Speech by AMA President, Dr Kerryn Phelps to the Sydney Institute - The Future of Medicine in Australia

Good evening. It is a pleasure to be back at the Sydney Institute.

While the headlines may be dominated by Iraq, the cricket World Cup, and the State election here in New South Wales, there is one major area of concern for the Australian people that continues to bubble under the surface ready to explode onto the front pages at any minute.

That area of concern is health - the health of all Australians today and into the future.

Even in these troubled times, health issues do occasionally manage to break through the world news because the Australian people are starting to demand answers to the problems they know are besetting the health system - their health system.

If only we had a Government and an Opposition prepared to launch a pre-emptive strike on health policy.

Nevertheless, I'll attempt to give the topic a push along here tonight.

Health policy in Australia today is by and large dictated by the electoral cycle - a few dollars here and a few dollars there to keep people quiet until the votes are counted.

That's simply not good enough. Not since Medicare was introduced - love it or hate it - has there been a genuine attempt at long term reform.

People may argue the private health rebate and Lifetime Health Cover are in the same league, but I think the jury is still out on the long-term success of these initiatives. For now, however, they are working well to keep a balance between the private and public systems.

The fact of the matter is that we are today in urgent need of visionary long-term reform in the Australian health system.

As you know, in recent months I have indicated that I think bulk billing is effectively dead. The latest figures confirm it is on a terminal slide into oblivion. It is time to move on.

Doctors can no longer afford to subsidise Medicare. Until the Government finds a workable alternative, people will continue to have to spend more of their household income on health.

Those who can pay are now getting used to a co-payment to see their GP but how big a co-payment they will tolerate into the future is yet to be seen.

The significant challenge for government policy is: what happens to the genuinely disadvantaged as co-payments continue to increase if doctors are no longer prepared to subsidise Medicare?

The costs of providing health care will rise and rise, but will the Government's commitment to Medicare and equitable access to health care rise concurrently? History would tell us that the answer is no.

We must have a workable safety net system. The AMA will be putting forward some policy proposals in this regard over the next couple of months.

One of the biggest problems is that there are not enough doctors in Australia.

The recently released 1999 Australian Institute of Health and Welfare statistics do not tell the whole story.

In fact, after their initial press release saying that Australia's medical workforce increased by over 6 per cent between 1995 and 1999, they had to release a supplementary statement saying that their own figures show there was actually about a 4 per cent decrease in full time equivalent practitioners during that period.

The problem is not simply about the number of doctors registered in Australia, it is more to do with what these doctors are doing with their time.

For a whole range of reasons, there is less face-to-face consultation time.

Today we are training too few doctors and the gloss has gone off medicine as a career.

After ten or more years of training, doctors are graduating into a profession with high practice costs, high medical indemnity costs and mountains of red tape.

The desire to practise medicine is being swamped by bureaucracy.

Towns, suburbs, whole communities are seeing their doctors retire or leave, never to be replaced.

Families have to travel great distances to get their kids seen by a GP.

Mothers are travelling to other towns or capital cities to have their babies...if they can find an obstetrician in the bigger centres.

Specialist treatment of all kinds is harder to access locally for all Australians.

We need to take a careful look at the numbers of medical students and specialist training positions and ensure that the supply meets the demand.

We need greater incentives for doctors to want to move to and stay in areas of health need such as small country towns and outer suburban areas.

Poor funding and low morale are affecting the quality of care in our public hospitals. These are our major teaching hospitals.

Elective surgery in public hospitals is becoming much harder to obtain.

Medical indemnity continues to strike at the very heart of a doctor's capacity to afford to stay in practice.

Problems continue to mount in the aged care sector as the Australian community confronts an ageing population that will place even greater pressure on stretched resources.

The health of indigenous Australians is the worst in our community and among the worst of any group in the world.

Alcohol and drug abuse are still taking the lives and quality of life of too many young Australians.

Smoking is still one of our biggest killers.

Yet against this backdrop the Treasurer, Peter Costello, says there will be no new health money in this year's Budget.

