ACOSS proposes alternative evidence-based and equitable savings to health services

The Australian Council of Social Service today called on the Federal Government to heed the growing community concern about affordable, accessible universal health care; and to focus on evidence-based solutions to pull back wasteful spending in the health Budget.

“We know that our health system faces increasing costs with an ageing and growing population, but it’s certainly not a crisis,” said ACOSS CEO Dr Cassandra Goldie. “Savings measures should be selected that will either drive improved health outcomes, or cut real waste in existing spending.”

“The Prime Minister has asked for alternatives to the government’s proposals for the Health Budget. ACOSS welcomes the invitation. Our proposals are grounded in evidence and would improve the effectiveness of government spending in improving health outcomes for the greatest number of people.

“We urge the government to:

1. Abolish of the wasteful Private Health Insurance Rebate altogether. The PHI rebate has failed in its promise to increase private health insurance and take pressure off public hospitals. It disproportionately benefits people on higher incomes who can afford private cover in the first place, and has been a significant factor in driving up costs without any evident gain in achieving its initial policy intent. We estimate that this alone would save around $6.6 billion, rising to nearly $7b in in 2016-17.

2. Abolish the Extended Medicare Safety Net. This is another poorly targeted subsidy that has failed to adequately assist in reducing out-of-pocket costs for the public. In fact it may have increased the costs of particular medical procedures. This subsidy costs us around $400 million dollars a year.

3. Overhaul ineffective industry subsidies including in the PBS with an initial saving of almost $2billion to reduce the cost of out of patent prescription medicines. Simply introducing single pricing mechanisms, or accelerating these reforms in other ways, can deliver significant further savings. ACOSS has proposed alternatives that would provide a $1.8 billion dollar saving in this area in the next final year, increasing to $2 billion in 2016-17.

“ACOSS welcomes the decision by the new Health Minister Sussan Ley to take the changes to Medicare rebates, scheduled to begin on Monday, off the table. However the original policy for co-payments to GP services remains deeply flawed as a budget measure and inequitable in its impacts on those most needing to access GP services. We urge Minister Ley to work with a wider group of experts and community to develop a medium to longer term strategy on health spending.

“We need an open and rigorous process about the options based on evidence before major policy changes are made. Clearly this hasn’t happened in the case of the original GP co-payment plan nor with the plan to cut the Medicare rebate for doctor visits. This is not the way to make good public policy – and it’s resulted in very bad policy.

“A GP co-payment, including through cuts to rebates for GP visits, isn’t ‘serious reform’ as the Prime Minister has it. It’s a straight out cut that directly undermines the vital role of the GP in reducing chronic illness, and misses the point about where the most wasteful expenditure lies. We need to see the full picture on health expenditure and canvas a much wider range of options before big decisions are made.

“The Government needs to start again on health policy, and give top priority to supporting a decent universal health system, which is cost-effective.

“The Australian public does not want an American-style health system, and the budget cannot afford it. We also need to heed the advice of health experts to invest in prevention and early intervention, particularly through primary health, to reduce the incidence of chronic illness, and improve health outcomes over time. The GP co-payment would undermine all of these evidence-based outcomes we need to achieve.

“We urge Minister Ley to work closely with all stakeholders in the community to develop the right policies for ensuring sustained health care that is fair, accessible and affordable into the future,” Dr Goldie said.

Media Contact: Fernando de Freitas 0419 626 155

DOWNLOAD ACOSS health proposals here

Key proposals include:

  • Abolish the Extended Medicare Safety Net – Saving: $400 million in 2015-16 ($410 million in 2016-17)
  • Remove the 30% Private Health Insurance Rebate from 1 July 2015 – Saving: $6,600 million in 2015-16 (6,900 million in 2016-17)
  • Reduce subsidies for PBS listed medicines which are out of patent – Saving: $1,800 million in 2015-16 ($2000 million in 2016-17)