Senator FORSHAW —Starting with Medicare salary and GP trainees, the government claims in this year's budget that they will save $369.1 million over four years by placing GP trainees on salaries. Can you outline how those savings will be made and how you arrive at that figure of $369.1 million?

Dr Morauta —This saving was calculated on the basis of a formula which has been used over a number of budgets and agreed between the Finance and ourselves for calculating the savings when a doctor moves off the Medicare benefits schedule. We would like to table a paper which explains the way this has been calculated for this measure.

Senator FORSHAW —Are you going to take me through this?

Dr Morauta —Yes, we can do that if you like. We just thought that, because it is rather an arcane subject, it would be good to have a piece of paper on it as well. Basically, the number is 130,000 per doctor, and it is not calculated with respect to a particular measure. It is a generic calculation of the relationship between MBS activity and the activity of a single doctor. Sometimes when it is used it might overestimate, sometimes it might underestimate the real savings from the measure, but it is used across a whole lot of savings measures over several budgets. We can go a little bit more into how we then use that figure to relate to the number of GP registrars, but it is basically a multiplication of that figure by the number of GP registrars who are moving off the MBS and onto a salary.

Senator FORSHAW —It is a model to be used?

Dr Morauta —Yes.

Senator FORSHAW —Plug the figure in and run it out the other end?

Dr Morauta —That is right.

Senator FORSHAW —How certain can you be that that bears any relationship to reality once this system comes in?

Dr Morauta —I think the way to describe it is that the figure, 130,000, has been proved to work in the generality for MBS and doctor activity, but for any particular measure it may not accurately reflect it. Finance and we have agreed that over all the different activities we undertake, some of one nature and some of another, this is a reasonable average figure to apply; so that is what we have been using. It is not perhaps a very scientific way of coming at it, but it is the way that has been agreed upon to approach this particular saving.

Senator FORSHAW —Are you aware that this figure that has been included in the budget as a saving has received a reasonable amount of criticism that it is just unreal?

Dr Morauta —Yes, Senator, but I think the confidence that the department, Finance and we have about the estimate is in the context of a whole series of measures on general practice, not just this particular measure. It seems to us that it is a reasonable way of attacking these issues when we have a very large program like this. So, whatever the measure—there might be very expensive doctors going off or slightly less expensive doctors going off—we use the same formula. So sometimes we lose, sometimes Finance loses, in a sense. It is just a swings and roundabouts kind of thing that has been found to work. The MBS estimates are coming in roughly on target, and we have found that this formula, over the history of changes to the MBS and general practice, has worked.

Senator FORSHAW —What discussions took place with the profession with regard to this proposal?

Dr Morauta —I think the answer comes in two parts. As you know, Senator, there was a review of general practice training which the minister set up, and within its report and in its recommendations it canvassed this possibility. But, as with all budget measures, when you actually come to put a measure on the table, that was not available for discussion with the profession subsequent to the review and its recommendations or prior to its announcement. Obviously in the implementation of the measure, we are fully engaged in discussions with the profession, the registrars and other groups.

Senator WEST —What feedback have you had to date from the GPs?

Mr Keith —The feedback has been quite varied because of the lack of understanding of how the measure would be implemented. This is one of the government responses to the training review and, seen in isolation, a lot of people have been stating opposition to it.

Senator WEST —They have given me an earful.

Mr Keith —The basis of implementing this is in line with a practice that we have been involved in with the profession—discussing implementations with the profession and working through the details and issues that they have raised. We have started meeting with the registrars, the RMCGP and the AMA to discuss their concerns and resolutions through those. One meeting has occurred with each of those groups at this time.

Senator WEST —It has been raised with me, and my understanding is that these registrars—the general practice people in training—will be paid a salary; they will not be bulk[hyphen]billing and they will not be making any charges on Medicare. Therefore, when the patient fronts at the doctor's surgery, you will have the situation where some patients will be being charged or bulk[hyphen]billed and others will be saying, `Thank you very much; bye[hyphen]bye.' Is that correct?

Ms Batman —As Mr Keith was saying, the details need to be worked through with the profession, but there are a range of options that could happen, depending both on general acceptance, particular practices and how they wish to approach it. Basically, there are about 80 per cent of general practice services that are bulk[hyphen]billed, and in those cases the plan would be to have something like shadow billing happening where the patient would still present their Medicare card. It would look very similar, but a benefit would not be paid when it turned up at the Health Insurance Commission.

In the other cases where the services are patient billed, there are a couple of options that could work for practices, depending on how they wished to approach it. One is that they may wish to say that that particular doctor in the practice bulk[hyphen]bills everybody. They could, instead of trying to set up a different arrangement, say, `Young Dr Smith bulk[hyphen]bills his patients.'

Senator WEST —Hey; you are talking about towns and communities here that will not touch bulk[hyphen]billing except for their pensioners. Do you really think that is going to go down?

Ms Batman —Senator, there are actually very few practices that do not bulk[hyphen]bill anybody. The huge majority bulk[hyphen]bill at least some patients some of the time. There are very few that have a policy of `no bulk[hyphen]billing on these premises'.

Senator WEST —Yes, but there are a lot of areas where they are very careful that they bulk[hyphen]bill only those who are in receipt of benefits and pensions.

Ms Batman —That is right. If they do not wish to take that option, they could enter into an arrangement whereby they either charge the patient the gap and not the amount that Medicare would pay—

Senator WEST —Is that legal?

Ms Batman —Yes, as long as they are not bulk[hyphen]billing they could do that. The other option would be to enter into some arrangement, if they wish to charge the whole lot, to pay back the benefit that otherwise would have been paid. And that would be part of their contracting arrangements in terms of having a registrar.

Mr Keith —So in terms of them seeing the patient—the patient[hyphen]doctor interaction—there would be no change vis[hyphen]a[hyphen]vis other doctors in the practice. The administrative arrangements behind that would adjust.

Senator WEST —I think there would be some doctor[hyphen]patient interaction. If the patient thought they could see so[hyphen]and[hyphen]so for less money, they would be lining up to see so[hyphen]and[hyphen]so. You would change the billing; you would change the whole demographic working of that practice.

Mr Keith —What I am saying, Senator, is that from the patient's perspective there is no need for any change because they would pay or sign their direct billing form in the same way for the registrar as they would for other members of the practice. So in terms of the patient interaction, the arrangements would be the same. It is the administrative changes behind that which would sort the issue out.

Senator WEST —You are talking about, in some areas, some fairly significant administrative changes that the practices potentially are going to have to make, aren't you? Some of the scenarios you—

Mr Keith —We do not believe so.

Senator WEST —You do not believe so?

Mr Keith —In discussions to date, people have raised concerns, but we do not believe so.

Senator WEST —If they took the option of—

CHAIR —Senator, it is just after 1 o'clock. I would like to break for an hour. Can I just ask a point of clarification before closing for an hour: how long has the formula to calculate doctors' incomes been is use?

Ms Batman —Just from my memory, 1992[hyphen]93 may have been the first time.

CHAIR —So it has not changed?

Ms Batman —No. Essentially the formula has not changed; it gets updated and indexed each year, and it grows a little but, essentially, the formula has been the same for quite a long time.