Against this backdrop the Federal Health Minister thinks it's a good idea to boycott the Australian Health Ministers' Conference on the eve of the next round of Australian Health Care Agreements.

These agreements only come about once every five years. They are independent of the election cycles of Federal and State governments and for the first time were showing promise of delivering real reform in the health system, rather than just arguing about money.

There is no commitment evident to put in place a strong and equitable health policy framework to serve this and future generations of Australians.

But what will we need to get us through the next 20-30 years? What changes can we expect or hope to see?

If you cast your mind back to the 1970s, the differences between then and now can be illustrated by the medical shows on TV - The Young Doctors versus MDA.

The biggest ever drama confronting the ever-smiling glamorous doctors and nurses at the Albert Memorial Hospital were the exorbitant prices at Gwen Plumb's kiosk.

On the other hand, MDA confronts the very real issue of medical indemnity in a tough and uncompromising way.

The only real similarity between the shows was the appearance of former teen pop idols - Mark Holden and Jason Donovan.

The issues, the pressures and the crises have all changed over time.

They will be different again 20 years down the track, but are we prepared? I'd say not.

Nor will we be prepared for a TV medical show starring Nicki Webster.

The future of medicine is inextricably linked with the future financing of medicine and the framework for delivery of health care.

It is worth looking at the recent history of health financing in Australia, because those who fail to learn from past mistakes are doomed to repeat them.

In the 1980s, we experienced the initial budding and blooming phase of Medicare.

Governments were able to finance it because aggregate outlays were initially low and reasonable indexation was no great burden.

It could be managed within Federal outlays where health was only 12 per cent of the Federal budget, medical Medicare was $2.5 billion per annum, and hospital Medicare cost the Federal Government $2.8 billion per annum.

Australians enjoyed the new levels of access to GP services, and other health services.

By 1995-96, they visited the GP 36 per cent more often than they did at the beginning of Medicare. This was a result of two factors:

1. There was no price signal so patients could attend any number of doctors any number of times with no cost to them if the doctor chose to bulk bill, and
2. Medicare was delivering a significant amount of unmet need for health care in the community.

In the 1990s, the effort was not maintained.

Health had risen to 15 per cent of Federal outlays and further growth could only be achieved by inflicting considerable pain in other portfolio areas.

GP rebates hardly moved between 1992 and 1997, sowing the seeds for the decline in bulk billing that we see today.

Private health insurance declined under the burden of cost shifting from the Federal Government. The demand on the public hospital system was more than it could meet and stories of long waits and queues in Accident and Emergency became commonplace.

In this decade, the noughties, we have seen the resurgence of private health insurance thanks to the rebate and Lifetime Community Rating - which I alluded to earlier.

Private hospital activity has lifted significantly and public sector activity has flattened, which is evidence of the success to date of these initiatives.

But still the rebate does not have universal political support. The rebate is constantly threatened. The AMA will have more to say about this in coming weeks.

General Practice in Australia is in serious trouble. Although the Government says it has a plan, the only plan seems to be the 'no plan' plan.

At the start of Medicare, the gap between Medicare rebates and total fees charged was only $245 million.

Now it is close to $2 billion - nearly a tenfold increase - and there has been 'naked' cost shifting onto households directly or through private health insurance.

The Government had an opportunity with the Relative Value Study to put things right, but dropped the ball.

Let me put the effect on GPs into perspective.

In 1991, the Medicare patient rebate for a standard GP consultation was around $20.00. Today it is $25.05. That is approximately a 25 per cent increase in the rebate in twelve years.

Over the same period, the cost of running a medical practice has increased by at least 40 per cent.

It just doesn't add up, does it? What other small business in Australia has been forced to operate in such a false and unfair economy?

GP bulk billing rates fell below 70 per cent in the December 2002 quarter, the lowest level in more than a decade.

The rate dropped 4.3 percentage points in the second half of 2002, with a fall of 5.6 percentage points over the whole year.

Feedback from doctors and communities indicates that, in real terms, the rate is much lower and will get even lower very quickly.

In short, bulk billing is on its last legs. The only question remaining is why so many GP services are still bulk-billed. The GPs' sense of altruism and community responsibility to provide affordable heath care is now outweighed by their need to survive so they can provide that care to their community.

