Jennifer Doggett. Budget 2014 – Primary Health Care

May 16, 2014

While some commentators are calling this Budget ‘The end of universal health care’ others are seeing some opportunities to improve health system performance, in particular through better collaborations with state-funded health services and programs.

The most high profile Budget measures in the primary health care sector are the introduction of new co-payments for bulk billed GP services and increased charges for related tests and medicines.  There will be caps for high level users and some support provided for people on low incomes but overall these changes will result in higher out-of-pocket costs for consumers.

These payments have been widely criticised by consumer groups, health economists, service providers and other stakeholders.

These criticisms have focused on the hardship the increased costs will cause to disadvantaged patients on low incomes as well as their impact on the quality and cost-effectiveness of primary health care.  Many experts have warned that there could be an increase in demand for (much more expensive) hospital emergency department services as consumers try to avoid the co-payment.  The Government’s answer to this is to allow the States, for the first time since the introduction of Medicare, to charge a payment for emergency department presentations. However, State Governments thus far appear reluctant to introduce these charges.

Another concern about the impact of the co-payments is that it will undermine efforts to improve preventive health services and continuity of care for people with (or at risk of) chronic conditions.   This is partly because the payments will create a disincentive for consumers to access care early and also because of the likely shift of some patients to public hospitals. This will complicate already complex care pathways with an increase in the number of patients receiving care across the community/hospital interface.  It is also likely to result in care that is much less efficient, both from a ‘health system’ and consumer standpoint.

In relation to Medicare Locals (MLs), the Government is responding to the findings of the Horvath Review which recommended consolidation of existing MLs into larger Primary Care Networks.  While the Review was broadly positive about the need for some coordination primary health care infrastructure bodies, the Government (in rhetoric at least) has moved to clearly differentiate itself from the previous Labor regime, describing MLs as “a new layer of primary health bureaucracy”. However, there is little substance about the roles and functions of the proposed new Networks and Dutton’s description of their aims “to join up patient care in the community to keep people out of hospital” appear very similar to those articulated by Labor when establishing MLs.  The key factors in determining the outcome of these changes will be if the focus on an evidence-based, population health approach to primary health care is retained.   In flagging an increased role for GPs, the Government is responding to pressure from the AMA which has been concerned about sharing control of the primary health care sector with other health professionals. However, the inclusion of GPs (which have always been integral to MLs) should not occur at the expense of input from other stakeholders, including consumers, allied health professionals, pharmacists, nurses and practice managers.

Dutton also reiterated the Government’s interest in a greater involvement from private health insurance in primary health care saying “We will also be looking over the next few years at new and innovative ways in which we might fund and deliver primary health care, including through partnerships with private insurers.” Given the evidence that private health insurance pushes up costs for health care, without delivering improved outcomes, this proposal is not sensible policy even for a conservative government.  Its political attraction, however, is that it may offer further opportunities to shift health costs from the public to the private sector.

Budget primary health care workforce measures included an increase in GP training places by 300, to a total of 1500, in 2015 and a doubling of the teaching payment to GPs for training medical students from $100 to $200 per three hour session.  There are also 175 infrastructure grants for GPs in rural and remote settings to build training facilities in their practices and an increase in the funding available for incentive payments under the GP Rural Incentives Program for GPs to work in rural and remote areas.  Also announced were 500 more scholarships for nursing and allied health workers (over three years).  These measures are welcome, however, the lack of any significant workforce reform within the health sector means that the inherent inefficiency of the workforce will persist and the potential benefits of new health professionals will not be realised.

The challenge now facing the Government will be to get these measures through the Senate. With the Opposition, Greens and Palmer United parties all indicating their reluctance to pass the co-payment legislation, the Government may find that its agenda for primary health care is thwarted before it gets off the ground.


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