Senator WEST —I am not arguing about the formula. I am happy to break now, Senator.

CHAIR —We will continue on the same program and Senator Forshaw will begin the questioning.

Senator FORSHAW —Before lunch, we were discussing the impact of the changes on trainee GPs. How do you expect this new system to work in practices which do not bulk-bill? Do you think it will have any impact upon those practices?

Mr Keith —My impression is that it will not. We have spoken to a number of GPs and, remember, we are only talking about the ones who have registrars. There are about 1,200 full-time equivalent registrars going through the system at any one time. Most of the practices have a relationship with the HIC, in that they bulk-bill or direct bill in one form or another. Therefore, we think appropriate administrative mechanisms can be put in place to ensure that there is no change at the point where the patient pays for the medical services, but there will
be a readjustment behind the scenes, as it were, to adjust for the salary base where the registrar would bill.

Dr Morauta —The registrars will all have a provider number in the normal way, so the activity that is attributed to them could be recorded in the HIC if we wanted to do that.

Mr Keith —It needs to be recorded.

Dr Morauta —As Mr Keith said before, we are still discussing with the profession about the exact way to do this.

Senator FORSHAW —There have been claims made that this new measure could reduce the income of some trainee GPs by as much as $40,000 a year. Have you heard those claims?

Dr Morauta —One comment to be made, firstly, is that it is prospective. No existing registrars go onto this scheme, so no particular person would ever have that kind of impact. If one was to talk about the overall distribution of income for registrars, it is possible that some registrars might in the past have had these higher amounts of money, but it may have been a result of their being overused, for example, in a situation that was not appropriate for training.

Senator FORSHAW —Maybe I am misunderstanding it, but I cannot help thinking that, if you have a practice at the moment and you have a trainee GP in there who is to go on to a salary based system, there would certainly be potential for the earnings of the practice overall to be affected. I am worried about whether or not that will have an impact in the future upon the opportunities for GP trainees to get access.

Mr Keith —I think that is our concern, too. We certainly do not want a situation where we cannot have registrars having access to the best possible training. This measure is about ensuring that the range of training posts available is extended. It is not as a consequence of the ability of the practice to pay for the trainee but what teaching and health and medical experience the trainee can get. Most trainees, particularly first[hyphen]year trainees, are on a salary anyway which is paid for by the practice.

Senator FORSHAW —But isn't it the case that, even though they may be paid a salary by the practice, they in fact can bring income into the practice on the basis of the normal billing system?

Mr Keith —That is right.

Senator FORSHAW —It is a bit like a legal practice, where you have an employed solicitor who is paid a salary but who brings income in over and above the share they take out.

Mr Keith —But, in terms of first[hyphen]year trainees where they see between three and four patients an hour, I would put it to you that the practices actually have difficulty in raising the amount, and therefore they receive a subsidy from the RACGP anyway to pay for that registrar to be there.

Senator FORSHAW —How long are they required to stay in the practice? Is it two years?

Ms Batman —No. It varies from state to state, but their placements in practices are generally either three months or six months. So they move from practice to practice. They do not stay and do all their training in one practice for two or three years. The length of training is three years and it includes one year in a hospital.

Senator FORSHAW —That is right. That is what I meant by two years—a year in the hospital and then two years in general practice. So you can assure us then that this measure will not lead to a loss of potential places for trainee GPs?

Mr Keith —It is our intention that it will not. It may open up other opportunities in practices which, because they have not been able to generate the income but may offer unique educational opportunities, may be able now to take a registrar. We will be working closely with the profession to ensure that we maintain the highest possible level of trainee placements.

Senator FORSHAW —Will practices that do take on the trainees get some form of compensation or subsidy separate from the salary that is paid to the GP?

Mr Keith —Practices do at the moment, from funds that are paid to the RACGP for first year trainees.

Senator FORSHAW —You mentioned that a moment ago.

Mr Keith —We will look at that whole arrangement to ensure that practices are compensated for taking trainees, but compensated appropriately. We certainly would not be able to give a guarantee that some wouldn't lose out from what they currently earn. I think the notion is that we are talking about the training of registrars, and compensating people for that training, rather than operating a business.

CHAIR —Are there any more questions on 2.1?

Senator FORSHAW —Yes. I have some questions on the closure of Medicare offices. Can you give us the latest situation on all 43 or 44 offices, whatever it was, it is intended will close down?

Mr Mynott —At the moment, 41 of the 43 branches have been closed. There are two more to close: one in South Australia and one in Western Australia. I can give you the dates for those closures: the final branch closure in South Australia will be on 26 June this year, and the final one in Western Australia will be on 5 June.

Senator FORSHAW —What is the situation with respect to the lease arrangements for all of the offices that have been closed and the two that are about to be?

Mr Mynott —At the moment, there are 11 offices where we are still negotiating those arrangements. The lease provisions for some of those are just about to expire. I think I can get that exact detail for you. I think one or two are fairly close—in the next month or so—and some are a bit longer. They are all still being negotiated. One has been sublet, and we are negotiating to perhaps do that with a couple of others. If we can't get out of leases, we are also considering using them ourselves for mini[hyphen]processing, or something like that.

Senator FORSHAW —I understand that, in at least two cases, there has been quite a significant dead rent bill for offices that have been closed. Is that correct?

Mr Mynott —There is some dead rent involved in the closures; that is right.

Senator FORSHAW —Can you tell us where they are and how much is involved?

Mr Mynott —They are still negotiating them. Those arrangements have not been finalised yet, so I don't think there is a figure we can give you because it is still subject to negotiation.

Senator FORSHAW —But you have acknowledged that there is some dead rent.

Mr Mynott —There is money being paid and, because we are not occupying them, we are still paying for those premises. But as to the actual payout figure, the negotiations have not been finalised.

Senator FORSHAW —Can you tell me how much has been paid out in dead rent so far?

Mr Mynott —The rents vary from premises to premises. Whatever arrangements were in place at the time the offices were still open, we have been paying that since the offices were
closed. As to the actual rents we pay, that is not something we disclose because they are subject to lease negotiations and they are commercial[hyphen]in[hyphen]confidence.

Senator FORSHAW —With respect, what we have here is a decision to close 43 offices progressively across the country. This is intended to be a significant savings measure—or was when it was announced. If there is dead rent being paid because the offices have closed and no other arrangements have yet been made either to sublet or to pay out the lease or whatever, I would put it to you that we are entitled to know how much is involved here. This is public money that is just being paid out as dead rent.

Senator Herron —I think we should take that on notice.

Senator FORSHAW —He has not taken it on notice at all.

Senator Herron —As the officer said, there are individual tenancies where there are variations from tenancy to tenancy. I would not expect that the officer would have this information with us here. We can get it for you ASAP if you like. I have no difficulty with the question.

CHAIR —Not unless there is the issue of commercial[hyphen]in[hyphen]confidence, which Mr Mynott referred to.

Senator Herron —Given that proviso, which we have over everything of course.

Senator FORSHAW —Yes, I know you have it over everything.

CHAIR —All governments have that.

