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Parliamentary Library budget briefs: Health programs and primary care

Each year Croakey provides a forum for analysis  of  the federal budget and its impact on health and health services. While we like to think that our parliamentarians and civil servants dip into this site for analysis and reaction, they are also provided with a series of briefs by the the Parliamentary Library. With permission and thanks to the Parliamentary library, this week we will be re-publishing some of the briefs regarding the health portfolio. 

In this article, Amanda Biggs looks at the major savings sought through changes to health programs and the changing face of after hours primary care.

Amanda writes:

Major savings

A significant saving announced in this Budget is the $962.8 million over five years expected to be achieved by changes to a range of health programs.[1] Programs to be targeted for savings include: the Department of Health’s Flexible Funds, workforce and research programs, the GP Super Clinics program, a program for special foods and medicines and a medical aids appliance program.

In 2011, 18 Flexible Funds were established as a result of the consolidation of 159 separate funding programs—consolidation was intended to reduce red tape, improve flexibility and more efficiently fund health priorities.[2] Following machinery of government changes after the 2013 federal election, 16 Flexible Funds remained in the Health portfolio.[3] Under the Flexible Funds, non-government organisations are funded to deliver a range of health and community services. Flexible Funds cover a diversity of health priority areas, including: chronic disease prevention, substance misuse prevention, rural health outreach, health workforce, communicable disease prevention, Aboriginal and Torres Strait Islander chronic disease, quality use of diagnostics and therapeutics, and primary care incentives.[4]

The Budget does not detail if all or only some of these Flexible Funds will be affected, or the precise level of savings to be realised from rationalising this particular program, although media reports suggest a figure of $500 million.[5] Last year’s Budget included a pause in indexation for the Flexible Funds over three years, with $197.1 million in savings forecast.[6] The flow-on effects of this pause in indexation remain unclear as the measure was not to apply to all funds and, in any case, is not due to commence until the 2015–16 financial year.[7] Michael Moore of the Public Health Association of Australia has raised concerns about the cuts to the Flexible Funds, stating: ‘If these drastic cuts go ahead it could decimate NGO sector responses to many of the key challenges in public health and leave Australian families and communities without the support they need’.[8] Others worry that funding for organisations that treat drug and alcohol abuse will be cut.[9]

Unspecified savings from rationalising and streamlining other programs include: not proceeding with GP Super Clinics that have not commenced construction; redesigning some dental workforce programs, including incentives to encourage dentists to relocate to smaller rural centres; ceasing funding for the Inborn Error of Metabolism program as key medicines are subsidised through the Pharmaceutical Benefits Scheme (PBS) and low-protein foods are more readily available at lower cost; piloting competitive tendering in the Stoma Appliance Scheme and rationalising preventative health research funding.[10]

In addition, savings of $113.1 million over five years are forecast from the Smaller Government – Health Portfolio measure.[11] This aims to create operational efficiencies in the Department by merging certain corporate functions across agencies, ceasing departmental activities in areas already performed by a number of other agencies (including agencies that were previously slated for merger in last year’s Budget), ceasing a Lead Clinicians Group, rationalising departmental structures and business functions, consolidating staffing and reducing contracting arrangements.

The combined savings from these two measures total over $1.0 billion, which will be redirected to fund other health priorities and the proposed Medical Research Future Fund (MRRF).

Savings of $7.6 million over four years are also forecast from changes to items that are listed on the Stoma Appliance Scheme.[12] This scheme provides free products to people who require either a temporary or permanent stoma to remove body waste (for example, following a colostomy). From 1 July 2015, two new items will be listed on the Stoma Schedule, one will be removed and prices for a further 21 products will be amended (presumably including price reductions), consistent with recommendations of the Stoma Product Assessment Panel (SPAP).[13]

After hours primary care

The Budget also seeks to shift funding for after hours primary care away from the After Hours GP Helpline (AHGPH) and the Medicare Locals After Hours Programme to a new Practice Incentives Programme (PIP) After Hours Payment from 1 July 2015.[14] This measure is intended to encourage General Practitioners (GPs) to provide after hours care and follows recommendations of a review into after hours primary care by GP, educator and researcher, Professor Claire Jackson.[15]

