1996-1997
2.1: Medicare Benefits and General Practice Development
The 1996-97 Portfolio Budget Statements, informs Senators and Members of Parliament of the proposed allocation of resources to portfolios outcomes and their objectives and targets including the agencies within the Health and Family Services portfolio.
Objective
- To enable eligible patients to obtain appropriate private medical services which are necessary for their health care, without excessive price barriers, through payment of Medicare benefits and associated arrangements.
Goals
- The Medicare Benefits Schedule to reflect modern and appropriate medical practice.
- General practitioners encouraged to undertake continuing education, comparative activities and projects in order to improve quality of general practice including through greater integration with other elements of the health system and addressing identified local health needs.
- Slow the growth in the number of general practitioners providing private medical services while increasing the number of general practitioners who are practising in under-supplied rural and remote areas.
- Reduce the growth in expenditure under the Medicare Benefits Scheme, particularly for pathology and diagnostic services.
- The Medicare Benefits Schedule to reflect more closely professionally-accepted relative values of services.
Strategies
- Investigate and implement systematic reviews of the Medicare Benefits Schedule.
- Support the Health Insurance Commission (HIC) in its role of payment of benefits for medical and other professional services under Medicare.
- Build further upon the General Practice Strategy, and encourage general practitioners to apply for Better Practice Payments based on appropriate and relevant criteria.
- Investigate and implement systematic reviews on the appropriateness of pathology services and treatment regimes and introduce measures to monitor pathology practices to ensure a more cost effective industry.
- Improve the quality and cost-effectiveness of diagnostic imaging practice, delivery and use through a range of structural and other measures.
- Undertake a Relative Value Study of the Medicare Benefits Schedule to set relativities of fees for private services covered by the Medicare Benefits Schedule on a consistent, fair and workable basis.
Performance Indicators and Targets
Effectiveness
- Percentage of Medicare services that are bulk billed.
- Average out-of-pocket costs of Medicare services.
- Extent to which growth in medical workforce has been contained.
Efficiency
- Medicare benefits expenditure in selected areas eg, general practice, pathology, diagnostic imaging.
- Administration costs (HIC and Department) as a percentage of Programme costs.
- Medicare outlays per capita.
Target: To implement budget initiatives and to come within budget estimate.
Quality
- Client satisfaction as measured by HIC client surveys.
- Volume of complaints received about suspected fraud, over servicing, and inappropriate treatment.
Equity
- Percentage of general practitioners and percentage of specialists available in rural and remote areas.
Budget Measures
Election Commitments
Private Health Insurance Incentive
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
6.1 | 38.1 | 38.3 | 39.3 |
The John Flynn Medical Student Vacation Scholarships
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
0.4 | 0.8 | 1.1 | 1.5 |
Purpose of Measure
As part of the General Practice Strategy aimed at addressing the maldistribution of general practitioners between urban and rural areas, this initiative will encourage medical students to undertake elective placements in rural and remote locations during their vacation.Top of page
Expected Implementation Strategies for Measure
It is anticipated that the scholarships will be administered by each medical school. Scholarships to each university will be allocated on the basis of medical student numbers at the university. Universities will grant scholarships based on guidelines provided by the Department of Health and Family Services. There will be some flexibility in the allocation and value of scholarships according to the level of interest and proposed electives.Implementation as follows:
- Guidelines will be developed in consultation with key stakeholders eg: universities, co-ordinating agencies and medical students.
- Draft guidelines provided for Ministerial approval.
- Grants offered to universities outlining the number of scholarships available and including guidelines.
- First round of scholarships to be offered for 1996-97 summer vacation period.
