Review of methadone treatment in Australia

12.5 Discussion

Page last updated: October 1995

The above discussion of the relative advantages and disadvantages of the four funding mechanisms considered in this report highlights the fact that there is no single funding mechanism which addresses and solves all the problems associated with the provision of methadone services and their remuneration. Notwithstanding this fact, the choice of payment system may act as a major influence on practitioner behaviour, and provide an incentive (or disincentive) for promoting models of best practice.

The existing fee for service arrangements embodied in the current Medicare system, coupled with the fact that these services are not separately identifiable from other medical services in the CMBS encourage over-servicing. However there have been no widespread reports of this occurring, and most complaints about these issues have been restricted to a relatively small number of practitioners.

Of the options considered, the fee for service approach caters best for the significant variation that exists between individual clients and their clinical needs, and remunerates practitioners according to the quantum of services they provide. It is also the most commonly accepted form of payment for medical services, and is supported by medical practitioners, which is essential if they are to be retained and attracted to providing methadone services. Despite these advantages, this approach does not encourage or facilitate the adoption of best practice methods.

If the fee for service model is to be continued, we consider that, as a minimum step, medical services relating to methadone treatment should be separately identified within the CMBS.

While recognising the difficulties associated with developing and applying appropriate service definitions and potential service boundary problems, such an approach is likely to lead to greater clinical and financial accountability, without significant change to the current payment mechanism. This change is unlikely to be opposed by medical practitioners, although clients may have reservations because of privacy and confidentiality concerns. At the same time, we consider that the differential fees charged for methadone consultations between GPs and specialists (including psychiatrists) are not justified by the nature of the methadone services provided to clients who are stable, and that a common set of fees should be determined for these cases. Such a step is likely to reduce the costs to the Commonwealth for methadone services.

A client management model reduces the incentives for over-servicing, and as such may be seen to promote models of best practice. This model may be structured to provide financial incentives for medical practitioners to retain clients in methadone programs for longer periods. On the other hand, it may also promote under-servicing, leading to concerns about the quality of services provided under this model. The client management payment model also has equal application in both the public and private sectors. The model works best for stable clients, but does not cater well for variations in clients' clinical needs unless differential payments are made. In the absence of differential payments, more complex cases may be excluded from treatment altogether. In order to reduce the potential for abuse, and to cater adequately for the different needs of complex and stable cases, the client management payment model must work in concert with the service delivery model. In particular, the role of the general practitioner in assessing the needs of individual clients, and acting as the referral agent for complex cases to "specialist" practitioners (whether in the public or private sectors) is pivotal to its success. The client management model also provides a mechanism for the Commonwealth to limit its funding liability.
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The final option considered of removing methadone treatment from the CMBS and substituting it with direct grants to the States effectively transfers the payment responsibility from the Commonwealth to the States, who may adopt any of the funding models described. While this approach may be criticised in that it fails to address the underlying deficiencies in the payment systems themselves, it nevertheless provides for greater flexibility and control by the States over the mix of public and private services they choose to employ in their jurisdiction. It also brings the regulatory and funding roles closer together, which may be used to monitor and improve the quality of services provided. On the other hand, this approach will lead to a duplication in the infrastructure required to administer methadone services, leading to higher total costs of administration. It is problematic as to whether these higher administrative costs can be offset by lower costs of service provision achieved through a competitive tendering environment. A variation to this approach would see the transfer of the purchasing role to the Commonwealth. While this variation has some attractive features, it would entail significant changes to the legislative and administrative framework to be effected. It also calls into question the capacity of the Commonwealth to plan and administer methadone services at the local level. In addition, this approach raises the issue of the capacity of the States to negotiate alternative payment structures to the existing fee for service arrangements with medical practitioners. As the central purchaser of the services in the private sector, the Commonwealth is in a much stronger position to negotiate alternative payment structures.

The Terms of Reference for this study identified a number of factors to be considered in evaluating alternative payment options. Table 22 seeks to rate each of the payment systems described in this section against each of these factors. The basis of evaluation is necessarily subjective, and reflects the consultants' views on the different systems. Nevertheless, the table illustrates how the different options rate against the criteria specified. In regard to Option 4, it has not been feasible to rate some of the characteristics, since the nature of the funding system which might be adopted by the States (or the Commonwealth under the alternative variation) is unknown. Should a fee for service model be adopted, then the ratings ascribed to Option 2 would apply. If, on the other hand, a client management model were adopted, then the ratings ascribed to Option 3 would apply.

The ultimate choice of funding system will be determined by the priorities of the various parties, and their views on the significance of the individual assessment criteria.

Table 22: Comparison of alternative payment systems against specified criteria

Criteria Option 1Option 2Option 3Option 4
Provides an equitable means of payment
Y
Y
Y
Y
Ensures an optimal balance of service between the public and private sectors
N
N
Y
?
Provides a baseline standard for the administration of methadone programs
N
Y
Y
Y
Is flexible and adequately caters for - differing levels of service e.g. counselling
Y
Y
N
?
Is flexible and adequately caters for - choice of treatment approach
N
N
Y
?
Is flexible and adequately caters for - client mobility
Y
Y
N
?
Is flexible and adequately caters for - safety and medical issues
N
Y
N
?
Provides adequate incentives for private sector participation
Y
Y (depends on fee)
N
?
Incurs minimal cost to the client
Y
Y
Y
Y
Allows for appropriate provision of service personnel
Y
Y
Y
Y
Minimises the potential for abuse and fraud
N
Y
Y
Y
Improves efficiency of administration
N
Y
Y
N
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