Outsourcing payments is not Medicare privatisation, says new AMA head

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Dr Michael Gannon: ‘The [payments] system doesn’t work. The proposal was to get the Productivity Commission to look at fixing it. We would support that, whoever does it.’ Photograph: Mick Tsikas/EPA

The new head of the Australian Medical Association has said handing over Medicare payments to the private sector does not equate to privatisation, contradicting comments made by the opposition leader, Bill Shorten.

Shorten has ramped up his attacks on the Coalition’s plans for Medicare as the election campaign enters its final weeks, declaring the election a “referendum on Medicare”. On Wednesday he is visiting GP clinics in western Sydney to push Labor’s health policies.

On the weekend the prime minister, Malcolm Turnbull, backed away from a proposal to have the Productivity Commission examine whether some aspects of the Medicare payments system could be outsourced to cut costs, following a campaign by Labor that equated such a move to the privatisation of Medicare.

He accused Labor of running a “disgraceful scare campaign” over the issue.

But the AMA head, Dr Michael Gannon, said of outsourcing the payment system: “In no way would it undermine our universal healthcare system,” and that in fact the system needed to be modernised.

“When we talk about the sacred cow that is Medicare, what we’re talking about is free visits to public hospitals,” he told ABC News 24.

“That must remain. What we’re talking about is bulk-billed visits to GPs for the most needy in our community. That must stay. But as for modernising a system that in many parts is old and antiquated, that reform is overdue.

“The system doesn’t work. The proposal was to get the Productivity Commission to look at fixing it. We would support that, whoever does it. It needs substantial investment.”

The CEO of the Consumer Health Forum, Leanne Wells, agrees with Gannon, and has previously said in response to questions about the outsourcing of Medicare’s payment systems that it could improve efficiency.

“Provided there were firm guarantees regarding protection of personal patient data, service cost and efficiency and a clear case for better levels of customer service from processing agencies, the Consumer Health Forum would not oppose it,” she said.

But despite Gannon’s comments, Turnbull has ruled out re-examining outsourcing aspects of the payments system.

“Medicare will never, ever be privatised, it will never, ever be sold,” he told reporters on Wednesday. “The payment services of Medicare will not be outsourced. There there are many ways the payment system can be upgraded. My decision and my commitment is, as the payment system is updated and modernised, that will be done within government. Full stop.”

He said that while “a case could be made” for outsourcing aspects of the payments system, “I believe that we can bring that into the 21st century and do that within government.”

Despite agreeing with Turnbull that Labor was running a scare campaign over Medicare, Gannon said there were elements of ALP policy of which the Australian Medical Association was “highly supportive”.

“We have asked the government to unravel the freeze [on GP rebates], the Labor party has promised to do that,” Gannon said.

“We welcome the ALP’s commitments on public hospital funding. We welcome their comments on pathology and radiology. But referring the payment system to the Productivity Commission to see how we can make a 30-year-old system work better, that’s not privatising Medicare.”

Asked about Gannon’s comments, Shorten maintained that it was necessary for Labor to “fight to save Medicare”.

“People are entitled to their opinion about the importance of keeping the payment system in government hands,” he said.

“Labor has always been prepared to modernise our system but what we’re not prepared to do is outsource it. Labor is emphatically opposed to the overt and covert privatisation of our system.”

Gannon was elected the new president of the Australian Medical Association last month, taking over from Brian Owler. Owler frequently spoke out about the government’s treatment of asylum seekers and delivered a scathing attack on Coalition health policy during his final address as president.

Gannon, however, has already taken a different tack to his predecessor, saying the association’s criticism of issues such as asylum seeker policy will be toned down, and that he would be working on building a more cooperative and productive relationship with the government.

“I think that the association should always try and be constructive when it criticises policies of government or opposition, and should try to to come up with alternatives,” he said after being elected.