Senator FORSHAW —What is commercial[hyphen]in[hyphen]confidence now about this? The decision has been made to close the office. Rent is still being paid. It is a pretty tall order to say that it is commercial[hyphen]in[hyphen]confidence.

CHAIR —It is while negotiations are going on to relet the premises. That is the problem. Once the premises are relet, the problem diminishes.

Senator Herron —I meant in terms of identification of an individual tenancy.

Mr Mynott —I will take that on notice and we will come back to you with some figures on what rents we have paid out.

Senator FORSHAW —What precisely are you taking on notice, because we have had a couple—

Senator Herron —You wanted an overall figure, as I understand it.

Senator FORSHAW —No. I want to know, in respect of the offices where dead rent is being paid at the moment, how much is involved in each case.

Mr Podger —Can we take on notice, in respect of those offices that have been closed, how much is being paid in rent while they are not occupied by the HIC? If you like we could also indicate what the savings in rental have been so far from the closures.

Senator FORSHAW —If you want to provide me with extra information you are at liberty to do that. But I am specifically asking for how much. That is what dead rent is.

Mr Podger —Yes, but your implication is that, somehow, there is a lot of waste in this. The issue is that the exercise was about making savings, and there were still savings coming through.

Senator FORSHAW —I stated at the outset that I have no doubt that, overall, as was intended, there could be significant savings. Closing 43 offices down at some point or other
is going to produce some pretty significant savings. There may be some costs along the way to getting those savings and one of those costs would be the amount of dead rent.

Mr Mynott —It was a four[hyphen]year exercise and the closing of the branch offices was to facilitate the roll[hyphen]out of the 400 kiosks. That was a four[hyphen]year exercise. It was always expected that, in determining which offices were to close, lease arrangements were part of that consideration. It was always expected that there may well be that element of cost of dead rent. That was part of the original submission and, over four years, we believe that the whole exercise would be a cost neutral exercise.

Senator FORSHAW —Were you going to provide us with the information that has been requested and that you have indicated as well that you would provide? What are the outstanding liabilities and costs that are likely to be incurred in respect of each of the premises? What I mean by that is that there is clearly potential for rent. Are there any other costs or liabilities?

Mr Num —For the 30 offices that have been closed and acquitted, there are no further liabilities. For the offices on which we are still undergoing negotiations with the landlords, there will be a varying amount of liability depending on whether we have make[hyphen]good clauses in the leases, et cetera. It is all determined by the commercial arrangements which we entered into individually for the leases, and also whether or not we are making use of those premises or mini-processing centres, as Mr Mynott has mentioned.

Senator FORSHAW —In addition to rent, clearly you would be liable for any other costs associated with other requirements of the lease arrangements, which is another way of putting what you said a moment ago, such as make[hyphen]good. Can you tell me about the Belmont Medicare office in Newcastle? It has closed, hasn't it?

Mr Mynott —Yes, I believe that has closed.

Senator FORSHAW —I am told it was closed about the end of March. Is that correct?

Mr Mynott —My record shows 27 March.

Senator FORSHAW —When does the lease on that office actually expire?

Mr Num —At the moment we are still negotiating termination arrangements with the owner of the premises.

Senator FORSHAW —But when does the lease expire? There is a date when the lease expires. The fact that you are negotiating with them about what happens between now and then is not what I am asking you about at the moment. When does the lease expire?

Mr Num —It is 30 June 2001.

Senator FORSHAW —Three years away. Is there a term in the lease which requires the Health Insurance Commission to operate a Medicare office at those premises until the expiry of that lease? Is that one of the terms of the lease?

Mr Num —I am not familiar with the detail of the lease.

Senator FORSHAW —Is anyone here?

Mr Mynott —I do not have that detail.

Senator WEST —I thought one of the reasons for office closure and why the ones on this list were selected—we have been discussing this for a number of estimates now—was the relationship to the length of time left to run on the lease. I would have thought that a lease with over three years to run from the time of closure would have indicated that it was not—

Mr Mynott —That was certainly one of the considerations, but there were others. They have been discussed here in previous Senate hearings. Certainly the potential to remove ourselves from that lease was a consideration. This one is just taking a little longer to negotiate. It was a long time, perhaps, but the other factors, the other criteria, still supported the decision to close that office.

Senator FORSHAW —You say that this one is taking a little bit longer to negotiate, this one being the Belmont office. Is one of the reasons why it might be taking a bit longer to negotiate the fact that there is a term in the lease which requires the HIC to operate a Medicare office at those premises? Further, has the owner of the property threatened to sue the HIC for the full rental value of the lease, plus outgoings, plus damages for non-compliance with the lease conditions? Is that correct?

Mr Mynott —I do not know, Senator. I am not aware of that term in the lease.

Senator FORSHAW —You do not know?

Mr Mynott —And I am not aware of the action that might be pending on that.

Senator FORSHAW —Does anybody know whether this is true or not?

Mr Num —As a general rule, the Health Insurance Commission does not enter into leases which have `must trade' clauses. I am not aware that this lease had a `must trade' clause in it, and I am also not aware of any pending action. My understanding is that, at the moment, we are close to resolving a figure that will acquit the lease.

Senator FORSHAW —I would ask you to take on notice whether or not the `facts' that I have just reported to you are correct.

Mr Mynott —Certainly.

Senator WEST —What is the annual rent on that particular premises?

Mr Num —I am not aware of that detail.

Senator WEST —What are the outgoings?

Mr Num —Again, on the specifics for that office, I do not have that detail.

Senator WEST —Why is this one taking longer than the rest?

Mr Mynott —The operation of our branch offices is managed by our state management, and all those negotiations would be done at that level. We can certainly get that information for you, but we do not have it.

Senator WEST —You can tell us that it is taking longer than the normal. Have you inquired as to why it is taking longer?

Mr Mynott —As I said, there are 11 that are still under negotiation. So when I say that it is taking longer, it is taking at least as long as those others.

Senator WEST —That is 11 out of 43?

Mr Mynott —That is correct.

Senator WEST —What was the length of time left to run on those leases?

Mr Mynott —On the remaining leases?

Senator WEST —Yes, on the 11.

Mr Num —Two expire this year, five expire next year, three expire the following year and one expires in 2001.

Senator WEST —Given that length of lease was one of the criteria, you might like to tell me what criteria was used to decide upon the closure of the Belmont office and those that are due to close in the year 2000 and in the latter half of 1999.

Mr Mynott —The same criteria was considered for all of them. It was then a matter of weighing up which of all the branch offices best fitted the criteria. Without knowing the exact figures for Belmont, I can only just suggest to you that it fitted the criteria. The leasing one was one that perhaps had it on the margins, but it fell in in terms of the overall criteria. We will take it on notice.

Senator WEST —What is the normal length of a lease for a Medicare office?

Mr Num —They vary from three to five years. Generally, we try to keep them at the shorter end of that. It depends on the commercial realities of each lease which we negotiate.

Senator WEST —So how long was the lease for Belmont?

Mr Num —We know that it lasted—

Senator WEST —We know that it was longer than three years because it still has more than three years to go.

Mr Mynott —It was five years.

Senator WEST —It was a five[hyphen]year one. This program started more than 18 months ago. Was that not a consideration when you were negotiating that lease? As I recall, Belmont was not one of the ones with a heavy usage rate, was it? I am going from memory on Belmont's usage rate.

