1997-1998
Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98
This page provides a summary of health initiatives from the 1997-98 Budget.
Fact Sheet 2
Summary of health initiatives
Medicare Benefits
Revised process for Medicare Benefits Schedule (MBS) listing and review
A new Medicare Services Advisory Committee (MSAC) will be established to oversee the assessment of new procedures and reassess procedures covered by existing Medicare Benefits Schedule items. This will ensure that Medicare benefits are paid only for those procedures supported by evidence as being safe, efficient and cost-effective.
Where insufficient evidence is available to fully assess a new procedure, interim listing will be considered provided the service is delivered within a properly conducted research setting. Funding has been made available to support the interim listing and associated research.
In 1997-98, $1.5 million will be available to support the initiative, including infrastructure and research activities, increasing to $2.5 million in 1998-99, just over $4 million in 1999-2000 and $7 million in 2000-2001. Funding is expected to be available in early 1998. The Government will be investing significantly in the new process to produce improved health outcomes and modest savings in Medicare.
The total effect of the measure on the portfolio will be additional expenditure of $1.5 million in 1997-98 and $520,000 in 1998-99, and then savings of $490,000 in 1999-2000 and $3.1 million in 2000-2001.
Introduction of electronic commerce for Medicare claim processing
Doctors will be encouraged to give patients the option of electronically lodging their Medicare claims directly from the GPs' surgeries. This will substantially improve access to Medicare services, especially for many people in rural and remote areas.
Doctors will be able to electronically lodge claims for all Medicare services, instead of only bulk billed claims. Electronically lodged Medicare claims will generally be processed more quickly than paper-based claims, as lodging claims at the point of service will help reduce payment delays. Existing payment arrangements, including bulk billing, will still apply.
The costs of this measure are costs to Medicare benefits caused by reduced payment delays from electronic claiming. These are transitional costs over the medium term and will not impact when the new system is fully implemented.
The savings from more efficient payment of benefits will obviate the need to close rural Medicare offices following the introduction of the pharmacy claiming process and will provide funding to offset some of the costs of separation of Medibank Private from the Health Insurance Commission.
A gradual uptake of this option is expected over the next four years. The cost of the measure is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-0.1 | 0.1 | 11.7 | 16.4 |
Medicare fee increase
Doctors will benefit from a general increase in Medicare Schedule fees for 1997-98 of approximately 1.7 per cent.
There will be a 0.85 per cent increase in the Schedule fees for General Practitioner Attendance items (eg the Medicare Schedule fee for a level B consultation is expected to rise to $24.70), with the balance of the fee increase available through the General Practice Strategy.
There will be no increase in the Schedule fees for the Other Non-referred Attendance items, Family Group Therapy items or the Acupuncture item.
The fee increase will come into effect on 1 November 1997.
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Medicare benefits for optometrical consultations
An agreement has been reached with the Australian Optometrical Association which will promote appropriate and cost-effective patient care, as well as significantly reducing Medicare payments.
The agreement will result in restructuring the descriptions and fees for some items in the Medicare Schedule for Consultations by Optometrists.
Areas targeted for restructure include the payment of Medicare benefits for a second comprehensive consultation within two years except where there is a genuine clinical need, and tightening of the conditions for contact lens prescriptions.
The change to the contact lens items will affect patients who have myopia of greater than 4.00 dioptres but less than 5.00 dioptres. Previously, patients with myopia at 4.00 dioptres or greater were eligible for Medicare benefits for contact lens prescriptions. The change has been introduced as a result of the improved effectiveness of spectacle lens material, now available for disorders within the range of 4.00 to 5.00 dioptres.
The measure will come into effect on 1 November 1997. The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-7.8 | -13.9 | -14.8 | -15.5 |
Medicare benefits for home visits
From 1 November 1997, Medicare benefits for home visits by non-specialists will be paid on the same basis as Medicare benefits for non-specialist consultations at all other non-surgery locations (eg hospitals, nursing homes). This means the loading for the inconvenience and extra costs associated with visiting patients away from the surgery will be reduced where two or more patients are consulted at the same location.
Under the new arrangements, when a Level B home visit is made to one patient, the Schedule fee for the visit will be $42.20 (taking into account the anticipated Medicare fee increase). When the visit is made to two patients at the same location, the Schedule fee for the first consultation will be $33.45, and the Schedule fee for the second consultation will be $33.45.
The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-2.0 | -3.5 | -3.7 | -3.8 |
General Practice Strategy
As a crucial element of the commitment to improving and supporting General Practice, the Government will review the current General Practice Strategy in consultation with the medical profession. The Government intends to work with the profession to develop alternative approaches to General Practice funding that will reinforce and promote strategies which achieve positive outcomes for patients.