Government inaction has meant Australians are forced to pay more from household incomes for their basic health care - not forced by doctors, forced by the Government.

Somewhere along the line, Medicare lost its original intent, which was a universal health insurance scheme. Gradually the Australian population was sold the line that Medicare entitled them to free health care.

This is a big fat lie. Health has never been free. It has to be paid for out of our taxes. What taxes don't cover, household incomes must. The debate we now have before us is what that balance should be.

Without a plan of action, sadly, the poorest and the sickest will be the hardest hit.

This situation will only get worse year after year unless the Government decides whether it remains committed to Medicare and does something about it.

Public hospitals creak under the pressure of budget austerity. Their teaching and research role is constantly under threat.

This means that future generations of medical practitioners may not get the benefits of good training that today's doctors enjoyed.

To top it off, the competition watchdog - the good old ACCC - has turned its misguided attention to doctors just trying to do their job.

Instead of chasing real threats to the Australian economy, the ACCC chooses to froth ideologically at the mouth at any prospect of persecution and prosecution of the medical profession no matter how trivial the supposed misdemeanour.

In just the last year, ACCC intervention has literally destroyed the obstetric service in Rockhampton...but still they trumpet it as a victory. And don't the consumers just love that. Good one, Allan and the gang.

The Government has had the chance to do something about this, too, but hasn't acted decisively.

The Prime Minister commissioned an inquiry into the impact of the Trade Practices Act on rural health services. They found that there needed to be a significant culture change in the ACCC. No sign of that yet.

Then there is medical indemnity. We still have a long way to go before this is resolved. I will be speaking at length on this subject later in the week at another forum.

Would you be surprised if the top graduates from schools and Universities are not contemplating a medical career? That's the sad truth. Our brightest and best students are deserting medicine for other careers. Most of my colleagues try to talk their children out of applying for medical school.

Let's hope tomorrow's IT consultants are adept at removing a gall bladder or replacing the odd hip joint.

In terms of access to medical services into the future, much of it is up to Government.

Government controls the number of University places for medical aspirants.

They control the number of postgraduate training places, directly in the case of GPs and indirectly in the case of specialists.

Government controls how much specialists are paid in public hospitals, they control total public hospital funding, and they control the Medicare Benefits Schedule virtually unilaterally. This in turn limits all patients' rebates for medical services.

They control the laws governing medical indemnity.

They control virtually all aged care expenditure.

Governments contribute nearly 80 per cent of all medical and hospital expenditure, with the rest contributed by individuals.

The only control doctors have is that, in relation to their private work (as opposed to their visiting medical officer work in public hospitals), they can set their own fees.

God help them if they give that up. The future would indeed be bleak.

In fact, many cannot even afford to switch over to work full time in the public sector because of the size of their medical indemnity payments. Their public work would not cover it.

In terms of quality, the basic critical relationship in the health system is between the doctor and the patient.

Governments and insurers have been trying to elbow the doctor out of the way so they can control even more things. For this, you should read "cut costs and deny services".

If Governments and insurers are successful in achieving this, quality will decline and we are well and truly on the slippery slope.

So we have an underfunded MBS, an underfunded PBS, a struggling public hospital system, and a private system which is subject to great sovereign risk.

The medical workforce is in undersupply, GPs in outer metro areas and rural areas are undersupplied, and nurses are a complete limiting factor on the level of care that can be provided.

You can have the most contemporary shiny new, fully-equipped hospital ward. But without suitably qualified nursing staff the beds will stay empty.

Rationing is extensive and getting worse.

Paying for your health care is regarded by nearly half the community as a sinful behaviour. We really need a rethink!

One option is for the Government to recommit to universal access principles.

But the downside is, if it does, it needs to fund it and that will take a lot of money - a lot of taxpayers' money because it has fallen so far behind.

Either that or it needs to acknowledge that it won't or it can't.

In which case the principles of Medicare need to be redesigned to provide a safety net system for those who genuinely cannot afford to pay their own way. Integral to that is a way to encourage the private financing of health for those who can afford it.

