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ESTIMATES COMMITTEE E - 19/09/1991 - DEPARTMENT OF HEALTH, HOUSING AND COMMUNITY SERVICES - Program 5-THERAPEUTIC GOODS

SENATOR MCMULLAN -I have to leave at 12.15 and I flag that, depending upon where we are at 12.15, I might be concerned about the hearing continuing if I am not here. Hopefully, we will be at a stage where something is properly a matter for discussion between senators and the officers.

SENATOR WALTERS -Why would Senator McMullan be concerned about where we are? Standing Orders do not require a Minister, or yourself, to be present.

SENATOR MCMULLAN -In my view they do, because, from my experience in other Estimates committees, though I have not experienced it here, questions are essentially directed to the Minister and/or representative, and answers are provided by officers to assist that person. I do not think it is appropriate for the Estimates committee to proceed with only officers present. A lot of things are just dialogue and exchange of information between officers and senators; that is entirely desirable and I would want to facilitate that. But when matters stray into the political arena they should be appropriately responded to by Ministers or their representatives, and there should be someone in that capacity here all the time. I have changed just about everything today to try to accommodate the Committee, but I cannot change everything. I will try to accommodate on this occasion, but I am sounding a warning now, and I do not think it is unreasonable.

SENATOR WALTERS -We have never had any problem at all in this Committee. Senator Tate frequently gets up and leaves; we have never had the slightest problem. We keep any question we believe should be asked of the Minister until he comes back. Our Chairman is very good at making sure that happens. I do not see why we have to be held up because you are not going to be present. The Government set the hours for Estimates and then changed them so that we were not able to sit early in the morning but were put off until after 3 o'clock or 4.30 in the afternoon. The Committee has been very good in coming back for an extra day, accommodating Senator Tate, who was unable to stay on.

SENATOR MCMULLAN -Everybody understands what led to that three-hour delay. I want to be as cooperative as possible. That is why I am here. But I am not going to withdraw that reservation. I hope no problem will arise; let us cross that bridge when we come to it.

SENATOR HERRON -I want to ask about the implementation of the Baume report. What steps have been taken to implement it?

MR HAMILTON -The Government announced at the beginning of July that it accepted the recommendations of the Baume report as a package. We have established within the department a task force headed by Mr Peter Pflaum, who had been national manager, who has been moved to head up a task force within the Department to implement all the recommendations of the report. We have commissioned Dr Bob Hodge-formerly Director of the National Heart Foundation, and one of the people who assisted Professor Baume-as an external person to keep us honest, as it were, and report to the Minister directly on how he feels we are going. We provide regular reports to the Minister on implementation. We are on track in relation to the implementation of the report. Professor Baume put a number of time lines down. We are attempting, I think successfully, to meet those time lines.

SENATOR PATTERSON -I want to ask a couple of questions on the Baume report. Will there be legislative requirements to meet some of the recommendations?

MR HAMILTON -Yes. We need, for example, to change the objects clause of the Act to add the requirement that the objects include timeliness as well as safety and efficacy.

SENATOR PATTERSON -Is it hoped that they will be through in this sitting or is it likely to be the following sitting period?

MR ROCHE - We hope to get some of the legislation through in this sitting. Some areas are more critical than others.

SENATOR WALTERS -Which recommendations are you accepting?

MR HAMILTON -All of them. Obviously, some are broad and need to be fleshed out . Some simply say we need to look at ways of doing X, and maybe it could be done in a particular way. We might in the end say we will do X, but it might be done slightly differently.

SENATOR WALTERS -Which recommendations are you referring to in particular?

MR HAMILTON -No particular ones; I am simply saying that some of the recommendations are extremely precise and can be implemented without any work; others say that we should consider ways of doing X better, and we have to consider those ways.

SENATOR PATTERSON -Do you imagine you will need an increased number of staff to implement the recommendations of the Baume report?

MR HAMILTON -Professor Baume recommended that we should have increased staff in the short term, to remove backlogs; that recommendation has been accepted.

SENATOR PATTERSON -Has the national manager been appointed yet?

MR HAMILTON -No, that process of selection is under way.

SENATOR PATTERSON -Has there been a delay in filling this position?

MR HAMILTON -No. We moved immediately on the acceptance of the Baume report. We have engaged assistance from a major private sector consultant and he is in the process of short listing and recommending candidates to us.

SENATOR HERRON -On page 167 there is a heading `Time taken to evaluate new products'. I appreciate that this has been overtaken by the Baume report, but I have compared the figures with last year's figures. Under `Market Approval during 1990-91-Working Days', the table shows a figure of 322 for the item ` ADEC to approval'; last year it was 545 days, which would appear to indicate a significant improvement. Yet, under `Partial Evaluation', the figure is 499, compared with 166 last year, which is the reverse. Is there an explanation for that? It would appear superficially that it is just a change in categorisation. I will just repeat that. In 1990-91 the indicated time taken to evaluate new products from ADEC to approval was 322 days; the figure for the time for partial evaluation was 499 days. The comparable figures for the previous year were 545 and 166.

DR CABLE -The comparable figure from last year was 545 against 653, not against the 322, so in fact this year's figures in that area are slightly worse than last year's rather than better, as you would perhaps have drawn from that earlier statement.

SENATOR HERRON -What about the second one then, the comparable figures between the previous year and partial evaluation and minor changes?

DR CABLE -Yes, they are worse than the previous year. The previous year was 166 against 499 and 40 against 201.

SENATOR HERRON -Is there any reason for that?

DR CABLE -The main reason has been a combination of a very big volume of work that is coming in prior to the introduction of the fees and charges in February-a lot of people sought to lodge their applications prior to the implementation legislation, so there is a huge volume of work being processed in the early stages, and it is just to handle that workload-and in the clinical trial area, as Dr Ashley can probably tell you, the fees and charges due to come in on that date. So, given that they have the short deadlines, 30 and 60 days, a lot of resources were devoted to making sure we met those in that area.

SENATOR HERRON -You are happy that the implementation of the Baume report will overcome that sort of delay?

DR CABLE -The implementation of the Baume report sets timelines and makes some recommendations about procedures which will help to reduce this delay. It will certainly be a significant challenge to achieve that. Part of that will be a combination of the resources. Part of it is the different ways in which we now handle clinical trials, thereby freeing up more of the clinical resources which were available under the previous arrangements.

SENATOR HERRON -That is a very good response. Thank you.

SENATOR PATTERSON -Can you tell me how many export only products have been approved for listing?

DR CABLE -I think 219 applications have been processed, but I will get you the exact figure.

SENATOR PATTERSON -How many have been submitted that are pending approval?

DR CABLE -I do not know, but I can find that for you. What I do know is that only one of those submitted has been rejected at this point in time. That was rejected on the ground that it was actually a food and, therefore, did not fall under the Therapeutic Goods Act. The major manufacturers which have been involved in export only have come and identified the difficulties of their providing the information to us on all the products, and we have worked very closely with them on a number of occasions.

SENATOR PATTERSON -Do you have a rough idea about the approvals pending? Is it in the tens or hundreds? Do you know even roughly?

DR CABLE -No, I do not know, but I can find out for you.

SENATOR PATTERSON -When can you tell me? I would like to know because it relates to some other questions I want to ask.

DR CABLE -I could find out with a phone call to the register. These goods are only listed; they are not subject to an extensive evaluation.

SENATOR PATTERSON -I would appreciate it, if you could do that. Will you do it or will some other officer?

DR CABLE -Mr Pflaum will.

SENATOR PATTERSON -Thank you. What is the average length of time taken from submission to approval for listing?

CHAIRMAN -For export only products.

DR CABLE -I would have to get the exact figure for you, otherwise I would be misleading you. I do not have this figure here right at the moment.

SENATOR PATTERSON -Maybe I could go through these, and then we can go back to them after lunch. We could have the answers after lunch.

CHAIRMAN -Senator Patterson can go through the questions and see where we get to.

SENATOR PATTERSON -Will further extensions of the deadline for listing be necessary? I think it is currently 15 October.

DR CABLE -I do not believe so. I do not believe a further extension will be necessary.

SENATOR PATTERSON -So you will be able to process all the outstanding applications by 15 October?

DR CABLE -We have set targets for performance within the area on a weekly basis, and my advice of a day or so ago is that there are high hopes they will achieve this.

SENATOR PATTERSON -Are there problems if they do not achieve those?

DR CABLE -There is a difficulty in that there is a legislative requirement for the goods to be entered on the register at the time in terms of the provision of a register number. We extended the period for the two-month period. Originally, it was 15 May, which went back to 15 July, and then the three- month period after that is allowed by the legislation.

SENATOR PATTERSON -Will any manufacturers be disadvantaged if you cannot achieve that processing by 15 October?

DR CABLE -The two or three major manufacturers that have some concerns have been with us and have raised the ones that they want to have on at the time. Basically, one of the companies has a very large number of products which it keeps, in effect, in a catalogue of potential export only products. Within that, it has some priority ones which it generally finds are ordered. We sat down with them and said, `Right, we will make sure all of those are placed on the register'. They have identified which ones they want on, and I am confident they will all be on.

SENATOR PATTERSON -So if you do not make it, there will be the priority ones that make it ahead of the others?

DR CABLE -As identified by the company to us. I would anticipate that all of those that we receive, that they lodge by that time, will be entered. They are looking to see whether or not they wish to lodge all of their applications in order to meet the deadline.

SENATOR PATTERSON -Is product quality the only assessment that is used in assessing them for export applications for listing?

DR CABLE -Flowing from product quality, we also ask for a translation of the label to assure ourselves of fulfilling our export certification role. As a regulatory agency, we are frequently asked by the regulatory authority in the importing country for an export certification. In order to certify that, we ask for a translation of the label, if it is in a foreign language, so we can see that what is represented to be in the goods is indeed the same as the formulation that has been provided to us.

SENATOR PATTERSON -If we import therapeutic goods, do we require that we have a translation of any instructions on them in the other direction?

DR CABLE -Imported therapeutic goods which are supplied for entry onto the register, if they form conditions of supply, do indeed have to be supplied to us with conditions of the details of the product in English and of what is on the label.

SENATOR PATTERSON -A translation of what is on the label?

DR CABLE -It is my understanding, although I would need to check this, that the label for marketing in Australia should be in English.

SENATOR PATTERSON -Do we import any with foreign instructions co-existing on the label?

DR CABLE -Dr Ashley has pointed out there would be a situation for personal imports. There would be the dispensation to allow those products to be imported as they were provided in the country of origin.

SENATOR PATTERSON -We are talking about commercial imports?

DR CABLE -For commercial purposes, yes, they should be.

SENATOR PATTERSON -Do they have foreign languages coexisting on the labels with any of them? You are saying no?

DR CABLE -I do not think I am in a position to answer that because there could well be products which indeed have both. Our concern is that they at least have the English; there is no prohibition on them having more than one.