This may include, for example, support for initiatives that provide best practice management of chronic conditions such as diabetes and asthma, that participate in preventive health measures such as cervical cancer screening and mammography, and that can demonstrate appropriate prescribing and pathology ordering.
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The precise nature of these activities, and the outcomes at which they are directed, will be determined in consultation with the profession. The resulting improvement in patient health will, in turn, reduce the call on Medicare funds.
Changes to the Better Practice Program to reflect the new arrangements are expected to be in place by 1 February 1998.
The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-34.4 | -28.0 | -37.9 | -39.9 |
Further savings of approximately $8 million over four years will be achieved by merging two components of the Strategy relating to evaluation, and reducing the allocation to reflect actual spending levels. The merged program will continue the work of the existing programs.
The effect of the merging of these components is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-2.0 | -2.0 | -2.1 | -2.1 |
Pharmaceutical Benefits Scheme
The Federal Government has decided on a number of measures to ensure the ongoing value-for-money of the Pharmaceutical Benefits Scheme (PBS), and to support quality, cost-effective prescribing of medicines under the PBS.
National Prescriber Service
It will provide around $22 million over the next four years for a National Prescriber Service aimed at helping the medical profession develop best practice clinical standards for prescribing medicines. This service, to be in place by 1 March 1998, will be managed by a board made up mainly of doctors and government representatives, which will operate at arm's length from the Government.
The service will provide doctors with up-to-date information about their prescribing patterns, and access to individually tailored educational resources to support evidence-based, cost-effective and quality prescribing. It will also manage a grants program to identify and develop effective approaches to quality prescribing.
The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
0.4 | -8.1 | -8.0 | -7.9 |
Therapeutic group premiums
The Government has decided also to extend the practice of price premiums beyond generic brands of a drug to groups of drugs which, while not identical, have very similar clinical activity. A low-priced drug in the group will set a benchmark, and the price difference for higher priced drugs will be paid by the patient.
From 1 February next year, for each of a number of therapeutic groups containing very similar drugs, a base price will be established. The Government subsidy will be on the basis of this price, and any price difference for a more expensive drug in the group will be paid by the patient. Based on experience with the pricing of alternative brands, the competition in the market place will result in premiums in the order of $2.
Six drug groups will be affected: ACE Inhibitors, Calcium Channel Blockers, and Beta Blockers, all used to treat hypertension; Selective Serotonin Re-uptake Inhibitors (SSRIs), to treat depression; some drugs for lowering blood cholesterol; and H2 receptor antagonists for the treatment of ulcers.
The decision over which treatment to use still lies solely with the doctor and the patient. There will be no substitution by pharmacists.
Implementation will be based on professional and clinical advice, and there will be a two-year education campaign incorporating a help-line service.
While Australia's health care system provides excellent equity of access to health care for the community, it is important to ensure that the people who use the system - both doctors and patients - take cost into account in reaching treatment decisions. This measure will encourage greater price competition and changes in prescribing patterns.
The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-41.4 | -157.5 | -173.8 | -188.7 |
Funding of $4 million in 1997-98 will be provided to assist pharmacists with the costs of properly advising the community about the details of the measures and other aspects of cost-effective use of medicines, including the availability of alternative brands.
Deletion of less important medicines from the Schedule of Pharmaceutical Benefits
The Government has decided also to delete from the Schedule of Pharmaceutical Benefits a number of drugs used to treat less serious medical conditions, resulting in an estimated $112 million in savings over the next four years.
Most of these products are available over-the-counter at prices ranging from $2.45 to $9.65. The drugs proposed for deletion are listed below.
The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
-10.9 | -29.7 | -33.4 | -37.6 |
The ready-prepared medicines proposed for deletion from the PBS are:
Antispasmodics
Belladonna alkaloids, tablets containing atropine/hyoscyamine/hyoscine
Anti-diarrhoeals
Diphenoxylate with atropine, tablet
Aluminium hydroxide with kaolin, mixture
Topical anti-inflammatories
Methyl salicylate, liniment
Anti-emetics
Promethazine theoclate, tablet
Anti-fungals
Amorolfine, nail lacquer
Terbinafine, tablet
Rural Health
The Federal Government has strengthened its commitment to the health needs of Australians in rural and remote areas by introducing new measures in the 1997-98 Budget to build on the rural health initiatives announced in last year's Budget.
