STEPHEN LEEDER. Review of the Medicare Benefits Schedule.

Jul 26, 2017


The Medicare Benefits Schedule, or MBS, is the basis for Medicare payments made for medical care in the community. It runs to over 900 pages and contains 5,700 items. Well over $2Ob pass through its ledger each year. It includes long and short clinical consultations and surgical procedures ($17b), pathology tests ($2.65b) and x-ray and other imaging ($3.2b) that form the bulk of out-of-hospital care, mostly but not entirely ($1b not) provided by doctors.

What the government pays for an item is frequently lower than the fee charged to the patient, unless the doctor ‘bulk-bills’ Medicare directly, bypassing the patient, accepting 85% of the cost of a consultation on the understanding that he or she avoids having to raise an invoice for each item of service provided. The patient is left with no additional payment to make, unless co-payments are imposed as proposed in the 2014 federal budget.

Predictably the fees set for the items on the MBS are contentious. The MBS has been tinkered and tampered with since its inception as a principal component of Medicare. While doctors have wanted the rebates to be higher, government has sought to reduce reimbursements where new and cheaper technologies, such as those used in cataract removal, have radically lowered the time taken to perform a procedure. In 2009 the federal government sought to halve the fee paid for uncomplicated cataract surgery to about $400 for a procedure that now, in uncomplicated cases, may take only 15 to 20 minutes. It lost.

The vast majority – upwards of 90% – of items on the MBS have not been assessed for their utility in improving patient well-being or for their comparative effectiveness.

Facing growing political concerns about the cost of healthcare, in April 2015, Sussan Ley, the federal minister for health, established an MBS Review Taskforce, headed by Bruce Robinson, former dean of medicine at Sydney University, chair of the NHMRC and an endocrinologist. The review was asked to examine how the 5,700 items on MBS ‘could be [better] aligned with contemporary clinical evidence and practice and improved health outcomes for patients’.

This was not the first attempt to review the MBS: in 2010 the MBS Quality Framework was asked to do the same thing and in the 2011-2012 budget a comprehensive management scheme was announced to carry forward the work of the 2010 review. The pushback from the medical profession seriously limited its effect.

The Robinson review has involved the medical profession in its review, thus avoiding the automatic pushback that plagued previous efforts. Twelve clinical committees, each in a specialty such as gastroenterology, have been established, comprising doctors, academics and economists, to assess items related to their interests.

While, predictably, the groups vary in their competence and enthusiasm, Robinson reports that he has been greatly encouraged by the seriousness with which many clinicians have participated and the commitment shown to using the review to ensure health service resources are used to pay for tests and consultations that have a high probability of working. He estimates 75% of the medical practitioners he meets are favourably disposed.

The MBS clinical committees are concerned not only with assessing the research as to whether a test or procedure has intrinsic merit (safety and effectiveness) but also clarifying where and for what purpose that test or procedure should be applied. At their best they will rid the MBS register of useless and dangerous procedures and define more precisely where and when the remaining items should be used and paid for.

Storm clouds gather. There are serious problems with health care financing that will inevitably limit the efforts of the MBS review. First, we have yet to develop measures of what medical and surgical interventions are achieving. Metrics that tell us about activity – how many admissions to hospital – tell us nothing about the appropriateness and impact of that activity. In the case of the MBS we do not know what goes on in, and what comes out of, funded medical activity. Without such knowledge we can make no serious comparison of effectiveness of care.

Second, and deriving from the first problem, we cannot make statements about the quality of care provided by individual doctors so payers have no way of managing their performance. True, when patients are treated in public hospitals we can measure the length of stay in hospital and compare the rates of procedures in similar communities. We can thus question wide variations in surgical operative rates for a condition equally common in two regions. But there are no measures of patient satisfaction or other outcomes.

Information technology will likely provide information of this kind whether we want or not. But at present managing health care must proceed in Australia without the light shed by measured outcomes that would enable us to compare the performance of practitioners or institutions – in terms of the thing that really matters, namely, to paraphrase Amartya Sen, the extent to which our efforts are enabling the people who come to us for help to live lives that they have reason to value.

The MBS review will move us one step closer to that ideal, but we have a long way to travel.

Stephen Leeder is Emeritus Professor of Public Health and Community Medicine, the University of Sydney. Bruce Robinson is a colleague of Stephen Leeder in the Sydney Medical School. Stephen Leeder, however, is not involved in any way in the MBS review.



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