Clearly the Mid-Year Economic and Fiscal Outlook is not primarily focused on trying to improve the nation’s health or healthcare. If it were, it would look quite different to the document released yesterday.

For the health, aged care and welfare sectors, most of the focus is on yet more cuts — to the tune of $3.7 billion, according to the ABC’s calculations (though of course these are described in the MYEFO papers as “savings”).

These include:

  • A program to improve cancer patients’ access to treatment will stop, with $26.6 million in savings over four years from the end of the Better Access to Radiation Oncology program. Currently committed projects will continue until completion in 2016-17.
  • Savings of $650.4 million over four years from 2015-16 by: removing bulk-billing incentives for pathology services; aligning bulk-billing incentives for diagnostic imaging services with those that apply to general practitioner services; and reducing the bulk-billing incentive for magnetic resonance imaging (MRI) services from 15% to 10% of the Medicare Benefits Schedule fee, aligning it with other diagnostic imaging services. Bulk-billing incentives for diagnostic imaging services will continue to apply for patients with concession cards and children under 16 years. These changes to pathology and diagnostic imaging bulk-billing incentives apply from July 1, 2016.
  • Under the title “more efficient health programs”, there will be savings of $146 million over four years by redesigning 24 health programs to operate more efficiently, including programs associated with population health, medical services, eHealth and the health workforce. Following the axing of the Australian National Preventive Health Agency, this doesn’t augur well for population health initiatives.
  • Cuts to a range of health workforce programs, which is expected to reduce cash payments by $178 million in 2015-16 ($595 million over four years to 2018-19). On the chopping block are the Clinical Training Fund; the Rural Health Continuing Education program; the Aged Care Education and Training Initiative; and the Aged Care Vocational Education and Training professional development programs. However, the government will redirect a further $225 million from these measures to support current health workforce priorities, including $131.2 million over four years to expand the Rural Health Multidisciplinary Training Program and establish grants to private healthcare providers to support undergraduate medical places; and $93.8 million over four years to develop an integrated pre-vocational, postgraduate medical training pathway in rural and regional areas.
  • Some $70 million will be saved over four years from 2015-16 by further reducing the number of government bodies in the Health Portfolio. The government will rationalise the functions of six agencies by: abolishing the National Health Performance Agency from June 30, 2016, and transferring its functions to the Australian Institute of Health and Welfare, the Australian Commission on Safety and Quality in Health Care, and the Department of Health. (Here is an example of the type work done by NHPA.) The operational functions of the Independent Hospitals Pricing Authority will be transferred to the Department of Health from July 1, 2016, with the board, chief executive officer and functions retained. The National Health Funding Body and the Administrator of the National Health Funding Pool will be abolished from March 31, 2018, in line with the scheduled end of activity-based funding payments from the Commonwealth. (This is a shift from the budget announcement in 2014 that a Health Performance and Productivity Commission would be created by merging the Australian Institute of Health and Welfare, the National Health Performance Authority, the Independent Hospital Pricing Authority, the National Health Funding Body, the Administrator of the National Health Funding Pool, and the Safety and Quality Commission. Presumably the states and territories dug in against the initial proposal.) Meanwhile, the government will no longer proceed with the merger of the National Blood Authority and the Organ and Tissue Donation and Transplantation Authority, as announced in the 2014-15 budget.
  • Interestingly, the Department of Health is going to have to find funds for the scheme to regulate cannabis for medicinal and scientific use: “The cost of this measure will be met from within the existing resources of the Department of Health.”
  • Search the MYEFO papers for details of new PBS listings and new MBS items, including for addiction medicine and sexual health care.

Peter Fray

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Peter Fray
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