Chris Evans (WA, Australian Labor Party, Leader of the Government in the Senate) Share this | Hansard source

I would like to speak on behalf of the government and the Minister for Health and Ageing, Ms Roxon, and oppose the motion from the opposition to disallow the government’s pathology reforms in the Health Insurance (Eligible Collection Centres) Approval Principles 2010. This motion again highlights the sort of negativity and destructive attitude to health reform—and all reform, in fact—that we have seen from the opposition in recent times. It is really an issue of whether people are going to side with the interests of big business or with the interests of patients. We would argue that the interests of patients ought to be given priority, and the opposition approach in this matter does not reflect a commitment to putting the interests of patients first.

It also seems to highlight that a commitment to competition and choice is all rhetoric from the opposition, not something that they give any serious attention to when we get to these sorts of debates. Discussions on National Competition Policy between the Commonwealth and states identified the regulation of pathology collection centres as an area where impediments to competition may exist. An independent review by KPMG in 2006 found that these restrictions protected the market share of the three major pathology providers which dominate the sector. That is a very important point: KPMG’s independent review found that three major pathology providers dominate the sector. It also found that the restrictions were a major barrier to new entrants to the market.

The government’s reforms lifted, from July 2010, restrictions on the number of collection centres for pathology tests which can be operated by a provider. The government’s decision to lift these restrictions has improved competition in the pathology sector, leading to greater choice for patients and better access to services. And pathology providers have voted with their feet, opening more than 1,000 new collection centres around Australia, providing much greater access for Australians. About 20 per cent of these collection centres are operated by smaller pathology companies. This means that the smaller providers are increasing their market share, as previously they only operated about 16.8 per cent of all collection centres.

Medicare data shows that, as of November 2010, 21 per cent of new collection centres were in rural and remote areas. So we are seeing greater access for Australians to pathology centres and much better access and coverage in rural and remote areas. We have got new collection centres in regional New South Wales, including Kiama, Molong and Orange; regional Queensland, including Toowoomba, Bundaberg and Rockhampton; regional South Australia, including Port Augusta, Bordertown and Whyalla; and regional Victoria, including Mildura, Benalla, Ballarat and Bendigo.

While some existing major companies have publicly criticised the government’s reforms, I think it is worth noting that there may be issues for them in terms of market share and the threat of competition. They may not be the best source of advice on these matters. From the opposition’s point of view, it has been publicly revealed recently that the pathology tycoon Ed Bateman has been a big donor to the Liberal Party. We know he funded political ads attacking the government recently, claiming the sky would fall in if Labor’s pathology reforms were not reversed. But, of course, that has proven to be incorrect and he can be judged on the outcomes. This is perhaps more about his commercial interests than the interests of good health policy in this country. The sky has not fallen in, as was claimed.

The government’s $329 million pathology bulk-billing incentives have helped ensure that the bulk-billing rates for pathology continue to rise. The bulk-billing figure for pathology in the December 2010 quarter—the latest figure available—is 87.1 per cent, an increase of 1.4 per cent on the September 2010 figure. Pathology volumes rose 2.9 per cent in December 2010. The chief executive of Sonic, the biggest pathology provider, told shareholders last November that growth in its pathology business would return to long-term trends in 2011. Even Mr Ed Bateman agrees with this assessment. Primary Health Care advised shareholders on 15 February that earnings would improve in 2011 as revenue growth in pathology resumed.

This motion should be defeated by the Senate. It is much more about supporting the interests of some big companies with large market share than about focusing on the needs of patients and their access to pathology services. This motion would clog the arteries of competition, and it does not reflect well on the opposition in terms of their negative approach to good public policy in this country.

I will conclude with those remarks and make it clear that the government opposes the motion in Senator Fierravanti-Wells’s name. Can I say, though, in closing that I understand there was some discussion between Senator Xenophon and the office of the Minister for Health and Ageing on the issue of overservicing in the pathology sector and related compliance matters. I draw colleagues’ attention to the Health Insurance Amendment (Compliance) Bill, which was debated in the other place this morning. That bill will strengthen oversight of issues such as inappropriate servicing and obviously will come to us in due course. But I am able to table a brief summary of the very comprehensive arrangements the government has in place already. It is a document titled ‘Overservicing in the pathology sector: compliance and monitoring’. I table that to help inform the debate in the chamber.