Mr Mynott —I am not sure that I have those figures with me—the actual volumes and things.

Senator WEST —I have those figures back in the office. I thought you might have had them on you.

Mr Mynott —This issue has been brought up at previous hearings, and I was not expecting it.

Senator WEST —This issue has been debated before this estimates committee every—

Mr Mynott —I appreciated that it would be raised. I just did not prepare myself for the figures.

Senator WEST —Senator Forshaw said it remains an ongoing issue. How is the easy claim service going?

Mr Mynott —It is going very well. The intention was to roll out 400 easy claim facilities over a four[hyphen]year period. We started out with a number of rollouts, and I think last time we would have been able to advise you about rollout No. 1. We are now up to about 220 fax machines all up, Australia[hyphen]wide. By the end of this financial year, of that 400, we will have something like 350 installed. You would be aware there was an announcement of a further 200 in these current estimates and we hope to have those, plus the outstanding ones, in place by the end of August.

Senator WEST —So, in fact, what turned out to be a rollout of 400 over four years is going to be a rollout of 550 over what period of time?

Mr Mynott —It will be 350 over about two years and then the other 250 another couple of months after that, so it is a bit over two years. But when the original proposal was put forward, there was never really a knowledge about how well it would be received and how
effectively we could do it. We started with a rollout of offers of 110. I think 104 were accepted and that rollout went very well. The feedback from the community—both the public and the pharmacists—was very positive, and there was a lot of interest in them. We found that we were able to install them much more quickly and effectively than we anticipated, so it has just basically accelerated along that line. We put forward a proposal and we have continued along that way. We have also gained economies in scale in moving forward a bit more quickly than we expected.

Senator WEST —What problems have there been?

Mr Mynott —There were initial teething problems in the first rollout. You might recall we did a pilot prior to the initial rollout and there were some teething problems in people not quite understanding how it worked. Some of the pharmacists were getting involved a bit more than they anticipated, but we addressed those problems in the first rollout. I think the feedback that is coming back now from the surveys is that it is very well regarded and very well accepted.

Senator WEST —How much time of pharmacy staff is it taking?

Mr Mynott —Not enough for them to lodge any serious complaints about it.

Senator WEST —How many people are using the system?

Mr Mynott —I can tell you the claims—

Senator WEST —You might want to take that on notice.

Mr Mynott —I would appreciate that; I can get you the number of claims that are coming through the various locations, if you like.

Senator WEST —Yes, that would be helpful. What are the average number of claims being processed through each facility each day? I recall in the first rollout they were very small centres, so they might have been doing only 10 or 12 claims per day. It has now been moved into larger centres, to the busier centres where there is more than one pharmacy, and I am thinking of Tumut. What number of claims are they processing per day?

Mr Mynott —I will take that on notice. Would you like that for all the faxes that are installed at the moment?

Senator WEST —Yes, it would be very interesting to know what usage rate it is getting. Are they above or below what you anticipated or estimated?

Mr Mynott —I will get that information back to you.

Senator WEST —On easy claim, are they now being put into outer metropolitan areas or not?

Mr Mynott —That is part of the 200 rollout.

Senator WEST —You had better give me a list of that 200 rollout, please.

Mr Mynott —We are still negotiating that. In fact, the offers have not gone yet. We have set some criteria for that and we have identified a number of areas that fit that criteria, but we have not yet been to the pharmacists, so we would be looking to hold that information until such time as we have approached the pharmacies and got their response.

Senator WEST —How are outer metropolitan areas going to overlap with areas where we have seen Medicare office closures? I am thinking of the places such as Belmont, Merrylands, Mount Druitt, North Rocks—

Mr Mynott —Part of that rollout was to consider areas where branches had closed. Criteria were set to address that particular group of branches. Of the 43 branches that closed, 22
branches met the criteria we established to facilitate the rollout of some faxes. Of the total 200 of the later rollout, some 88 are going to go into areas where branches had closed.

Senator WEST —We have only closed 43 branches at this stage, haven't we?

Mr Mynott —That is correct. Of those 43 sites, 22 fitted the criteria we set.

Senator WEST —What are the other 66 you are talking about? You said 88 were going to—

Mr Mynott —No, 88 fax machines are going to go into the sites.

Senator WEST —Into 23 sites.

Mr Mynott —Into the 23 sites that met our criteria.

Senator WEST —Is it possible to have a copy of the criteria?

Mr Mynott —Yes.

Senator WEST —Who devised the criteria?

Mr Mynott —It was devised by the Health Insurance Commission.

Senator WEST —I will get into trouble for asking about advice you might have given the minister, but who initiated it, you or the minister?

Mr Mynott —The distribution of our network is always something that the commission manages, whether it be branches or any other of our facilities. Certainly, we negotiate, and we keep the minister informed. We put forward the criteria as we did with the closure of the branch offices, and that was noted by the minister.

Senator WEST —Will they be fax machines or the interactive kiosk?

Mr Mynott —They will be fax machines.

Senator WEST —What is happening with the interactive kiosk?

Mr Mynott —That is still on trial. We initially had two faxes in Palmerston and two each in Seymour and Wonthaggi. We are just about to trial them in some of the bigger areas in Victoria with different demographics to see whether there is a greater need for them in those areas. They will be put into those areas, I think, within the next couple of months.

Senator WEST —You are still offering them to all pharmacies in a particular area. You are not just appointing one pharmacy?

Mr Mynott —For the kiosk?

Senator WEST —The kiosk or the easy claims.

Mr Mynott —Yes, in the areas that were nominated, kiosks have been offered to all pharmacies. For the fax machines—I mentioned to you that part of that 200 is directed at sites where branches have closed—we had to set some criteria that limited the number we put into those areas. You might imagine that in areas like Randwick or Marrickville where branches closed there would be quite some number of pharmacists. We had to develop some criteria so it did not go into all pharmacists in that area.

Senator WEST —So some pharmacies are going to get a competitive advantage?

Mr Mynott —Pharmacists who met the criteria in terms of closeness to our sites and distances from other centres were selected.

Senator WEST —Is there a distance criteria as part of it?

Mr Mynott —Yes.

Senator WEST —You better read me out the criteria.

Mr Mynott —The first criteria is a distance from the nearest open branch office or customer service centre.

Senator WEST —What is the distance?

Mr Mynott —Five kilometres.

Senator WEST —So they have to be more than five kilometres away.

Mr Mynott —No, within five kilometres.

Senator WEST —It does not make sense to say that to be eligible they have to be within five kilometres of a Medicare office. It does not make sense to me anyway, but I do not want to make policy for you.

Mr Mynott —It must be more than five kilometres from the nearest open site or customer service centre. That is the first criteria before it is even considered. If it met that criteria, we selected pharmacies that were within one kilometre of the site where the office was closing.

Senator WEST —Have you looked at that in terms of shopping centre distributions and things like that?

Mr Mynott —No. It was only those two criteria that were considered.

Senator WEST —You get large shopping centres in Sydney metropolitan areas, even outer metropolitan areas, that run over a couple of hundred metres. I can envisage a scenario, depending on the location of the pharmacy's position within the shopping centre, where one pharmacy could find itself within one kilometre of the office and the other one could find itself just over one kilometre.