SENATOR PATTERSON -If they have both do we require that they have a translation of what is written in the foreign language to ensure that what is written in the foreign language is not different from what is written in English?

DR CABLE -I follow your line of questioning. I do not know the answer to that.

SENATOR PATTERSON -Are we asking our manufacturers to do something we are not asking overseas manufacturers to do? If there is a foreign language on anything we import, do we request from the therapeutic goods, or whatever they call themselves in the country of origin-

DR CABLE -I would say no. My understanding would be though that what they need to provide are the details of the product for us to enter it on the register and, as specified there, that has to match up with the English label. We have the reverse problem, that if there is something for export and the only label we get is a foreign label, then there is no way we can match up the details of the formulation with the label on the exported goods.

SENATOR PATTERSON -So you are going to make the assumption that the foreign instructions on imported therapeutic goods are the same as the English instructions?

DR CABLE -I think that is the situation at the moment. I mean, one would argue that what the English provided is in fact the translation of the other. But you are asking me how do I know for sure.

SENATOR PATTERSON -How do you know that migrants are not reading the other instructions? Are you making a demand on our manufacturers that we are not then making on manufacturers of imports? Do you have a group of people here who are reading the instructions in a foreign language? I would be interested to know what you do.

DR CABLE -I take your point. Are you putting forward the view, though, that perhaps we should, in that circumstance, to ensure this is not the case?

SENATOR PATTERSON -I am saying that there ought to be consistency. If we are protecting people who are consuming our exports, should we not equally be protecting people who are consuming our imports?

DR CABLE -I take your point.

SENATOR PATTERSON -I want to ask a couple of questions regarding international cooperation and acceptance of Australian therapeutic goods on export markets. Have we reached any agreements with Asian authorities regarding this issue?

MR ROCHE -In what respect? In respect of evaluations or quality of acceptance?

SENATOR PATTERSON -Yes, acceptance, evaluation, quality and assessment of our therapeutic goods?

MR ROCHE -There has been no agreement with any Asian country on evaluations.

SENATOR PATTERSON -Have we made any contact with any of the Asian authorities about facilitating acceptance of Australian products? Is that the role of the Department?

DR CABLE -Certainly we have made contacts with the regulatory agencies in Asian countries but not in that context. We have mainly made it in the context of responding under the WHO export certification requirements, where that country can ask us in the line of the WHO system whether the product is (a) manufactured here or on sale here and (b) if it is manufactured here what assurance do we have in terms of a code of good manufacturing practice and adherence to the code of good manufacturing practice principles. In other words, have we inspected and licensed the facility. Those are the general requirements under the WHO certification. More directly, we have fairly close contacts with the regulatory agencies and, through WHO programs, have trained a number of the people from the Asian countries.

MR HAMILTON -Japan requires that clinical trials for drugs be conducted in Japan. So the Japanese are hardly likely to accept Australian evaluation. Therefore, the scope for the exchange of evaluation with Japan is fairly slim.

MR ROCHE -Korea falls into the same category.

SENATOR PATTERSON -Does the Department have all of those countries listed and what criteria it requires?

MR ROCHE -No. We do know what a lot of them require but there is no requirement for the Department to maintain a register or a monitor of the import requirements of every other country.

SENATOR PATTERSON -I want to ask some other questions about imported products. Have all the imported grandfather products been assessed for good manufacturing practice standards?

DR CABLE -The grandfathering for the straight listing of goods is such that they are grandfathered as they were supplied in this country at that time. There is no requirement in relation to grandfathering of goods to go any further than that. The grandfathering was intended to be a point in time, and we would not impede the sales of those things that were here.

In terms of grandfathering, those that existed and could establish that they existed are entered onto the register. The legislation then provides an opportunity to seek information to establish whether these should be continued on the register. But in concert with grandfathering there is no specific review of the data or the GMP because it was meant to be that in that point in time this was the circumstance that would continue afterwards and if we had concerns then the legislation provides the opportunity to follow them up. At this point in time we have not done that.

SENATOR PATTERSON -I thought Mr Staples said on 11 January that imported grandfathered products which have not been granted import permits within 15 months prior to the introduction of the Act would be assessed for good manufacturing practice standards within six months from commencement of the Act?

DR CABLE -You are talking about goods which were not granted a permit? Indeed, if they were not granted a permit, they were not being supplied at the time the Act commenced.

SENATOR PATTERSON -Those ones?

DR CABLE -So those ones that would come in for basically new listing rather than grandfathering.

SENATOR PATTERSON -So they were not grandfathered; they were in a between the stage category?

DR CABLE -If they do not fall into that category of qualifying for grandfathering, they fall into being a new entry.

SENATOR PATTERSON -A new entry in that period?

DR CABLE -A new entry onto the register.

SENATOR PATTERSON -Have all those ones that fell in that 15 month period been assessed?

DR CABLE -The answer would be no.

SENATOR PATTERSON -How many are we looking at, and how many have been assessed ? Can we have that information after lunch?

DR CABLE -Yes. I am not sure of the numbers that would fall necessarily in there because it depends on whether the company wishes to continue to supply. There are two different questions: those that can be grandfathered anyway, for which there is no GMP, and, secondly, those that have applied since the commencement of the Act to supply new listings in effect.

SENATOR PATTERSON -I really want the listings in that 15 month period and to know how many have been assessed. You are telling me that the gap will not tell me how many have not been assessed because they will never want to supply some of them; they would just put in a-

DR CABLE -That is right. Since they did not have a permit, they may not wish to continue with the supply.

SENATOR PATTERSON -I will take your comment that the gap does not represent those that are backlogged or have not been assessed. Would all imported products be assessed for good manufacturing practice compliance by 15 February 1992?

DR CABLE -Will all imported products be assessed for compliance with GMP?

SENATOR PATTERSON -Yes?

DR CABLE -The answer would be no because it depends on what you see as assessment for GMP. If they are in the listed category of goods-the ones I think you are referring to-the Act provides that one can assess this in a couple of ways: either by advice from the other regulatory agency or an undertaking from the company that you may wish to inspect it. The thing about listing of therapeutic goods on the register is it relates to whether you have a concern, and if you are aware of a concern then the secretary is not to list it if he has evidence that they are not acceptable.

As I understand it, it was intended to follow up where you may have a concern and, by contact with another regulatory agency, you could not obtain information that you regarded as satisfactory in relation to GMP. In the same way as we issue export certification to other countries, they do not necessarily seek further than that because they are aware that we have a GMP inspection of local manufacturers and that they will be required to be licensed. There is a variety of evidence that you might wish to follow up, depending upon the country of origin.

SENATOR PATTERSON -I do not necessarily think, by the look on honourable senators' faces, that anybody else on this Committee is particularly interested in this. Do you have a paper about it?

DR CABLE -I could get some figure together for you.

SENATOR PATTERSON -That would get me up to speed on what is exactly happening with the implementation of that Act and it would give a bit more detail on the things you have been outlining so I can understand them better.

DR CABLE -I do not have a paper put together in that form, but I can put one together for you over a little time.

SENATOR PATTERSON -I would appreciate that very much. I have a couple of questions about asthma drugs-which I almost needed a few minutes ago. There has been quite a lot of press coverage about broncho-dilators and I do not want to start another run on that. Has the drug Berotec been delisted from the PBS?

MR HAMILTON -It has not been listed on the PBS.

MR ROCHE -It was listed; it is no longer listed.

SENATOR WALTERS -You are saying that it has been taken off.

MR HAMILTON -Yes, it is no longer on the PBS.

SENATOR PATTERSON -When was it taken off the PBS? Do you know why it was taken off?

MR HAMILTON -I will check that for you.

DR ASHLEY -It was taken off recently.

SENATOR PATTERSON -Why?

DR ASHLEY -I can answer that question from the drug evaluation point of view. A problem was perceived with this particular drug which arose from studies in New Zealand where it seemed that the prescription of this broncho-dilator was associated with an increased mortality in patients over and above other broncho-dilators. This increased mortality occurred in a particular group of patients who were the more severe asthmatics, as defined in a particular way.

That finding was challenged by the company and two further studies were conducted by the New Zealand group which tended to confirm its original observations. As a result of this, the Australian Drug Evaluation Committee, which had been considering this issue for quite a while, decided that the use of this particular drug should be restricted to patients with mild to moderate asthma and that it should not be given to severe asthmatics. I believe it was for this reason that it was taken off the Pharmaceutical Benefits list.

SENATOR PATTERSON -Is it still available over the counter?

DR ASHLEY -No, I think it has now been rescheduled to schedule 4. It used to be available over the counter, as were all other anti-asthmatic drugs.

SENATOR PATTERSON -Have all the others been rescheduled as well?

DR ASHLEY -No, not at this stage. There is some controversy over the ready availability of anti-asthma drugs. The original reason, I understand, was that it was felt that, if a patient ran out of a product at the weekend or whenever, he or she needed to have immediate access to the drug without going through a medical practitioner.

SENATOR PATTERSON -Is Berotec the only drug that has been rescheduled?

DR ASHLEY -Rescheduling is not my particular area, but I think it was the only one that was rescheduled.

SENATOR PATTERSON -Has the Department commissioned any research into Ventolin? The Victorian Department of Health recently announced that it would conduct an inquiry into Ventolin. Has the Commonwealth Department looked at Ventolin?

MR HAMILTON -Not so far as I am aware.

SENATOR PATTERSON -Are you considering making broncho-dilators prescription only?

MR HAMILTON -I am afraid we do not have the officers who are responsible for drug scheduling present. It is part of program 1, for a reason too arcane to go into. I cannot answer the question, but I can get that information for you.

SENATOR PATTERSON -I would appreciate it if you could do that. Will we have that answer after lunch?

MR HAMILTON -Yes.

SENATOR GILES -You gave us some information about the indicators. I am looking at indicator 3 in the level of compliance. Of the routine inspections, it looks like well over one-third did not comply with current good manufacturing practice. What action has been taken against those manufacturers?

DR CABLE -In looking at the 38 that did not comply, we need to go back to the 63. We inspect people whose performance is frequently not as high as perhaps the general average. Obviously, we do not just conduct surveillance on a random basis; the manufacturers are targeted. Having 38 at that sort of level is a higher than average figure. Having said that, a lot of those are manufacturers whom we inspected during that year in preparation for the legislation because they required a licence under the legislation. Some of those people had not been inspected before and they were often the smaller companies that had been engaged in the manufacture of alternative or herbal medicines. We inspected a number of those with the intention of providing advice ahead of the requirement under the legislation.

