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21 Sep 2015

Among its responsibilities, the Health Financing and Economics Committee (HFE) is tasked by Federal Council to develop policy and make recommendations on healthcare financing and funding arrangements, the delivery and structure of health care, and the management of the AMA List of Medical Services and Fees (AMA List).

At its meeting on 23 July 2015, HFE considered what should be the AMA’s policy in relation to Government caveats and restrictions on MBS items and the AMA List.  

As part of an increasing trend to including restrictions on MBS items, the Department of Health is introducing contraindications for where particular MBS items cannot be used.  What is particularly concerning is that the Department has introduced these caveats without any formal assessment process, such as the Medical Services Advisory Committee (MSAC).

HFE considered whether the AMA List should simply contain a description of the medical service and not include any clinical indications or contraindications in the item descriptors where they have not been formally evaluated. 

On HFE’s recommendation, Federal Council agreed on 22 August 2015 to amend the AMA’s existing policy resolution on where the AMA List does not need to align with the MBS to also cover this situation.  This means the AMA List will not include clinical indications or contraindications on medical items that have not been identified by a formal assessment process.

In relation to the Reform of the Federation process, HFE drew on its previous discussions of health financing and public hospital funding issues in assessing the health reform options put forward in the Government’s discussion paper (released 23 June 2015).

The rationale for these options includes the false perception that health expenditure is unsustainable, or even out of control.  In fact, the Government’s own figures for health expenditure establish there is no crisis. In the 2014-15 Commonwealth Budget, health was 16.13 per cent of total Commonwealth Budget funding, down from 18.09 per cent in 2006-07.  It reduced further in the 2015-16 Budget, representing only 15.97 per cent of the total Commonwealth Budget.

HFE found the five reform options in the discussion paper were barely sketched out and largely uninspiring.  They range from the States and Territories being fully responsible for public hospitals to the Commonwealth establishing a health purchasing agency.

HFE agreed that governments should be requested to develop improved health reform options in collaboration with the AMA and other health stakeholders. 

These should start with recognition of the need for sufficient resources for the health system, the role of the private sector in providing healthcare services, and the need for coordination and cooperation across governments.  Federal Council passed a resolution to this effect on 22 August 2015.

Two other matters considered at HFE’s July meeting will require further discussion and development before proposals are put to Federal Council.  This includes the use of health outcomes information, and what makes outcomes valid for measuring and reporting in context.  Possible publication of average fees charged for Medicare items also needs careful consideration, including working through samples of actual MBS data.


Published: 21 Sep 2015