Mr Mynott —I guess that is a possibility.

CHAIR —I do not think too many would fit into that category over 200 metres.

Senator WEST —No. If you have shopping centres or shopping strips where you have a pharmacy at one end and a pharmacy at the other end, how will that impact upon the competitive advantage that one pharmacy might get over another pharmacy? I just raise it for you as something to think about. If those are the two criteria that are being used to select pharmacies, there is a possibility of competitive advantage being given to one pharmacy over another. The competition policy watchdog might think that is not necessarily the most fair way to go about it.

Mr Mynott —If you have heard of particular instances that you think we should be looking at, we are prepared to take those on.

Senator WEST —I cannot think of particular instances because I do not know the areas well enough. I am sure that if you talked to local members and local government authorities they would be able to tell you. It is quite possible, if you think about it. You could have a Medicare office situated somewhere and, if there is a shopping centre straddling that one kilometre, you could have a pharmacy at one end being eligible and the other one not.

Mr Podger —You have raised the possibility as a hypothetical issue. The officers have said that if there are particular instances of it the commission is happy to have a look at them.

Senator WEST —I raise it as something for the department to be aware of. How is the pharmacy intranet going? What is happening with that? You would be aware that the Pharmacy Guild has put out a press release saying that the pharmacies could be banks for the bush, and they were in their submission to the House of Representatives inquiry into alternative means of providing banking services. They drew attention to the pharmacy intranet and its potential.
I am wondering what comment the department might have about the use of the pharmacy intranet for something like banking and what privacy issues there might be.

Mr Podger —I refer that question to Dr Graham.

Dr Graham —The department is involved in the intranet, along with the Pharmacy Guild commercial and the Health Insurance Commission. That is certainly one of the aspects that is being looked at in the pharmacy intranet pilot. Under that pilot we have set up a management committee to look at such issues as privacy, and we have also established a consultative group with stakeholders on it to provide input into it. The commercial opportunities, the business type opportunities, is one component. So that will be referred, as it has been already, to the consultative group to provide advice on. We have not been aware of any concerns about privacy in that area at this point of time.

Senator WEST —So if you put the intranet in and then other services hung off it, would you get a fee for being the provider of the intranet? You should almost be able to copyright the idea because you have been working it up. If people are going to hang off it, is there some intellectual property rights that you have to earn a bit more money?

Mr Graham —From the point of view of the department, we are very keen to ensure that the final product—and this is only a pilot at this stage—is an open system that will be accessible by people who want to participate. At the present time, for instance, Pharmacy has networks to wholesalers and manufacturers for ordering products and it is really not that dissimilar. Certainly there will have to be precautions put around private information being transmitted through the intranet. At this point of time the pilot is operating through the Health Insurance Commission computer.

Senator WEST —Because you would not want access to their bank account numbers and they would not want access to the pharmacy information. There has also been some speculation in recent times about moves by supermarkets to move into the pharmacy area. Is this an appropriate area in which to deal with that issue?

Mr Podger —It is program 2.2.

Senator WEST —Okay, I will hold it till then. Last time around I asked if you had given us anywhere a set of figures as to what was going to be the cost of running Medicare without Medibank Private on the premises. The answer I received was that there was no set of figures published as yet. I want to know if those figures have been completed. Have they been published? Can we have a copy, please?

Mr Podger —That work has not been completed yet. As the separation has been going through, we have had it subjected to an audit process. That audit process will end with a report identifying the elements of the costs of the separation. I hasten to say that the whole separation costs are being absorbed either within the Medibank Private arrangement or within the HIC arrangement. The separation is being done on a strict budget neutrality basis. That means, for the purposes of Medibank Private, that the cost will not have any impact on premiums. For the HIC, the cost will not have any impact on its appropriations. But, within that, what the costs will be is subject to the audit process that is not yet complete.

Senator WEST —Let me use the example of the Belmont office. I know it has closed, but we have some figures on it. Say you had an office like the Belmont office with $20,000 per annum plus outstandings as the rental. You have that being shared up until the split by Medicare and Medibank Private. After the split—it is a hypothetical office—Medicare stays there and Medibank goes some place else. Are you telling me that, if you do not do anything
to the premises that you are in, Medicare is not going to have to absorb all of the rent that it would have been sharing?

Mr Num —The arrangements are different for different offices and the volumes that were processed were different for different offices, so it is quite varied as to the impact on the differing organisations. What has occurred is that decisions have been taken so that neither side is advantaged out of any of those branch arrangements.

Mr Podger —Certainly the nature of the separation will involve some diseconomies of scale. They are very easy to identify in that there are, in that sense, gross costs to both organisations.

Senator WEST —Yes, that is what I wanted to hear.

Mr Podger —That is absolutely so, and that it is being monitored. There will be an audited report on that. Those costs are sufficiently small that both organisations can absorb them: Medibank Private, without any impact on premiums; HIC, without any impact on its appropriations.

One of the reasons for that is that the separation does have its advantages, but you cannot actually calculate them in a direct way. Each organisation is able to concentrate on its core business. In relation to Medibank Private, it is able to compete more directly with its private health insurer competitors, overcome some of the artificial processes or formulas with the HIC over time and look for a whole range of measures it will take as it moves on a more openly competitive framework. The HIC will also be able to concentrate on its core business a little more. You cannot put numbers to the efficiencies out of that, but you can put numbers to the diseconomies of scale, and those are being monitored carefully.

Senator WEST —What I would like, when you can do it, is a list of the offices, as much as you can give me, with what their rents and other costs are when they are amalgamated. I want a comparison. I want to be able to compare these diseconomies that you talk about. I want to be able to understand that there has been a diseconomy, which is a great euphemism; it is going to cost you more. I want to know how the separation is going to bring about the savings that are going to make up for that diseconomy.

Mr Podger —When we do have an audited report, we can make that report available, but we do not have that completed at this stage. We have an independent auditor providing us with advice on it.

Senator WEST —Who is the auditor?

Mr Num —The auditor is KPMG.

Senator WEST —How did they get the guernsey?

Mr Num —They are the auditor appointed by ANAO to audit the commission. They picked up that function because of their knowledge of the two organisations as part of the separation process.

Senator WEST —It is an issue I have been asking questions about before too, you will recall.

Mr Podger —As I said, it is acknowledged by the government that there are some economies of scale, but they are able to be absorbed in a cost[hyphen]efficient manner. It is not always true that big amalgamations lead to overall savings or that disaggregating organisations into their different core businesses necessarily cuts overall costs. But you can identify the diseconomies of scale. It is very hard to be able to do a straight calculation on why you think a more focused organisation can operate very efficiently.

Senator WEST —I am after the reasons because I remain a sceptic about whether your diseconomies of scale are going to be balanced by your intangible savings. I would appreciate evidence that you can provide to me that I am being oh ye of little faith, if you do not mind.

I now turn to general practice developments, rural GPs and incentives to get doctors to come to the bush. The first question is about getting medical practitioners to the bush. What are you doing about getting other health professionals to the bush? By golly, there is probably a bigger shortage of social workers, physiotherapists, speech therapists, occupational therapists, dietitians and all of those as there is doctors.