There are a number of established manufacturers in there of course who have not achieved the standard over a period of time. In this financial year, they have had 4 months from the start of legislation in which to apply and we then have a period of time in which to determine the licence. If they are established manufacturers, then we would be looking for them to comply within this calendar year and we would be reinspecting. For those who are first- timers in the alternative medicine area, we have adopted a policy of giving up to two years to reach the standard, given that they had not faced these sorts of requirements before. In terms of the actual quantitative breakdown, I do not know how many fall into each category.

SENATOR GILES -I gather that you would be paying a fair amount of attention especially to the established manufacturers whose shortcomings have been identified in the past and who still have not brought themselves up to scratch ?

DR CABLE -That is correct. To that point, we have a rating scale where we would regard manufacturers as either acceptable, unacceptable or critical. Those who fall into the critical category obviously are on notice that, if the improvement does not occur, things will be defined. Clearly, the option of maintaining a licence no longer exists.

SENATOR GILES -Are a significant number in the critical category?

DR CABLE -There are a number. I again do not have the actual figures, given that we have not inspected the whole range of people, but there are a number of manufacturers in the critical category, yes.

SENATOR GILES -The other question I would like some assistance on arises from indicator 5-a number of harmful or substandard products found to have reached the Australian population. It says that 170 of the 1,212 products used in humans failed to comply with acceptable standards. That is 7 per cent. Is that unusually high? Has this been a bad year, or is that average? Over 20 per cent of the veterinary products likewise failed to comply.

DR CABLE -My understanding is that that is relatively average for two reasons. Firstly, we target those products where we have a lead from one source or another. The most common source is when the GMP inspector, during a visit to the factory, observes some aspect of production which might lead him to believe that it would be useful for us to take official samples to determine the quality of those goods. Secondly, we follow up reports from individuals, who write indicating that the goods have not had the desired effect, and from the adverse drug reaction areas. We monitor each of those areas to decide what goods to sample.

I do not have last year's figure in front of me, but I recall when I was in charge of the laboratories that 5 to 7 per cent was common in terms of the level of failure. These failures are generally in three areas: the dissolution performance of the goods; the content of the active substance; and the level of related substances. They are the most common areas in which one finds a defect in the product relative to the specifications. This below standard aspect of the product is often batch related, though not always.

One then asks the company to take corrective action. Depending upon whether there is seen to be a clinical problem, the product is recalled. In many instances, it is not necessarily regarded as a clinical problem but one which the company needs to address by not manufacturing any more batches of that nature. Obviously, recalls are necessary in some areas. There is reference in here somewhere to the treatment for influenza that fell below potency, for instance.

SENATOR GILES -What about the 102 device products which were recalled?

DR CABLE -The 102 device products that were recalled were recalled on the basis of information supplied from the overseas sponsors-in other words, there was a problem detected in the country of manufacture. We had a proportion of that batch in Australia, so the advice flowed in that direction.

Our awareness of problems also comes from our device reporting system involving reports generally related to the function of the goods-given that they range across the whole device area-and where the company may have found the potential for a faulty switch or some electrical problem in some products. There are a whole range of problems, but we are becoming more of a presence in the device area and people are more aware of the opportunity to report what they see as a potential problem in many cases where the manufacturer might take action to avert a recall. I appreciate it would be much more useful if I could provide you with particular categories of goods. I do not have that information here, but I can obtain it from the head of the devices branch.

SENATOR WALTERS -Has any thought been given to reintroducing heroin for terminally ill patients in considerable pain?

MR HAMILTON -It is not current policy to do that.

SENATOR WALTERS -That was not what I asked. I asked whether any thought has been given to reintroducing heroin for terminally ill patients.

MR HAMILTON -The most relevant work that we are watching with interest is that being done by the National Centre for Epidemiology and Population Health. It is proposing a trial in this area, not particularly related to the terminally ill but more related to the controlled use of heroin. The ACT Legislative Assembly is considering whether it should proceed to the next stage. Nationally, we are obviously watching that with some interest. It is not focused on the terminally ill. That is the only work of which I am aware.

SENATOR WALTERS -When you say that, are you referring to heroin use for medical purpose alone?

MR HAMILTON -No. It is not just for that.

SENATOR WALTERS -It is nothing to do with medical problems?

MR HAMILTON -They could potentially be caught up in it, but it involves a broader access to heroin.

SENATOR WALTERS -So what you are referring to is heroin use for drug users?

MR HAMILTON -As I understand it, it is broader than that. It encompasses the terminally ill.

SENATOR WALTERS -It never ceases to amaze me why terminally ill patients have been penalised for the fact that heroin is a drug of abuse and why quantities cannot be isolated for the terminally ill, because it is such a wonderful drug , particularly for cancer patients who are in a lot of pain and to whom it can be of great benefit.

MR HAMILTON -Former Senator Baume recommended a new regime in relation to drugs generally for the terminal ill-basically with the exception of drugs that are on schedule 9 of the prohibited imports list which includes heroin- whereby they should be made available. You are drawing attention to the fact that heroin should be included on that list. That is a proposition that could be examined. All I can say right now is that government policy is to continue to include heroin on the list of prohibited imports.

SENATOR WALTERS -It was because of former Senator Baume's recommendation that I asked the question. You said you are implementing all his recommendations?

MR HAMILTON -Yes. As I understand it, he did not recommend that heroin be taken out of schedule 9. He simply said that, with the exception of drugs that are in schedule 9, we should allow people to use drugs in terminally ill cases.

MR ROCHE -Senator Baume made a recommendation that went to the provision of drugs to-

SENATOR WALTERS -Or any therapeutic drug. I did not understand that it was accepting those in schedule 9.

MR ROCHE -I have since spoken with Senator Baume about this recommendation. His view was that he did not intend it to include drugs that were in schedule 9. Heroin is in schedule 9 along with a number of other drugs, including cocaine, LSD and so on. He certainly had no intention that those drugs be provided freely to patients.

SENATOR WALTERS -It is not suggested that they would be used freely, is it? His recommendation is provision for terminally ill patients in consultation with their doctors. Which Senator Baume are you talking about?

MR ROCHE -Professor Peter Baume. I am rather used to addressing him by his other title when in this room. Professor Peter Baume said that it was not his intention that those drugs included in schedule 9 be included in that recommendation.

SENATOR WALTERS -I asked whether any thought has been given to using that and you have told me only to the opening up of heroin for drug users.

MR ROCHE -There is no other work being done on the issue. We certainly looked at whether there should be any restriction. It seemed to us that schedule 9 was a fairly logical exclusion from that recommendation, a proposition which we subsequently tested with Professor Baume. He agreed with us.

SENATOR WALTERS -Is there any reason why heroin should not be made accessible for only the terminally ill?

DR PRIMROSE -There is little evidence that heroin is superior to morphine as an analgesic for the terminally ill patient. Heroin is metabolised completely to morphine 10 minutes after its administration. It is really a different way of administering morphine. I should point out that the sustained release preparations of morphine sulphate has made quite a difference to the management of patients, particularly those with chronic pain due to terminal malignancy.

SENATOR WALTERS -I do not question the fact that morphia can deal with the pain as efficiently as heroin can. That was not my claim. Having used both on terminally ill patients, there is no doubt in my mind that morphia has the true drug effect where the person lapses into semi-consciousness and does not know what is going on whereas heroin keeps the patient very clear of mind enabling that person to be comfortable but mentally alert. There is just no doubt in my mind that that is the difference. That is why I think heroin ought to be included for the terminally ill cancer patients particularly.

DR PRIMROSE -I do not know what the pharmacological explanation for that would be because the drug is metabolised to morphine. In my clinical experience of treating several hundred patients with cancer who are in the terminal phase, the majority become resistant to the sedating effects of morphine quite rapidly. The lapse into a coma is an agonal event.

SENATOR WALTERS -There is a lot of evidence to suggest that heroin ought to be made available. Obviously, we will not convince each other on that matter.

MR ROCHE -We have some answers to the questions that Senator Patterson raised on the export only drugs.

DR CABLE -Senator Patterson sought advice on the number of export only applications that are on hand and that we had listed. We had listed 230-I think I said 219, so I was not too far off. On hand we have 350 at this point in time. The average time taken to list the initial 230 has been 40 calendar days. Clearly there is a difficulty that needs to be addressed over the next month or there could be some potential difficulties on 15 October.

SENATOR PATTERSON -You have given me one suggestion that you will do the drugs that the companies have put on as priorities. What else will happen to get them through?

DR CABLE -We will have to devote as much in the way of resources to this problem. I would be asking the staff how we will deal with this problem. If it takes 40 calendar days and there are 350 drugs on hand, given that some of those have been on hand for part of the time, one would assume that we will still be getting applications towards the end of the period where a 40- calendar day processing time would not be available to the company.

SENATOR PATTERSON -I would have thought that the Department would have fully briefed you on those figures since 80 more than the number you have already processed are involved. I asked you before whether any manufacturers would be disadvantaged as a result of this delay. Do you think you will need a further extension of the deadline?

DR CABLE -Yes; you raised that before. We do not envisage any general extension of the deadline. I anticipate that the majority of these drugs lie with two companies. We will be discussing the problem with them. I hope it is under discussion now. I had discussions with one of the major export manufacturers three or four weeks ago when this was not the situation. I knew exactly how many drugs it had, how many it had in the pipeline and how many could be dealt with each week in the way of proper applications. It would appear that we have received quite a lot in the past few weeks.

SENATOR PATTERSON -Does it seem more of a problem than you thought when I asked the question?

DR CABLE -I think it is. I accept that.

SENATOR PATTERSON -I hope that you come up with some way of resolving it.

DR CABLE -We certainly intend to do that.

SENATOR PATTERSON -That is why I needed the answers.

DR CABLE -I take your point.

MR ROCHE -We are certainly conscious of the difficulties and will do our best to work the matter through with the companies concerned.

SENATOR PATTERSON -It appears that Dr Cable was not conscious of the matter until now. Hopefully this discussion will make him more conscious of it and people will not be disadvantaged by the fact that even though the applicable date is 15 October, a lot of applications are still pending.

SENATOR MCMULLAN -I wonder whether, to suit my convenience and to avoid any possible argument about process, subprograms 6.2, 6.3 and 6.4 could be dealt with before subprogram 6.1. In that way there will no question about any discussion regarding policy matters occurring when I am not here. We have re- arranged other parts of the program. I wonder whether we could do that.The subprograms would all still get done. It would just be more convenient for me if that were the sequence.

The subprograms will all still get done. It would just be more convenient for me if that were the sequence.

SENATOR WALTERS -What are you expecting to be controversial in 6.2, 6.3 and 6. 4?

SENATOR MCMULLAN -No, it is the other way round.

CHAIRMAN -He wants to do the policy subprograms later on.

SENATOR MCMULLAN -I am about to leave. Let us do 6.2, 6.3 and 6.4, starting now.

CHAIRMAN -You are putting to us that we look at the pharmaceutical benefits scheme, financial support to service providers and strategies in performance information.