Intended Impacts of Measure
Longer term impact, in conjunction with other initiatives under the General Practice Rural Incentives Programme (GPRIP), is that more medical students indicate an interest in, or undertake a career in, rural practice.Introduction of Pharmacy-based Medicare Claiming Services
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
8.7 | -0.2 | -2.3 | -5.7 |
Purpose of Measure
To extend access to Medicare claiming by providing claiming facilities in selected pharmacies.Expected Implementation Strategies for Measure
Medicare claiming facilities will be installed in up to 400 pharmacies. The role and number of Medicare offices will need to be reviewed however, no change will occur without proper community consultation and a satisfactory alternative being available.Top of page
Intended Impacts of Measure
By enabling pharmacies to provide claiming facilities for Medicare there will be more widespread access to Medicare for rural and regional people.Reduction in Better Practice Programme Funds
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-28.5 | -26.9 | -1.8 | - |
Purpose of Measure
Reduction of $57.1 million over 3 years in funds available under the General Practice Strategy. This reduction is largely in response to a slower than anticipated take-up of the Better Practice Programme.Expected Implementation Strategies for Measure
Projected savings from the strategy are based on a revised take up rate for the Better Practice Programme, taking into account the experience of the Programme's first 18 months of operation.Intended Impacts of Measure
There will be no impact on the level of funds available for the Divisions and Projects Grants Programme or the Rural Incentives Programme, and sufficient funds remain available to meet the anticipated demand for the Better Practice Programme.Savings
Increase Medicare Maximum Patient Payment
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-8.6 | -15.7 | -16.5 | -17.1 |
Purpose of Measure
To increase the maximum gap between the Schedule fee and the Medicare benefits from $30.60 to $50. The maximum gap only applies to out of hospital services.Top of page
Expected Implementation Strategies for Measure
An amendment to the Health Insurance Act 1973 will be introduced in the 1996 Spring session.Intended Impacts of Measure
Reduce Medicare expenditure.Reductions in Hospital Funding Grants to the States to Offset Cost- Shifting of Public Hospital Related Services
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
1.5 | 0.9 | 0.7 | 0.7 |
Reduce Medicare Benefits for Psychiatry Consultations in Excess of 50 per Patient per Year
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-2.0 | -3.7 | -3.9 | -4.1 |
Purpose of Measure
To better target Medicare outlays on psychiatry by reducing the schedule fees for out-of-hospital consultations by psychiatrists where those consultations exceed 50 in a year for an individual patient.Expected Implementation Strategies for Measure
The measure is to restructure the specialist psychiatrist attendance items in the Medicare Benefits Schedule so that the fees for attendances at consulting rooms which exceed 50 in any 12 month period will be 50% of the fee for the existing equivalent attendance item. The restructure will be implemented in the November 1996 reprint of the Medicare Benefits Schedule.Intended Impacts of Measure
Disincentives for providers and/or price signals for patients having more than 50 out of hospital psychiatric consultations per year.Top of page
Reduce Medicare Fees on Overpriced Items
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-12.2 | -22.2 | -23.4 | -24.4 |
Purpose of Measure
R educe Medicare Schedule fees for items which, through developments in medical practice, have become overpriced in comparison with other items in the Medicare Benefits Schedule.Expected Implementation Strategies for Measure
Introduce new Medicare schedule fees (90% of existing schedule fees) for 15 services which cover certain diagnostic ophthalmic investigations, electrocardiography, sleep studies, ultra violet light therapy in dermatology practice, laparoscopic cholecystectomy and appendicectomy, upper and lower endoscopy, endoscopic prostatectomy, lens replacement surgery and arthroscopic knee surgery.The fee changes will be effective as from 1 November 1996 to coincide with the reprint of the Medicare Benefits Schedule.
Intended Impacts of Measure
The Medicare fees for the identified items will be brought to a comparable level with other Medicare fees.Remove the Medicare Benefits Advisory Committee's Power to Determine Higher Medicare Benefits in Unusual Cases
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-2.4 | -4.4 | -4.7 | -5.1 |
Purpose of Measure
To fully apply the principle that Medicare fees are regarded as being reasonable on average for the service having regard to usual and reasonable variations in the time involved in performing the service on different occasions and to reasonable ranges of complexity and technical difficulty involved. There will no longer be power to increase fees for a particular service beyond the scheduled Medicare fee.Removal of non-specific items from the Medicare Benefits Schedule will prevent the creation of items attracting Medicare benefits without Ministerial approval or parliamentary scrutiny.
Expected Implementation Strategies for Measure
Legislation will be introduced to remove the powers in the Health Insurance Act 1973 to increase fees for services of unusual length or complexity.Top of page
Intended Impacts of Measure
To provide for Ministerial and/or Parliamentary scrutiny of all new items in the Medicare Benefits Schedule and to have all fees covered by the "swings and roundabouts" principle.Remove Medicare Benefits for Sterilisation Reversal and Reduce Medicare Benefits for In Vitro Fertilisation
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-2.6 | -4.7 | -4.8 | -5.0 |
Purpose of Measure
Reduce Medicare fees for in vitro fertilisation services which are overpriced in comparison with other items in the Medicare Benefits Schedule. A complementary measure will deny Medicare benefits for procedures which involve reversing a previous sterilisation procedure.Expected Implementation Strategies for Measure
Introduce new Medicare schedule fees (90 per cent of existing schedule fees) for the 8 items in the Assisted Reproductive Services area of the Medicare Benefits Schedule. The fee changes will be effective as from 1 November 1996 to coincide with the reprint of the Medicare Benefits Schedule. At the same time changes to a number of other items will restrict those items to services other than sterilisation reversal.Intended Impacts of Measure
The reduction in fees will bring the Medicare fees for these services to a comparable level with other Medicare fees. The measure dealing with reversal of sterilisation will prevent government funding for the reversal of elective procedures.Implementation of Reforms for Diagnostic Services
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
3.6 | 3.8 | 3.9 | 1.8 |
Purpose of Measure
To implement the pathology and diagnostic imaging reforms.For further description see the Pathology Reform Savings Package and Diagnostic Imaging Reform Savings Package measures under this sub-programme.
