about better health outcomes but about trying to patch up black holes. We saw the completely arbitrary 50 per cent cut in the Medicare rebate for cataract surgery. Again, this would potentially have left older Australians—mostly on fixed incomes—hundreds of dollars out of pocket for this incredibly important procedure. Through multiple disallowances the coalition was able to force Labor to the negotiating table with patient groups and the profession. Ultimately a compromise position was reached. The whole complicated and unnecessary process, which dragged on for months and caused enormous stress to thousands of patients, could have been avoided entirely through initial consultation and mature, competent administration. We have seen it again with cuts to the private health insurance rebates and the incredible decision to defer listing medicines on the Pharmaceutical Benefits Scheme for fiscal reasons, not for better health outcomes. We still have no certainty that medicines will not again be deferred in the future.

At the same time, it is worth noting, that Labor has committed billions of dollars to the establishment of around a dozen new bureaucracies. The coalition has consistently argued that, in this regard, the government's priorities are entirely wrong. Funding should be targeted to patient services and ensuring the affordability of health care, not to creating new bureaucracies. The bill before us today makes further amendments as a result of the caps that the government has put in place. In her second reading speech the minister stated that there was a need to 'close a loophole' in how the EMSN operates. It seems that this is an issue that should have been addressed when the caps were enacted but, given the legislative chaos caused by the government's handling of the changes at the time, it is certainly not surprising that some mopping up is now required. The bill will allow caps on benefits under the EMSN to apply when more than one Medicare service is performed on the same patient on the same occasion, and they are deemed to constitute one professional service. Examples of a deemed service that have been provided include a patient who is having varicose veins treatment in both legs and medical expenses for administering anaesthetic for multiple operations on one occasion. These situations currently fall under section 15(1) and section 16(4) respectively of the Health Insurance Act. Section 15 provides that in calculating the Medicare benefit payable for two or more operations covered by an item and performed on the one occasion on the one person amounts other than the greatest shall be reduced by half and the other amounts reduced by three-quarters. As the minister indicated in her speech, this is in recognition of the efficiencies of providing multiple services at one time.

The bill limits the Medicare benefit payable under the EMSN for a deemed professional service to what would apply to the constituent items of service—that is, the EMSN cap that will apply in such circumstances will not exceed the sum of the caps that would apply to the individual Medicare items. Whilst we will continue to monitor the consequences for patients of the changes the government has made, the bill before us does address an anomaly rather than create additional changes to policy. The bill also removes the requirement that families confirm in writing the composition of their family for the purposes of the EMSN. Clause 3 states that, instead, notification is to be provided 'in a manner approved by the chief executive of Medicare'. It is argued in the explanatory memorandum that this will allow a more streamlined process and ensure faster payment of safety net benefits to patients.

The coalition does not oppose the changes in the bill. We will, however, continue to apply appropriate scrutiny, especially to the administration of policies affecting patient services. The Labor government has undermined confidence in key pillars of our health system not just by the process in which they have made changes to policy affecting the EMSN but through its changes around Medicare rebates, the PBS and private health insurance, to list but a few. The coalition will continue to work closely with those affected by the government's actions in the portfolio to ensure there is accountability and to offer a stable, competent alternative.

Bob Baldwin (Paterson, Liberal Party, Shadow Minister for Tourism) Share this | Link to this | Hansard source

I rise to speak on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2012. Medicare is the cornerstone of our nation's health needs, in particular for those who live in my electorate of Paterson. It provides access to health treatment for millions of Australians who otherwise would not have access due to affordability. In 2011-12 expenditure on Medicare benefits totalled just over $17.6 billion, making it the fourth most expensive Commonwealth government program. However, advances in medical technology and an ageing population mean that health costs can be expected to rise far faster than the average cost of living increases. One of the reasons the coalition oppose the government's changes to the Private Health Insurance Rebate Scheme is the potential increased burden on public health services. This is a particularly salient issue for my electorate, which has a higher than national average of retirees, many of whom are reliant on access to local health services, and they are not wealthy.

It was the Howard government that established the extended Medicare safety net, or EMSN, and it did so to provide further additional help on top of the existing original Medicare safety net. It was established for those Australians and their families who incurred high costs above the Medicare schedule fees for out-of-hospital services, the difference between the health professional's charge and the Medicare rebate being the patient's out-of-pocket expense. The level of the rebate was set at 80 per cent and covered any further out-of-pocket expense for out-of-hospital costs on a calendar year once the relevant thresholds had been met. At the beginning of this year, for concession holders and families whose income levels entitled them to family tax A the threshold was $598. Other Australians faced a threshold of $1,198.

