1997-1998
Australia's Commonwealth Department of Health and Family Services, Budget Document 1997-98
The 1997-98 Budget cements the Government's commitment to a sustainable health care system which provides better quality of care, greater fairness in access to services for rural communities, and a stronger focus on health promotion and public health with an enhanced role for consumers and general practice.
Dr Michael Wooldridge
Minister for Health and Family Services
Building upon the achievements and strengths of Australia's health care system
The 1997-98 Budget cements the Government's commitment to a sustainable health care system which provides better quality of care, greater fairness in access to services for rural communities, and a stronger focus on health promotion and public health with an enhanced role for consumers and general practice.Significant new initiatives and the extension of important public health programs have been funded, and we have taken further steps to contain the rate of increase in some program areas where there has been unsustainable growth in expenditures while maintaining our fundamental commitment to Medicare and continuing to honour our election commitments.
Key initiatives include the introduction of electronic commerce for the lodgment of Medicare claims direct from doctors' surgeries, Hepatitis B Vaccination for schoolchildren, strengthening the evidence base of the Medicare system, new fellowships to encourage young researchers now overseas to return to Australia, and $17.4 million over four years for health priorities in rural and remote areas.
Managing reform for long term change
I will soon begin negotiations with my State and Territory colleagues concerning the next Medicare Agreements, due to commence on 1 July 1998. I am determined to use this historic opportunity to ensure that the Agreements focus on outcomes for people who use our health system rather than only on financial inputs, and have clear principles and objectives related to quality and access.
The key issues for discussion include Australia's over-reliance on hospitals and the under-reliance on community care, increasing the use of step-down facilities to free up acute hospital beds, securing a stable funding base for palliative care services into the future, greater reliance on day surgery, and better integration of funding so we can achieve improved services and more innovative models of health care.
We now have 15 coordinated care trials being developed across Australia (12 in general care settings and three in Aboriginal communities) which are already showing that there are enormous gains possible in terms of improved patient care if we fund health services more flexibly. Former Labor Health Minister, Graham Richardson, recently commented that coordinated care, "should bring about real improvements in health care while actually saving money."
This is a good example of the sort of objectives I want to achieve through the next Medicare Agreements in cooperation with my State and Territory colleagues.
This Budget demonstrates our ability to finance improved health outcomes, and strengthen Australia's research and public health efforts, when we have greater control over the cost-drivers in the health care system .
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Electronic commerce for Medicare claims processing
People will have the option of electronically lodging their Medicare claims directly from doctors' surgeries. This will substantially improve access to Medicare services, especially for many people in rural and remote areas, and bring the payments system firmly into the electronic information age.
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. Doctors will be able to electronically lodge claims for all Medicare services, instead of only for bulk billed claims. Existing payment arrangements, including bulk billing, will still apply.
The savings from more efficient payment of benefits has obviated 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.
First steps to establishing evidence-based medicine in the MBS process
Worldwide the moves towards an evidence-based approach to medicine will be the single most important line of thought over the next decade in health care management. The Cochrane Collaboration and other cooperative efforts are allowing health professionals to have access to an overwhelming body of evidence that evaluates the effectiveness of different clinical, surgical, pharmaceutical and other treatments.
For Government the benefits of evidence-based medicine are obvious. First, it promotes quality of care for patients. Secondly, it promotes cost containment because, by supporting what we know works well and discouraging what we know doesn't work, patient care will be more effective and we can have better cost control in a manner acceptable to the profession. Evidence-based medicine is supported by the medical profession, purchasers of health care services, providers and consumers.
A Medical Services Advisory Committee (MSAC) will be established to provide advice on the inclusion of new procedures and services on the Medicare Benefits Schedule (MBS). MSAC will oversee the assessment of new procedures and the review of existing MBS items, to ensure that Medicare benefits are paid only for those procedures supported by evidence as being safe, of benefit to the patient and cost effective. MSAC will absorb the functions presently undertaken by the Medicare Benefits Advisory Committee (MBAC) and the Medicare Benefits Consultative Committee (MBCC).
Medical practitioners will be able to access findings from research commissioned or compiled by MSAC, and in some cases will be able to participate in the evaluation of new medical procedures.
