Delivering a better health system

These measures are aimed at improving the efficiency and effectiveness of our health system, including by making use of latest technology, achieving better value for money for private health insurance, and ensuring affordable access to services and medicines.

Page last updated: 19 December 2016

Why is this important?

Medicare reform continues, with the clinician-led Medicare Benefits Schedule (MBS) Review Taskforce reviewing the 5,700 items in the schedule line by line. The aim is to ensure the MBS is up-to-date and reflects contemporary practice. The Taskforce’s work complements the work of the Medical Services Advisory Committee (MSAC), which is responsible for the ongoing maintenance of the MBS, adding new and amended listings as appropriate. New and amended listings funded in MYEFO 2016–17 include items relating to ophthalmology to prevent inappropriate claiming, middle ear implant, skin cancer treatment, blood test for tuberculosis, and genetic testing for breast and/or ovarian cancer. Both the Taskforce and the MSAC aim to ensure the MBS continues to fund quality care aligned with contemporary practice.

The Government is continuing to consult with the pathology and diagnostic imaging sectors on the package of changes agreed during the 2016 election campaign. To provide continuity, the Government has delayed implementation of the changes, including changes to bulk billing. The Government is committed to consulting broadly on these measures, to ensure that all stakeholders are given the opportunity to express their views and to ensure that any changes are appropriately targeted.  The Government is continuing to engage collaboratively with our partners in these agreements – the Australian Diagnostic Imaging Association and Pathology Australia – on the best implementation models to deliver affordable pathology and diagnostic imaging services for all Australians. 

Australia needs to be a leader in health technology. First steps are under way to replace the health and aged care payments IT system to deliver reliable and accurate health, aged care and veterans’ payments. This is in line with Government moves to make better use of technology to drive efficiencies. The new digital system will support the Government continuing to own, operate and deliver Medicare, the Pharmaceutical Benefits Scheme (PBS), aged care and related veterans’ payments into the future. MYEFO funds the first phase of the transformation, which will involve extensive stakeholder engagement and a request for proposals process.

Private health insurance reform continues, with the Government reducing the minimum benefits payable by private health insurers for medical implants and devices such as hip and knee replacements, pacemakers and intraocular lenses. Savings are expected to be passed on to consumers – a first step in reforms to improve the value of private health insurance for consumers. 

Two new listings on the Pharmaceutical Benefits Scheme (PBS), costing $342.8 million over four years, will enable affordable treatment for cancer patients and patients with severe uncontrolled asthma. From 1 February 2017, lenalidomide (Revlimid®) will be listed as a first line treatment for patients with newly diagnosed multiple myeloma, a cancer of blood plasma cells, and who are ineligible for stem cell transplantation. From 1 February 2017, tiotropium bromide (Spiriva® Respimat®) will be listed for the treatment of patients with severe uncontrolled asthma. Without subsidy, patients would pay more than $155,000 per course of treatment with lenalidomide, and more than $700 per year for treatment with tiotropium bromide.

There are new funding arrangements for dental services from 1 January 2017.  A modified Child Dental Benefits Schedule (CDBS) will continue from 1 January 2017. The Government will continue to fund the states and territories to assist them to provide public dental services to adults through a National Partnership Agreement (NPA) of $320 million over this year and the next two years.

The Government will not proceed with its proposed $2.1 billion Child and Adult Public Dental Scheme, which would have merged federal funding for child and adult dental services into one program, because some states did not support the scheme.

Who will benefit?

New and amended listings on the MBS support the whole-of-government priority of Budget repair and the health-specific priority of ensuring that medical services receiving subsidies through the MBS are clinically appropriate. They improve patient access to evidence-based treatment, and help to ensure the ongoing viability of the MBS. Patients and taxpayers can be sure the MBS continues to fund quality health care and reflect clinically appropriate practice.

The Australian Government is embarking on a large scale transformation of the ICT systems supporting health, aged care and veterans’ health payments. The program will implement a new payment system to support the Government continuing to own, operate and deliver Medicare, the Pharmaceuticals Benefits Scheme, aged care and related veterans’ payments services into the future. When complete, the new system will deliver an integrated, customer-focused digital claims and payments service that is seamless, flexible and sustainable.

Patients will pay less for a range of implants and medical devices – the start of private health insurance reform that will give consumers better value for money.

Over five years, an average of 56,000 patients with severe uncontrolled asthma could benefit from the listing of tiotropium bromide; and an average of 2,000 patients could benefit from the listing of lenalidomide.

From 1 January 2017, the maximum benefits available to eligible children under the CDBS will be reduced from $1000 to $700 over two years. However, eligible children who began a two-year cap period in 2016 will continue to have access to benefits up to $1000 for that two-year period.

The changes to the CDBS better reflect utilisation patterns, which indicate that most children are claiming well below the $1000 cap. The NPA will provide continued federal funding for the delivery of public dental services to adults. State and territory governments will also continue to have access to the CDBS as they do now.

How much will this cost?

Medicare – net impact of $7.1 million from 2016–2017 to 2019–2020.

Digital payments – $29.8 million from 2016–2017.

PHI – nil financial implications.

PBS high cost listings – $342.8 million from 2016–2017 to 2019–2020.

Dental – $3.1 million from 2016–2017 to 2019–2020.