SENATOR MCMULLAN -Correct.

SENATOR PATTERSON -If I may be indulged, when I asked a question about the privacy issues relating to the data held by the Health Insurance Commission under program 9, I was told to go back to program 6. Is it possible to deal with that now? It deals with subprogram 6.1 and 6.2, so it covers the whole lot.

SENATOR MCMULLAN -As far as I understood, that was part of 6.2 and I was expecting that to come up now. I do not have the detail about it, but that was my procedural understanding.

CHAIRMAN -Let us start on that and see where we go from there. Then we will go on to 6.2 and 6.3.

SENATOR PATTERSON -I ask this question again. Over the last two or 2 1/2 years , since the pharmaceutical benefits scheme went to the Health Insurance Commission, I have obviously been asking questions about data. At this Estimates last year, the Department said that, as a result of those questions, it was going to format a policy in relation to the depersonalisation of health-related information. Mr McNeil, could you tell me what has happened in regard to that?

MR MCNEIL -The Department sent a draft information data policy to the Privacy Commissioner on 21 May. The Privacy Commissioner has responded in a letter dated 31 August 1991, wherein he has indicated general agreement with the thrust of the policy. He has raised a couple of minor issues which will need to be dealt with in further consultation with him. We hope to have further discussions with the Privacy Commissioner over the next month or two and finalise the policy by the end of this calendar year.

SENATOR PATTERSON -Has the Department had any consultations with any health, research or privacy agencies other than the Privacy Commissioner in forming this policy?

MR MCNEIL -Not other than with the Privacy Commissioner at this stage.

SENATOR PATTERSON -Will you be having consultations with groups representing, say, epidemiologists or people who might want to use that information for research?

MR MCNEIL -Yes, senator. We will be, but that will not go to the detail-for example, how long the Health Insurance Commission will hold the data. It will go to how long the Department holds depersonalised data.

SENATOR PATTERSON -Could you repeat that?

MR MCNEIL -There are two parts to the data policy. The first part is in relation to how long the Health Insurance Commission will hold the data, which is in a form which enables the Commission to identify who the person is. The second part is on how the Department holds the data. The Department will be holding the data in a form which does not enable us to identify who the person is. It will be holding the data based on the internal PIN number with no reference back to the Medicare provider files. We will not know who that person is. That data will be held by us and used for various research and analytical purposes. That is the data which would be of relevance to epidemiological studies rather than data which will identify individuals.

SENATOR PATTERSON -So what function will that PIN number have if it is not able to be coded back to the Medicare number?

MR HAMILTON -It will not be coded back by the Department. That is the point that Mr McNeil was making. It will be a number which will enable you uniquely to identify that that is person X; so you can trace person X, but there is no way of knowing who person X is.

SENATOR PATTERSON -That sounds a bit like Alice in Wonderland stuff. Maybe that is because I am getting tired.

MR HAMILTON -If we are trying to do longitudinal studies about what happens with certain interventions, we need to be able to trace that intervention to a person.

SENATOR WALTERS -Can you give us an example from go to woe?

MR HAMILTON -If you want to trace the long term effect of a certain treatment, you might want to know that that person was treated 10 years ago and that the treatment is still not effective. You need to know that that person is still receiving the treatment when it is meant to be a short term treatment. You need to know who that person is, but you need to know that that person is still under what is meant to be short term treatment.

SENATOR WALTERS -How could you not know?

MR HAMILTON -We have the number delinked. We do not have it identified as to who person X is. Precisely the issue of making absolutely sure that there is no way we can do that is the nub of the guidelines, the nub of the process that Mr McNeil has been outlining.

SENATOR PATTERSON -You are saying to me that any more information that comes in on person X would go into the file of person X. You are building up information about a person, but you would not know that that was person X. It is building up a profile on that person.

MR HAMILTON -Without having any way of finding out that person X is Joe Bloggs .

SENATOR PATTERSON -I can understand what you are saying. When you depersonalise the number, you still have a way of compounding the information from after the depersonalisation, of adding information to that person's file.

MR HAMILTON -Without being able to know who the person is; that is correct.

SENATOR WALTERS -This is done using a number.

MR MCNEIL -Yes, senator. The way it works is as follows. Ever person is given a Medicare card number. The HIC computer generates an internal PIN number, and the data is retained against that PIN number rather than the Medicare card number. The Health Insurance Commission, in its Medicare enrolment file, has a reference to which PIN number relates back to which Medicare number so that it is able to track services on the basis of an individual. The data that comes to the Department is only against the PIN number. We have no access to the link between the PIN number and the Medicare card number, because the PIN number in relation to the Medicare card number is constant. The data on person X will be constant over time.

SENATOR PATTERSON -It is most probably better not to have a long discussion here about it. I am sure it will all come up when the number is in a more finalised form. I can see the problem now. I understand why you need to be able to keep that information going into that same person's file. Otherwise, you would not know that 30 years of taking a particular drug has caused effect X.

SENATOR HERRON -Will there be the same number of PIN numbers as there are Medicare numbers?

MR HAZELL -The Medicare number is not an individual number, as we have discussed before. It is simply a number of a card that is issued, on which one or more persons may appear, but each of those persons on a card will have a PIN.

SENATOR HERRON -We had evidence the other day of a patient who had 31 Medicare cards.

MR HAZELL -To the extent that that occurred, that person would have 31 PINs. Let me correct that. If perchance there were 31 totally separate identities, if the person had been defrauding--

SENATOR HERRON -If the person gave fictitious names for Medicare cards--

MR HAZELL -Then there would be 31 PINs. If it were two or three iterations of the same card, of course, it would be the same PIN.

SENATOR PATTERSON -If you have not read that section of Hansard on the pharmacy restructuring inquiry in Community Services and Health, you will find it to be quite interesting reading about a person who did that to obtain masses of laxatives and purgatives. It was delightful evidence.

SENATOR HERRON -Yes, laxatives. I recall the evidence produced of overprescribing, which I instanced. A photograph was produced of a kleptomaniac patient who required hundreds and hundreds of bottles of drugs. A similar psychotic personality obtained 31 Medicare cards.

SENATOR PATTERSON -He visited the doctor everyday to describe his last bowel motion. I felt sorry for him. We will look at that in more detail. What classes of records held by the HIC and the Department will have to be de- identified five years after the Privacy Commissioner's draft Medicare and pharmaceutical benefits guidelines are implemented?

MR HAZELL -The Commission holds information on a line by line basis for each service that it pays and passes that de-identified information to the Department. The records within the Commission will always be capable of identifying persons-hence the policy that they be retained only for a limited payment period of time. But those same records, as they pass to the Department , are de-identified for the Department's long term research and policy purposes. The Commission does not really have a need for de-identified data. Its functions require its data to be identified to it. So there is no proposal for data to be de-identified within the Commission.

SENATOR PATTERSON -It is de-identified after five years as far as the Commission goes?

MR HAZELL -It is destroyed; it is not proposed to be held any longer than five years. It is not quite right to call it de-identified.

SENATOR PATTERSON -When I asked you the questions originally, I asked how long you kept the data for. You said, `Since the inception of Medicare'. You indicated that it was kept in a form that was not a Medicare number; it was a number to which certain people in the Department had access. It could be decoded back to the Medicare number. When will it be in the position when you cannot decode it back, unless you suddenly find that with the taking of some drug-such as the drug women took in the 1950s when we started seeing problems in their daughters and sons at 20 years-you might want to be able to go back into it for the purpose of finding those people? I guess it has to be thought through.

MR MCNEIL -The only way you can go back and reconstruct would be to use the data that the Department holds on a depersonalised basis and for a process to be put in place to go back through the Health Insurance Commission and reopen the link between the Medicare card number and the pin number. That would require a policy decision to be taken where there was some very important reason why the data needed to be looked at and depersonalised.

MR HAMILTON -The draft guidelines deal with those issues and it is something which the Privacy Commissioner has looked at.

SENATOR WALTERS -Would that decision be made public before you did it?

MR MCNEIL -The guidelines do not cover whether it be made public or not. There is no reason why it could not be made that way. It is a case for rare circumstances. The intention is to protect the data and not have access on a personalised basis unless something exceptional happens. If something exceptional happens, there may well be a case for making that public.

SENATOR PATTERSON -I am trying to identify whether there has been a change. In our previous discussions it seemed to me that there were a number of people who could enter that data and link it back. You are now saying that after five years that will not be possible. Will that be the policy change that is occurring?

MR HAZELL -That plus the fact that the data that the Commission holds beyond five years will be discarded from its point of view. It will be held depersonalised by the Department. From the Commission's point of view, we will only hold data up to five years.

SENATOR PATTERSON -I am looking forward to those guidelines because I have taken a particular interest in this area. People I have discussed it with have been amazed that we have not thought about it as an issue. If we could have access to the guidelines as soon as they are available, that would be most useful.

SENATOR WALTERS -So if you want to do something urgent after five years, how do you code it back?

MR MCNEIL -If some exceptional circumstance came up, the Commission could release details of the Medicare card PIN link to the Department or, alternatively, the Department could pass its data back to the HIC to extract the information relating to the individuals. We would be holding the data beyond five years on a depersonalised basis against the PIN number. We could pass that data back to the Commission to enable it to do the extraction.

SENATOR WALTERS -Mr Hazell said the identification part was destroyed.

MR HAZELL -The data that we are talking about that the Department is holding is claims data. The links regarding the PIN and the Medicare number are held on an enrolment file which is not subject to five years. The person's entitlement goes on. That is a file that is held indefinitely at this particular stage. Within that enrolment file there is the ability to reconstitute, but the procedure would outline the conditions under which that would apply. It would be a circumstance initiated by the Department.

MR HAMILTON -For example, if drug A was under a cloud and you knew that X, Y and Z had been prescribed drug A and there was a claim in 1983, we would still have the record that drug A was prescribed to person X. In that very exceptional circumstance, Mr Hazell is saying that we can go back and say, ` Can you tell us who person X is? Can you make that link back?'. Whether or not you could depends on whether that person is still alive and still a claimant under Medicare. There would still be a Medicare file number for them. In that case, you could go back and relink person X to Joe Bloggs, and say that it was Joe Bloggs who took drug A in 1983. The whole thrust of the guidelines, as Mr McNeil said, is that we will not be able to do that except under exceptional and very public circumstances.

SENATOR WALTERS -When you say very public circumstances, how public?

MR HAMILTON -That is the sort of thing we have to talk about and settle with the Privacy Commissioner. The sort of circumstances we have talked about are in relation to royal commissions that go into particular treatments.

SENATOR WALTERS -I asked whether it would be made public and you said no. Mr McNeil said it could be but it does not have to be. How public would it be if there was an exceptional circumstance where you had to trace back several people?