At a practical level doctors and medical colleges will no longer need to compile all the evidence themselves when making a submission for the listing of new procedures. Consumers will be reassured that new procedures have been rigorously evaluated before they attract Medicare benefits.
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Immunisation and Hepatitis B Vaccination for school children
Building on the Immunise Australia strategy, the Government will provide more than $14 million over four years for the States and Territories to purchase the Hepatitis B Vaccine (HBV) and a further $1.6 million over this period towards delivering these vaccinations in schools commencing from February 1998.
The National Health and Medical Research Council (NHMRC) recently incorporated HBV into the Standard Schedule of recommended vaccinations. Hepatitis B is a serious disease which can cause prolonged illness in the acute stages and which, in a proportion of cases, results in chronic liver disease or cancer of the liver.
The Hepatitis B pre-adolescent immunisation program will ensure that young people receive the necessary vaccinations before a time when life style risks are beginning to become a factor. It recognises, however, that some young people will be vaccinated through their family GP rather than the school.
An additional $13.3 million has been provided over four years for the new package of measures included in Immunise Australia, bringing the extra amount being spent on childhood immunisation to about $29 million over the next four years.
Medicare benefits and general practice
The Government acknowledges the contribution of the medical profession last year to repairing the fiscal problems inherited by the Government, and its acceptance of a one-year freeze in Schedule fees.
Doctors will benefit from the full effect of indexation with a general increase in Medicare Schedule fees of an estimated 1.7% from November 1 1997. Half of this adjustment will be provided through an estimated 0.85% increase in General Practitioner Attendance items with the balance available through the General Practice Strategy.
The Government will review the current General Practice Strategy in consultation with the medical profession with a view to developing alternative approaches to general practice funding which reinforce and promote strategies which achieve positive outcomes for patients.
This may include, for example, support for initiatives which provide best practice management of chronic conditions such as asthma and diabetes, which participate in preventive health measures such as cervical cancer screening and mammography, or which demonstrate appropriate prescribing and pathology ordering. The resulting improvement in patient health will reduce the call on Medicare funds, producing modest savings.
From November 1, 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 locations away from the surgery, such as hospitals and nursing homes.
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Strengthening Australia's health and medical research capacity
The Government will provide more than $10 million to strengthen the health and medical research workforce. Funding for our health and medical researchers is an investment in the future health of all Australians, as the research community needs to maintain a high level and broad base of skills.
15 research fellowships will be established to encourage bright young researchers to return from overseas after gaining valuable international experience. Although Australia is a world leader in health and medical research, some of our best young researchers move to overseas institutions after completing their doctorates rather than seek postdoctoral training in Australia. These fellowships will help turn the so-called brain drain into a two-way street. Five will be awarded each year over the next three years, and they will have a two-year tenure.
They will be known as the Howard Florey Centenary Research Fellowships in tribute to one of our most famous scientists, who shared the 1945 Nobel Prize in physiology and medicine with Sir Ernst Chain and Sir Alexander Fleming for the discovery and development of penicillin, the first antibiotic, and was the first Australian to be president of the Royal Society. 1998 will be the centenary of Lord Florey's birth in Adelaide on 24 September 1898 and also the thirtieth anniversary of his death at the age of 70 on 21 February 1968.
The Budget has also funded additional scholarships and fellowships in priority health areas which are not currently well supported by strong research, and a review of the research workforce to develop a strategy to strengthen our national capacity.
Quality, cost-effective prescribing of medicines under the PBS
The Government will extend a number of measures to reduce the currently unsustainable growth of Pharmaceutical Benefits Scheme (PBS) expenditure, and to support quality, cost-effective prescribing of medicines under the PBS. PBS outlays doubled in the last five years and such a rate of growth is clearly unsustainable.
- A National Prescriber Service will be established to help doctors improve the way they prescribe medicines. This service, which will commence from March 1998, will be managed cooperatively with the medical profession. Around $22 million will be provided for this service over the next four years although this measure is expected to yield savings of around $24 million over the period through better and more appropriate prescribing.
- The practice of price premiums will be extended beyond individual brands of drugs which have identical chemical make-up to groups of medicines which have very similar clinical activity. This will build upon the generic pricing policy introduced by the Labor Government in 1990.
