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AMA President A/Prof Brian Owler, National Press Club Speech

23 Jul 2014





**Check Against Delivery

The Australian Health Care System

I acknowledge the traditional owners of the land on which we meet today, and pay my respects to their elders, past and present.

Thank you to the National Press Club for giving me the opportunity to talk about health today.

I would like to acknowledge two past AMA Presidents here today - Dr Steve Hambleton and Dr Mukesh Haikerwal.

I would also like to acknowledge the Chair of the AMA Council of General Practice – Dr Brian Morton.

I want to take the opportunity to express, on behalf of the AMA, our deepest condolences to the families, friends and colleagues of all those who tragically died on flight MH17.

There were a number of doctors aboard that flight, along with medical researchers and activists, many of whom were due to attend the international AIDS Conference in Melbourne.

Their loss, and indeed the loss all those who died so unnecessarily, causes us all deep sadness.

This week is an important week in the AMA calendar. It is, of course, AMA Family Doctor Week. It’s an event that the AMA has been running for more than 20 years.

It is a week when we pay tribute to the important work – often taken for granted – that is carried out by doctors in local communities around Australia every day.

The Family Doctor Week theme is Your Family Doctor – Keeping You Healthy. It’s a particularly pertinent title this year.

What I am going to talk about today is the Australian Health Care system - its performance, sustainability, affordability, and the central role of the family doctor in its success.

Foundations of the health care system

Australia’s health care system is far from perfect.

Having said that, it is comparatively a very good health system.

It is one of the most efficient and highly performing health systems in the world.

It is a system that is worthwhile protecting, improving, and investing in for the future.

The life expectancy of Australians has been consistently amongst the best in the world and continues to increase. For a boy born in 2012, it is 79.9 years, and for a girl 84.3 years.

It ranks 6th for boys and 7th for girls amongst the 34 other OECD countries.

Death rates continue to decrease rapidly. A decrease of 8.4 per cent, according to a COAG Reform Council Report, in just five years between 2007 and 2012.

Our infant mortality rate is 3.3 deaths per 1000, which is lower than the OECD average of 4.0.

Significantly, 85.4 per cent of Australians report their health as good. This is the fourth highest in OECD countries and, unusually, the same for both Australian men and women.

The mortality rate for ischemic heart disease in Australia is 98 per 100,000 population, compared to the OECD average of 122. The death rate from circulatory disease decreased by 21 per cent in the five years from 2007 to 2012.

Cancer is now the leading cause of death, overtaking circulatory disease for the first time. Having said that, cancer death rates have also decreased by 6.2 per cent during the same time.

There is a lot to be proud of in terms of outcomes from our health system. But there are many challenges, as well, particularly for the health of Indigenous Australians.

The AMA is committed to improving the health of Indigenous Australians.

Life expectancy of Indigenous Australians is 10.6 years less for men, and 9.5 years for women. 

On the other hand, there have been gains in Indigenous health.

Life expectancy has increased by 1.6 years and 0.6 years for men and women respectively over the past five years.

The child death rate fell by 30 per cent between 2001 and 2012. It remains too high and the improvements in life expectancy too slow, but it shows that there have also been gains.

The rate of heart attacks fell between 2007 and 2011 by 10 per cent for Indigenous Australians. That is good. But for non-Indigenous Australians, it fell by 20 per cent.

Indigenous health has been a cause for many AMA Presidents. I share that interest. I will be travelling to the Northern Territory to visit some communities in a few weeks to continue to learn more first-hand about the state of Indigenous Health.

The standard of medicine practised in this country is among the best in the world, whether it be in our general practices or in our hospitals.

It is because we have a highly trained medical workforce. We have an established apprenticeship model, with our Colleges maintaining education and training standards.

More and more, we see Fellows coming from overseas to work with Australian doctors because of the high quality work being performed here. Our Fellows are popular overseas because of their practical skills and good training.

Many people think that, to be a paediatric neurosurgeon, you must have some sort of divine gift. If only that were so.

When situations get difficult, when you know that your actions will literally decide life or death, you have to remain calm, and you have to think and you have to be confident.

I can do all of those things because of my training, the apprenticeship I served with thousands of hours with my mentors.

Whether you are a paediatric neurosurgeon, a physician, or a GP, the decisions you make will have life and death consequences.

That is why it is so important that we continue to invest in training our GPs and our other specialists of the future.

Our health system is strengthened by the active way in which doctors engage in the governance of the health system.

GPs seek an active role in coordinating primary care and in the governance of primary health networks.

Hospital doctors are an essential part of hospital and local health district governance. Their input is essential, and many of us have experienced the problems that occur when doctors are not central in governance of the health system.

