Medicare Safety Net has Become More Sustainable

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PDF printable version of Medicare Safety Net has Become More Sustainable (PDF 17 KB)

1 July 2011

An independent report has found that changes by the Australian Government to the extended Medicare safety net (EMSN) have made the program more sustainable.

The report, undertaken by the Centre for Health Economics Research and Evaluation at the University of Technology Sydney, reviewed the impact of limits put on the amount of benefits paid through the safety net for a small number of items.

These limits were implemented by the Government from January 2010, as Mr Abbott’s poorly designed safety net had been blowing out by 20 per cent, or $100 million a year, which was unsustainable.
Within around 30 years, the extended Medicare safety net would have grown to be larger than Medicare itself. Moreover, for some services, 78 cents in every additional dollar in safety net costs had been going to higher doctors’ fees, not to benefit patients.

The report shows that safety net expenditure in 2010 returned to about $310 million a year, similar to the cost in 2007 before costs blew out to $538.6 million in 2009.

At the same time, while the safety net has become more sustainable, the number of people accessing safety net benefits has remained stable, with almost one million people receiving benefits in 2010. The report also did not find robust data to suggest an increase in pressure on public hospitals.

However, the report also found that the safety net is not well targeted at Australians most in need, and that some doctors are continuing to charge excessive fees.

The report has found that people in the wealthiest areas are receiving more than half (53%) of safety net benefits, while less than four per cent (3.7%) of benefits are going to the most disadvantaged areas.

People in rural areas are only receiving about one third the benefits per person compared to people in capital cities.

In addition, the review shows that there are still some doctors who are charging excessive fees to take advantage of a program meant to help patients — leading to some high out of pocket expenses.
For example, the fees charged by specialists for anaesthetic used in association with cataract surgery increased by as much as 400 per cent between 2009 and 2010.

Fees charged by some specialists have increased by significantly more than increases in Medicare rebates. While the Medicare rebate for one IVF item in an initial stimulated cycle has increased by $1,000, the fee charged by specialists for this one item increased from $3,700 in 2009 to over $6,000 in 2010.

In addition, some doctors appear to be providing complex procedures out of hospital, such as medically necessary breast reduction surgery, in order to access safety net benefits.

The Government will carefully consider this report and its findings to see if any further steps are required to ensure that Medicare and the safety net support safe and sustainable services.

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