Top of page
Restructure Medicare Benefits for Assistance at Operations
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-5.6 | -10.5 | -11.9 | -12.4 |
Purpose of Measure
Introduce a revised structure of Medicare benefits for the provision of assistance at operations which will provide a more rational, equitable and efficient basis for the payment of such services.Expected Implementation Strategies for Measure
The revised structure will ensure that Medicare benefits are only paid for assistance at operations where a real clinical need for such assistance has been demonstrated, rather than being paid when certain monetary criteria are met. The new structure will be introduced as from 1 November 1996 to coincide with the annual reprint of the Medicare Benefits Schedule.Intended Impacts of Measure
The restructuring will improve the efficiency of Medicare Benefits by relating benefits for surgical assistance to clinical necessity rather than price.Restructure of Medicare Items Covering Removal of Tumor, Cyst or Scar
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-3.3 | -6.0 | -6.3 | -6.6 |
Purpose of Measure
Introduce a more rational and efficient structure of Medicare items covering the removal of tumours, cysts or scars.Expected Implementation Strategies for Measure
Changes to relevant Medicare items and fees will take effect from 1 November 1996 to coincide with the annual reprint of the Medicare Benefits Schedule.Top of page
Intended Impacts of Measure
The restructuring will lead to reduced fees for a number of services and also limit the opportunities for inappropriate billing and excessive servicing.Increase in Medicare Levy for Higher Income Earners without Private Health Insurance - Flow On to Medicare Benefits
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
- | 20.2 | 20.6 | 21.0 |
Pathology Reform Savings Package
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-32.4 | -64.4 | -104.1 | -144.1 |
Purpose of Measure
To cap pathology expenditure to pre-determined annual target amounts through a three-year Agreement with the two peak pathology professional bodies.Expected Implementation Strategies for Measure
The Agreement will contain a series of measures to manage and keep expenditure within the cap. Co-operation is underwritten by an agreement that there will be automatic fee discounting if measures do not constrain growth. There is also allowance for re-negotiation in light of significant changes including new tests and diseases.The Agreement also contains a number of elements to address inappropriate pathology practice and use, to better manage demand and to develop more systematic approaches to evidence accumulation and assessment as part of on-going management of pathology.
Intended Impacts of Measure
To bring stability to pathology, constrain growth rates and promote quality, appropriate and cost effective patient care.Top of page
Diagnostic Imaging Reform Savings Package
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-30.0 | -62.3 | -69.7 | -78.8 |
Purpose of Measure
To reduce growth rates and bring about structural reform of radiology, nuclear medicine and other areas of diagnostic imaging through a package of measures developed in co-operation with professional bodies.Expected Implementation Strategies for Measure
Measures include:- strengthening incentives in the Medicare benefits arrangements to promote appropriate, quality and cost effective diagnostic imaging practice by:
- introduction of multiple service rules, targeted changes to fee relativities and item restructuring from 1 November 1996;
- moving towards capital-sensitive items from 1 July 1997; and
- reviewing ultrasound arrangements in light of Australian Health Technology Advisory Committee's forthcoming report;
- a one-year fee freeze from 1 November 1996;
- introducing accreditation arrangements to support high standards of practice as well as respond to varying needs of the sector:
- to be developed and implemented in consultation with professional and other bodies over the period 1996-97 to 1997-98
- a review of current arm's length requesting arrangements to ensure they are responsive to current and future needs with results to be implemented in 1997-98;
- strengthening monitoring, review and evaluation arrangements; and
- supporting the development of information and education arrangements to promote rational ordering.