The AHGPH was established in 2011 by the Gillard Government.[16] Callers are first triaged by a nurse through the National Health Call Centre Network who assesses their medical condition before transferring the caller to a GP if appropriate.[17] More than 208,000 calls were transferred to the AHGPH in 2013–14.[18] Between July 2011 and June 2014, the AHGPH dealt with over 407,000 calls. Of these, around 63.1 per cent of callers were advised to either self-care or see a doctor within normal operating hours.[19]

The Jackson review reported that the AHGPH had received a ‘mixed evaluation from many respondents’.[20] A number of issues were identified, including: incomplete awareness of local services, suitability of some conditions referred to the Helpline, anecdotal evidence of unnecessary presentations to emergency departments, accountability and transparency issues, cost and communication arrangements with a patient’s regular GP.[21] However, the review acknowledged that a full cost-benefit analysis of the Helpline had not been conducted.[22]

Medicare Locals (MLs) are due to be replaced with new Primary Health Networks (PHNs) from July 2015. One of the key tasks of MLs was to improve access to after hours primary care. However, concerns were expressed to the Jackson review that the transition to these new organisations should not disrupt effective after hours programs. The National Rural Health Alliance (NRHA) submission cautioned: ‘The impending transition from MLs to PHNs may stifle opportunities for collaboration in the establishment or expansion of after-hours services’.[23] The NRHA further advised that ‘PHNs should consider the full range of models by which after-hours care might be delivered in their respective area’.[24] Whether this advice will be heeded by the new PHNs remains to be seen.

[1]. Australian Government, Budget measures: budget paper no. 2: 2015–16, p. 110.
  [2].          Department of Health (DoH), ‘Flexible funds’, DoH website.
[3].          Two moved to the Department of Social Services. Ibid.
[4].          Ibid. Others cover indemnity insurance, health surveillance, health protection, health information, and health system capacity.
[5].          M Koziol, ‘Budget leaves ice addicts in the cold’, The Canberra Times, 15 May 2015, p. 5.
[6].          Australian Government, Budget measures: budget paper no. 2: 2014–15, p. 131.
[7].          Officials quizzed at Senate Estimates indicated that five funds would be exempt from indexation. Senate Community Affairs Committee, Official Committee Hansard, 25 February 2015, p. 129.
[8].          M Moore (Chief Executive Officer, Public Health Association of Australia), Health Budget 2015: death by 1000 cutsmedia release, 12 May 2015.
[9].          M Koziol, op. cit.
[10].       Budget measures: budget paper no. 2: 2015–16, op. cit., p. 110. The Inborn Error of Metabolism program provides financial assistance to patients with rare genetic disorders in which the body cannot properly turn food into energy.
[11].       Ibid., p. 111.
[12].       Ibid., p. 112.
[13].       A review to assess the clinical effectiveness of products is being undertaken by the Department of Health in conjunction with the Stoma Product Assessment Panel (SPAP) and an expert group. Department of Health, ‘Stoma Appliance Scheme – Group 9 Review’, DoH website.
[14].       Budget measures: budget paper no. 2: 2015–16op. cit., p. 109.
[15].       C Jackson, Review of after hours primary health care: report to the Minister for Health and Minister for Sport, 2014, p. ix.
[16].       J Gillard (Prime Minister) and N Roxon (Minister for Health and Ageing), GP care a phone call away for families, media release, 30 June 2011.
[17].       Callers from Tasmania are transferred to the GP Assist service in that state.
[18].       DoH, Annual report 2013–2014, (vol. 1) p. 80.
[19].       Jackson, op. cit., pp. 20–1.
[20].       Ibid., p. 39.
[21].       Ibid.
[22].       Ibid., p. 40. Conducting a cost/benefit analysis was considered beyond the scope and timeframe of the review.
[23].       National Rural Health Alliance, Submission to the Review of After-Hours Service Delivery, 2014, p. 4.
[24].       Ibid.

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