- From 1 February 1998 there will be a base price established for a number of therapeutic groups containing very similar drugs, and any price difference for a more expensive drug will be paid by the patient. The setting of price signals will give doctors and consumers more information in choosing between medicines, and the capacity to switch from higher-premium drugs to lower cost alternatives which provide very similar clinical benefits but don't require an increased payment by the consumer. For those who do not choose to switch to the base price drug, based on experience with pricing of alternative brands it is expected that competition in the marketplace will result in the premiums settling in a narrow and affordable range of about $2.00.
- Implementation will be based on professional and clinical advice, and there will be a two-year education campaign incorporating a help-line service. Funding will be provided to assist pharmacists advise the community about the changes and other aspects of cost-effective use of medicines, including the availability of alternative brands. This measure is expected to result in savings of around $560 million over four years.
- The Government has also decided to delete from the Schedule of Pharmaceutical Benefits a number of drugs used to treat less serious medical conditions, many of which can be obtained without a prescription, resulting in an estimated $112 million in savings over the next four years.
Further initiatives in rural and remote health
The Government will increase funding for rural health initiatives, building upon the measures announced last year to attract GPs to rural communities and improve access to services. The 1997-98 Budget initiatives include:
- Additional funding of $17.4 million over four years to target major rural and remote health priority areas, including the extension of specialist medical training in rural areas and the development of innovative models for service delivery;
- The creation of a rural and remote health support program to provide greater flexibility in addressing changing priorities, and which will bring together a number of existing programs including 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 $5 million pilot study to develop obstetric services in rural areas and to 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.
Leadership in stimulating acute care reform
The Government will spend a further $40 million over four years on 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 measures are improving the way hospitals work through microeconomic reform; updating information technology; and improving hospitals' performance indicators.
A number of programs to improve hospital performance were previously scheduled to end this year. The Government has decided in the 1997-98 Budget to extend the work in this important area under a comprehensive and integrated program covering four years. The measure will work across several policy areas to overcome barriers to microeconomic reform and improved health outcomes. The Commonwealth will work on a collaborative basis with the States and Territories.
Financial and structural barriers can cause fragmentation, duplication and lack of coordination with other sectors of the health care system. This measure will, in collaboration with the States and Territories, develop more cost-effective linkages between public hospitals, ambulatory care and community based services.
The information technology initiatives will establish national standards and specifications for electronic formats for patient records and for electronic links between health service providers. It will also pilot electronic decision support systems, including best practice and evidence based clinical guidelines. A key component of this work will be the resolution of privacy and confidentiality issues.
This measure will improve communication and decision making at all stages of health care provision. It will use information technology to integrate medical records, clinical decision support systems and provider links.
The Government is also working in partnership with the States and Territories and other stakeholders to develop robust, nationally consistent, reliable and valid indicators to monitor progress in health service performance. Considerable investment has already been made by the Federal, State and Territory governments through the National Hospital Outcomes Program.
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Other significant measures
Other significant measures, spelt out more fully in Fact Sheets, include:
- $33 million to extend a number of public health programs for an extra two years, including the National Women's Health Program, Hepatitis C Surveillance and Education, the NHMRC National Breast Cancer Centre and the National Anti-Tobacco Campaign
- Restructured funding for methadone services, and the description and fees for some MBS items relating to optometry
- $2 million for a television advertising campaign to remind people of the benefits of having private health cover and inform them of the Private Health Insurance Incentives Scheme
- $28 million to continue the National Mental Health Strategy, and an additional $14.7 million to extend funding for the Palliative Care Program, with future payments to both programs to be considered in the context of the renegotiated Medicare Agreements due to commence in July 1988.
- An increase of about $15 million in funding for the Aboriginal and Torres Strait Islander health and substance abuse program in 1997-98, including $5 million being taken up as new primary health care services come on stream following the 1996-97 Budget decision to extend primary health care to 35 communities previously lacking access to basic health care services.
For further detailed explanation of policy measures:Appropriate Departmental contact officers for detail of specific policy measures and other technical information are nominated in the Fact Sheets. These are available by mail or fax from the Department of Health and Family Services (06) 289 1555 and also from the Department's Internet Service located via the home page at http://www.health.gov.au/
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