And, given the Australian demography, it seems highly uncertain that future health needs can be financed by taxation and will need to be financed by savings.

We need to stop sneering at private financing and work out ways to encourage and improve it.

There is scope for further reform of the private health insurance environment.

There is still a lot of work to do to encourage entry and innovation in the private health insurance sector.

There is a strong case for dismantling regulation of premiums, waiting times, reinsurance and gap cover.

The important elements of the regulatory framework to keep are Lifetime Community Rating, prudential requirements, and for clear and succinct information about the products - supported by an effective complaints mechanism.

Every consumer should have the option of being able to purchase comprehensive health insurance covering the full range of medical services.

We are rapidly approaching a realisation that as the ratio of working to retired Australians changes from 70/30 to 30/70 over the next 40 years, funding a universal health system via the taxation system becomes quixotic.

We need to start the search for intelligent ways to incorporate a savings aspect into the private health insurance system.

So, we know a few things about the future of health financing and the future of medicine.

The first and most important thing is that it will be different. The last thing we need is to be surrounded and advised by those who are rooted in the past - 1984 in particular.

What we had in the 1980s seemed good at the time but those times are gone and will never come back.

We need to take the best of that system and go on a search for new ideas, new advice, new options and new solutions.

If we can resolve this sensibly and rationally and equitably, we can continue to provide access to high quality medical services.

We need some attitudes to change as well.

Doctors are not part of the problem: they are a key to the solution.

There are doctor shortages all over the world. Doctors could sit back and enjoy the economic benefits of undersupply. But doctors want to be able to provide services to patients. That's what we trained to do.

Governments need to loosen the controls on the profession to ensure doctors can provide quality care, and they need to seek and value the advice of the medical profession in resolving problems.

Doctors just maybe know more about the issues at the coalface than bureaucrats in Canberra.

Ministers and politicians of all persuasions should cast their net wider when seeking health policy advice and debate. This has begun to happen with the working parties on the Australian Health Care Agreements.

The Canberra gene pool of health advisers has grown stagnant.

Meanwhile, many backbench politicians are getting free health policy advice from the patients and doctors in their electorates.

The AMA has set up a GP network in every electorate so that elected representatives have a touchstone in their own communities. My theme for this network could be: "If you don't believe me, ask your local GP!"

This advice is on the money. It is real, not theory. It's what I base my policy decisions on.

While government has a responsibility to provide an economic framework for health care, technological advances are proceeding with dizzying pace.

The medical profession and the community have a responsibility to ensure an ethical framework for the implementation of that new technology.

In fact, Dolly the Sheep - God rest her cloned woollen socks - has given us a glimpse of what lies ahead. More on Dolly in a moment.

Basically, there are two types of cloning techniques relevant to human beings - reproductive cloning, where the intention is to create a human being, and therapeutic cloning, where the intention is to produce human stem cells, tissues, and possibly organs.

Stem cells are cells that are capable of developing into a variety of different types of cells - blood cell into a bone cell, for example.

Adult stem cells are found in adults while embryonic stem cells are found in embryos.

Reproductive cloning is generally considered to be unethical for reasons of safety, efficacy, and morality.

There are already serious concerns involving the safety and efficacy of reproductive cloning technologies in non-human mammals such as sheep, cows, mice, monkeys, and other mammals.

Good old Dolly the Sheep is, or was, probably the most famous cloned mammal. Her death was announced by her creators at the Roslin Institute in Scotland on Valentine's Day this year.

Dolly was created using a technique known as somatic cell nuclear transfer.

This technique involves transferring the nucleus from the cell of one animal into an unfertilised egg from which the nucleus has been removed.

The egg is then stimulated to grow into an individual. Dolly was created from a mammary gland cell of a six year old sheep.

Dolly's creators at the Roslin Institute in Scotland have compiled data on the efficiency of somatic cell nuclear transfer, and the cloning technique used to create Dolly.

They found that the overall efficiency of cloning is typically between 0 per cent and 3 per cent - the number of live offspring as a percentage of the number of nuclear transfer embryos.

