Good morning Deputy Prime Minister, Ministers, Shadow Ministers, Honourable Members and Senators, AMA Federal Councillors, advisers and staff.

On behalf of the AMA, I thank you for taking time out to be with us this morning.

Health is still a major political battleground.

And health issues now also reflect the mainstream issues of the day.

Infrastructure.

Skilled worker shortages.

Access to services.

Affordability of services.

The AMA has been talking about these issues for years in relation to the health system. But now they are being talked about as the fraying edges of the fabric of Australian society.

There is no more important national infrastructure project than our health system. Like the road and rail systems, the health system needs constant maintenance.

The health system is a mix of major highways and freeways, city arterial roads, country avenues, and dirt tracks out in the bush.

But at the moment some of the health roads are roads to nowhere. They have grown over with weeds through neglect.

Things like Indigenous health, mental health, public hospitals and country practice are in need of repair.

With our national medical workforce shortage, these roads are becoming roads less travelled by doctors.

There is no better example of a shortage of local skilled workforce in our community than the shortages in medicine.

Doctors and nurses are in short supply, especially in the bush, and particularly in Indigenous communities.

Unfortunately, getting kids to leave school early and take on a trade will not boost the medical workforce.

We are not training enough doctors. We are not training enough nurses.

The ones we have out there are not necessarily in all the right places.

It takes around ten years to get new doctors into the system - so the shortages won't be fixed overnight.

This means there is no equity of access to health services. This means people are paying more for their health care.

And I am sure you are hearing all about it in your electorate offices.

Despite the considerable amount of promises and funding thrown at health at the last election - for which our patients are grateful, by the way - we still haven't addressed the health infrastructure problem.

I don't think the policies and programs we are seeing now are setting the health system up for the long term - for our kids and their kids, not to mention us in our old age.

And this means we have to take a long hard look at the heart of our system - Medicare.

It's not often I borrow words from Paul Keating, but his story about the economy being like a car applies equally to Medicare.

We are still driving the same Medicare car that we got off the used car lot in 1983. It was a 1970s model, as I recall, with a few modifications.

Successive governments of different persuasions over the years have gone about filling it with petrol and changing the oil.

They would clean the windscreen occasionally. And they have tried to remove the ashtray but a few people keep sneaking it back in.

But nobody has given the Medicare car a proper service - a tune-up - something to really improve the performance.

A few years ago we suggested they try a new blend of petrol called RVS - high performance Relative Value Study - but it was rejected. They chose to stick with the old standard formula.

These days it has been further watered down with bulk billing incentives - hence the rattle in the engine.

So we still have the same old model Medicare humming along but in danger of failing rego any time soon.

As a community, we have to ask the question: do we keep patching up Medicare or do we trade it in for a brand new model?

We have to make a decision on whether Medicare - in its current form - is capable of taking us into the future to serve the old and the chronically ill.

With an ageing population, can Medicare serve the growing needs of general practice, public hospitals, aged care, and sub-acute care through the rehabilitation sector?

I have my doubts and I am not here to offer alternatives today. I just want to sow the seeds for the debate we have to have. I'm sure you all have your own ideas on this.

But I want to hear from you about what's happening in health at the local level in your electorates with the Medicare we have.

Health policy can only be judged on how it works at the coalface - at the local hospital, the aged care home or the suburban general practice.

And as we all know, every policy will impact differently in the city than it does in the country town.

We also know that health dollars have to work a lot harder in regional Australia - a heck of a lot harder.

The AMA judges the success or failure of health policy by five tests:

Independence

• Quality
• Access
• Affordability
• Choice

IQAAC - or I Quack. And I tend to quack a lot.

You have heard me go on about these things many times and you are probably getting sick of hearing them. That's good. It means the message is sinking in.

In the AMA's Budget Submission this year we applied those five tests to a few key areas of health in urgent need of assistance.

More needs to be done on Indigenous health. The extent of the need is in the AMA's Healing Hands report, which has been sent to you all.

More needs to be done on mental health, and with a Senate Inquiry now up and running we should hopefully see some results.

Again, the AMA's suggestions are in the Budget Submission that was sent to you last month.

And third, as a community we need to produce a better system to care for the severely injured. The AMA is pushing a long-term care scheme that covers people severely injured in medical accidents.

I know there have been post-election delays in looking at this scheme, and I can live with that.

But I was disturbed to read recently that some in the Government see this as a State issue. It is not a State issue. It is a national issue that needs national leadership.

