Interview with Dr Kerryn Phelps, AMA President - 'Sunday', Channel Nine

OAKES: Now that you and Dr Wooldridge have kissed and made up, is the AMA going to stay out of the election campaign?

PHELPS: No. In fact, the AMA is well and truly involved in the upcoming election campaign because we think it's so important that any prospective Members of Parliament are very well informed about health issues. And the AMA has undertaken to educate all prospective MPs about those health issues.

OAKES: So how are you going to do that?

PHELPS: We have set up a network of GPs and I can tell you there's no shortage of volunteers who will be assisted by the AMA in coming up to speed with what issues are on the table at the moment and where we're at with government. And to make sure that they have meetings arranged for them with Members of Parliament and that they are able to answer any questions that those MPs and prospective candidates might have.

OAKES: What about voters? Are you going to educate them? Or...

PHELPS: Well, I think that...

OAKES: ... shift their views from one party or another? I mean, you've said nice things about Jenny Macklin, for example. Does that reflect what you'll be doing?

PHELPS: No, I think it's important that it's not politically partisan, and I have said this from the outset, that the AMA is not a politically partisan organisation. But what we want to do is to make sure that the views of doctors and patients are kept in account while this election campaign is happening. And that we get appropriate assurances from both sides of the equation and from all major parties about what they're going to do with the problems in the health system.

OAKES: Can I ask you about the relative value study? The joint AMA government review that's indicated, I think, that one and a half billion dollars is required to make the medical benefits fair. You have said that's at the centre of your agenda? Is that still the case?

PHELPS: Yes, it is. We've got an evidence-based study, which has taken six years and tens of millions of dollars to complete. And it's been a joint study with the AMA and the government, looking at where medical fees ought to be in terms of providing quality medical care. And what it's shown is that the Medicare benefits schedule is about one point five billion dollars a year short. So that's the amount that has to come out of household incomes if Medicare is not going to pick up the tab for medical services. So...

OAKES: But Dr Wooldridge says this is just a pay claim for a hundred thousand dollars a year per GP. Is he sticking to that attitude?

PHELPS: I hope not, because it's certainly not an accurate representation of the case. It's not just about general practice, it's about the entire range of fees for all medical service and all surgical services including anaesthetists, psychiatrists, dermatologists, surgeons and GPs. And what is occurring is that we're seeing the gaps for patients potentially increasing because the Medicare benefits schedule hasn't even kept up with average weekly earnings.

Doctors' fees have risen at less than average weekly earnings for the last ten years and so it's not the doctors fees that are problem. It's the fact that Medicare hasn't kept up pace to keep those gaps down.

OAKES: Now I think your view is that this endangers Medicare. Did you explain that to Dr Wooldridge?

PHELPS: Yes, I have spoken to the government about this because if we do have a universal health insurer surely it should be covering what is an appropriate level of fees. We're not talking about exorbitant fees here. We're talking about realistic fees. It's not...

OAKES: But how does it threaten Medicare?

PHELPS: It threatens Medicare because if it is the insurer then Medicare needs to look at how much of the medical fees it's going to be covering. Now if it's going to continue to cover a reasonable amount of the medical fees then people will see that the government is supporting Medicare.

But if the gaps continue to widen and Medicare stays static where it is now and fees increase because the cost of providing the practice, the cost of medical indemnity insurance are increasing exponentially and Medicare doesn't keep up then Medicare will fall apart. It simply can't survive unless it keeps up to pace with what's happening in the health sector.

OAKES: Do you think Dr Wooldridge understands that or agrees with you?

PHELPS: Look, I think that there is a conundrum for the government here, because they understand that Medicare is very popular with the Australian people as it...as it's popular with the medical profession because we see that it has elements of social justice. But those elements of social justice will disappear particularly for the disadvantaged if they are paying increasing amounts out of their household incomes to cover medical expenses and particularly for people who are very disadvantaged.

If they feel they can't go to see their doctor because of cost, even though the doctor would be likely to discount their fee for them then that, I think, is a threat to Medicare.

OAKES: Is Dr Wooldridge's attitude threatening bulk billing? Will it wipe bulk billing out?

PHELPS: Bulk billing is an issue here because it's a measure of whether GPs are able to maintain their practices at the current level. I think it's important to point that the relative value study found that a minimum fee for a GP consultation for fifteen minutes should be forty-five dollars.

Yet the rebate for Medicare and what a doctor gets if they bulk bill is only twenty-three dollars forty-five. So that's...there's that enormous shortfall that GPs have been subsidising. And that because GPs for the last three successive quarters have been declining in their bulk billing rates it's actually an indicator that gaps are increasing and that GPs are saying we can't do it for that price anymore.

OAKES: So what does the government say to that?

PHELPS: Well the government is acknowledging that they have a problem with this but at the moment they're not saying that they're going to acknowledge the relative value study.

GPs want that fee recognised. Now it's either going to be a case of GPs just starting to charge that amount as a minimum fee for a fifteen minute consultation and the insurer Medicare will just reimburse people for the twenty-three forty-five. Or alternatively, Medicare will have to say maybe for the disadvantaged we increase that amount that Medicare gives them back, so that their gap is smaller. Maybe for everyone we increase that and acknowledge that health costs more than we're prepared to pay at the moment.

