Australia Highlights Rising Health Costs
The 2009-10 Mid-Year Economic and Fiscal Outlook includes an increase in estimated expenditure on Health and Ageing of $4.8 billion over four years – mainly due to increases in projected expenditure on Medicare Benefits, Pharmaceutical Benefits and the Private Health Insurance Rebate.
Continued expenditure growth in these areas underlines the importance of health reform, and in particular the Government’s commitment to managing long term growth in health costs so that health expenditure is sustainable into the future.
For example, in the May Budget the Government proposed changes to private health insurance subsidy arrangements to put these arrangements onto a more sustainable footing.
Today’s Mid-Year Economic and Fiscal Outlook projects continued growth in expenditure on the Private Health Insurance Rebate – due to the continued strong growth in private health insurance membership. This makes a mockery of the Opposition’s claims that the fair and reasonable changes to private health insurance rebate arrangements proposed by the Government would result in an exodus of members from private health insurance funds.
The Mid-Year Economic and Fiscal Outlook includes two savings measures:
- the creation of three new ‘therapeutic groups’ under the PBS – under which the Government will pay the same amount for medicines that deliver a similar health outcome (because the price at which the Government subsidises the cheapest medicine in the group are used as the basis for pricing the other medicines in that group). The new therapeutic groups, being created on the advice of the independent Pharmaceutical Benefits Advisory Council (PBAC), will result in a saving to the PBS of $48.2 million over the next four years. Changes in the price paid by the Government for these medications will not affect the majority of patients as their prescriber will choose the cheaper alternative medicine; and
- promoting the better use of selected spinal X-ray items on the Medicare Benefits Schedule, by encouraging practitioners to request region-specific X rays for particular clinical indications and limit requesting rights for allied health practitioners in relation to three and four region spinal X-rays to one per patient per calendar year. This measure, which will also reduce the risk of unnecessary patient exposure to radiation, will result in a saving to the Medicare Benefits Schedule of $17.1m over the next four years.
If the Government is to invest in reforming Australia’s health system, we have to ensure that existing funding is used as efficiently and effectively as possible.
Topics: Australia, Economy, Governance, Health Care, health reform, healthcare reform, long term growth, Mid Year Economic and Fiscal Outlook, MYEFO, Private Health Insurance Rebate, private health insurance subsidy
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