Mr Wells —The other professional categories are generally employees of state health authorities. They are generally employees rather than being employed on a fee for service basis. Their employment is generally not with the Commonwealth. We do not have a lot of influence over their distribution. We do not have measures to assist their distribution to rural areas.

Senator WEST —You do not think that this is a national problem that requires a national focus in that you do not want one state running off doing a number of strategies to try to train up and attract the health professionals so that they are trained up very nicely and then the other states all go along and offer more money and headhunt them? It is a serious problem that I keep reading about in the professional nursing journals. I know from trying to refer people to speech therapists and social workers and such that it is a problem with those professions. You do not think that there is not a national strategy needed?

Mr Wells —The situation in states and territories varies of course. Each state and territory has within it, because it is the employer, the capacity to develop its own strategies to meet the particular needs of the health system of that state or territory.

Senator WEST —Just like you cannot make doctors go to various places, it is very hard to make nurses, speechies and social workers go to the rural and remote areas. We need a national strategy. Doctors are privately employed.

Dr Loy —I will leap in to the rescue of my colleague.

Senator WEST —Thank you, Dr Loy.

Dr Loy —Not necessarily to do better, but I will leap in. Yes, you are right, Senator.

Senator WEST —I know I am right.

Dr Loy —In direct programs, as Mr Wells said, the Commonwealth does not have a lot of direct influence, but I would mention two things. First of all, there is the development of an overall national rural health strategy between the Commonwealth and the states.

Senator WEST —Yes, I want to talk about that at a later time.

Dr Loy —There is an extant national rural health strategy that was approved probably five years ago now. It resides on people's bookshelves, but there is a process going on at the moment to bring forward a new national rural health strategy. We hope that that would be ready to be considered by ministers—and by `ministers' I mean Commonwealth and state ministers—by the end of this year. That, if you like, gives a framework for both the Commonwealth and the states to address a whole range of problems, but clearly that work force problem beyond the medical work force is one of the issues there.

The other thing I would point to that the Commonwealth does is that the reset program, as part of the overall rural health programs we operate, provides funding for, as it says, rural health, support, education and training. It tries to look at the ability to have training and
support for the whole range of health professions in the rural areas. It is not directly attacking the problem, if you like, by subsidising positions or providing direct incentives, but it is trying to improve the overall framework, support, education and training that people need to operate in rural areas, and it goes beyond the medical work force.

Senator WEST —Have the reset grant criteria and guidelines been changed in recent times? Have there been some changes to those?

Dr Loy —Yes. The reset committee found that, when it sought submissions from people to set up projects for the support, education and training initiatives, what was happening was that people were putting an enormous amount of work into submissions and then only a number of these were able to be funded. Often the submissions missed the mark, but people had put a lot of effort into them. So they said, `Look, a better process is virtually to give us a two pager on what you have in mind and then in a dialogue between the committee and the proposers we can build up a proposition that may have a strong chance of being funded.' But I do not think there has been a fundamental change in the sense of the sorts of things they are interested in.

Senator WEST —How many reset grants in recent years have looked at or addressed the work force problems? You might want to take that on notice.

Dr Loy —I had better do that.

Senator WEST —Because I do not think there has been too many from my recollection. I just wonder as a humble backbencher if there is some way we can get this issue looked at by the ministers' council because it is becoming a major problem. How are we going with getting more doctors into the bush?

Mr Keith —We are looking for a shift in the way that we manage trying to attract and retain doctors in the bush. In the past, we have had a rather centralised process where we have provided a range of relocation grants, remote area grants and whatever. These, by their central nature, have not always fitted in with the various approaches taken by state governments. So we have worked with the profession, particularly rural general practitioners, to establish rural work force agencies in each state and we are providing funds to each of those so that they can apply these grants in more flexible ways to suit local circumstances. In a sense, it is not us trying to indicate that a doctor should go to X but talking to the profession and the profession working to attract doctors to the bush and meeting the requirements to retain them there.

Senator WEST —Are there any consultancies being done on medical work force in rural areas?

Mr Keith —We have just undertaken three consultancies on looking at rural work force. One was to develop a model for classifying the degree of difficulty of attracting doctors to particular areas, a work force index, if you like. One was to look at developing models of sustainable general practice in rural areas and one was to deal with how divisions of general practice could assist in attracting and providing support to maintain general practitioners in rural areas.

Senator WEST —When were these let, who got them and how long for?

Mr Keith —On the first one, the profile of rural and remote medical work force and training opportunities, the successful contractor was Health Connections Pty Ltd. The start date was 18 August 1997 and the completion date was 28 February 1998. The second one was the best practice models for sustainable general practice services in rural and remote areas. The
successful contractor was a Monash University consortium, which also included people from a number of universities around Australia. That was let on 18 August 1997 and we are negotiating closure of that at present. The third one was roles of divisions of general practice in rural work force issues. The successful contractor was Human Capital Alliance Pty Ltd. That was let on 18 August 1997 and was received in early March.

Senator WEST —Of the two that have completed, maybe even the third one, are there reports arising out of that work?

Mr Keith —Yes, there are reports arising out of the three pieces of work.

Senator WEST —Are they available?

Mr Keith —The role of divisions in rural work force is available.

Senator WEST —Was that the first one?

Mr Keith —The first one on profiles of rural and remote medical work force is currently being independently evaluated to test the methodology employed because, as you can imagine, it has very significant implications on the classifications of locations for their ability to attract and retain general practitioners. The report was presented to the advisory group we have, which is RIPIC, which contains rural general practitioners. They were concerned that the implications of the research were such that they wished it to be evaluated by some independent evaluators. That is where it is at the moment.

Senator WEST —Who is doing the evaluation?

Mr Keith —I will have to take that on notice.

Senator WEST —When is it expected to be hitting the deck?

Mr Keith —I should know this, I apologise. Can I take that on notice too. I think it is to be soon. The evaluation process takes three parts. The first is to have the statistical method and the information used analysed to see if that is appropriate and to see that they have involved all the factors. It is somewhat of an art rather than a science and it is ensuring that all the relevant material has been put in. It has to be tested. We then want to test it with a number of people in the field—a number of rural doctors—to see that it does take into account all the things that they suggest. Then we want to run it through the rural work force agencies for 12 months to analyse the material to see if it does have an appropriate measure of difficulty in attracting people to one location vis[hyphen]a[hyphen]vis another location.

Senator WEST —What are the numbers of doctors in country areas these days? The ANAO report showed that up until 1996—a very significant year—we had been having a small increase. Is that trend continuing?

Mr Keith —May I take that on notice?

Senator WEST —Okay. I thought you would have had that.

Senator DENMAN —I recently met with a group of medical practitioners up in the north[hyphen]west coast of Tasmania where I live. A large percentage of them are at the stage where they want to retire; they want out. They cannot just walk away from their practice. Most of them are over 70. One of the suggestions they put to me was that provider numbers be attached to practices rather than individual people. Is that being looked at?

Dr Morauta —I think the answer is that you need it attached to both.

Senator DENMAN —Yes. Their suggestion was just in their case.