We have a well-developed and highly respected medical research sector. It is true that Australia punches above its weight for medical research with world leaders and fine medical research institutes across the country.

Medical research does have the ability to transform our lives. That is why the AMA supports a Medical Research Future Fund.

I was reflecting last week how a concerted international effort, of which Australia was a part, has changed HIV from a death sentence to, at least in developed nations, a disease that can be managed.

I remember distinctly, as a medical student at Royal Prince Alfred Hospital in Sydney, the many AIDS patients on level 10 of the hospital. A whole ward devoted to patients suffering from AIDS.

Thankfully, through the efforts of so many, the existence of that ward is just a memory.

What about the efficiency of our health care system?

We are often told we need to be more efficient. Well, let me say that this is not news to us. Doctors have successfully been driving efficiency in our hospitals and in general practice.

The length of stay for just about any condition has fallen.

For example, for patients suffering a heart attack, the average length of stay in hospital is 5.5 days in Australia, compared to 6.8 days in the OECD, and 6.7 days in Australia back in 2001.

In terms of avoidable hospital admissions, the rate of diabetes hospital admission in adults reduced by almost half in Australia between 2006 and 2011.

Doctors are trying to work more efficiently. Are there more gains to be had? Yes, there are, and we will continue to strive for better outcomes for our patients.

What are the key foundations of our health care system? What are the aspects of the Australian health care system that the AMA believes that we should value and guard?

First is the universality of the Australian health system. Everyone has access to care.

There are issues with equity of that access, but everyone in this country has access to our health care system.

The second is affordability. Not only do we have access, it is affordable - affordable for those even on low incomes.

A GP’s ability to bulk bill patients who cannot afford out-of-pocket expenses is an important part of encouraging access to health care.

Third is something that Australians probably take for granted, but is something that must be sacrosanct. That is the independence of the doctor-patient relationship.

A doctor’s ability to order tests or prescribe a course of treatment without the interference of a third party such as an insurer is essential.

The alternative is, of course, a US-style managed care system.

Another important component of the Australian health care system is the balance between the private and public health care systems.

Australia has benefitted from having this balance, something missing in the UK and the US.

When the balance is right, the systems can support each other.

These are qualities that the AMA values and will protect. But all of these qualities are also currently under threat.

Role of the Family Doctor

The role of the GP is pivotal in our health care system. The GP is often referred to as the cornerstone. It is an apt term because our health system is built on general practice.

The AMA recognises that there are several models of providing care in general practice. However, for most GPs, their role as the family doctor is something that they most value.

That is why the AMA holds Family Doctor Week – to recognise and support this essential role.

The health journey for life-long good health starts with the GP. It is the GPs as family doctors who share the life-long journey with their patients.

They know their patients and their families, providing more than just a diagnosis and a treatment. They become a support, a source of advice and counsel and indeed, for many patients, a friend.

As life expectancy increases, the most significant problem for Australia is the management of chronic diseases such as type 2 diabetes, cardiovascular disease, arthritis, osteoporosis, depression and dementia.

At least a third of the adult population has at least 1 chronic disease.

As patients age, the number of chronic diseases rises - with 50 per cent of people 65 to 74 years of age having 5 or more chronic diseases.

The family doctor is essential in managing patients with chronic disease throughout their life, keeping them well, and avoiding complications.

However, we also need to encourage more people to access their GP for this management. For type 2 diabetes, the prevalence is just over 4 per cent, but half don’t manage it well and one quarter remain undiagnosed.

The rate of growth in medical knowledge has become exponential.

New treatments, new medications, and even new diagnoses come seemingly every day.

As a specialist, in a fairly defined area of medicine, the challenges are hard enough.

Let me say that I do not envy the task of the GP in being across the range of medical conditions, medications, and treatments that a GP, or family doctor, must be familiar with.

It is why it is so important that we have a highly-trained general practice workforce. But this is under threat.

While the Colleges set the standards, general practice training has been coordinated through a body called General Practice Education and Training, or GPET, and delivered by regional training providers, or RTPs.

GPET had strong professional governance, but it is no longer a stand-alone entity.

The loss of GPET into the Department of Health, as announced in the recent Federal Budget, is not simply a cost-saving measure. It represents the loss of professional oversight in the coordination of GP training.

The proposed open tender process for the new RTPs to be held next year also poses a risk in terms of fragmentation of GP training, but also loss of the valued apprenticeship model.

The AMA is very concerned about the implications for the future of training for GPs.

I must acknowledge, however, the creation of an additional 300 first year training places from 2015 onwards, which was announced in the Budget.

