Recommendation 17: Short to medium-term health care reforms
Australia’s health system is not well equipped to face future challenges such as an ageing population and rising health services costs. The Commission recommends the Commonwealth Government pursue reforms to improve the health system as soon as practicable including:
- requiring higher-income earners to take out private health insurance for basic health services in place of Medicare; and precluding them from accessing the private health insurance rebate;
- the introduction of co-payments for all Medicare funded services, underpinned by a new safety net arrangement that would operate once a patient has exceeded 15 visits or services in a year. General patients would pay $15.00 per service up to the safety net threshold and $7.50 per service once the safety net threshold has been exceeded. Concession card holders would pay $5.00 per service up to the safety net threshold and $2.50 per service once the safety net threshold has been exceeded;
- implement arrangements to ensure that consumers are not able to insure against the co-payment and that medical practitioners who wish to bulk bill are not able to waive the co-payment;
- encouraging the States to introduce a co-payment structure for public hospital emergency departments for less urgent conditions that could be appropriately treated in a general practice setting;
- increasing the threshold for the General Extended Medicare Safety Net to $4,000, while maintaining the Concessional Extended Medicare Safety Net threshold at existing levels. Safety net arrangements for Medicare and the Pharmaceutical Benefits Scheme should be retained to ensure support for people facing significant hardship, albeit with some adjustments;
- reviewing the Medicare Benefits Schedule to identify and remove ineffective items, replace expensive items with less expensive alternatives where available and investigate options for cost recovery for applications to list items on the Schedule;
- reforming the private health insurance market to provide greater incentives for efficient and cost effective health management through deregulating price setting arrangements, allowing health funds to expand their coverage to primary care settings, relaxing community-rating to allow health funds to vary premiums to account for a limited number of lifestyle factors, including smoking; and reforming the arrangements by which insurers equalise risks through the sector;
- limiting the Commonwealth’s contribution to efficient growth in the cost of public hospital services to 45 per cent applying from 2014-15 and — with the exception of activity based funding — reducing the health reporting requirements significantly that the Commonwealth places on the States; and
- extending the current scope of health professional practices (for example, pharmacists and nurse practitioners) to address the future needs of Australia’s health care system.
Recommendation 18: A pathway to reforming health care
Detailed work is required to examine opportunities to improve the efficiency and effectiveness of Australia’s health care system over the medium to longer term. The Commission recommends the Minister for Health be tasked with developing options to reform Australia’s system of health care.
The Minister should report to the Prime Minister in 12 months’ time on progress and a preferred way forward.
Source: NCOA