Dutton signals Medicare overhaul

Federal Minister for Health Peter Dutton has called for a frank and far-reaching discussion on staggering healthcare costs including the introduction of a Medicare co-payment and ways to manage frequent users of the health system.

 

Federal Minister for Health Peter Dutton has called for a frank and far-reaching discussion on staggering healthcare costs including the introduction of a Medicare co-payment and ways to manage frequent users of the health system.

In his first major speech as Health Minister on Wednesday night, Mr Dutton said the government faced ballooning Commonwealth health expenditure and doing nothing about long-term budget sustainability was not an option.

“I want to start a national conversation about modernising and strengthening Medicare and helping to heal our health system,” he told the Committee for Economic Development of Australia (CEDA) conference.

He said without any policy changes, Treasury’s Intergenerational Report projected federal health expenditure would grow from 4 to 7 per cent of GDP by 2050. “The report is effectively putting government on notice – that action is needed – and needed now,” he said.

Mr Dutton said Australia’s health system could not modernise without an increasing contribution from individuals with the capacity to pay more for their healthcare costs.

While the advent of technology had led to efficiency gains through productivity or labour costs in other sectors, this was not the case in health, he said.

“In health we see robotic surgery, telemedicine, remote optometry examinations, diagnostic testing, to name but a few. All of which can undoubtedly result in better health outcomes but all of which come at enormous additional cost. Again, costs not factored into the forward estimates.

“None of it is mechanised or sees a reduction in labour cost as we might see in other applications of technologies. And the expectation in our country is that we will be early adopters with minimal if any co-payment,” he told the conference in Brisbane.

The Opposition and the Greens leapt on the speech as evidence the Coalition Government wanted to dismantle Australia’s universal healthcare system.

Australian Greens health spokesperson, Dr Richard Di Natale, said Mr Dutton was misleading the public about a crisis in healthcare costs.

“The Health Minister claims that health costs are spiralling out of control when in reality spending has increased only slightly as a proportion of GDP over the last decade,” said Dr Di Natale.

“User-pays health care takes Australia towards a two-tiered American style health system where many people simply can’t afford basic health care. It’s also much more expensive with the US spending twice what Australia does as a proportion of GDP, with much worse health outcomes,” he said.

Mr Dutton said in the past 10 years, the cost of Medicare had increased by 124 per cent, the Pharmaceutical Benefits Scheme by 90 per cent and the cost of hospitals by 83 per cent.

“If we do not start to build sustainability now – in a planned, cohesive, controlled and measured way – sudden adjustments may well be forced upon us as has recently occurred in many OECD countries in large part because of the Global Financial Crisis.”

In terms of expenditure, Mr Dutton said a small group of patients accounted for a large proportion of MBS costs and the government needed to look at how it managed the most frequent users of medical services.

In 2012-13, 10 per cent of patients accounted for 46 per cent of MBS expenditure and around 53 per cent of MBS benefits went to people with concession cards, he said.

AMA president Dr Steve Hambleton agreed that Australia needed to have a conversation about rising health costs but said preventive health measures such as tackling tobacco and alcohol use and obesity would deliver greater savings to Australia’s health budget.

Read related coverage: National Seniors backs controversial GP co-payment

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