Many of the animals born 'successfully' experience problems and abnormalities like respiratory or cardiovascular dysfunction.

Dolly herself experienced very early onset of arthritis in her legs and eventually succumbed to a lung disease at the age of 6 years (when she was euthanased). Sheep tend to live on average around 11 or 12 years.

Such a 'success rate' of 0-3 per cent is alarming for non-human mammals but abhorrent if applied to the intended creation of human beings.

And indeed, it appears as if there are factions in the world willing to take the chance anyway.

Late last year, a company called Clonaid, related to a religious sect known as the Raelians who believe human beings were created by aliens, announced they had successfully cloned a human being.

At this stage it seems their claim is somewhat exaggerated. Promised DNA tests never eventuated.

In what appears to be a race to clone the first human being, an Italian reproductive scientist, Dr Severino Antinori, has also claimed that he knows of several women currently carrying cloned babies who are due to give birth soon.

But why all the fuss over reproductive cloning of humans?

Besides the issues of a clear lack of safety and efficacy surrounding reproductive cloning, there are moral and ethical concerns related to this technology.

Now, to be fair, there are some potentially 'good' applications of human reproductive cloning.

For example, reproductive cloning could provide a viable alternative to current assisted reproductive technologies and would allow some groups of infertile couples to have a baby genetically related to at least one of the parents.

Also, such technology could help couples conceive a child without passing on a life-threatening genetic mutation.

There are, however, serious moral and ethical questions, again aside from the current safety risks, that require debate in advance of that technology being implemented:

• For example, how would society treat a cloned individual? Would that individual have their own self-identity? Would we treat them as individuals or simply 'copies' of their 'donor parent'?

• Could cloned human beings be created as a means to an end? For example, creating a clone of yourself so that you have 'spare parts' in the future should you need them - liver, heart, or kidney. Or creating a clone of a dying child so that individual 'lives on'?

The moral and ethical considerations are almost endless but many hinge on society's acceptance and treatment of cloned individuals as individuals - with their own personalities, desires, morals and values.

There are also many question marks over the long-term health implications for the cloned individual.

A human clone has an identical genetic blueprint to its 'donor mother or father', but that's it. He or she will still have their own experiences, starting from in the womb, which will differ from their 'parent'.

What makes human beings truly human is not their genetic makeup or what they look like, but their unique qualities...their "soul" if you like.

In Australia reproductive cloning is currently banned by law and this ban needs to continue at least until more of the very valid ethical concerns are examined.

In the near future, reproductive cloning is unlikely to be sanctioned by governments, the medical profession, and broader society (worldwide).

At this stage, it is clearly unsafe in non-human mammals and there really does not seem to be any other strong justification for it, even when considering the possible alternatives it may contribute to assisted reproductive technologies.

Undoubtedly, there will be your radical 'off-shore' groups such as Clonaid (the Raelians) who will do their best to claim to clone human beings or even do it.

Not only is such 'research' taking serious risks with the safety and health of any cloned babies - and probably the mothers - but it is also feeding the increasing worldwide mistrust in genetic research and the biotechnology industry.

Even if the Clonaid cloned baby or babies is just a hoax, the perception of scientists as monsters and radical individuals who care nothing of ethics and societal values will prevail.

This perception can and will have serious implications for truly ethical, beneficial research such as ethical stem cell research.

So what about therapeutic cloning?

This technique uses the cloning procedure to produce a clonal embryo, but instead of being implanted in a womb and brought to term it is used to generate stem cells.

Therapeutic cloning to create cells, tissues, and (possibly) organs has advantages over using non-cloned cells, tissues, and organs in that the clonal donor will not have to worry about his or her body's immune system rejecting 'foreign tissue' harvested from another human being, because the tissue is created from his or her own tissue.

Australian law currently prohibits the creation, importation, or exportation of a human embryo clone.

But the Research Involving Embryos Act 2002 does regulate the use of already existing excess assisted reproductive technology (ART) embryos for research purposes in very limited circumstances.

An example is where an excess ART embryo may be damaged or destroyed in the research, the excess ART embryo must have been created before 5 April 2002.