This measure is unfortunately undermined by other issues in relation to the Federal Budget and general practice.

The loss of the Prevocational General Practice Placements Program, the PGPPP, will hit hard.

This program - through which prevocational hospital doctors were able to rotate into general practice to experience community medicine - not only gave important exposure to these doctors to the realities of general practice, but there were practical implications such as satisfying prerequisites or applying for training schemes and providing workforce, particularly in regional areas.

The AMA believes that there is still a role for such a scheme, or at least a variation of it.

Of course, those issues have not been discussed in the public arena to any degree because most of the concern has been around the co-payment proposal for general practice, and also for pathology and diagnostic imaging.

The AMA has stated many times now that it is not opposed to co-payments. Many doctors already charge co-payments.

The AMA is, however, opposed to the co-payment proposal in this Federal budget.

We are opposed because it threatens the very foundations of the health system I described earlier.

The lack of protection for vulnerable patients, and the multiplier effects of pathology and diagnostic imaging co-payments, threaten the universality and affordability for health care for the neediest and the sickest in the community.

The proposal also goes against the grain of conventional health policy. That is, encouraging people to see their family doctor for measures such as vaccination and monitoring of problems such as the silent killer of hypertension.

It especially jeopardises policies that support the efforts to improve Indigenous health and to ‘close the gap’.

It penalises those with chronic disease.

Analysis of the BEACH data from the University of Sydney found that patients with type 2 diabetes, many of whom work and are not on concessions, would incur extra costs of $120 per year and a quarter of them would spend $150 or more. This is only one example - but it is not the sort of policy we can support.

In addition, the proposal threatens the viability of some medical practices - not just in general practice, but in radiology and pathology - particularly those in disadvantaged areas in which bulk billing rates are high, such as those in Western Sydney.

Family doctors are vital for care, cure, treatment, and referral, but they are equally important for prevention and chronic disease management – keeping people well and out of hospital.

Suffice to say here, as I have said many times, GPs are the answer to the sustainability of the health care system. They are not the problem.

Our family doctors have been undervalued for far too long.

Medicare rebates have increased at rates well below CPI and, while bulk billing was incentivised by the current Prime Minister when he was the Minister for Health in 2005, the competitive drive towards bulk billing has further undervalued general practice.

And now we have a $5 cut to the Medicare rebate – plus the cascading effect of co-payments for radiology, pathology, and the emergency department, should the States choose to go down that path.

The AMA has been asked by the Government – by the Prime Minister himself – to come back with an alternative proposal.

We are not in a position to release our alternative proposal here today.

However, what I can say is that the AMA’s plan will provide protections for vulnerable patients and it will value general practice.

We will discuss it with the Government soon.

Private health system/managed care

Another reason Australia has done so well is that we have had a strong private health system. Indeed, as I mentioned earlier, there has been a balance between private medicine and our public system.

Unlike the US system, we have a community rated health insurance system, which has ensured that we have been able to continue to insure patients with chronic conditions, and where patients cannot be refused private health insurance or have their policy withdrawn when they become ill or too expensive to care for.

The cost of expensive care is shared amongst insurers.

Our private health insurers have done well. In 2012-13, both BUPA and Medibank Private achieved big profits – around $251 million and $294 million respectively.

This year, they successfully lobbied the Government to increase their premiums by 6 per cent, while at the same time complaining that they had to undertake measures to make health insurance more affordable.

Despite the protests of innocence, I fear a concerted effort on behalf of private health insurers to undermine and control the medical profession.

The stage is being set for a US-style managed care system in both the primary care and hospital settings. I am concerned that the Government is also looking towards such a system.

Private insurers are looking at avenues to access general practice and primary care.

The Medibank Private/IPN trial is such an example.

Medibank Private is circumventing the legislation that prohibits them from insuring for any ‘co-payment’ by paying IPN an administrative fee. In return, Medibank’s patients receive priority appointments.

That might work in this trial, but how does that work with multiple insurers and practices. Those without insurance, often those that most need health care, will have less access to a GP.

There is talk of private health insurers tendering to provide support to general practice through the new Primary Health Networks. The AMA has concerns about the appropriateness of such an arrangement and the inherent conflicts of interest.

Recently we have become concerned about processes that have been introduced for pre-approval of certain medical procedures.

The AMA supports a strong role for private health insurers but we will not allow private health insurers, motivated by profits and market share, encroaching into the doctor-patient relationship.

Budget and sustainability

Meanwhile, we are still regaled with cries of budget crisis, including in health.

From the Government’s perspective, the arguments are about the affordability and the sustainability of our health care system.