OAKES: Could I ask you about gap insurance? I think the government's spending something like fifteen million dollars on an advertising campaign praising the gap insurance system that's been introduced. Why do you regard that as an attack on doctors?

PHELPS: Not so much an attack on doctors, but it's an attack on patients' choice of doctors, and particularly with these lists that the health funds put up onto their websites. And some of them, I notice, have mysteriously disappeared over the last couple of weeks because they were quite inaccurate in some places.

For example, there were lists of a so-called specialist anaesthetist put up on one of the health fund websites, and it only contained, I think, twenty-eight per cent of the people on that list were not specialist anaesthetists. And it only listed about ten per cent of those specialists, in any case. And so it really is a diminishment of choice because, for example, the traditional referral pattern is that a GP will provide a referral for a patient based on what we know to be that doctor's expertise in a particular area for that patients individual circumstances.

And doctors object, well GPs won't be classed for the health funds and going through what hospitals have what contracts with what doctors and what patients have what insurance, and whether that covers what that doctor is going to provide them. GPs simply don't have the time to administer that kind of bureaucracy. And it's not our role as a GP. And specialists...

OAKES: But that's what the funds are doing, but why are you down on the government for their advertising campaign?

PHELPS: Well, the advertising campaign is a little misleading in it talks about no gap and it talks about closing the gap. And the reason for the gap is fundamentally because, as we've said before, the relative value study showed where medical fees ought to be. And all of the gaps are because the Medicare benefit schedule hasn't kept up.

So in blaming the doctors for the gaps that patients are having to pay it's really unfair because in fact it's Medicare not keeping up that is responsible for that gap.

OAKES: Now, did you explain all this to Dr Wooldridge at your famous lunch?

PHELPS: We did have a discussion about gap insurance at the lunch, and...

OAKES: With what result?

PHELPS: Well, we're going to have to continue talks. Obviously, in a few hours you can't cover the whole gamut of health policy discussions, but we certainly got off to a much better start that we've had in the past.

OAKES: What about some of the other issues on the AMA agenda? Did you get anywhere with Dr Wooldridge, for example, on the impact of the Trade Practices Act on medical practice and the activities of Dr Fels?

PHELPS: Yes, we did, on both of those issues. And I think we will see within the next month a really exciting announcement about, particularly about structured settlements which is all about how people can be compensated if they're the victim of medical negligence or bad outcome from a health encounter.

OAKES: So you expect a change to the tax laws?

PHELPS: Yes, we expect a change to the tax laws. We have seen an early draft, and at this stage it's looking good and I think that that will be a part of the foundation for a change to the way medical negligence is dealt with in the legal system. And that is very welcome because it is becoming unaffordable for a lot of specialists like obstetricians to continue to work in their fields, and particularly it has an impact on rural and regional Australia.

So we will be hopefully getting the structured settlements issue on the table in a very short space of time. We are also looking at an independent inquiry into the Trade Practices Act. Now, the Trade Practices Act was...rose out of legislation in the 1800s, which was to control monopolies in...

OAKES: ...in America...

PHELPS: ...in the oil and the railroads industries. And it was... it applied in 1995 to the medical profession and to individual doctors ...hardly what you would call enormous monopolies. And so there are a number of unintended consequences that have emerged since then, and what we'd like to see is an inquiry to look at how those unintended consequences have impacted on delivery of health services.

OAKES: Have you had an indication from the government that they'll agree to that?

PHELPS: Yes, we have had some positive feedback from the government on that, and I believe that we will also hear an announcement that there will be an inquiry looking at the impact that this is having, particularly on rural and regional health services.

OAKES: Now, you're also interested, I think, in ... well, I know that you're interested in the under-funding of hospitals and the aged care system. How under-funded are our hospitals? How under-funded is the aged care system?

PHELPS: Aged care is in something of a crisis at the moment. I think if you walk into any aged care facility and say, is this how I would like to spend the last years of my life, you'd be hard pressed to say yes for ninety per cent of cases.

So, what I think we need to do is to get all of the elements of the aged care sector together ...the consumer groups, the aged care providers, the medical profession, government, agencies and the nursing groups...and say, well, listen, what are the problems? We know for example that the workforce...nursing workforce in aged care is a major crisis. We know that it's difficult for GPs to get into the nursing homes and provide the care that they want to be able to provide. We know that funding for aged care places went down in the last budget for actual places to put... to provide for people.

Now, what we need is a, I think, a summit, to look at aged care and to say, well, lets take a look at all these problems and lets look at reasonable solutions. And I think we need to also look at, not seeing aged care places as a one way street. But saying, well, lets have some rehabilitation facilities, lets have step down care, transitional care. So that it's not just home or hospital or nursing home. That we have a number of flexible options for people that as they age we can help them to maintain their independence, rather than having this enormous decision about losing your independence and going into facility that doesn't suit you.

OAKES: Dr Phelps, we're out of time, but we thank you.

PHELPS: Thanks Laurie.

OAKES: Back to you Helen.

PRESENTER: Thanks Laurie. Dr Kerryn Phelps talking with Laurie Oakes.

Ends