AMA Transcript - Primary Health Care, Health Care Home, Public Hospital Funding

BRIAN OWLER: I'm going to talk today about the release of the Primary Health Care Review Report. The Prime Minister and the Health Minister have obviously released that report this morning. It is something that the AMA welcomes. We certainly acknowledge the need to invest in chronic disease management to keep people well, to keep them out of more expensive hospital care. It's probably the biggest challenge that we have with a growing and ageing population. And so the AMA has been lobbying, amongst other health groups, to try and get a better way of managing people with chronic disease.

There are existing arrangements, through chronic disease management items and team care arrangements, but this system, which uses voluntary enrolment, strengthens the relationship between a patient's regular GP or practice, and I think that's a good thing. So, the missing element of today's announcement though was in relation to funding. What we would like to know is how this policy is going to be funded in the longer term.

We presume that there is going to be some rearrangement of the funding to do with chronic disease management items, and team care arrangements, and that may well be appropriate, but what we do want to make sure is that we get investment into general practice, so that they can do this work to keep people well and keep them out of hospitals.

So we look forward to the detail that's going to come out in relation to that. One of the concerns though today has been the suggestion that some of the funding, $70 million, would come out of hospital funding. That's not acceptable. We have a hospital funding crisis and this notion that somehow you put a small amount of money into primary care, to chronic disease management, you're going to save a huge amount of money in our hospitals, when they already are a long way from meeting the demand that's there for their services, whether it be elective surgery or emergency department performance, the notion just doesn't stack up. So I do hope we get some investment. I'm pleased that the Government has acknowledged the importance of primary care and chronic disease management. Happy to take questions.

QUESTION: What do you make of suggestions that the States should take greater control of health and hospital funding as part of the Federal Government's changes to income tax?

BRIAN OWLER: Look, the States are managers of their hospital system. What they need is funding, but many of the States, particularly the smaller States, have limited capacity to raise revenue. Now, well before I was AMA President, before the term of this Government, it was suggested - or I was asked for my opinion on whether pushing responsibility for health and hospitals back to the States was a good thing. And I still have the same response today, and that is that we already have inequity of access in terms of the State that you live in determines the access to healthcare that you're able to get. And changes of this nature that push the responsibility away from the Commonwealth, to the States and Territories, is going to disadvantage - particularly those States and Territories that have smaller economies. And I don't think that's the sort of system that we want to see. We want to see Australians having access to healthcare that is similar, no matter where they live in this country.

Now there's another element that's missing here from this Government's approach to hospitals, and that is around policy. It's one thing to talk about the money, but there is a policy vacuum when it comes to hospitals in terms of the Commonwealth, and their responsibility is also to try and lift the standards and maintain some of the performance measures across the country, not just leave all of that up to the States.

QUESTION: If you have a compensation formula, does it not make sense to have that direct link between the States, as you say, running the hospitals, and the voters deciding how much money they'd like to spend on it?

BRIAN OWLER: Well, it's a matter of what the compensation is going to be, but clearly the current proposal which does seem to be made on the run - it almost is a thought bubble that comes out day after day. I mean I've been really struggling to keep up with what the actual policy is when it comes to hospital funding.

We've had a discussion now for, ever since the 2014 Budget, almost two years of discussion on this topic. We've had discussion around GST. We've had some discussion around raising the Medicare Levy. I mean, at the end of the day, we need to make sure that we first of all fix the funding that's going to the hospitals.

Now, somehow raising income tax at a State level with lowering Commonwealth income tax doesn't solve the problem of the hole that was created in the 2014 Budget. And sure, you might say well 57 billion wasn't the right amount, but we know that the current arrangements are woefully inadequate if we're going to be able to maintain standards of care in our public hospital system.

QUESTION: The plan's indicated that there'll be some sort of arrangement about compensation. Is it not worth looking at that and waiting to see what it is before deciding on the merits of the plan?

BRIAN OWLER: Well, we want to see what it is, and let's see, but I'm - the discussions that are being had with the States at the moment don't seem to be reassuring them that they're going to be properly compensated. I look forward to the details of the announcement, but having this discussion, seemingly with small leaks that are coming out in the week before COAG, I don't think is a very good way to do healthcare policy.

It might be innovative, but it's not solving the problem.

QUESTION: Are you expecting the States to be given their $5 billion between now and 2020 to cover health costs, or hospital costs, and then a new funding model to take place after that time?