Prior to the pain of the Federal budget, Australians were pre-medicated on a constant narrative of an out of control health care system.

Compared to OECD countries, Australia spends a lower than average amount on health.

Health spending was 9.1 per cent of Australia’s GDP in 2011, and lower than the OECD average of 9.3 per cent.

If we look back over a longer period, it has slowly grown from 7 per cent 20 years ago and 6 per cent 40 years ago.

This was also used as justification for the recommendations of the National Commission of Audit.

The question that should be posed is this. Is it such a bad thing that Australia spends more of its wealth on health care?

Not only has our economy changed but, economically speaking, health is a superior good.

As a nation becomes more prosperous, its total expenditure on health care should increase - just as it should on education.

In terms of Commonwealth Government spending on health, the budget is about $67 billion compared to total health care spending of $140 billion.

The Federal Government contribution to health expenditure is about 41 per cent. It has been around 40 to 42 per cent for the past decade. It hasn’t changed.

While health expenditure is a big ticket budget item for the Commonwealth, health expenditure has stayed broadly constant as a share of total expenditure over time. 

The proportion of the Commonwealth Budget allocated to Commonwealth-funded health spending has reduced from 18.09 per cent in 2006-07 to 16.13 per cent in 2014-15.

These numbers demonstrate that health spending is not out of control.

Our health care system is affordable.

Real solutions for sustainability

As a nation, we need to decide what we want from a health system.

As we live longer and have access to better treatments, there will be new technologies.

New drugs and treatments may deliver better outcomes, and longer lives, but they can also be expensive. In fact, new medical technologies are one of the drivers of the increasing cost of health care.

Clearly, the AMA agrees that funding a sustainable health system is important. However, health cannot just be viewed through a financial lens.

Much of the Budget mayhem was fuelled by the slash and burn Commission of Audit. My predecessor, Steve Hambleton, labelled the Audit process “health policy for bean counters by bean counters”. How true.

A discussion about health care spending must take place with reference to health care policy. Unfortunately, this reference was missing in many aspects of the recent Federal budget.

One such example is Commonwealth funding of public hospitals. We need proper funding of the public hospital system, but we also need greater efficiency from the funding we receive.

We have unmet demand for health care within the current system.

While there have been improvements in emergency department performance and elective surgery waiting lists in some jurisdictions, we still have people waiting far too long for services.

We are all familiar with public hospital waiting lists. Some jurisdictions have had substantial improvements, but others continue to perform poorly. Patients can wait several years for surgery in some cases, and that is once they are on the waiting list.

We have long waiting lists for public outpatient clinics for many areas in our public hospitals. In some cases, outpatients’ appointments can mean a wait of two years or more.

For surgical outpatients, this is the hidden waiting list, or the list to get on the list. But similar waits can exist for specialties such as pain clinics or allergy clinics.

Proper funding of our public hospital system is essential and the Commonwealth must do its share of the lifting. Funding public hospitals at CPI plus population growth from 2017 turns the Federal Government from a lifter into a leaner.

One of the great achievements of the reform process that was started some years ago was to re-engage a cynical clinical workforce. They worked hard on a system of activity based funding, or ABF.


This was never designed to be an open-ended funding arrangement.

The funding was always effectively capped by the States.

What it did provide was transparency and a method to address efficiencies.

A national efficient price was designed to highlight issues such as unwarranted clinical variation.

It required clinicians to examine their practices and adjust them accordingly.

The decision of the Federal Government to end the National Health Reform Agreement - in which they were to contribute 50 per cent of growth funding - and instead fund public hospitals based on population growth and CPI, not only represents a cut in funding compared to that under the reform agreement, but will disenfranchise and disengage a generation of clinicians.

While a form of ABF will continue in many jurisdictions, the vacation of the Federal Government from this space is a lost opportunity to address public hospital costs in a sustained way for both Federal and State Governments.

This is an example of the ‘disconnect’ between the budget process and health policy.

It is also an example of the contradiction between a reduction in public hospital funding to make the system sustainable and abandoning a structural reform that was designed to address sustainability.

The role of prevention and public health

Preventative health care and public health measures are an important means of not only keeping people healthy but are also important for the sustainability of the health care system.

Two-thirds of deaths in patients under 75 years are potentially avoidable, with the most common causes being heart disease, lung cancer, and suicide.

Indigenous Australians are three times more likely to die from potentially avoidable conditions.

The application of high quality comprehensive primary health care can deliver gains. Last year, the AMA’s Indigenous Health Report Card focused on the importance of targeting the early years – getting the right start to life.