Dr Morauta —On the current arrangements, I think you do need provider identification for all kinds of reasons, such as accreditation and standards and everything else.

Mr Wells —There have been a number of suggestions like that and other suggestions around how provider numbers might be allocated. These have been looked at from time to time. Generally there are problems around that because you get into the area effectively of compulsion, and there is a constitutional problem around that as well. These things do come up and are looked at from time to time. We could certainly talk to those doctors, if you like—

Senator DENMAN —Yes, please.

Mr Wells —to see if they have a particular spin on the proposal which we might not have come across before.

Senator DENMAN —It has become very difficult for them.

Mr Keith —Can I say that is the reason that a decision was taken to establish rural work force agencies in each state, because they are particular circumstances that apply to Tasmania and the group can look at that, whereas there are different circumstances in rural Victoria, for instance.

Mr Podger —There are difficulties in this whole issue, as Mr Wells was indicating, about trying to use provider numbers as a basis for geographic distribution, because geographic provider numbers are likely to break our legal limitations for the Commonwealth government in the constitutional basis of that because of our inability to do things which smack of conscription. If we work closely with state colleagues, we are able to do things with incentives and arrange for that sort of thing rather than direct compulsion from the Commonwealth. But, if there are any particular suggestions that might come through in the area you are talking about, we would be happy to look at them.

Senator DENMAN —Okay.

Mr Podger —But there are very severe legal constraints on how far the Commonwealth can go.

Senator DENMAN —I have some documentation—not here, back home—and I will forward it to you.

Senator FORSHAW —I have a couple of questions about bulk[hyphen]billing and Medicare. Could we be provided with bulk[hyphen]billing figures by electorates since the December quarter 1996? What I am looking for are the rates for bulk[hyphen]billing, which I understand are available on a quarterly basis.

Dr Morauta —We can provide that if we have not already provided it.

Senator FORSHAW —You did provide some in the August hearings last year. So essentially what we are looking for is an update.

Dr Morauta —We can certainly do that, Senator.

Senator FORSHAW —Can they be divided into GP specialists as well as the total percentages?

Dr Morauta —We can do that, but there are some limitations on small centres. Where only a few providers or individual providers could be identified, we fudge it in some way so that they cannot be, but otherwise we can provide it in that form.

Senator FORSHAW —I see. I remember you mentioning that last time that, in very small centres, in order to ensure that—

Dr Morauta —Yes, where there is only one pathologist.

Senator FORSHAW —Yes, so that person does not get identified. What we are looking for here is an electorate by electorate analysis. Do you believe there are any discernible trends in bulk[hyphen]billing?

Dr Morauta —At the moment it is certainly moving around in a way that a trend downwards or upwards is not observable. We thought there was a slight downwards trend and then it turned around again in the last quarter.

Mr Broadhead —Essentially it is going up. If you take it over a long period of time every year it is increasing.

Senator FORSHAW —I am advised—and I confess that I do not have specific figures in front of me—that over the last 10 months bulk[hyphen]billing rates have fallen for almost all of that period compared to the same months last year. In other words, we are talking about the last 10 months compared to the equivalent 10 months in the previous year. The rates are less now than what they were, which would suggest a decline. First of all, is that picture correct for the last nine or 10 months?

Mr Podger —If I simply look at some of the figures, for March this year on March last year, it is down very slightly. For December 1997 on December 1996, it is down very slightly. For September 1997 on September 1996, it is up. For June 1997 on June 1996, it is up. I do not think there is a consistent story in the way that you have presented it, but people can look at it in more detail.

Dr Morauta —We can certainly table the figures, Senator.

Mr Broadhead —There is a table here which gives month by month figures for the last few years.

Senator FORSHAW —I would like to have a look at that.

Mr Podger —I think a view has been given that over a long picture you can see a very slight trend upwards year on year. In looking at the last couple of years, you are talking about movements within a very narrow band, and I would be extremely reluctant to draw a conclusion in any direction. You are seeing very tiny moves within a narrow band.

Dr Morauta —What happened over the last 10 years is that there was a continuous rise in bulk[hyphen]billing, and that rate of rise has certainly stopped. It is either plateauing or just wobbling around on a level at the moment rather than continuing to rise in the way it had over the last 10 years. As the secretary says, there is no clear picture at the moment of what is going on. We can give you the back year figures too. We have them here if you would like them. They go back to 1984-85 if you would like those numbers.

Senator FORSHAW —I am having a look at this table that you have just supplied, which is for 1996 to April 1998. It seems that they have either stayed constant or dropped in most months, if only by a very small percentage.

Mr Broadhead —I have handed over my copy of the table, so I cannot actually comment.

Senator FORSHAW —I was advised that they have been falling over the course of the last nine or 10 months compared with the previous similar period.

Mr Podger —It is not a clear-cut conclusion of that sort. I really do believe we have got things jumping about in a very narrow band, and I would not want to call a trend in the last two years at this point.

Senator FORSHAW —I am also advised that the HIC has stopped publishing monthly figures. Is that correct?

Mr Num —That is correct.

Senator FORSHAW —That confirms what I was told. Why?

Mr Num —What we were finding was that, because there was so much variation and because of processing differences, the figures were essentially meaningless. So, to ensure consistency with the department, we went back to publishing those figures on a quarterly basis.

Senator FORSHAW —Thank you for that. I turn now to the issue which has been in the news again recently—that is, the potential for co-payment. Has the department had any work undertaken on the possibility of co-payments for medical services?

Mr Podger —No.

Senator Herron —I think the last work that was done on that was by the previous minister.

Senator WEST —About 1992. There has been some media speculation in recent times. I thought you might have done some more work.

Mr Podger —The answer I gave is no.

Senator FORSHAW —That is nice to know. That about covers 2.1 for me.

Senator WEST —Can I ask about the figures on page 87. I could not let you go without talking figures. I will accept the variations in the running costs, as previously said. Why is there a drop in the education, accreditation and review of diagnostic services?

Ms Rogers —The education, accreditation and review of the diagnostic services appropriation was brought down in the 1996-97 budget. In particular, it was allocated for the three-year pathology agreement as well as the radiology savings and reform package at that time. The money was allocated for pathology over three years and for radiology over four years. It was not an amount in each year, but it reflected the cycle of the programs. The major reduction is because we are moving into the third year of that three[hyphen]year pathology agreement.

Senator WEST —What is the reason for the variation in the next one below: `Trials of coordinated care for people with ongoing and complex health needs'? There are some fairly good variations there.

Mr Broadhead —That is because the trials have only gone into the life phase part way through the current financial year. So the figure of $41,605,000 is a part[hyphen]year figure, whereas the figure for the next year is a full[hyphen]year figure.

Senator WEST —But it is still a drop on the budget estimate for this financial year?

Mr Broadhead —That is because there were delays in getting the trials up and running. We had expected to spend more but, because of delays in getting the trials up and running, we have spent less than we originally expected and budgeted for.

Senator WEST —But you went for an additional appropriation?