The party opposite are fond of claiming the mantle of being the party of Medicare, but their approach to the extended Medicare safety net seems to be rather haphazard under this government. As the Kevin 07 election approached—do you remember that?—there was optimism and excitement that they were going to be on the benches. They had been out of power for so long, they thought government was easy. Now after making mistake after mistake and backflip after backflip—most recently this week—the litany of failure, ineptitude and broken promises has begun to stare them in the face. Under the Howard government there was a policy in place to ensure that Australia had protected borders and there was an orderly process for refugees. It took five years for the government to reverse their border protection policy error and realise that government involves hard choices. It is not simply about platitudes or changing your leader when the times get tough.

As I was saying, at the 2007 election Labor claimed that it would honour the safety net, that it would not put pressure on family budgets and that the then shadow minister for health, Nicola Roxon, would not take any assistance away. I think it was at the same time that they were promising they would help the Australian people with their fuel and grocery bills. Who can forget Grocerywatch and Fuelwatch? What rippers of successes they were! They promised to put downward pressure on the cost of living. Hard choices are required; hard decisions are needed to be made. After promising to honour the safety net in 2007, not two years later, in the 2009 budget, they proposed to cut $610 million from the extended Medicare safety net. In came the caps for a range of services, and these included obstetrics, assisted reproduction technology, treatment of varicose veins and, in particular, one that has massively affected my electorate, the injection of therapeutic substances to the eye and cataract surgery. As I said, I have a rapidly ageing, high age demographic in my electorate and eyesight is particularly important to them. This measure was going to affect my constituency. What was more amazing, and typically arrogant of this government, was that these changes were announced without any consultation. The government clearly was surprised by the storm of controversy that this break of their election promise to honour the safety net generated amongst patient groups and health professionals.

You would have thought that this breach of promise was something that the Prime Minister might have wanted to learn from and avoid, but then again at the last election we heard the Prime Minister say, 'There will be no carbon tax under a government I lead.' Say one thing before an election; do an entirely different thing after an election—and just blow the constituents. The constituents do not really matter to the Labor Party; to them it is all about being in power.

But, thankfully, on the EMSN the government has finally started to listen to the health sector, after being forced into negotiations. The coalition has secured some important concessions to ensure the passage of this bill through the Senate. These concessions include increases in Medicare rebates, increases in the proposed caps, and the addition of new items, in particular in relation to IVF. The coalition was also successful in preventing the capping of the item number for injections into the eye, which would have been detrimental to patients requiring treatment for macular degeneration. This is a concession that many in my electorate of Paterson are very grateful for. In my electorate, I took more constituency representations on this issue than any other health issue, such was the importance of this to my constituency.

As a member of the opposition, I believe that it is our role to hold this government to account. After the government's breach of promise on the EMSN, the coalition was not prepared to give it the benefit of the doubt, which is why, as part of the EMSN concessions, we introduced an amendment requiring any ministerial determination to change the caps to be approved through a resolution of both houses of this parliament. An independent review, conducted by the Centre for Health Economics Research and Evaluation showed that the EMSN had led to an inflation of doctors' fees in some areas, leading to a situation where the doctors' incomes had risen more than the reduction in patients' costs. This had led to an unsustainable growth in EMSN expenditure. The review showed that out-of-pocket expenses had increased for patients for those items that had been capped.

In this amendment bill, the government is seeking to make further changes to those it had already put in place. They include the capping of all GP, specialist and allied health services consultations, 38 selected procedures and one ultrasound item. If the government had understood its own legislation and had foreseen the changes back in 2009, it would not need to be making further changes to the EMSN now. This appears to be as a result of an error or an omission within the original bill enacting caps to benefits for the EMSN. However, the coalition is not seeking to oppose this bill. The proposed provision that, when more than one Medicare service is performed on the same patient on the same occasion, it should constitute one professional service and a cap under EMSN would seem to be a very sensible one.

I also welcome the removal of the requirement that families have to confirm in writing who members of their family are for the purposes of the EMSN. With this amendment, they will be able to notify Medicare in other ways approved by the chief executive of Medicare Australia. The only concern regarding this provision would be that there are structures to ensure that adequate identification and privacy issues are in place. I also note that this bill limits the Medicare benefit payable under the EMSN, so that the EMSN cap does not exceed the sum of the EMSN caps that would apply to the individual Medicare item. Furthermore, I see that the party opposite claims that this amendment bill will allow 'a more streamlined process and ensure faster payment of safety net benefits for patients', and that that should lead to a saving of $79.6 million. I hope this will be the case, but forgive us on our side of the House if we are not prepared to take the word of those opposite at face value. We will continue to hold this inept government to account. We are watching the changes carefully, for this government's record should not give Australians confidence that this government's claims will always be matched by its deeds.

Paramount in all of this is the provision of health care to our constituents. The legislation and actions of this government have been detrimental to the health care of my constituents. I, like my colleagues on this side of the House, will not stand by and allow that to happen.