MR HAMILTON -That is something that the guidelines are not clear on. It is an issue that we have to be clearer on. It has to be a matter that is tabled in Parliament in relation to a royal commission or something like that. I do not think that is covered in the guidelines at this stage.

MR MCNEIL -No, it is not covered in the guidelines at the moment. We will need to discuss it with the Privacy Commissioner to make sure he has no concerns about us releasing some information that could in turn infringe privacy. I would not think that would be a concern, given the exceptional circumstances we are talking about. That is an issue that we will raise with him.

SENATOR WALTERS -When are you discussing that with him?

MR HAMILTON -There are two issues there: making public the circumstance that we are doing it is one thing; making public the names of the people in relation to whom we are doing it is a totally different issue.

SENATOR WALTERS -I am not suggesting you make public the names of the people, but making public the fact that you are doing it is what I believe should be done, otherwise you could have the situation where it is abused. When are you going to discuss that with the Privacy Commissioner?

MR MCNEIL -We are hoping to have discussions with the Privacy Commissioner in the next month or so with the aim of trying to finalise this policy by the end of this calendar year. We will raise that when we have those discussions.

SENATOR WALTERS -Will you keep us informed of the result of that?

MR MCNEIL -Yes.

SENATOR PATTERSON -Which classes of records are held by the Department that this policy will apply to?

MR MCNEIL -The draft policy applies to the Medicare claims data and the PBS data. It also applies to the pre-Medicare medical data that the Department holds. Because the Health Insurance Commission runs Medibank Private as well as performing the Medicare and PBS functions, and because of concerns of the private health funds about that relationship, the Health Insurance Commission does not hold the data for pre-Medicare schemes.

SENATOR PATTERSON -I will not ask you again-I have forgotten how many classes of information you keep, but I guess I have a truckload of information I can look at-whether they are all the ones that ought to be looked at. Have you gone through all the others and justified why it will not apply to them?

MR MCNEIL -We are looking at other data holdings beyond the Medicare and PBS data. We have given priority to the Medicare and PBS medical data because of the size. They are universal schemes. We will look at any flow-on effects into other data holdings of the Department.

SENATOR PATTERSON -I will refresh my memory and go through all that stuff you gave me last year. I will look at other ones you may come up with.

SENATOR WALTERS -Under the agreement between the Pharmacy Guild and the Minister, which gave rise to the Pharmacy Restructuring Authority, there are some clauses which relate to the eventual possible sharing of costs of the restructuring. In simple terms, what is the detail?

MR MCNEIL -The clause in relation to sharing the cost of restructuring meant that the Commonwealth Government and the Guild would share the restructuring on a 50:50 basis, except that if the volume of prescriptions fell below a certain amount-which was below what the Government was estimating at the time the discussions took place with the Guild-then the requirement for the Guild to repay part of the restructuring costs would be diminished. Those discussions took place prior to last year's Budget. Obviously the impact of the Budget changes last year, in terms of the co-payment on pharmaceuticals for pensioners, has caused the volume of transactions to drop.

SENATOR WALTERS -You said last year's Budget?

MR MCNEIL -Last year's, yes.

SENATOR WALTERS -It had dropped before last year's Budget?

MR MCNEIL -The discussion that took place with the Guild that led to that agreement took place prior to last year's Budget being brought down. The Guild obviously wanted some sort of insurance policy in relation to other things the Government might or might not do in the Budget last year. The clause was included in the agreement so that if the volume of transactions fell below what the published figures had been up to that time then the Guild's liability to repay its share of the restructuring costs would be diminished, and there would also be an opportunity for an increase in the amount of the essential pharmacy allowance.

The fact is that with the changes that occurred in last year's Budget it is highly probable that the Guild will not be required to make any repayment or any contribution to a share of restructuring costs.

SENATOR WALTERS -At all?

MR MCNEIL -At all.

SENATOR WALTERS -It will just be the taxpayer?

MR MCNEIL -It will all be taxpayers' money in terms of restructuring, in the same way that the reduced outlays flowing from the reduced remunerations will also flow back to taxpayers.

SENATOR WALTERS -I think the Community Affairs Committee was told that the $2. 50 prescription charge would reduce the number of prescriptions by about 18 per cent. What is it now?

MR MCNEIL -We do not have any more reliable data than that to date. As I indicated to that Senate Committee, there is a problem in analysing the effect of the $2.50 co-payment because of the degree of hoarding which took place prior to it coming in.

SENATOR WALTERS -When did it come in?

MR MCNEIL -1 November last year.

SENATOR WALTERS -So we have had 12 months?

MR MCNEIL -We have had almost 12 months. Our estimate of the degree of hoarding is that about $60m took place prior to 1 November. That is not necessarily additional outlays; that includes bringing forward expenditure where people would have had scrips filled post 1 November.

SENATOR WALTERS -What percentage of prescriptions would that account for? You gave me a financial figure. What percentage would that be? I want a percentage that you thought created the hoarding.

MR MCNEIL -It was $60m worth of hoarding. It represents about eight million scrips. Pensioner scrips per annum total about 60 million, so it is about 12 per cent.

SENATOR WALTERS -What you are saying is that of that 18 per cent reduction in prescriptions, perhaps 12 per cent were due to hoarding?

MR MCNEIL -No. I think out of the 18 per cent in terms of total reduction-and bear in mind that was an 18 per cent reduction against the previous year's actual; the long term trend in relation to pensioner scrips has been a growth of about 5 to 6 per cent per annum-it is probably about a 24 per cent reduction without the charge. Some of that is the effect of hoarding and some is the effect of an ongoing reduction.

SENATOR WALTERS -I understand that. I am trying to get a percentage of what your estimate is of hoarding.

MR MCNEIL -At the time the co-payment was introduced, the estimated assumption was 15 per cent reduction in volume compared with what would otherwise have occurred. We are probably not going to know for another six to 12 months about the long term effects of co-payment because it will take that time for hoarding to work its way out of the system.

SENATOR WALTERS -You are saying two years?

MR MCNEIL -Yes. Some prescriptions have a very long shelf life. Until such time as we get to a stage where we are confident that the hoarding has worked out of the system, we will not be able to work out what the effect of the co- payment is.

SENATOR WALTERS -You really believe it will take two years to work its way out ? That is a very long time. People got prescriptions for a two-year supply? Is that what you are saying?

MR MCNEIL -In some cases, yes.

SENATOR PATTERSON -I went to a pharmacy one day and there was one man there with a pile you could hardly jump over.

SENATOR WALTERS -What is your estimate?

MR MCNEIL -The estimate is that the outlays growth prior to 1 November on pensioner scrips was about $60m more than it would have been otherwise, so our estimate is about $60m worth of extra scrips filled during that period. On the back of an envelope type figure, it would seem that about $40m was brought forward and another $10 to 20m was extra scrips which were just wasted.

SENATOR HERRON -Is that pensioners or concessional cards?

MR MCNEIL -The figures related to pensioners only. The concessionals were not affected. They had been paying $2.50 prior to 1 November, so there is no change and no reason for them to be hoarding.

SENATOR PATTERSON -You are saying that your back of the envelope calculation is that $20m will have been bought to hoard. Then they have lost them or the scrips have passed the use-by date, or whatever?

MR MCNEIL -Or their medical condition has changed and the doctor has changed the treatment regime.

SENATOR HERRON -You are saying that all that hoarding is due to pensioners?

MR MCNEIL -To pensioners.

SENATOR PATTERSON -Just for interest sake, I would be interested to know the figures for prescriptions dispensed to pensioners for March and April-I think we have got them for February-May, June, July, August and September of this year. You may not have the September figures, but up to August, and similar figures for last year.

SENATOR WALTERS -I am going to ask a more extensive question for that information.

MR HAMILTON -We can provide those figures, but the point is that for Mr McNeil to draw conclusions from them would be specious.

MR MCNEIL -There are processing delays in terms of pharmacists lodging claims and also in terms of HIC processing times, et cetera. So the most reliable figures we have are probably up to the end of June. Even July and August figures would be very much preliminary at this stage.

SENATOR PATTERSON -When we got the figures last time, Mr Hamilton, I think there was a qualification; we all accept that. But our interest is to watch the wash through of what the effect has been.

MR HAMILTON -We will provide them up to the end of the time when we think the figures are reliable, which we rather think is June.

SENATOR WALTERS -The HIC requires the PBS returns, so you have got them very accurately month by month, have you not?

MR HAMILTON -Once they have been received. Sometimes it takes time for them to be received and processed.

SENATOR WALTERS -Are you able to get us accurate figures month by month? Can the Commission make available to the Committee monthly figures showing the total number of NHS prescriptions on a State by State basis?

MR MCNEIL -We can certainly provide you with a break-up State by State.

SENATOR WALTERS -Can you do it for each month since June 1989?

MR MCNEIL -Yes. That will not be a problem.

SENATOR WALTERS -Do you have any figures in relation to the number of non-NHS prescriptions which are filled and, if so, could these figures be made available on the same basis?

MR MCNEIL -We have some estimates in total in relation to prescription drugs. Those items that used to be subsidised which fall under the $15 cut-out point patient contributions, we can get you an estimate on those. If you are looking for figures beyond that in relation to over the counter drugs, we do not have those figures available to us.

SENATOR WALTERS -No, not over the counter drugs.

MR HAMILTON -Do you mean prescription drugs that are not on the PBS?

SENATOR WALTERS -Yes.

MR HAMILTON -We do not have information on those drugs.

MR MCNEIL -No. The most reliable data we would have would be estimates related to those drugs which are on the PBS where they fall below the maximum patient contribution, so there is no subsidy paid in relation to them. But where a drug is not listed at all on the PBS but filled completely as a private scrip, we would not have any data on that.

SENATOR WALTERS -So that means you have no idea what the usage of certain drugs is that are not on the PBS?

MR MCNEIL -That is correct.

SENATOR WALTERS -Is that a big hole in your data collection?

MR HAMILTON -If you are looking at national data on the usage of prescription drugs, indeed, it is a hole. But since we have no responsibility for subsidising them, it is unclear on what basis we could seek information, constitutionally.

SENATOR WALTERS -But if you are finding that one particular drug is used extensively, it may well come to your attention that that drug perhaps should be on the PBS because it is a very valuable drug and therefore one that you should be subsidising.

MR HAMILTON -The manufacturers, the colleges, and the Pharmaceutical Benefits Advisory Committee go through that process all the time. We hear that a certain drug is a high use drug; it is very effective; and that it should be on the PBS, et cetera. I do not know that we need individual figures on that and we do not have a way of gathering that information.

SENATOR WALTERS -So you do not have any figures you could check their submissions against?

MR HAMILTON -No. We have no lever, as it were, to get those, other than being invasive of privacy, if I may say so.

SENATOR WALTERS -You are joking!

