Senate Inquiry on Out of Pocket Costs for Healthcare Consumers

By Petrina Smith
Wednesday, 30 July, 2014

A Senate Inquiry on out-of-pocket expenses for healthcare consumers has seen Australia's leading health organisations and associations present submissions.
After addressing the inquiry yesterday AMA president A/Prof Brian Owler said in a doorstop interview that the AMA cannot support the Government's current co-payment proposal and is working on an alternative model which would put a greater value on general practice, protect those most vulnerable in our community and encourage people to see their doctor for preventative healthcare.
"I've said to the Government that our alternative proposal is not about a proposal that will fund the Medical Research Future Fund. "Now we know that the proportion of funding for the Medical Research Future Fund, only a fraction of it actually comes from the GP co-payment proposal, so there are other sources of funding for the Medical Research Future Fund.
"And look, while we think the Medical Research Future Fund is a very important thing for the future of Australian research and the health of Australians going forward, but we're not going to advocate to take the money out of primary healthcare to put it into a tertiary level research fund. "It will be up to the Government to come up with how they plan to fund the Medical Research Future Fund."
On Medicare, A/Prof Owler said he believes Medicare does have a future and that while the Australian healsh system is imperfect, it is serving the Australian population."What we need to do is value the health system that we have, its universality, the access to affordable healthcare that we do actually have in this country, and the very high standard of training and practice that people are enjoying.
"Australia is doing well at healthcare. So I think we need to value this system that we have. There are always ways that we can improve it to make sure that we get the best value for the money that we're spending, but we've got to make sure that our health system continues to look after those that are most vulnerable, that those that really need healthcare can access it without an excessive financial barrier.
"Australia's biggest challenge in terms of healthcare is going to be an ageing population and the burden of chronic disease. As we get older, we often have more chronic diseases. It doesn't mean people are sick, but it means their disease needs to be managed and the right person to do that is going to be the person's GP. "And so we need to value general practice and primary care to make sure that we manage people in our communities, keep them well, and keep them out of expensive hospital care.
When asked when the AMA expects to put its proposal to Government, A/Prof Owler said he had a meeting scheduled later this week with the Minister and would then work through the proposal with AMA members.
The  Australian Healthcare and Hospitals Association, which represents Australia’s largest group of health care providers in public hospitals, community and primary health sectors cited in its comments to the Inquiry into out-of-pocket expenses in Australian healthcare that out-of-pocket expenses already have a significant impact on Australians seeking healthcare, and measures in the 2014-15 Federal Budget will provide a further hit to the wallets of our most vulnerable.
“With OECD data showing that only residents of the USA and Switzerland have higher out-of-pocket healthcare costs than Australians, the AHHA believes that the Commonwealth Government needs to do some urgent homework to ensure an evidence-based approach to improving access to affordable health services,"  AHHA Chief Executive Alison Verhoeven said.
“The proposed GP co-payment, for example, was put forward with a political case, but little evidence. The Department of Health and the Department of Human Services are both unable to provide detailed modelling of the scheme’s impact, or data which would allow others to undertake that work.”
Ms Verhoeven also stressed the need for robust evaluation to look at the impact of budget measures on primary care, emergency department and hospital utilisation.
“Linking data across multiple systems to map interactions is challenging, but the data matching studies undertaken, for example, by the Department of Health in the Northern Territory demonstrate the value of this type of work,” Ms Verhoeven said.
“This kind of evaluation provides a holistic view of the health system, and acknowledges that decisions not based in evidence can have both unintended and far-reaching consequences.”
“In addition to considering how much people are paying, a parallel discussion examining what is being paid for is also necessary. A more rigorous examination of the evidence supporting a range of services, treatments and investigations would help address concerns about growing healthcare costs.”
The AHHA also raised with the Committee a number of other key issues, including the subsidisation of pharmaceuticals, financial consent, data limitations and the cumulative impact of recent changes as a result of the 2014-15 Federal Budget.
In its evidence to the Senate Inquiry, Grattan Institute Health Program Director Stephen Duckett focussed on the Federal Government’s plan to make most patients pay $5 more for each drug prescription. Mr Duckett said the new pharmaceuticals co-payment would only raise $450 million in 2017-18, yet the Government could save $580 million a year immediately if it matched the prices that the British Government pays pharmaceutical companies for just 20 drugs.
“A proper drug pricing policy would save money for both government and consumers. Joe Hockey can have his health cake and eat it too,” says Dr Duckett.
These figures update Grattan Institute’s 2013 report, Australia’s bad drug deal, which shows that the Pharmaceutical Benefits Scheme pays drug companies more than $1 billion a year too much for prescription drugs, compared to the sums paid by the most efficient schemes overseas.
Grattan research also shows that out-of-pocket health costs are straining the budgets of low-income Australians even before the Government introduces co-payments for GP visits and prescriptions.
In one in 10 of the poorest households that pay out-of-pocket costs, these costs eat up more than 20 cents in every dollar of the household budget.
“The result is that poor people who are sick are likely to avoid doctors and get sicker,” says Dr Duckett.
Many people already miss out on health care because of cost: 5 per cent skip GP visits, 8 per cent don’t go to a specialist, 8 per cent don’t fill their prescription and 18 per cent don’t go to the dentist.
“These proposed changes will put people’s health at risk yet do little to balance the budget. There are much fairer and safer ways to cut health spending,” Dr Duckett says

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