Both Acts will be reviewed in approximately two years.

But why all the fuss over therapeutic cloning and stem cell research, you may ask?

Therapeutic cloning involves creating an embryo, which some would equate with reproductive cloning - thus going down the 'slippery slope' towards reproductive cloning - and then destroying that embryo to derive the stem cells.

Currently, stem cell research predominantly focuses on embryonic stem (ES) cells.

They are more successfully directed into a preferred cell type than adult stem cells.

The source of ES cells is an embryo and to derive stem cells from the embryo, the embryo must be destroyed.

It is the destruction of the embryo that causes the most ethical and moral dilemmas for therapeutic cloning and stem cell research. It raises the age-old question of the beginning of life.

Many individuals, as well as religious groups, believe that life starts at conception and that deliberately destroying an embryo equates to murder.

Both therapeutic cloning and stem cell research hold wonderful applications to treat diseases such as Alzheimer's, Parkinsons, and spinal cord injury.

Unfortunately, the moral and ethical issues surrounding both technologies limit the amount of research that can actually be done.

Australia (as other countries) continues to face shortages in the blood and organ supply, and cloning and stem cell research could help alleviate these problems.

Again, the major issue will always hinge on the moral status of the embryo and if one thing is for sure, it is that this is unlikely to be resolved in the near future.

Meanwhile, other developments offer hope for patients.

Genetic testing, including predictive and predisposition testing -determining your genetic chance of developing a certain type of cancer - and diagnostic testing to determine whether you have a genetic disease such as Huntington's, will help patients and doctors focus more on preventive health.

If you know you have a 'high risk gene' for colon cancer, you may make sure you have healthier habits and have regular surveillance colonoscopies.

Patients will have more informed choices regarding reproductive decisions and even their own social and financial decisions like insurance.

But there is a downside to the great positive potential of genetic research, particularly the potential for inappropriate access to or demands for genetic tests imposed by third parties such as insurers and employers.

Genetic information is very personal and not only reveals health-related information about the patient, but also, by its very nature, about the patient's blood relatives as well.

The AMA's fear is that patients will be coerced into undertaking genetic tests that they didn't want to take - to get a job, for instance - or that they will forego genetic testing if forced into revealing existing genetic test results.

This already happens with life insurance where insurers have the right to ask for existing test results but cannot make you take a genetic test.

The AMA has already expressed these concerns in submissions to the current Australian Law Reform Commission/Australian Health Ethics Committee Inquiry into Human Genetic Information - which is due to make its recommendations in March.

Along with genetic testing will be a greater demand, and a necessary one, for genetic counselling.

General Practitioners, in particular, will be the first port of call for genetic testing and will not only be required to be 'up to date' on the latest test, but will be required to assist in pre- and post-test counselling.

Here's an example. We discover the gene, and a way of identifying people who will in later life develop a hereditary neurological disorder, but there is not yet a cure. Do you tell the parents of that child? Do you tell the person? What effect might it have on their lives? Whose responsibility is it if that person takes their own life as a result of that information?

With the rapid pace of developments in genetic research, there is room for caution.

Yes, there are great gains to be made...but the ethical framework must first be in place to anticipate the potential for problems.

Genetic testing will only increase with time, and appropriate privacy protection and considerations such as adequate counselling are vital to ensure the health benefits from genetic testing are truly seen.

As with other areas of medicine, there will be increased challenges from alternative sources outside the medical profession of genetic testing kits.

Currently, on-line genetic testing is on the rise, including paternity testing.

On-line kits are widely available from overseas sources and take little or no consideration for counselling, interpretation of results, and sometimes even verification of the source of the genetic material.

For example, the AMA spoke out a few years ago against an on-line paternity testing company that encouraged women to take a sample of their partner's and child's hair to send in for DNA testing!

You can see the PR spin...less expensive than seeing your doctor in some cases, more convenient because you can just sit at your computer to order the materials, and more private.

It is therefore reasonable to predict that patients/consumers will increasingly be tempted to go on-line for these overseas resources.