It is affordable. Especially when it would deliver proper care to people who currently miss out because they don't go to court or can't afford to go to court.

The AMA has sent you all details of our ideas for such a Scheme.

The long-term care scheme would finish the job started so well by the Government's medical indemnity reform package of 2003.

Indigenous health, mental health and the long-term care scheme are all integral parts of the health system infrastructure. We must build them in.

Another core component of the health infrastructure is the PBS - the Pharmaceutical Benefits Scheme.

The PBS has been under a lot of pressure from a Government anxious to keep costs under control. PBS expenditure has fluctuated widely from year to year as new and more expensive drugs are listed.

The pressure will not go away because we are keeping more people healthy with pharmaceutical interventions.

We are keeping more people out of hospital with pharmaceutical interventions. Governments may try to restrict the listing of these new pharmaceuticals. Or they may restrict the indications for which they are available.

But it is vital that this only happens when there is no alternative.

The economic truth is that restricting the availability of pharmaceuticals may generate even higher costs in other parts of the health system.

We have to make sure we examine the easier and more appropriate solutions first.

That is why the Government has applied competition policy in health.

Doctors are out there competing. So are the nurses and allied health professionals. The only ones missing out on a good dose of competition are the pharmacies.

And the Pharmacy Guild is working hard to preserve the uncompetitive protections built into the pharmacy agreement.

The Guild wants another five-year agreement with the Government that restricts the number and location of pharmacies in Australia.

The agreement means that no pharmacy can set up within 1.5 kilometres as the crow flies of an existing pharmacy.

The agreement forces the crow to fly straighter and over shorter distances.

The Guild also knows that the big supermarket chains are circling like vultures with a hungry eye on those crows.

The pharmacy agreement is uncompetitive. It doesn't make sense.

Pharmacy ownership is already restricted to pharmacists. Pharmacists can own medical practices, and some do. But these same pharmacists argue strongly that only pharmacists can own pharmacies.

We will be calling on the Prime Minister, Tony Abbott and other Ministers to end this madness.

I make it clear that our dispute is with the activities of the Guild, not with the local pharmacists.

I'm sure the relationship between the grassroots GPs and pharmacists in the towns and suburbs of your electorates is friendly and cooperative. And so it should be.

Another issue that I'm sure is on your minds is private health cover and gap payments.

Let me say first that much has been achieved in the last five years. Today, almost 80 per cent of all private in-patient medical services are performed with "no gap".

But there are still some private health insurance funds who don't offer "known gap" products. They should.

Informed financial consent is essential and is supported by the AMA. There are still some areas, however, where there can be improvements.

In some cases, the doctors have little direct contact with patients. This means less opportunity to directly discuss matters of informed financial consent. I think that must change.

As a high profile patient recently suggested, maybe the best thing we can do is to simplify the billing process.

Next week the doctors, the private health insurers and the private hospitals are getting together to nut this one out.

And Tony Abbott is coming along to help us roll away the stone of mystery from single billing and 'no gaps'.

It is important we get the private health side of the equation right. It, too, is part of health's big picture infrastructure.

We need to see big bold ideas in health policy if we are to get the right health infrastructure in place to serve future generations of Australians.

In doing so, we must preserve the independence of the medical profession.

We have to provide quality patient care.

Every Australian must have equal access to services.

Health care must remain affordable.

And we must give patients choice and flexibility.

The policies to shape Australia's future health infrastructure cannot be produced in isolation by medical groups and politicians. The real experts are out there in your electorates.

I take my advice from the patients I see every day and the doctors I work with every day.

Health policy must come from the people who use the health system and from the people who are the health system. I urge you to take your advice from the same sources.

Health politics is local politics. And that's a message I want to leave you with.

This is my final speech to you as a group. My term as AMA President ends in May.

In my two years as Federal President - and before that as Queensland President - I have met many of you in formal and informal settings.

I like to think we have mostly had cordial and productive exchanges.

I have tried to call things as I see them for the benefit of the patients and the community.

I have clashed with some of you on some issues. I have clashed with others on other issues.

But let me say that I have been impressed by you all - as people and as politicians. And that goes across the political spectrum, across all parties.

You are all committed to your causes and your ideologies and your passions. Most of all, though, you are committed to your voters.

I thank you for tolerating me these last two years, and I hope our paths cross many times again in the future.

Thank you. I'm happy to take questions.