Mr Broadhead —Yes, because there were two categories of costs associated with the trials: one was to do with service delivery, the actual process of providing services to people; the other was to do with set-up and development costs. The additional appropriation was in relation to set-up and development costs. But, because the trials have been delayed in starting, the service costs are below what was anticipated. There are two figures underlying that figure. We went for additional money for set-up and development, but there is a reduced amount being spent on services in the current year.

Senator WEST —Okay. Another item on that page is `general practice infrastructure training—training and support'. I presume that is putting everybody on salary, is it?

Dr Morauta —Senator, I am afraid this is not a particularly clear piece of public explication.

Senator WEST —I am very glad you said that because I am finding it exceedingly unclear and unhelpful.

Dr Morauta —You must realise there has been an effort to recycle. What has happened here is that, unfortunately, appropriation item numbers have been recycled. The number of an appropriation which was $26 million last year for a different purpose has been reused this year for a new purpose at $150 million—

Senator WEST —Do you think that you could give me a set of accurate figures with accurate numbers? And how often has this occurred in the rest of the book?

Dr Morauta —I think this is probably an unusual circumstance in that the general area of activity—being general practice training—was continuing but the way it was handled was quite different in these papers from previous papers.

Senator WEST —So the original $26.199 million related to the old 340.4.06?

Dr Morauta —That is right.

Senator WEST —Is that general practice infrastructure training and support or was that something different?

Dr Morauta —General practice education.

Ms Batman —It used to be called `Support for education and training' but it had the same appropriation item number—

Senator WEST —What does it get this year?

Ms Batman —It did include some of the same things. For example, it included the general practice training funds and it included an evaluation program which is still there. It now includes virtually all of the funds from the old general practice strategy—the money from the rural incentives programs, accreditation, as well as the John Flynn scholarships—

Senator WEST —According to somewhere else, doesn't the John Flynn scholarship fall off or does that just fall off because—

Ms Batman —They have been picked up in this $150 million.

Senator WEST —Do you think you could give me a list of what now occurs under 340.4.06?

Ms Batman —If we take it on notice, yes, we will do our best. It is a combination of that appropriation and the one below it—`alternative funding for general practice services'. There have been some changes and movements between those two. If we can give you something that tries to explain—as best we can—what went in and what went out, we will certainly do that.

Senator WEST —Isn't it possible to have a computer program that would ring alarm bells if you had a variation of 474 and it might make you go and have another look to see if you have not made a mistake?

Ms Batman —It is not an error; it is a change in what goes into that appropriation. It is just a bit unfortunate—we were expecting it to have new appropriation numbers so that it did not have a past history, misleading people about what it meant.

Senator WEST —I am waiting for a complete redo of the Social Security figures like this because of a similar sort of thing that happened all through their PBS. I hope this has not happened all through here and that I have to start saying, `Excuse me, but can I have them all sorted out very clearly?'

Ms Batman —I do not think it happens anywhere else, although I do not know. It is an issue really for the Department of Finance and Administration.

Senator WEST —Is this caused by the Department of Finance and Administration guidelines?

Mr Podger —No, I think this particular case, as I hear it, is an isolated one for this document that you are raising. But it is an issue for our department as well as Finance. We should have picked that there was an issue here and worked out a way of describing it better, and I apologise for that. But I am not going to turn around and say, `It is all Finance's fault.' They should have picked it, but we should have picked it as well.

Senator WEST —They did not pick it in DSS's either. How much of a problem are their guidelines?

Mr Podger —This one is not an issue of their guidelines. The issue of their guidelines that I picked up earlier in response to Senator Forshaw was to do with the way we described the measures and the relationship between the measures and so on—that certainly has been a matter for them. Also the way we set these out in broad terms is in those guidelines.

Senator WEST —Oh, yes.

Mr Podger —But there is certainly room for us to make sure the explanations are clear and, on this one, there should have been some reference.

Senator WEST —Can I go to the one on the bottom of the page on the medical work force. You were given a budget of $20.156 million, you expect to expend $10.546 million, you have budgeted for $10.659 million and you are calling that a variation of one per cent. I want to know why there was a 50 per cent drop in the first place.

Mr Wells —The reason for the drop in expenditure for 1997-98 is that it was clear that the full $20 million would not be required for those work force measures. As part of the budget process, there were some savings taken and used for other purposes. The outcome then was $10.546 million.

Senator WEST —So there has been savings taken from the item `Medical workforce—financial assistance for the provision of additional services in areas with a shortage of doctors'?

Mr Wells —For 1997-98. For 1998-99 and ongoing $10 million has been directed into that general practice training item.

Senator WEST —We have just had a fairly lengthy discussion about the problems of attracting doctors to rural areas and then I discover there is a $10 million cut to assistance. Is that what I am discovering?

Mr Wells —There is no cut for 1998-99 overall. It is just that the money is spread differently between the items.

Dr Morauta —For example, the funding to rural work agencies which support rural doctors increased in the budget by more than $10 million—

Senator WEST —So some part of what was originally in 340.4.14 has disappeared somewhere else, has it?

Dr Morauta —Into 340.4.06.

Senator WEST —How am I supposed to ask intelligent questions?

Mr Podger —A few moments ago we said we would take on notice to give you a description of the particular issues around 340.4.06. We will clarify in that what the numbers cover and what the change in the year on year figures means—

Senator WEST —Please.

Mr Podger —I will take that on notice. I think we need to make sure we have things exactly right with Finance as well in the way we present that.

Dr Morauta —We also need to include in that the item `Alternative funding for general practice services', because that item was previously amalgamated with some of the elements of the previous one. What we were trying to do was make it clearer. We were going to split program support elements for general practitioners from cash payments to them under the practice incentives program. The idea is that these two things are that. It was just the translation from one year to the next that went wrong.

Senator WEST —I think I will have questions for this—if we have not gone to an election—at supplementary estimates. I will see you in August. Over the page, to page 88, there is an item `Payment for special health programs—blood transfusion services, artificial limbs scheme, payments for former Commonwealth pathology laboratories', et cetera. The way this reads, that has folded its tent up and gone somewhere in the night, because it has gone from $32.9 million this year to zero next year. Where has it disappeared to? Have we stopped the bone marrow donor registry?

Dr Morauta —This is a case where, when the money moved, they closed down that appropriation item, if you like.

Senator WEST —Yes, I know. But where has it moved to; what has happened to it? Are the blood transfusion services still going to be funded? Is the artificial limbs scheme still going to be funded and to the same level? Are the payments for former Commonwealth pathology laboratories going to continue? What is happening to the Australian bone marrow donor registry? And nationally funded centres, what is happening to those?

Mr Maskell-Knight —That money has all been broadbanded into the health care agreement money, which is shown under subprogram 2.3. So, yes, all those things are going to be funded.

Senator WEST —At the same level?

Mr Maskell-Knight —Yes.

Senator WEST —I did not connect subprogram 2.1 with 2.3. I apologise.

Senator FORSHAW —I have some questions on the Australian health care agreement.

Mr Podger —That is subprogram 2.3.

Senator FORSHAW —Yes. This goes back to a comment I made at the outset. At page 283, where it sets out the budget measures for the Australian health care agreements, it lists the three subprograms. I am happy to deal with it in subprogram 2.3.; I just wanted to check that that was the right place.

[3.31 p.m.]