BRIAN OWLER: Well I think we need to, in the long term get to an arrangement where we actually have reassurance about what the funding for hospitals is going to look like in the long term, and that we have a commitment from the Commonwealth to the States and Territories that's going to make sure that people do get access to the healthcare that they should all expect and deserve.

But what is going to be offered to the States over the next few days, we've seen a leak that suggests $3 billion over the next three years - that's inadequate. It's not going to meet the problem of the gap that exists. It looks like about $7 billion is really the required figure that's needed over the next three years, and that's the sort of figure that we should be aiming for.

That would allow us to have some time to have a proper policy debate to get back to something that is sustainable in the longer term.

QUESTION: The Prime Minister says that a lot of the decisions - the- his proposal to overhaul income tax would just simply make the States a lot more accountable about where and how money is spent. Isn't that a good thing?

BRIAN OWLER: No, look I - I think people have got to realise, when it comes particularly to health policy and health funding, the States are trying to do their very best to be efficient, and they are certainly accountable. If you look at the mechanisms that are in place in many States to look at their performance in terms of elective surgery and emergency department performance, there is accountability there, and when those waiting lists get too long, I mean the blame is usually put to the State, not the Commonwealth.

But in this situation, when you take money out, as the Commonwealth has done, it goes away from the agreement that was reached before, which tried to end this blame game between the States and the Commonwealth.

The other aspect that was there is the agreement was the activity-based funding model.

Now activity-based funding is around trying to get efficiencies into the system. I mean, we have been trying to get a more efficient system and have been effective in doing that year on year, but this was another mechanism that dealt with issues like unwanted clinical variation and a whole range of changes that could be made to make our hospitals efficient. But of course the 2014 Budget and the changes that were made there did away with that focus on activity-based funding. So whatever agreement is reached in the longer term, we need to get back to some of those arrangements, which actually does link the funding to some efficiencies as well.

QUESTION: There's been some suggestion that some of the problem with health funding is due to the fact that there are fat bureaucracies among the States and at a Federal level. Is there some merit in some of the bureaucracies in the Health Department to be scaled back, and the money that's saved to go to more frontline services?

BRIAN OWLER: No, it's … that argument is an outdated argument. I mean, most health departments, they've been struggling to meet the demand, they've been lowering their costs and they've streamlined their bureaucracies. When it comes to the Commonwealth, most of the focus on the Commonwealth Department is on other aspects of health funding, particularly Medicare, for which they take primary responsibility. Most States have introduced local health boards, have streamlined their ministries and actually devolved a lot of the responsibility back to local hospital boards, or at least health district boards. So those changes in governance were made under the previous government. It saw the size of ministries scaled back. I don't believe that that's where the cuts are supposed to be made.

QUESTION: The Government's going to ask the States tomorrow to help fund this chronic disease plan. If they don't agree to help fund it, or that $70 million figure is in fact agreed upon, where does the AMA think this money should come from?

BRIAN OWLER: Well there is some scope to try and move some of the money around that is there for chronic disease management items and team care arrangements, some of that might be used. There is also - it's alluded to in the report that private health insurers may have a role in funding some of these arrangements as well. We've seen private health insurers take a greater interest in terms of trying to prevent hospitalisation, so this might provide a vehicle for them to actually do this without necessarily adversely influencing things like equity of access or introducing a managed care system.

So there are other aspects that can be looked at as well. But I don't think it's the States' responsibility, when they have this funding crisis that's before them, to start all of a sudden funding a Commonwealth responsibility.

You know, I think at the moment we need to fund the hospital funding crisis, and I think it's quite cynical that this report's been there since December and it was released on the eve of COAG, and now they're trying to link the two together.

I mean, it just seems like, you know, it's one policy released after another with no coherent vision or plan for our health system as a whole, and that's something that I think we need to get back to so that we all know where we're supposed to be heading, otherwise it seems like it's a day to day rollercoaster of health policy.

QUESTION: What do you make of patients paying a quarterly fee, rather than the current fee for service model that's happening?

BRIAN OWLER: Yeah, so it won't necessarily be the patient paying the fee, the fee will actually go to the practice, and that will - it's unclear as to how that will work, whether it's funding directly from Medicare itself, whether it goes to another fund holder such as a primary health network. All of those things are the detail that we need to see in this arrangement to make it understandable, not only for doctors and our members, but for patients as well. So I don't think that there will be a quarterly payment for patients, but we'll wait and see what the detail shows.

29 March 2016

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