While not a classic pre-election budget, the Budget is directly influenced by the imminent federal poll. There were few new spending measures as many of the ‘bigger ticket’ funding items, such as the dental and hospitals packages, had already been announced.
In fact, as pointed out by Stephen Duckett, even some of the ‘new’ measures announced as part of the Budget actually involved a re-shuffling of funds from one program to another, for example, the savings from PIP payments and the funding allocated to the Health Care Homes pilot.
Clearly the Government is keeping something in its ‘back pocket’ for the election campaign. Its focus in the Budget was on neutralising areas of potential liability during the campaign period (hospitals and dental), along with funding some lower profile issues which are unlikely to have much electoral appeal.
Tactically, delaying major policy and funding announcements until the election campaign makes sense as it gives the Government more time to fine tune strategies to reflect the mood of the electorate closer to the poll and allows the Opposition less time to run a negative campaign.
Despite the Government’s reluctance to relax the purse strings, there are some sensible measures in the Budget, many of which have arisen from the raft of inquiries and consultation processes initiated by the Government.
Action of antimicrobial resistance is well overdue, prostheses price-setting mechanisms could clearly benefit from health economics input and stakeholders have been calling for a reduction in the duplication and administration involved in TGA’s regulatory processes for years. On the positive side, these measures demonstrate that the Government is listening to stakeholders, at least on implementation issues and in specific policy areas.
However, a major gap in the Government’s strategy, as pointed out by a number of commentators, was the lack of overall strategy or vision for the health system. On the ‘big picture’ items it appears that the Government is still not hearing some key messages from stakeholders (or perhaps it is hearing the messages but is not willing or able to respond).
These issues include a need to broaden health policies to include a focus on the social determinants of health and to address the significant inequities in access to health care across the community.
Specific areas of the Budget are discussed in more detail, below.
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Jennifer Doggett writes:
Primary health care
One unwelcome surprise, particularly for the medical profession, was the continuation of the Medicare rebate freeze. This was understandably not popular with GPs and peak medical groups who made their disappointment clear.
When asked about the impact of this freeze on consumers, the Department stated that it is not expecting a decrease in the rate of bulkbilling, based on previous patterns of GPs absorbing the funding cuts. As you can imagine, advice on how to respond to the freeze from bureaucrats was received with a distinct lack of enthusiasm by GPs.
— Dr Bastian Seidel (@DrBastianSeidel) May 6, 2016
It will not be clear until after the election whether the Department’s prediction about bulkbilling rates is correct. However, a campaign launched today by the College of GPs may result in the rebate freeze becoming an election issue, regardless of its direct impact on bulkbilling levels.
Also in this Budget was the funding for the Health Care Homes pilot which will trial a bundled payment system for providing care for people with complex and chronic health conditions.
This measure, while relatively modest (at $22.8 million), does send the message that the Government is interested in finding better ways to prevent and manage chronic disease in the community.
However, the Government’s credibility on this issue is undermined by the $923 million being taken out of Medicare rebates via the rebate freeze, much of which will come from bulkbilling GPs. These are often the doctors who provide the most accessible and cost-effective services for people with chronic conditions.
Any serious attempt at improving the prevention and management of chronic disease in the community will require active involvement and cooperation from general practitioners. It therefore seems unwise to alienate this group though both continuing the rebate freeze and cutting funding for the Practice Incentive Payments (PIP) for the management of diabetes and asthma.
It is also worth noting that the Government has previously de-funded organisations which could have been valuable in informing the development and implementation of the Health Care Homes pilot, such as such as the Australian Primary Health Care Research Institution (APHCRI).
One of APHCRI’s key roles was to support research directly relevant to Government primary health care policies, such as the improvement of chronic disease management through initiatives like the Health Care Home. Its expertise and unique role in supporting the interaction of applied research and policy making would have given the pilot a much better chance of success.
The additional funding allocated to public hospitals should be enough to keep the states happy in the short term and get public hospital funding off the front page of the paper for the election campaign.
Still it is important to note that it does not restore the funding cuts from the 2014/15 budget and does not address the ongoing problems with cost-shifting, duplication and gaps across the federal-state divide.
The move towards activity-based funding is generally supported as a sensible move likely to drive increased efficiencies in the hospital system. However, there is little in this Budget that addresses the need to shift our health system away from a hospital-centred system to one more focussed on prevention and community-based care.
Private health insurance
Private health insurance (PHI) is a major policy trouble spot for the Government. Again, it has avoided dealing with the underlying problems affecting this sector and instead has established a new committee to develop options for improving the value of PHI for consumers.
The Government has also backed away from moves to cut prostheses prices, after initially responding to pressure from health funds, and instead is re-configuring the Prostheses List Advisory Committee to include health economics and epidemiological expertise with a view to putting downward pressure on prices in the future.
Somewhat contradicting its rhetoric about improving the value and attractiveness of PHI to consumers, the Government has decided to freeze the indexation of rebate thresholds until 2021 making insurance more expensive for some higher income earners over this period. But given the scale of consumer dissatisfaction and the fact that it will only impact upon 27% of fund members, this additional move is unlikely to be a game changer for PHI membership.
As Labor has little to offer voters as an alternative PHI strategy, there is little incentive (at least in electoral terms) for the Government to take on the short-term pain of reforming the fundamentally flawed PHI system.
The Government’s new Child and Adult Public Dental Scheme is one of the central pieces of the Budget but attracted less attention as it was announced prior to the Budget. The details of the scheme are not clear but overall it will provide additional funding to states for dental care for both adults and children. The scheme has been criticised by dental experts as its funding comes from axing the Child Dental Benefits Scheme and it is not clear that the states will be able to meet the expected increase in demand for services.
Whether or not dental care becomes an election campaign issue will depend to some extent on the responses of the states and territories to the scheme and whether or not the Opposition can find enough holes in the plan and come up with a more credible alternative.
The Public Health Association of Australia (PHAA) criticised the Government for its ‘fundamental misunderstanding of the importance of prevention for the economy and the health of the Australian population’ in a Budget that largely ignored preventive health in favour of funding for services.
Reflecting its approach to other areas of the portfolio, the Government did not attempt to develop a comprehensive approach to prevention in the Budget and instead focussed on isolated initiatives targeting single issues.
Some of these, such as the increase in tobacco excise was welcomed by public health experts as the ‘the most effective way of decreasing the number of Australians who die or get ill from smoking’. However, the Government was criticised for not investing the estimated $4.7 billion raised from this measure back into preventive health.
Also absent from the Budget was any action responding to the widespread calls for a ‘sugar tax’ or other similar strategy to reduce the consumption of foods that contribute to high levels of obesity, diabetes and other diet-related conditions. This may be on the agenda for the election, although pressure from the sugar lobby in Australia makes any substantial changes unlikely in the short-term.
Clearly, a major aim of the Government in this Budget was to neutralise key election trouble spots to ensure they won’t be dominating newspaper headlines over the next two months.
The Budget measures do little to address any of the underlying faultlines in the Australian health system or provide long-term strategies to address the inequities in access between different groups in the community.
Some of the most glaring health problems in our society, such as the gap in health and life expectancy between Indigenous and non-Indigenous Australians are barely mentioned in this Budget.
Overall, it is clearly a Budget focussed on the short-term rather than on long term reform. Although even in the short term its effectiveness may be limited.
Any measures in the Budget that require legislation (such as the dental program) or Ministerial decisions (such as appointments to committees) will not be progressed once the Prime Minister calls the election and the Government goes into caretaker mode. If there is a change of Government, then many of the initiatives may not eventuate and there will be even less to remember about this already forgettable Budget.