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14 May 2018


The Council of Private Specialist Practice (CPSP) met face to face in April in a joint meeting with the Health Finance and Economics Committee (HFE), chaired by Associate Professor Susan Neuhaus.

The AMA has always believed collaboration and transparency are key to delivering outcomes that are both practical for the profession, and just as importantly, supportive of our patients. Both CPSP and HFE are currently leading the AMA through significant and far-reaching health reforms in a number of areas, so a joint meeting was an opportunity to ensure our responses are connected and take a whole of system view.

The agenda tackled recent developments from the Government’s review of Medical Indemnity insurance and public hospital funding, while including an informative presentation from the CEO of the Independent Hospital Pricing Authority; upcoming COAG negotiations around hospital funding agreements; details of the Australian Commission on Safety and Quality in Health Care‘s Atlas of Health Variation; and of course, the work of the Private Health Ministerial Advisory Committee (PHMAC) were discussed. The latter included a lively exchange on the latest developments on out-of-pocket costs and private health insurance product design.

I encourage members to read Prof Neuhaus’s latest Australian Medicine opinion piece on quality and safety-based funding which details much of CPSP/HFE’s discussions on the Federal Government’s questionable plan to penalise certain hospital events.

However, with respect to private health, PHMAC is now at the implementation stage of private health insurance product design and clinical definitions. Some would be aware that the PHMAC Secretariat had publicly released the Issues Paper, Gold, Silver, Bronze and Basic, where clinical definitions have been assigned under each category of cover.

CPSP and the AMA more broadly have advocated for simplified, better value private health insurance products for consumers. Simpler products translate to no surprises, less out-of-pocket costs, and more informed patients.

In this context, CPSP/HFE reviewed the proposed classifications, noting while the proposed model is intended to make products easier to compare, it is far from perfect and needs considerable consultation and improvement. Indeed, to ‘operationalise’ these definitions and what they cover, PHMAC Secretariat has also mapped some of the relevant MBS item numbers under each of the ‘clinical definitions’.

But this first version appears to pose a significant risk to patients who may not be covered for services which are included within common clinical pathways. 

For example, patients with some policies appear covered for the removal of cancerous lesions, but they will not be covered for having the incision repaired – as this part of the service is considered ‘plastic and reconstructive’ and currently sits under a higher policy category.

It is evident that the current draft highlights the tension between value and affordability. Consequently, our concern is to ensure that any new scheme doesn’t worsen the situation for patients by putting some services currently in lower level policies into future gold level policies.

Thankfully the Department has approached select stakeholders, inviting them to examine their draft mapping of MBS items against each clinical definition, and by extension each insurance category.

The AMA has looked for feedback from our committees, our State and Territory AMA branches, some of the hospital peak bodies, and the Colleges in our response.

At first glance there appear to be gaps in the mapping that could have a negative impact if they were implemented. Furthermore, the mapping appears to be independent of the MBS Review, which has spent countless hours understanding how items are used individually and in combination to treat patients, which specialties use them and in what setting, and the range of procedures or services they cover.

The AMA has repeatedly called for the MBS Reviews to be informed by consultation with clinical experts familiar with the MBS and its application. Therefore, we feel strongly that the placement of MBS items under such definitions must be handled with the same rigour. The allocation of MBS items to clinical definitions ultimately determines the value proposition of private health insurance, when a patient is covered for a service, and when a benefit will be received. And of course, as the MBS Review rolls on, the items will change – and this will again need to be reflected in updated MBS item allocations for clinical definitions underpinning Gold, Silver and Bronze insurance policies.

To that end the AMA has stated strongly to the Department and Minister Hunt’s office that a longer, more rigorous process will be needed to properly develop this work. And it simply cannot be done in isolation of the expertise available from the Colleges, Associations and Specialist Societies.

Without doing so, arguably the most critical component of the private health reforms will fail, and ultimately our patients will suffer. Our role is to call loudly and strongly for that to be avoided. 


Published: 14 May 2018