Another application of genetic research will be pharmacogenetics where patients can have their treatment 'personalised' from a DNA analysis.

This has the promise of overcoming unexpected side effects that some patients might get, but others do not.

Basically, the individual's own genetic variations are tested for their individual drug response without having to actually take the drug first.

This will have a fantastic application and will ensure greater efficacy of treatment regimes, fewer side-effects, and should be ultimately much more cost-effective.

In the meantime, we have to gear ourselves for the challenges of an ageing Australian population.

While one school of thought says that the 'baby boomer' generation will place an enormous strain on the health system, there is another school that says this may not be the case...at least not immediately.

Ageing has been commonly cited in Australia as a potentially large factor for increases in health and other social expenditure.

However it may not contribute to a growth in outlays of the magnitude that is often suggested.

It is definitely a factor, but according to one report, "overseas experience witnessed by countries that currently have a demographic profile similar to that which Australia is heading in the next 20 years suggests that the consequences of an ageing population on health expenditure are manageable".

Why? Because our so-called 'older generation', more particularly those entering retirement, are fitter and healthier than any comparable age group before them.

The increased cost to the health system kicks in as older people near their death age - the last two years of life - but life expectancy is improving and the average death age is getting higher.

So, for now - and perhaps the next decade - the biggest cost burdens to the health system will remain improvements in technology, increased consumer demand, and pressures on medical workforce such as medical indemnity.

The 'big hit' of our ageing population with the increases in demand and costs will come, but the thinking is that it will be later rather than sooner.

Only time will tell whether this is true but it is clearly in the national interest to have a healthy population - particularly a healthy elderly population.

Keeping people healthier longer must be a national priority.

Central to this is managing chronic disease in the community.

The effective management of chronic diseases is a major challenge affecting medicine in Australia in the coming years.

As we have more people living longer we are going to have more people living with chronic diseases.

Chronic diseases and conditions lead mortality, morbidity and disability statistics in Australia and are responsible for a large proportion of the burden of disease.

Their rapid rise is one of the major health challenges of this coming century, with chronic diseases now of epidemic proportions.

Chronic diseases occur at higher levels and earlier in socio-economically or otherwise disadvantaged communities.

Risk factors include:

• low birth weight
• inadequate living environments that fail to promote healthy lifestyles;
• poor nutrition;
• educational disadvantage;
• alcohol misuse
• and tobacco smoking cluster in poorer communities.

Most people with chronic illness require additional help and the cost of this alone has a major effect on their income.

For those people with chronic illness on lower incomes this additional help is a very expensive. The cost of care and treatment varies with the extent and severity of an illness, more than the individual diagnosis.

Some illnesses are costly because they are rare and the medication is not on the PBS or not available in Australia.

Traditional medical care through general practice that is patient and illness-centred has managed most of the chronic disease in Australia.

Although outcomes of individual patients and disease is difficult to identify, Australian health outcomes for chronic disease are among the best in the world, giving testament to this model of care.

And it gives testament to the importance of a properly funded and managed PBS, but that is a topic I will pursue another day.

Research shows that GP care that is patient- and family-focussed reduces costs and mitigates against the effect of social inequalities.

Yet in Australia we have seen an emphasis on disease management incentives which have been introduced in general practice in recent Federal budgets.

Disease management payments for general practice currently are for asthma, diabetes, cervical cancer, and depression/mental health. Most GPs I know say, 'thanks very much but I was doing that anyway'. It just adds another layer of administrative red tape to report back to Government.

Australian health care should continue to focus on care for individuals in the context of broad patient-centred care rather than provide services around specific and limited disease management.

General practice should remain just that - general practice - and the bedrock of our health system.

GPs are the window to our health system and should be supported, not forced out of the system as is happening now.

The future of medicine in Australia is all about challenges and ideas.

I have touched on just a few of them this evening.

We need vision and political courage if we are to have a health system to support all of us as we grow older and our health becomes more vulnerable.

We need vision and political courage to put in place a system that will provide care for future generations of Australians.

Sadly, I see no vision on the horizon at the moment.

Thank you. I'm happy to take questions.