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PDF printable version of Pathology Services to be Better Managed and Funded, Delivering $550 Million Saving to Taxpayer (PDF 22 KB)

11 April 2011

A new landmark agreement between the Gillard Government and the pathology sector will ensure that patients get access to quality, affordable pathology services and the tax payer, better value for money.

Minister for Health and Ageing Nicola Roxon welcomed the new five-year agreement and the more than $550 million saving that it offers to the budget following negotiations between the pathology sector and the Government.

“The Gillard Government has a strong track-record in pathology, with pathology bulk billing at near record levels and more than 1000 new pathology collection centres opening thanks to Labor’s reforms,” Minister Roxon said.

“Following very productive discussions with the sector, we have now secured a new five-year deal that will help the sector be prepared for the challenges of the future, including pressures from our ageing population and increased rates of chronic and preventable disease.

“The agreement will improve transparency for setting pathology fees and help to ensure that taxpayers are only paying for pathology tests that are clinically required.

“Improving healthcare for patients is at the heart of national health reform, and the Gillard Government has again delivered for patients today by securing this new deal,”

Since 1984, which is the entire period of funding pathology under Medicare, Government outlays have increased from $346 million to just over $2 billion, a 5.8 fold increase at an annual average growth of 7.3 per cent.

Under this new agreement, the average annual growth in pathology expenditure will now be capped to approximately 5 per cent per year.

Key components of the five-year agreement, which was agreed today by the Government and the Australian Association of Pathology Practices, the Royal College of Pathologists of Australasia and the National Coalition of Public Pathology, include:

• commitment to improve transparency for setting and reviewing pathology fees, including a new role for the Medical Services Advisory Committee to assess the cost-effectiveness of new pathology tests
• commitment to develop a National Pathology Framework covering issues like workforce development and laboratory accreditation
• integration of pathology results within e-health records
• engage with GP stakeholder groups to investigate ways to improve support services to GPs to better request pathology services
• establish a working party to develop an approach for genetic services
• maintain the Government’s competition reforms to ensure that big and small players alike can open new pathology collection centres.

The $550 million saving delivered by this agreement comes at a time when Government revenues have been hit by natural disasters and a patchwork economy, making it even more important to get the best possible value for money for Australian taxpayers.

The new agreement is supported by representatives of the pathology workforce and a clear majority of the industry in the public and private sectors, including Catholic Health Australia. A Pathology Agreement Advisory Committee will be established to oversee and provide advice to the Government on the agreement.

For all media inquiries, please contact the Minister's Office on 02 6277 7220

Media note:
The $550 million saving to the budget is for the life of the five year agreement. The savings over the forward estimates (2011-12 to 2014-15) is expected to be approximately $400 million.