ACOSS Health Proposals for 2015 Federal Budget

Note: the following is a section of ACOSS’ 2015 Federal Budget submission containing the peak body’s health recommendations. The submission will be released in full on January 27, 2015.

ACOSS on health

The design, funding and administration of the health system is a powerful determinant of healthcare access, equity and effectiveness. There is much that could be done to improve the equitable distribution and effectiveness of current spending within the health Budget.

In considering new health proposals and changes, ACOSS urges the Government to ensure that:
• there is an appropriate balance between health promotion, prevention and treatment;
• quality health services are provided according to need and not inappropriately rationed;
• there are no increases to the level or type of co-payments required by individuals when they access health services;
• additional consumer contributions to the cost of health services are levied according to individuals’ ability to pay through taxation or a health levy; and
• systems of resource allocation and cost control ensure efficient delivery of health services.

Adequacy of funding to deliver health services to individuals and households

In partnership with states and territories, the Federal Government has a fundamental responsibility to ensure that health services across the continuum are available to the people that need them and that particular at risk groups in the community are provided with the services they need to live healthy and productive lives.

While the Government has raised concern ab0ut the sustainability of the health system in Australia, we continue to track in line with the OECD average for health expenditure; 9.6% of GPD went to health expenditure in Australia in 2012-13, only slightly above the OECD average of 9.2%. Recent analysis by the Australian Institute of Health and Welfare found that during 2012-13 Government health funding fell for the first time, with the Commonwealth Government reducing its rate of expenditure by 4.4%. We do know that with an ageing population and changing health needs, there will be increasing pressure placed on health budgets; and we have called for a community conversation about appropriate mechanisms to fund the health services we expect as a community. However, analysis of the current situation suggests that there is no immediate crisis in health funding and no evidence to support measures such as individual co-payments in primary healthcare. Nevertheless there are key opportunities to redistribute the existing health Budget in a way that provides greater benefit to the community, and ensures that subsidies and services are well-targeted on the basis of evidence about what works and who needs access.

Universal healthcare is the most effective, efficient and equitable way to ensure the delivery adequate health care to the Australian public. ACOSS continues to argue strongly for universal coverage of essential health services for the whole community; and for measures to improve the accessibility of those services for people and communities that are currently poorly served. As well as being more effective in reducing the health burden of the country, this approach enables the health system to respond to the needs of the community and works to eliminate the current social gradient of health. ACOSS believes that a significant proportion of essential health services should continue to be delivered through Medicare.

Funding arrangements between the states and territories should reflect appropriate indexing; be based on evidence and agreement on adequacy of funding; and focus on performance and improvement of health outcomes across the community. They should also support the core principles of transparency and accountability that ensure communities are able to understand and inform the funding and program decisions intended to support them.

Accessibility of the health system for all members of the community

ACOSS has deep concerns regarding proposals to introduce new individual health co-payments. Additional individual co-payments in healthcare would further undermine access to essential healthcare services and disproportionately impact on disadvantaged groups in the community already not sharing in the good health experienced by most in our community. Particular groups including Aboriginal and Torres Strait Islander communities, those with chronic illnesses, and people with disabilities and mental health issues need to be supported to access the services they need, rather than facing additional barriers to access. We are also disappointed to see measures introduced in the 2014-15 Budget that increase current co-payments, particularly for Pharmaceutical Benefits Scheme (PBS) medications; and urge the Government not to consider any further increases in individual costs for these health interventions.

ACOSS has advocated for many years for reform to ensure that low income households have access to affordable dental services. Reforms to improve the national provision of and access to oral health services are particularly urgent at a time when we are seeing increasing levels of preventable dental decay in children. As such, we were disappointed with the deferral of the commencement of the National Partnership agreement for adult public dental services from 2014-15 to 2015-16. We urge the Government not to delay this any further.

Accountability and transparency in the health system

Government and taxpayer expenditure on health is significant and there needs to be an appropriate level of accountability and transparency within the health system. Healthcare services should be respected as a community asset and vested interests should not be able to access public funds to provide healthcare services without adequate accountability back to Government and community. The provision of community pharmacy services is a good example, where significant concerns have been raised regarding inadequate transparency over the negotiation and implementation of a $16 billion investment over five years through the community pharmacy agreement. The negotiation of a new agreement in this area creates the opportunity for significant improvements to be made, ideally building on recommendations flowing from the current Australian Audit Office audit into the agreement once released.

The delivery of health services needs to be connected to the community they are designed to serve, with patients at the centre of healthcare decision-making. The current arrangements around the funding and support of GP services works extremely well in moderating costs and changes, and current proposals being discussed such as allowing private health insurers to partially fund these services are likely to result in increased costs for the Government and taxpayers, in addition to individuals and households. This speaks to a greater concern within ACOSS’ membership regarding the privatisation of health care, as evidenced by moves to bring private health insurance into the provision of services across primary care, emergency care and pharmacy.