MR HAMILTON -We have all our figures in relation to a subsidy program. We spend a vast amount of taxpayers' money on the pharmaceutical benefits scheme. Therefore we have, if you like, a right to know information about that. In relation to drugs where we apply no government subsidy, we have no lever, no way of getting that information.

SENATOR WALTERS -Where is your privacy concern?

MR HAMILTON -There is a privacy concern about the fact that we have a script that says that a particular person has been prescribed drug X. That is a privacy concern. The balancing public interest consideration is that the taxpayer is spending a power of money and therefore it is fair enough that we know that that drug is prescribed. We spent time earlier in the Committee saying that we have to have a whole series of checks; there is always a balance of interest. In relation to a drug where we are providing no public subsidy, the balance of interest lies differently. Why do we need to know about people who get that drug?

SENATOR PATTERSON -I will ask that question in a slightly different way. It seems to me from a health promotion point of view, if you are looking at another angle, that one does not need to know that Mrs Bloggs is taking a particular drug, but do you have any information in the Department about the quantity of non-prescription drugs made available?

MR HAMILTON -There is no formal routine information. Research studies are done from time to time which we fund that look at the usage of the drugs. But in terms of routine by-product of administrative systems, we do not have reliable data on the precise number of prescriptions.

SENATOR PATTERSON -So if it were found that taking a particular compound was detrimental, we would not know whether it was worth spending taxpayers' money advertising and telling people about it because we would not know whether there were a large number of people taking it or a small number of people taking it?

MR HAMILTON -In relation to adverse reactions to drugs, we have the ADEC reporting system. So there is reporting by clinicians that a certain drug has been taken and that a certain number of adverse reactions are being registered . So we know about that to the extent that the reporting system works.

SENATOR PATTERSON -I will ask you about something slightly different. Just say a body of research comes out that says that a particular drug which we thought was not a problem is a problem. Would we not need to know fairly readily the level of the taking of that drug in order to decide what degree of advertising should be done?

MR HAMILTON -If there were a problem, I imagine we would take that up with the manufacturer and the manufacturer would have figures about the amount of that drug that is sold.

SENATOR PATTERSON -So you could obtain some guesstimate of the level of the consumption of that drug, given the fact that people buy stuff and do not take it?

MR HAMILTON -That is right. If there were a problem, we would go to the manufacturer through the TGA.

SENATOR PATTERSON -So you would have a way of finding out; that is all I am asking. It seemed to me in the answer you gave Senator Walters that you were saying, `It is not our responsibility and we would not know and we do not need to know'. But I think you are agreeing with me that if a situation such as that arose, it would be appropriate to get the information--

MR HAMILTON -I was talking about the routine collection of data on individual prescriptions; that is something we have no need to know. Where there is a problem, we have ways of getting the information.

SENATOR PATTERSON -Yes. I can understand that.

SENATOR WALTERS -The concern expressed by many pharmacists-and I am sure you have heard it expressed-is that patients arbitrarily choose which prescription they will have made up because they are not prepared to have each one made up and pay their $2.50 for each one. Is there a concern in the Department about this claim?

MR MCNEIL -There would be a concern if there were evidence that patients were not taking necessary medication because of the price barrier. However, whilst there has been some anecdotal comment from pharmacists, which you have referred to, there is no evidence that I am aware of that patients are not taking the medication they should be taking.

SENATOR WALTERS -Have you sought that evidence?

MR MCNEIL -A process is being set up to evaluate the effect of the $2.50 co- payment introduced last year. As I said earlier, that will take some time to evaluate. That will include looking at whether it has had an effect on health status.

SENATOR WALTERS -You are setting up a review to do what?

MR MCNEIL -To evaluate the changes in last year's Budget in relation to pensioner charges.

SENATOR WALTERS -To look at what? What is the review meant to look at?

MR MCNEIL -It is an evaluation to look at the impact in relation to usage patterns. From that we will flow into looking at particular drug groups, whether there is any difference in sedatives versus antibiotics versus hypertensive drugs, or whatever, as to where the impact in volumes is. We will see whether that provides any indication of potential concern about people not getting access to necessary drugs. We will look at some further follow-up work associated with that. So that will take some time until we get decent data patterns about what is happening, once the effect of hoarding works its way out of the system. Obviously the changes last year affecting pensioners were very significant. There was a significant change to a major program and it will have to be evaluated.

SENATOR WALTERS -How long will it take?

MR MCNEIL -It will probably take at least another 12 months before we get a decent evaluation out of it.

SENATOR WALTERS -When was this evaluation review set up?

MR MCNEIL -The evaluation work is proceeding internally to design the protocols for the evaluation. We have also designed systems in relation to what data we want to extract out of computer systems to provide the first stage of the evaluation. But until such time as the actual data is better and hoarding has worked its way out of the system, the evaluation cannot be completed.

SENATOR WALTERS -Could you say that again for me? I just asked: when will this evaluation commence?

MR HAMILTON -It has commenced in terms of design of systems. But the very reason that we cannot have a reliable estimate on savings to expenditure is the same reason that we cannot have reliable estimates on the effect in terms of which drugs are being used. The fact that prescriptions in a particular drug group have gone down a lot could be because the drug was hoarded or it could be because indeed there has been a real decline in the use of that drug group. We have to get the long term trend in the use of that drug group and then make an assessment about why there has been a long term decline. We have to decide to what extent that is a drug that pensioners clearly should still be having and perhaps are not having because of the $2.50 or, to a lesser extent, whether that is a drug that we are getting rid of the unnecessary usage of. That is the sort of thing that we cannot do until we have that baseline data.

SENATOR WALTERS -Have you had any evidence from doctors that they are concerned that patients do not have prescriptions filled that they consider essential?

MR MCNEIL -There have been no such representations to us from any of the professional bodies, either from the AMA or the Royal Australian College of General Practitioners.

SENATOR WALTERS -No, I said from doctors generally?

MR MCNEIL -I would have to check, but I am not aware of any representations from individual doctors to that effect.

SENATOR WALTERS -We have had evidence on our Committee and I was wondering whether you have.

MR MCNEIL -I am aware of that case.

SENATOR WALTERS -Yes, I think the Department was there.

MR MCNEIL -There was certainly someone there observing. I understand it was claimed that there may have been an impact, but this particular patient had other factors which could have influenced his or her willingness to take the drug. I believe that is what the doctor was saying.

SENATOR WALTERS -Perhaps we are talking about different ones. He gave evidence to us that his concern was that the patient arbitrarily chooses and does not always choose correctly.

SENATOR WEST -Have patients not been arbitrarily choosing for years?

SENATOR WALTERS -No, not when they have not had to pay.

SENATOR WEST -My dealings with the psychiatrically ill, particularly the schizophrenics, indicate that they have a chronic history over the years of choosing whether or not to take medication.

SENATOR WALTERS -No, we are talking about something totally different.

SENATOR WEST -I am quite aware of what we are talking about, because we have already been through this in another Committee.

SENATOR WALTERS -That is right. That is exactly what I am saying. I am just wondering whether there is any concern on the part of the Department that we are now getting evidence that it is not patients with psychiatric problems, but ordinary pensioners, because of the additional cost-for that reason alone- who are making decisions on which drug to get, and the decision is not always a good one.

MR MCNEIL -I have a couple of points on that. Firstly, the pensioners were given a pension increase to compensate for the effect of the charge.

SENATOR WALTERS -I understand that.

MR MCNEIL -We would be concerned if there was evidence that people were not taking necessary medication. To my knowledge, the Department has no evidence that that is occurring. We will evaluate that down the track. I am not aware of wholesale complaints, or even any complaints or representations from individual doctors to the Department to that effect.

SENATOR WALTERS -I asked whether you had sought the evidence, and you say no, not yet, but that a review will be set up to evaluate it. I am saying that it will be two years before we are aware of whether pensioners are indeed drawing back from having necessary prescriptions filled.

MR MCNEIL -It will be two years before we have comprehensive information. If there was a significant problem occurring, I am quite sure we would pick that up through either the State hospital network feedback or the professional bodies of the medical profession.

SENATOR WALTERS -We will have to wait and see.

Sitting suspended from 12.46 p.m. to 2 p.m.

SENATOR WALTERS -Do you know whether the Commission at any stage quantified the likely magnitude of the result of the reduction in demand of prescriptions ?

MR MCNEIL -The Health Insurance Commission?

SENATOR WALTERS -Yes.

MR MCNEIL -In relation to which measure?

SENATOR WALTERS -The reduction in prescriptions.

MR MCNEIL -There were a number of different measures involved. The one we were talking about earlier this morning related to the $2.50. The estimate for that, as I said this morning, was that that would result in a 15 per cent reduction in utilisation.

SENATOR WALTERS -But was it forecast before it was brought in? Was it ever forecast-by the Department or anyone?

MR MCNEIL -The 15 per cent assumption was certainly used by the Government at the time it took the decision.

SENATOR WALTERS -So you are saying it is spot on what you thought it would be?

MR MCNEIL -I am saying at this stage it is too early to tell what the final result will be, but the indications are that it will be of that order of magnitude.

SENATOR WALTERS -When did the discussions commence with the Pharmacy Guild in relation to the restructuring of the pharmacy industry?

MR MCNEIL -I think there was a series of discussions with the Pharmacy Guild dating back to about May 1989, based on the fact that around that time the Pharmaceutical Benefits Remuneration Tribunal was conducting an inquiry into the cost of dispensing and looking at what should be happening with dispensing fees. Discussions took place in that context and continued over a further 12 or 18 months, at which time there was a fairly protracted dispute between the Government and the Pharmacy Guild. Then, prior to the last Budget, discussions took place between the Guild and the Government about a revised package based around a new dispensing formula and restructuring proposals.

SENATOR WALTERS -When those final negotiations took place with the Pharmacy Guild just prior to the signing of the agreement, was the Department aware that the $2.50 was going to come in? That is what I am trying to establish.

MR MCNEIL -There are a number of stages in this. Discussions took place prior to the Budget and there was an exchange of correspondence between the President of the Guild and the Minister. The formal agreement was not signed until 6 December 1990. But the actual exchange of letters between the President of the Guild and the Minister about the Guild's intentions and the Government's intentions took place prior to the Budget.

SENATOR WALTERS -I am asking whether, before the signing of the agreement between the Guild and the Department, any discussion had taken place between the Department and the Minister on the $2.50.

MR MCNEIL -I cannot reveal what discussions took place between the Minister and the Department about a Budget initiative. I can say that at the time discussions were taking place with the Guild there was media speculation about the pensioner charge and it was made clear to the Pharmacy Guild that it would have to make a judgment about what agreement it wanted in the context that the Government could be making changes in the Budget which we could not provide details about.

SENATOR WALTERS -So before the signing of that agreement the Pharmacy Guild was aware that a charge was likely to be made?

MR HAMILTON -We cannot say what the Guild was aware of. It had to make its judgment. We made it clear to the Guild that we could not tell its members about the Budget; the Guild had to make its judgment about what that meant.