Intended Impacts of Measure
Constrain rates of growth, increase efficiency and effectiveness and enhance quality in the practice and delivery of services, better position the sector for the future, and promote quality, appropriate and cost effective patient care.Withhold 1 November 1996 Medicare Fee Increase (excludes Pathology and Radiology)
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-33.2 | -60.6 | -64.0 | -68.0 |
Top of page
Purpose of Measure
This measure withholds a fee increase for Medicare Schedule fees for 1996-97.Expected Implementation Strategies for Measure
The annual fee increase for items in the Medicare Benefits Schedules, which normally would have been provided as from 1 November 1996, will not be implemented.Intended Impacts of Measure
The measure will reduce Government outlays on Medicare. For services which are bulk billed the impact will be on doctors and optometrists. For services that are patient billed, the impact will be on patients. In 1995-96, 71 per cent of services were bulk billed.Limited Medicare Access for New Doctors Without Post-Graduate Qualifications - Department
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-23.9 | -100.1 | -171.7 | -241.7 |
Purpose of Measure
This proposal is to prevent payment of Medicare benefits for services provided by new medical practitioners who do not have formal postgraduate training and an appropriate professional framework. This would help patients to be confident that services subsidised by Medicare are being provided by appropriately qualified professionals.This measure also includes a $20 million per annum funding package to address a number of medical workforce issues, including salaried positions, rural and remote area services, and locums.
Expected Implementation Strategies for Measure
Legislation will be introduced in the Budget session to restrict access to Medicare by new practitioners who do not have formal recognition (based on completion of postgraduate training). The restriction will take effect from 1 November 1996. It will not affect the general ability of new doctors to practise outside of the Medicare system.In the first instance, medical practitioners seeking to provide services eligible for Medicare will need to be formally recognised as either general practitioners, specialists or trainees. Further legislative changes will be introduced at a later date to introduce measures to recognise certain groups of special interest medical practitioners.
The funding package of $20 million per annum will be developed in consultation with the States and Territories, the medical profession and other interested groups.
Top of page
Intended Impacts of Measure
The effectiveness of Medicare will be enhanced with a $20 million per annum funding package available to help address the under-supply of doctors in hospitals and rural areas.The efficiency of Medicare will be boosted as the growth in the medical workforce accessing Medicare, and the per capita outlays on health care, will be contained.
Limited Medicare Access for New Doctors Without Post-Graduate Qualifications - Health Insurance Commission
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
0.2 | 0.2 | 0.1 | 0.1 |
Reduction in Migrant Places under the Humanitarian Programme
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.2 | -1.0 | -2.2 | -3.7 |
Purpose of Measure
This measure recognises the savings to Medicare which follow the reduction in the number of places in the Humanitarian Programme by 1,000 places in 1996-97 and 3,000 thereafter.Expected Implementation Strategies for Measure
The savings will be consequent upon the changes to the Immigration Programme.Intended Impacts of Measure
The reduction in the Humanitarian programme will have a flow on effect on Medicare demand.Top of page
Changes to the Migration Programme - Tightening of Family Reunion Requirements and Processes, and Expansion of Skilled Migration
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-1.5 | -4.6 | -7.7 | -10.9 |
Savings from Reduced Cash Balances Held by Statutory Bodies
Financial Implications
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-54.1 | - | - | - |
Purpose of Measure
Improved cash management of HIC Medicare benefit payments.Expected Implementation Strategies for Measure
Under new arrangements, benefit payments will be drawn from the Commonwealth bank account as the cheques are presented. This change is to be implemented during 1996-97.Intended Impacts of Measure
This measure will reduce the level of Commonwealth cash held in the HIC bank accounts, thereby reducing the cost of public debt interest.Application of an Efficiency Dividend to Commonwealth Own Purpose Outlays and Specific Purpose Payments of a Running Costs Nature
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-2.6 | -3.8 | -5.7 | -6.9 |
Top of page
Reallocation of Funding for Administration of Re-opening Transfers from Commonwealth Superannuation Scheme to Public Sector Superannuation Scheme - Health Insurance Commission
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.04 | - | - | - |
Across-the-Board Reduction of 2% in Running Costs - Health Insurance Commission
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-4.5 | -4.5 | -4.7 | -4.9 |
Across-the-Board Reduction of 2% in Running Costs - Professional Services Review Scheme
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.03 | - | - | - |
Across-the-Board Reduction of 2% in Running Costs - Department
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.2 | -0.2 | -0.2 | -0.2 |
Whole of Government Telecommunications Savings Initiatives - Health Insurance Commission
1996-97 $m | 1997-98 $m | 1998-99 $m | 1999-00 $m |
-0.2 | -0.4 | -0.5 | -0.5 |
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