Medicare Locals cut to 24, no plan B for co-pay

The number of Medicare Locals is likely to be reduced from 61 to 24 following the change to Primary Health Networks, which will run on a more flexible model with the potential to lose territory if programs are not run successfully, Health Minister Peter Dutton said.

While the number of PHNs is not set in stone, it is understood that the Department of Health has drawn up draft boundaries for 24 PHNs, including one each for Tasmania and the Northern Territory.

Speaking at the HIMSS conference yesterday, Mr Dutton also said there was “no plan B” for the $7 GP co-pay if it fails to pass the Senate. Both Labor and the Greens have vowed to oppose legislation for the introduction of a co-pay, and Fairfax MP Clive Palmer has also vowed to block the proposal.

Doctors' groups and public health associations have also detailed their opposition, with the RACGP rejecting it outright and the AMA saying it would only accept a co-pay if it did not apply to the poor and vulnerable.

Mr Dutton repeated his argument that he did not think the increase in expenditure on the MBS was sustainable in the future and he believed a $7 co-pay was reasonable. “At the moment in some capital cities, in practices in particular where there is 100 per cent bulk billing, for people on high incomes like mine, people on non-concessional arrangements, that is clearly unsustainable,” he said.

He also said the extra $2 above the $5 cut in the rebate that is being channelled to a new medical research fund “would go back to the GP to supplement their business model and to allow them to service and provide support to people who need to be bulk-billed”.

(Pulse+IT has compiled figures that show that in order for practices to clear $2 on each transaction, they would have to collect the $7 in cash. Fees of 46c can apply to each EFTPOS transaction, and credit card charges of up to $2.50 per transaction would actually cost money.)

“We think that [the co-pay] provides a structural reform that strengthens general practice going forward, and from there there is no plan B other than tracking our Medicare system to the point where we won’t be able to provide a world-class health system like we do today,” Mr Dutton said. “I think ultimately the independents will see the sense in what it is the government is proposing.”

On Medicare Locals, Mr Dutton said the plan was to take what was working well in the current model and “discard what was wasteful”. The new PHNs will be given more flexibility to continue with existing programs, including those using eHealth technologies, but will be subject to competition from other PHNs or the private sector.

“In part the problem with the Medicare Local model was they were given a lot of money and told to define their own function,” Mr Dutton said. “Not surprisingly, those that had been successful divisions [of general practice] as a general rule translated as successful under the Medicare Local model.”

He claimed that some MLs had “completely shunned clinicians and frontline health workers and others had engaged them”.

He said the first plan was to change the name, and then to align the PHNs to the different state-based local health networks. He would also encourage competitive tension within the new networks, he said.

“We will reduce from 61 down to 24 the number of Medicare Locals. We want to go to market … and we don’t want to micromanage. If they have an [existing program] with aged care, for argument’s sake, they will have the flexibility to do that.

“But if they don't have success over the contract period then similar perhaps to the job networks at the moment, people will lose territory or there will be a competitive tension across those 24 organisations, or whatever number that turns out to be. We could allocate work to others that have been successful.

“I think that will drive innovation through technology and it will remove government from the process and allow creative minds to come together to keep people out of hospitals, to stop re-admissions and to deal appropriately with our primary healthcare response.”

Posted in Australian eHealth

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