Recently I was hearing about the gains made by focusing on antenatal care in the Pitinjarra lands of NW South Australia, where there have been major gains by the Nganampa Health Council in antenatal care, where 75 per cent of all pregnant women are seen in the first trimester.

The proportion of children under three years of age with significant growth failure has fallen from 25 per cent in the 1990s to less than 3 per cent today. Immunisation rates approach 100 per cent.

This has not been easy, but it shows you can attain significant outcomes even in remote communities.

General practice and your family doctor have the central role in preventative health care. However, prevention is not just the role of the family doctor and patient.

Governments at all levels have a responsibility to promote good health practices and to discourage activities that harm people’s health.

It is intellectually inconsistent for a government to suggest that everyone needs to contribute economically to the health system, only to divest responsibility for preventative health measures, and declare that health is a personal responsibility.

Governments have the capacity to shape social attitudes, provide education, but also to regulate. They should exercise these responsibilities judiciously, but regularly.

The AMA has a proud history of lobbying and advocating for better public health policies.

For me personally, I have become a passionate health advocate. It began after one long weekend some years ago.

Within a 24 hour period, I had operated on a driver whose actions had not only left them a brain injury, but had claimed the lives of three others; operated on another child with a severe brain injury; and watched as two other children died in hospital from injuries suffered in other road accidents.

I remember driving home and thinking that, if people could see what I had seen, perhaps they would change their behavior, make better decisions and, of course, as the ads say, choose wisely.

For me, that was the moment that it became not just about the patient in front of me, but about making it better for the patient that will come afterwards – and, of course, preventing people from becoming patients at all.

I took my ideas to the NSW Government and the result was the Don’t Rush road safety campaign in NSW.

The campaign works because it came through my experience as a doctor and, similarly, other doctors are motivated by their experiences.

That’s why the AMA is so active and passionate about public health advocacy.

It is why we are so active on the issue of alcohol-related violence and harmful alcohol consumption.

It is not because the AMA is an organisation of wowsers or prohibitionists. Rather, it is because many of us have seen the real costs in our emergency departments and on our operating tables.

I have dealt with the devastating brain injuries of king hits and the spinal injuries from people falling from balconies while drunk.

My colleagues see the scars from glassings and the fractured jaws, among many injuries.

We have seen good leadership in NSW with lockouts and earlier closing times that are reducing these problems.

However, alcohol-related domestic assaults, substantiated cases of child neglect, and the impacts of fetal alcohol syndrome mean that the issues around alcohol are not just a phenomenon of King’s Cross in Sydney or similar hot spots in our other cities.

It is a problem that pervades our society and enters people’s homes.

A key focus, therefore, must be to change the culture and attitudes around alcohol to reduce harmful patterns of alcohol consumption and the often horrific results.

The Federal Government does have an important role to play here. These are the reasons why the AMA will be holding a National Alcohol Summit later this year.

Despite numerous successful programs, including tobacco control and vaccination, Australia could do more in health prevention strategies across the spectrum – obesity, substance abuse, bullying, and other issues that affect our daily lives and health.

Of Australia’s total health expenditure in 2011-12, only 1.7 per cent was spent on prevention, protection and promotion. Compare that to the 7 per cent spent on prevention in New Zealand.

There are, of course, many other areas that are important in our health care system. Suffice to say that I cannot cover them all today.


Shortly after my election to the AMA Presidency, the headline of an article in the Australian Financial Review referred to me as the new ‘Guardian of the Health System’.

That was quite a compliment for me as an individual, but I think that description is better ascribed to the AMA.

While the cynics will suggest that the AMA only protects doctors’ interests, that conclusion would be a mistake.

Do we act to represent the best interests of our members? Of course we do. We are a membership organisation.

However, what inspires many of us in the AMA, what drives us as leaders of our professional organisation, is that we act in what we believe will be best for our patients.

What is in the best interests of both patients and the profession is:

  • a society that values keeping people safe and keeping them healthy;
  • a health care system that values general practice with the family doctor as its cornerstone;
  • a health care system that aims for the highest standards of clinical training in general practice and other specialties;
  • a health care system that provides timely universal access to affordable health care;
  • a health care system that has the capacity and resources in its public and private hospitals to provide timely quality care; and
  • a system in which the independence of the doctor-patient relationship is sacrosanct.

That is a health system that doctors can work in to provide the best outcomes for patients.

That is a health care system that the AMA will be the guardian of.


23 July 2014


CONTACT:        John Flannery                     02 6270 5477 / 0419 494 761

                            Sanja Novakovic                 02 6270 5478 / 0427 209 753


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Published: 23 Jul 2014