The measures include:
- additional funding of $17.4 million over four years to target major rural and remote health priority areas:
- enabling a greater capacity to respond to rural and remote health needs and to develop innovative models of health care delivery to remote communities by responding to particular needs;
- specialist medical training in rural areas will be extended in cooperation with the States and Territories and the specialist medical colleges;
- the creation of a rural and remote health support program which will provide greater flexibility in addressing changing priorities:
- the program, which will bring together a number of existing programs, includes funding for the Royal Flying Doctor Service, the Rural Health Support, Education and Training (RHSET) Program, training and support arrangements for nurses, and locum relief arrangements for specialists;
- a pilot study will be allocated $5 million to develop obstetric services in rural areas which will address the problems doctors face in providing obstetric care, such as difficult practice conditions, limited availability of professional indemnity cover and a lack of peer support:
- arrangements for the pilot study will be developed in consultation with key stakeholders, including appropriate medical professional groups;
- short-term pilot projects will be conducted to test alternative ways of planning and funding obstetric services in rural areas;
- funding will be provided by savings from Medicare benefits which will not be available for obstetric services provided in those identified areas for the period of the study.
The total effect of the measures on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
2.0 | 3.6 | 5.5 | 6.3 |
Mental Health
Renewal of the National Mental Health Strategy
The measure will provide a strong national framework for the ongoing reform of mental health services in Australia via the National Mental Health Strategy. It will shift the focus of reform towards prevention and early intervention, outcomes based performance monitoring and implementing evidence based approaches to care, while consolidating the gains already made in structural reform of mental health service delivery.
In recognition that existing resources are sufficient only to maintain the momentum of the current National Mental Health Strategy (which would have ceased in June 1998), supplementation has been agreed to enable development work in 1997-98 to ensure the measure is ready for implementation as of July 1998. Funds will be used to undertake work at the national level in the key areas of:
- mental health promotion;
- consolidation of community awareness programs to secure long term changes in attitudes;
- service monitoring and evaluation;
- development of outcomes focused performance indicators;
- epidemiological studies to monitor Australia's mental health;improved education and training, and supply and distribution of mental health professionals; and
- identification and dissemination of best practice in mental health service delivery, including for services in rural Australia.
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
0.2 | 7.5 | 11.8 | 9.0 |
Immunisation
Funding mechanisms for the purchase of essential vaccines, including funding for the Hepatitis B Vaccine
A new funding mechanism will be established to enable a more timely provision of new vaccines recommended by the NHMRC.
Funding for vaccines for childhood immunisation is currently provided through the National Childhood Immunisation Program (NCIP). As part of this program the Commonwealth makes special purpose payments to the States to allow them to bulk-buy vaccines for use by all immunisation providers, including general practitioners. However, as funding under the existing mechanism is capped, there can be significant delays between the availability of new vaccines and their provision through the NCIP.
This measure puts in place a new funding mechanism which will enable more timely provision of new vaccines recommended by the NHMRC. The new funding arrangements will be similar to the current Pharmaceutical Benefits Scheme (PBS), with new listings and de-listings of vaccines, based on technical assessments and cost-effectiveness data, included in the program through regulation under the National Health Act.
Hepatitis B vaccine for pre-adolescents will be the first vaccine made available through this mechanism and will cost approximately $3.9 million in a full year. The arrangements for the supply and delivery of vaccines under the proposed Public Health Agreements will remain in place.
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1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m | |
| New funding mechanism for the purchase of essential vaccines and purchase of HBV | 2.6 | 3.9 | 3.9 | 4.0 |
Hepatitis B pre-adolescent immunisation program
The Commonwealth has approved funding for a Hepatitis B Pre-adolescent Immunisation Program. It will be provided in the school setting to ensure that vaccines are administered prior to a time when risks of lifestyle, such as injecting drugs or sexual experiences, are beginning to become a factor. Delivery in the school setting has been chosen as the level of coverage of the target group would be low if delivered only by GPs and health clinics, as adolescents do not use these services frequently.
The Commonwealth will cover the cost of the vaccines and contribute up to half the additional cost of delivering the vaccines to schools. State and Territory governments which agree to participate will deliver the school-based Hepatitis B service. A February 1998 commencement date will allow States and Territories time to overcome logistical difficulties in implementing the program in the school setting.
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m | |
| HBV immunisation delivery program | 0.2 | 0.4 | 0.5 | 0.5 |
Comprehensive National Immunisation Strategy
Generally greater than 95 per cent vaccination coverage is required to reduce or cease transmission of vaccine preventable diseases. This figure will vary according to the epidemiology of disease and the efficiency of the vaccine. As one vaccine may protect against a range of diseases, it is important that coverage is high for one-off doses of all vaccines.