An Evidence Based Health Financing Program which draws on an investment paradigm

The health of individuals builds healthy families and communities, and a productive and prosperous economy. Health expenditure is an investment in our community. Health programs that are based on evidence and take a preventative and early intervention approach where possible are the best investments our Government can make. Evidence should also form the basis of funding decisions, such as those relating to pharmaceutical benefits and alternative remedies.

ACOSS is concerned about a number of announcements made in the 2014-15 Budget which reduced investment in early intervention and health promotion initiatives. Of key concern was the cessation of the National Partnership agreement on Preventative Health.

ACOSS urges the Government to continue and build on the significant work that has been done in relation to producing health performance data. The work of the Health Performance Authority is beginning to provide significant information for health providers and communities and will lead to improved outcomes. ACOSS also commends work being done to access ‘big data’ that will provide opportunities to learn more in relation to the effectiveness of interventions, improve health outcomes on a population level and increase the effectiveness and efficiency of the health system.

There is inefficiency in the healthcare system and there is waste. However, the solution is not to place a greater burden on individual health care consumers, most of whom do not have significant financial means. It would be much better to focus on areas where there are real savings to be made, including:

• The Extended Medicare Safety Net, which does not appear to have assisted in reducing out-of-pocket costs for consumers and in fact may have increased the costs of particular medical procedures.
• The Private Health Insurance Rebate, which has failed in its promise to increase private health insurance and take pressure off public hospitals.
• Continuing the work that has been undertaken to reduce the cost to Government of out of patent prescription medicines. Further accelerating reforms, or introducing single pricing mechanisms, have the opportunity to deliver significant further savings.
Aboriginal and Torres Strait Islander health

Aboriginal and Torres Strait Islander community controlled health services (ACCHS) provide the preferred method of primary health care to the majority of Aboriginal people in the areas they service. There are over 150 ACCHS around the country serving nearly 300 communities. ACCHS are also large scale employers of Aboriginal and Torres Strait Islander people, employing more than 3,200 Aboriginal people. Current funding for these services expires in June 2015.

The Aboriginal and Torres Strait Islander health sector delivers the best outcomes for Aboriginal and Torres Strait Islander peoples as well as providing a critical mechanism for self-determination, yet funding is not keeping pace with demand which is growing 6% per year. With approximately 5% of all health expenditure is on Aboriginal health, only one-quarter of this goes to Aboriginal specific services. Aboriginal and Torres Strait Islander health expenditure is projected to decline, in real terms, relative to population growth and health needs. In this Budget, the Federal Government must make a substantial funding commitment which delivers certainty to Aboriginal and Torres Strait Islander frontline services and the communities they support.

It is also fundamental that the Federal Government commits to resourcing the implementation of the National Aboriginal and Torres Strait Islander health plan, including working with the National Health Leadership Group to negotiate necessary resources.
Key Health Recommendations:

Recommendation 1: Sustain investment in effective preventative health mechanisms

Investment in preventative health programs should be maintained and based on evidence of what works and community direction about addressing priority needs.

Costing: 54 million in 2015-16 ($130 million in 2016-17)

Recommendation 2: Abolish the Extended Medicare Safety Net

The Extended Medicare Safety Net should be abolished due to its role in inflating prices.

Saving: $400 million in 2015-16 ($410 million in 2016-17)

Recommendation 3: Remove the 30% Private Health Insurance Rebate from 1 July 2015

The rebate has not reduced pressure on public hospitals and should be removed.

Saving: $6,600 million in 2015-16 (6,900 million in 2016-17)

Recommendation 4: Reduce subsidies for PBS listed medicines which are out of patent.

This would stop the practise of paying subsidies to pharmacies once medicines are out of patent and the subsidy is no longer necessary.

Saving: $1,800 million in 2015-16 ($2000 million in 2016-17)

Recommendation 5: Invest in accessible, affordable dental care for children and adults

Ensure access to dental care for children and adults though the public health system.

Costing: $700 million in 2015-16 ($1000 million in 2016-17)

Recommendation 6: Maintain funding for Aboriginal Medical Services around the country, including funding for a national peak body

Current funding for Aboriginal and Torres Strait Islander Medical Services expires in June 2015.

Cost: $700 million in 2015-16 ($718 million in 2016-17)

Recommendation 7: Maintain funding to Aboriginal and Torres Strait Islander health programs

Restore the $165.8 million/four years cut from Aboriginal and Torres Strait Islander programs in the 2014-15 Budget.

Cost: $80 million in 2015-16 ($85 million in 2016-17)