SENATOR WALTERS -It knew it was in the wind?

MR HAMILTON -It was in the wind in public speculation. It had to make a judgment whether that speculation was well founded.

SENATOR WALTERS -I presume that the Department knew that the $2.50 was going to be implemented and that therefore there would be a drop in prescriptions, which certainly would have influenced the negotiations with the Guild at that time had its members been aware of it. It has really affected members of the Guild.

MR MCNEIL -As you raised earlier this morning, there is a clause in the agreement about the effect of the volume being lower, and that is an insurance policy the Guild wanted as part of the conditions of signing the agreement.

SENATOR WALTERS -But the other negotiations were done on the volume of prescriptions and the Guild was not aware, as far as I can see-the pharmacists certainly were unaware-that there would be a big decrease in the number of prescriptions, leaving out the pharmaceutical restructuring. The number of prescriptions that would be filled would be vastly reduced. The Department was obviously aware of that, but the pharmacists were not. What influence would that have had on the negotiations had the pharmacists been warned about that likely occurrence?

MR MCNEIL -I cannot speculate about what would have happened if circumstances had been different.

SENATOR WALTERS -Had they been informed of the likely course.

MR MCNEIL -All I can say is that the agreement does include a provision for changes in relation to the Guild's liability in the case of the volume scripts being lower than estimated. It was a clause that was requested by the Guild and one can only take the view that it asked for that because it realised there was a possibility that the script volumes could change.

SENATOR WALTERS -I am aware of that on the restructuring side of it as far as the number of pharmacies is concerned. I am talking about the money coming in as per prescription. If it was done on the volume at the time, it would have been different.

MR MCNEIL -The agreement is a package approach covering the remuneration and the restructuring.

SENATOR WALTERS -Thank you.

SENATOR PATTERSON -I have some questions on the pharmaceutical benefits scheme and the program performance statements. Page 200 of the program performance statements says one of the strategies of the PBS is to:

Encourage medically appropriate and cost effective prescribing by . . . developing a proposal to publish an Australian National Formulary, which will provide prescribers with more thorough, unbiased information on pharmaceutical substances for Australian conditions.

Can you give me an outline of this proposal?

DR PRIMROSE -Last year the Pharmaceutical Benefits Advisory Committee became interested in the concept of an Australian national formulary because it had seen the British national formulary, which it recognised as being an excellent book in promoting rational prescribing amongst British doctors. There are a number of steps involved in the production of the formulary and we are still in the very early stages. However, we have done, though, a market survey of Australian doctors where a sample of one in 15 Australian doctors was surveyed to obtain their opinions on the best format for such a book and what information it should contain. Those survey forms have been returned and are currently being analysed by the consultant that we put on for that purpose. So the results of the survey are still not available.

SENATOR PATTERSON -Have you any idea, if you are going to publish this, when you might publish it?

DR PRIMROSE -The result of the market survey will be available for the next PBAC meeting. Concurrently with this, I understand the Pharmaceutical Society of Australia and the Australian Society of Clinical and Experimental Pharmacologists and Toxicologists have become interested in revamping the APF, the Australian pharmaceutical formulary, into a national formulary type text, so it may be that those organisations will continue with this process. What we may do is hold a workshop early next year and get all the interested parties together to discuss this project further to get a consensus on the best way to proceed. So it is still in the embryonic stage.

SENATOR HERRON -What makes that different from the MIMS annual?

DR PRIMROSE -There are three main alternatives to the information such a drug reference could have. It could simply be a therapeutic classification of drugs ; it could be a source of drug information, which is what the MIMS annual is; or it could be a set of guidelines as an aid to the selection of the best drug for a given indication. The preliminary results of the survey indicate that the majority of doctors would wish the formulary to be a source of drug information like the MIMS annual, but a significant minority also wanted to have information about selecting the best drug for a given indication. It is likely that when we produce this text we may be able to incorporate both of those types of reference in the same volume, or else as a two-volume set.

SENATOR HERRON -Would you envisage this costing the taxpayer anything?

DR PRIMROSE -As I say, the Pharmaceutical Society and ASCEPT are interested in producing such a text, I think on a commercial basis, so we perhaps would encourage them to produce a high quality product, but we would not be involved in financing it.

SENATOR PATTERSON -On page 201, another strategy of the Department to facilitate efficient and effective delivery mechanisms for pharmaceutical benefits is by monitoring claims by consumers of overcharging by pharmacists and, if necessary, by taking appropriate action. Have you any details of the number of complaints that have been received by the Department of supposed overcharging?

MR MCNEIL -I do not have the statistics with me, but there are a number of calls to our 008 information line with queries about overcharging. In some cases, the complaint relates to the margin which is allowable anyway when pharmacists have not overcharged. In other cases, there has been overcharging. The Prices Surveillance Authority also conducted a review of pharmacists' charging patterns, and the Department has undertaken surveys from time to time about charging practices.

SENATOR PATTERSON -Can we just go back. What would be the proportion of calls to the 008 number that are about legitimate overcharging out of all the calls that you get?

MR MCNEIL -I do not have that information with me. We can find that out for you.

SENATOR PATTERSON -Is that possible to get by somebody making a phone call?

MR MCNEIL -I am not sure how readily available the information is. It would have to be extracted from various files, so it may take some time.

SENATOR PATTERSON -You have no idea then?

MR MCNEIL -I think the more reliable source is the survey we have had conducted.

SENATOR PATTERSON -If you are going to go on to that, so I do not forget, you talked about the second survey of the Prices Surveillance Authority. What was the result of that survey?

MR MCNEIL -They had a number of complaints and they issued a report, of which we can obtain a copy for you.

SENATOR WALTERS -What is overcharging?

MR MCNEIL -Under the agreement with the Guild in relation to those drugs which are below the maximum patient contribution, that is below $15, the agreed formula is that the pharmacist can charge-based on the price to the chemist, plus the dispensing fee, plus the margin-up to $2 on top of that, and they can also discount below that. A number of pharmacists are charging above that. For example, if the formulary suggested drug should be $12, some are charging a flat $15.

SENATOR WALTERS -Did the Government not give them permission to charge more than that if they wanted to?

MR HAMILTON -The $2 mentioned is, as it were, the agreed area of charging discretion. Mr McNeil mentioned there was a $2 figure. They could charge up to $2 over the list price or they could discount. So we do not count as overcharging anything that goes less than $2 over the list price.

SENATOR WALTERS -What is wrong with a pharmacist charging over that amount? Is there any action the Government takes?

MR MCNEIL -If they charge above that, the problem is that it cannot be recorded on the patient record form and count towards the safety net. In relation to action, the Minister has raised his concerns about overcharging with the Pharmacy Guild. The Pharmacy Guild has advised its members, I understand, that they ought to comply with the agreement which was reached between the Government and the Guild.

SENATOR PATTERSON -There are 20 per cent of pharmacists who are not members.

SENATOR WALTERS -What about the hundreds of chemists who are not members of the Guild? The Government, for some strange reason, sends information out through the Guild. That is appalling, because the Guild does not send it on to the 20 per cent of pharmacists, as Senator Patterson just said, who are not members of the Guild. It is unbelievable.

MR MCNEIL -The difficulty in dealing with this is what constitutional power the Commonwealth has and has not available to it.

SENATOR PATTERSON -I think what Senator Walters is saying-and I do not think we will debate constitutional powers-is that advising pharmacists of their responsibility would seem to be a legitimate thing for the Department to do, surely, to remind them what they are allowed to charge. Are you trying to say to me that it is not within the Department's power or right to write a letter to pharmacists telling them what they are expected to do in terms of charging for those?

MR MCNEIL -All I am saying is that it is not within the Commonwealth's constitutional power to dictate what they shall charge for a drug which does not receive a subsidy from the Commonwealth. We can tell them the conditions in relation to the pharmaceutical benefits scheme such that if they charge above the agreed formula it cannot be recorded on the patient record form and therefore count towards a potential subsidy under the safety net. We have no power to compel a pharmacist to charge a particular fee.

SENATOR PATTERSON -So you are saying that pharmacists are overcharging?

MR HAMILTON -Some pharmacists.

SENATOR PATTERSON -Some pharmacists are overcharging. You say in the program statement `as necessary, to take appropriate action'. What would that appropriate action be?

MR MCNEIL -I have mentioned already that the Minister has raised his concerns with the Guild. I take your point that not everyone belongs to the Guild. He has raised it with the Guild. The Minister will consider what further action may or may not be necessary depending on what the results of our latest survey show.

SENATOR PATTERSON -It would seem to me to be more appropriate for the pharmacists to be advised that the Department was concerned about overcharging . You have every right to write to them and say that there has been concern about overcharging and that is what was going on.

MR MCNEIL -A couple of things were done there. At the time the agreement was signed with the Guild, a copy of the agreement was sent to all pharmacists-not just Guild members but to all pharmacists-telling them what the agreement was and what the expectations were for pharmacists. The margin is recorded in the pharmaceutical benefits schedule book which was distributed to pharmacists.

SENATOR PATTERSON -That yellow book?

MR MCNEIL -Yes, the yellow book.

SENATOR WALTERS -Pure competition will deal with that; there is no need for the Government to interfere.

MR MCNEIL -The argument put by the Guild to allow the $2 margin was that competition would sort it out because they would also be able to discount below it and on average it should balance out. The evidence suggests that that is not occurring, particularly in some States.

SENATOR WALTERS -Maybe the patients are happy with the service and, therefore, they are prepared to pay that extra whatever it happens to be. As you say, the Government does not have the power to interfere and neither do I believe it should.

SENATOR PATTERSON -Earlier, Mr McNeil, I thought you were saying you did not have the power to write them to tell them that there was concern about overcharging. You are not saying that; you are saying that you could write. I am concerned that when the Pharmacy Restructuring Authority's first newsletter went out, 20 per cent of pharmacists did not receive it because the same method of communicating with the pharmacists was used. Do you have mail-outs to pharmacists on a regular basis for other reasons?

MR MCNEIL -There are periodic mail-outs from the Health Insurance Commission, which go to all pharmacists.

SENATOR PATTERSON -Something like a timely reminder that there was some concern would alert the other 20 per cent to the fact that the Department was going to be looking at this. I would think-and I do not expect you to give me an opinion-that that would be a reasonable thing for those 20 per cent of pharmacists. I want to go back to the matter involving the Prices Surveillance Authority. You kept saying `a number of people' have been identified as overcharging. Can you tell me the extent of the overcharging?

MR MCNEIL -The most relevant thing is our previous survey which we did-

SENATOR PATTERSON -Can we go back to the report of the Prices Surveillance Authority? What was the evidence on the level of overcharging for the Prices Surveillance Authority report?