Tanya Plibersek (Sydney, Australian Labor Party, Minister for Health) Share this | Link to this | Hansard source

I want to respond very quickly to what the member for Paterson and the shadow health minister have said in this debate on the second reading of the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2012. It is pretty interesting hearing the member for Paterson, as part of a party that destroyed Medicare, claiming to be a great defender of it—not once but twice we on this side of the House have had to introduce Medicare. Talking about the health care of his constituents, no government has invested more. No government has invested more in hospital services; no government has invested more in primary care; no government has invested more in training doctors and nurses and allied health professionals. When we look at the record of the previous government, including when the Leader of the Opposition was the health minister, we see that there were caps to GP training places, there were too few health professionals, there was $1 billion taken out of hospitals, in contrast to the $20 billion we have put in. We can see their record. You have only to look at the states and territories, as well, to see the record of Liberals when it comes to cutting health services rather than investing in them.

The shadow minister was talking about bulk-billing and Medicare services. Bulk-billing has never been higher than it is now. We hit a GP bulk-billing rate of 81.2 per cent in March this year. In 2003, when the Leader of the Opposition was the health minister, bulk-billing was at a historic low of 67 per cent. As a government, we spend about $17.64 billion on Medicare benefits—that is the 2011-12 figure—an average of $784 in Medicare benefits for every Australian. Bulk-billing rates are higher under us because we have invested in the system. Since 2008 we have invested a record $2 billion to drive up bulk-billing rates with incentives for GPs, pathology, diagnostic imaging and telehealth services. It is also worth reminding ourselves that the average GP receives over $300,000 from Medicare each year. Over the past 12 months we have expanded Medicare to provide rebates for nurse practitioners and midwife and telehealth services.

The Extended Medicare Safety Net exists to give extra help to patients with high out-of-pocket medical costs. While the vast majority of doctors do the right thing, unfortunately some providers have exploited the extended Medicare safety net to increase their fees in excessive ways. For example, for a standard GP consultation of up to 20 minutes in length 99 per cent of services had a fee of less than $90, but some providers have charged $5,000 and one provider has charged $8,000. The member for Paterson mentioned anaesthetic for cataract surgery: for services out of hospital, the top 10 per cent of fees increased from less than $500 to nearly $2,000 in the space of one year—between 2009 and 2010. For electrocardiography—heart tests—81 per cent of services had a fee at or below $30.65; one provider charged $800. Removal of skin lesions without biopsy: 82 per cent of services had a fee at or below $33.35, but one provider charged $3½ thousand. The Extended Medicare Safety Net is a government benefit intended to help patients; it is not intended to subsidise excessive fee charging. I make the point also that the measures we are discussing today have had support from the vast majority of doctors and health professionals, who are doing the right thing and who see the importance of sustainability in our Medicare system. The AMA President, Steve Hambleton, said:

The changes to the Extended Medicare Safety Net (EMSN) appear to have been based on clinical and economic evidence and do not involve services or procedures that are regularly required by families.

The Consumer Health Forum Chief Executive Officer, Carol Bennett, said:

We can't expect wrinkle reduction, eye lifts, nose and ear jobs to be subsidised by taxpayers.

And Arthur Karagiannis, the President of the Australian Society of Ophthalmologists, whose members are actually affected by these rules, said:

Patients suffering macular degeneration now have peace of mind that they will have ongoing access to what is becoming an increasingly common procedure.

I thank members for their contributions to the debate on this bill. More than ever, we need to make sure that every precious dollar of our health investment is used as it should be. We are being guided by the evidence and we are investing wisely. We are finding efficiencies and we are returning those benefits to patients. Where the evidence says that things are not working, the government has done things differently and the bill before the House is part of that. We have looked at the evidence on how the Extended Medicare Safety Net works, and it says that we need to close a loophole to protect the integrity of the system.

The Extended Medicare Safety Net provides individuals and families with an additional rebate for their out-of-hospital Medicare services once an annual threshold of out-of-pocket costs is reached. Once the relevant annual threshold has been met, Medicare will pay for 80 per cent of any future out-of-pocket costs for out-of-hospital services for the remainder of the calendar year, except for a number of services where an upper limit Extended Medicare Safety Net benefit cap applies.

The government introduced benefit caps for certain services following an independent review that found some providers had used the EMSN to increase their fees to excessive levels—and I have given you some examples of that. The Extended Medicare Safety Net was designed to help patients with out-of-pocket costs, not to subsidise excessive fee charging by a minority of doctors.

Under the current legislation, in certain circumstances where more than one Medicare item is claimed by the same patient on the same occasion and the items are deemed to constitute one professional service, Extended Medicare Safety Net benefit caps are unable to apply as originally intended. An example of this is where patients have more than one operation performed at the same time. Some doctors are performing multiple operations to avoid EMSN benefit caps.

This bill amends the Health Insurance Act 1973. It allows EMSN benefit caps to apply even when multiple services are performed. This means that the Medicare benefit goes towards helping patients with out-of-pocket costs, not on subsidising those excessive fees charged by a minority of doctors. Importantly, it helps protect the integrity and the sustainability of the Extended Medicare Safety Net. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.