In the past, Australia's immunisation performance has been poor. In February 1997 the Government announced a major package of initiatives aimed at lifting Australia's immunisation rate to an acceptable level. The two most significant elements are linking age appropriate immunisation with entitlement to Maternity Allowance, Childcare Assistance and the Childcare Cash Rebate, and the provision of incentives to GPs for increasing immunisation coverage.
Other measures include monitoring and evaluating immunisation targets through collection of data and incentives systems; immunisation days to increase immunisation coverage particularly in low coverage areas; a feasibility study of a measles eradication program; education and research through the implementation of a communication strategy (mass media campaigns and establishment of a National Centre for Research in Immunisation); and working with States and Territories on the introduction of school entry requirements that involve parents submitting details of a child's immunisation history upon their child's enrolment, as has been achieved in New South Wales, the Australian Capital Territory and Victoria.
These initiatives complement other measures announced in the Budget. The introduction of a new funding mechanism will ensure more timely provision of new vaccines recommended by the NHMRC. In addition, the Commonwealth will assist States and Territories to implement a pre-adolescent Hepatitis B immunisation program in school settings. This Hepatitis B vaccine will be administered prior to a time when risks related to lifestyle (experimentation with drugs and sexual activity) are beginning to become a factor.
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1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m | |
| Comprehensive National Immunisation Strategy: "Immunise Australia" | 3.3 | 3.3 | 3.3 | 3.4 |
Palliative Care
Transitional funding for palliative care
Following the conclusion of the four-year Palliative Care Program (PCP), funding has been extended for one year pending consideration of funding for palliative care in future years in the context of the negotiation of new Medicare Agreements which will take effect on 1 July 1998. The transitional funding will enable continued funding of services and of the development of arrangements for the main streaming of palliative care in future Medicare Agreements. The Commonwealth will restore funding to real equivalence to 1995-96 levels, before the PCP was affected by broad banding savings that reduced funding in 1996-97. This will result in expenditure under the PCP of $14.7 million in 1997-98. 1997-98 funds will be provided in conjunction with the current Schedule G of the Medicare Agreements, not separate from Schedule G as they were during the 1993-97 PCP. For 1997-98, total Commonwealth funding under the PCP and Schedule G of the Medicare Agreements will be an estimated $27.8 million.
A Commonwealth review of the PCP has identified that the Commonwealth funding has provided up to two-thirds of the funds dedicated specifically to the delivery of palliative care services. The development of palliative care services across Australia was accelerated by the funding from the PCP over the past four years.
Methadone
Restructure arrangements for funding services related to the provision of methadone
The measure will fund methadone services as part of the Public Health Program, instead of through Medicare. Under the new arrangement, grants in lieu of Medicare payments for private methadone clients will be paid through Specific Purpose Payments to the States, subject to negotiation.
The level of funding will be based on an annualised allocation per client calculated from the average number of private clients treated in each jurisdiction over the previous 12 months (with an allowance for growth and inflation). Payments would be subject to performance measures and other statistical reporting.
The new funding arrangements will be based on the outcomes of the Commonwealth's 1997 trials of alternative models of methadone service delivery. A November 1998 commencement is envisaged. This timetable will enable trial outcomes to be evaluated and negotiations to be conducted with the States, and also to give the States and Territories time to prepare for the changeover.
Savings are expected from Medicare because the new funding arrangements will remove the scope for over-servicing inherent in the existing fee for service Medicare benefit structure.
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The total effect of the measure on the portfolio is as follows:
1997-98 $m | 1998-99 $m | 1999-2000 $m | 2000-2001 $m |
0.0 | -1.9 | -7.8 | -9.6 |
Acute health care
Initiatives to stimulate micro-economic reform in the management of acute health care, information technology and performance measures
The Government will spend around $40 million over four years on three measures designed to support improved management of the acute health care sector. The initiatives are designed to reduce costs and improve services for acute care hospital patients.
The three measures are:
- improving the way hospitals work through micro-economic reform;
- updating information technology; and
- improving hospitals' performance indicators.
The application of information technology to acute care and the availability of performance indicators to monitor progress in health services will improve the ability of doctors to provide best practice and evidence based care.
A pilot electronic decision support system will be developed and tested in an network of primary, acute and community care services. Key elements of the pilot will be:
- the development of specifications and standards for electronic medical records and clinical decision support systems;
- development of electronic clinical support systems; and
- the integration of electronic patient records, patient medical records, clinical practice guidelines and provider links.
Private health insurance
The 1997-98 Budget has allocated just over $2 million for a television advertising campaign to be cost-shared with the private health insurance industry to remind people of the benefits of having private health cover and to inform them that it is now better value through the Private Health Insurance Incentives Scheme.
Further details on specific topics and contacts are contained in other fact sheets
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