MR MCNEIL -The Prices Surveillance Authority report recorded the instances of complaints to the PSA rather than providing any level of opinion about the level of overcharging across the board.

SENATOR PATTERSON -What was the extent of those complaints?

MR MCNEIL -There were several hundred.

SENATOR PATTERSON -How many sales would that involve? What was the estimated percentage of the number of sales versus the number of complaints about overcharging?

MR MCNEIL -That would be less than one per cent. You are looking at about 40 million scripts below the maximum patient contribution and about another-

SENATOR PATTERSON -Forty million, and we had a couple of hundred overcharging referred to the Prices Surveillance Authority?

MR HAMILTON -Mr McNeil has made the point that that is not particularly reliable evidence of the level of overcharging. That only counts people who both knew they were overcharging and felt so moved by that to do something about it, that is, let the Prices Surveillance Authority know. It is hardly reliable evidence.

SENATOR PATTERSON -When it was said before, it was not as clear that that was the level of overcharging. It might be evidence but it is not very strong. But I take the point that there are some methodological problems; that there might be a lot of people who have been overcharged who have not seen fit to make a complaint. I also think it was being used as evidence of overcharging and it is not all that strong, given that it has methodological problems. With regard to the survey we have been trying to get to, what evidence is there of overcharging?

MR MCNEIL -I cannot recall the precise figures but we can certainly get you a copy brought across today. It showed variations and it showed very high levels of overcharging in Western Australia. It showed something like about 70 per cent or 80 per cent of scripts being overcharged in Western Australia.

SENATOR PATTERSON -What about in the other States?

MR MCNEIL -South Australia was the best in terms of overcharging; I think it was down about the 20 per cent mark. In the other States, it was probably about the 30 per cent or 40 per cent mark.

SENATOR PATTERSON -Is there any reason why Western Australia is worse than the other States?

MR MCNEIL -It is not clear to us. We speculate that South Australia is better than the other States because of the existence of the Friendly Society pharmacies, which are in greater number in South Australia. We are not sure why Western Australia goes the other way.

SENATOR PATTERSON -Are there fewer members of the Pharmacy Guild in Western Australia?

MR MCNEIL -I am not sure what the percentage membership of the Guild is in Western Australia versus nationally.

SENATOR PATTERSON -How many pharmacists did you survey-one in every 15?

MR MCNEIL -We did not actually survey pharmacists. The survey firm surveys patients which then in fact record details. These patients log all the details of script which are filled and the price they paid for them.

SENATOR PATTERSON -How many patients are involved in this survey?

MR MCNEIL -Again, I cannot recall off the top of my head but we will get a copy of the report brought across for you, which has that detail in it.

SENATOR WALTERS -Would they have accurate recall?

MR MCNEIL -As far as I am aware. The surveys are conducted by an experienced survey organisation which uses these people for other purposes as well as doing market survey work.

SENATOR PATTERSON -Has the Pharmacy Guild seen the results of this survey?

MR MCNEIL -Yes. Their view was, if I recall correctly, that that survey would have been out of date because there was a hangover of the dispute between the Government and the Guild which would have influenced their charging patterns at that time, and the pharmacists would have improved since then.

SENATOR PATTERSON -Over which period of time was the survey done?

MR MCNEIL -The survey was done in February this year.

SENATOR PATTERSON -And they have made no other comment about the fact that if you did another survey, it would not be happening?

MR MCNEIL -That is their view.

SENATOR WALTERS -Is that particular survey in this list of contracts that you presented us with?

MR MCNEIL -It should be.

SENATOR PATTERSON -How much did it cost?

MR MCNEIL -I will find out for you; I cannot recall off the top of my head.

SENATOR WALTERS -Could you tell me where it is in this list? Who was it done by?

MR MCNEIL -It was done by Roy Morgan Research.

MR HAMILTON -It cost $42,300, and it is on the list.

SENATOR PATTERSON -Will we have a copy of that before we are finished?

MR MCNEIL -Someone is going out to ring the Department now to get a copy sent across.

SENATOR WALTERS -That was the $49,300 and that was done in all of the States?

MR MCNEIL -Yes.

MR HAMILTON -It is $42,300. It is not the one you are looking at, Senator; it is two below that.

SENATOR PATTERSON -Mr McNeil, do you have any details on how the Roy Morgan people chose their sample?

MR MCNEIL -They have a group of people, of patients, consumers or users, who they use to record details of various transactions. In the case of pharmaceuticals it is which scripts have been prescribed, where they got them from and what price they paid for them.

SENATOR PATTERSON -So they are a rent-a-buyer sort of group?

MR MCNEIL -You could possibly describe them that way.

SENATOR PATTERSON -Would you think that they were a typical cross-section of the Australian population? Are they people who have been randomly selected or do they self-select themselves by advertisement that they are interested in consumer affairs?

MR MCNEIL -They are selected randomly using the normal market research statistical techniques.

SENATOR PATTERSON -Then they are asked, `Will you keep participating in rent-a -buyer type surveys?'?

MR MCNEIL -Yes.

SENATOR PATTERSON -Even if they were random and they had begun, they might not be a random sample now?

MR MCNEIL -It depends how often the group is updated.

SENATOR PATTERSON -Do you know how often they have been used, since we are paying for this? Have we asked Roy Morgan whether they have been in three, four or eight studies?

MR MCNEIL -I cannot recall whether they were asked that.

SENATOR PATTERSON -I do not think they need to be asked. Did you ask the question when Roy Morgan gave you the survey? That is the sort of question I would ask if I were looking at evaluating a research project, because the sample will get biased. I think you would agree that, after a while, they become highly sensitised. The group conducting the survey may even know which pharmacists are overcharging and decide to go to those pharmacies to get their scrips filled.

MR MCNEIL -I would agree.

SENATOR PATTERSON -Because they have suddenly become interested in consumer affairs, they may say to Mrs Smith, `What are you doing now?'. She may reply, `I'm doing pharmacy'. They could then say, `I know Mr Bloggs in Manuka or Mr Smith in Kingston really hits you hard'.

MR MCNEIL -I agree that the group could get biased over time if it was not updated properly. I was not personally involved in the discussions when Roy Morgan was selected, so I do not know which questions were asked. But we have no reason to believe that his people conduct it in anything other than a professional manner.

SENATOR PATTERSON -I have no reason to think they do not, but sometimes these biases can creep into research projects without people noticing. It is much easier and cheaper to use the same people without going through negotiating for and training a new group. If a business is trying to conduct a survey, I can imagine that it would want to use a sample a couple of times. I would be very interested in looking at the details of that. I hope Roy Morgan outlines how the sample was selected and how often the sample has been used.

SENATOR WALTERS -Could you tell me the difference between the two surveys conducted by Roy Morgan? Two surveys were conducted to evaluate the impact of the pharmaceutical benefits scheme education campaign and the other survey looked at pharmacists' prescription medication charging patterns. One looked at charging patterns, what did the other do?

MR HAMILTON -The $49,300 survey evaluated the impact of the PBS education scheme.

SENATOR WALTERS -What result did it come up with?

MR MCNEIL -I would need to check that, but I think this is the survey which was conducted to ascertain people's attitudes to the pharmaceutical benefits scheme and pharmaceuticals as baseline research for the PBS education program which is taking place so that we could measure the results of the program by comparing before and after. I think that survey does the baseline research in order to identify attitudes prior to the education campaign.

SENATOR WALTERS -When was that done?

MR MCNEIL -I think it was done some time earlier this calendar year, but I would need to check the precise time.

MR HAMILTON -I understand it was conducted in late 1990.

SENATOR WALTERS -But there are two surveys.

MR HAMILTON -I am talking about the $49,300 survey.

SENATOR WALTERS -So am I. There were two surveys involved.

MR HAMILTON -There was a baseline survey and then a follow-up survey.

SENATOR WALTERS -When were they both conducted?

MR HAMILTON -One was conducted at the end of 1990. The officers who are responsible for this area are not here because it was done on contract for another area of the Department. I will have to find the answer for you.

MR MCNEIL -The follow-up survey is being conducted at the moment. The report is due in September, but it has not arrived yet.

SENATOR WALTERS -When was the first survey done?

MR MCNEIL -The baseline survey was done in late 1990, prior to the education campaign. A follow-up survey is being conducted at the moment and the results are due in September.

SENATOR WALTERS -Can we have those results when they arrive? Can you tell me the result of the 1990 baseline survey?

MR MCNEIL -We will give you copies of both the before and after once we have received the after.

SENATOR PATTERSON -We have talked about the 008 information line and the number of complaints about pharmacy overcharging. Could we also have a breakdown, by topic, of the types of queries that come in, if you have that information? I presume you keep some track of what people are asking questions about?

MR MCNEIL -I will have to obtain something for you. All we have at the moment is a very basic table about who the callers were.

SENATOR PATTERSON -Could you take that question on notice, because I would like to look at the complaints?

MR MCNEIL -Yes.

SENATOR PATTERSON -There was an information package on PBS, is that correct?

MR MCNEIL -Yes.

SENATOR PATTERSON -To whom did you distribute that package? Did members of parliament receive it?

MR MCNEIL -I cannot recall to whom it went. I know it had a wide distribution; I would have thought members of parliament would have received a copy.

SENATOR PATTERSON -I do not remember receiving one.

MR MCNEIL -I will have to check and let you know what the distribution was.

SENATOR PATTERSON -Senator Walters just told me that she does not recall receiving one. I would like to know whether any members of parliament received it and, if they did, who did?

MR MCNEIL -We will give you a complete list of whom we sent the package to.

SENATOR PATTERSON -Thank you. Would you give me the details of the projects undertaken by the various community and professional organisations which have funding from the PBS education program? Do you have that information?

MR MCNEIL -We have a list that we can table for you.

SENATOR PATTERSON -That would be good, thank you very much. The Community Services and Health Committee is looking at restructuring and obviously I do not want to go over ground that has already been covered there; but I wanted to ask one question. I think it was the case that essential pharmacies' allowance payments were running a bit behind time. Is that correct?

MR MCNEIL -There are a couple of issues here. The one that you raise concerns, firstly, the question of whether we should backdate the payments to January; and, secondly, whether we should have annual reviews. I suppose there is another issue about whether the payments to the Commission have been made on time. In relation to the first two matters, we had preliminary discussions with the Guild last week and we will have further discussions next week to try to reach a resolution of those issues. In relation to the actual payments to the Commission, I ask Mr Hazell to reply.

MR HAZELL -All payments are up to date as of early this month.

SENATOR PATTERSON -Will we resolve the problem of any further bulge when the annual approval takes place?

MR MCNEIL -That will depend upon what happens in the discussions with the Guild. If we move to a situation which has the payments backdated to 1 January and we also move simultaneously to a situation where pharmacists do not need to reapply every year-which is a point that was raised by the previous Committee-then that would avoid the problem with the bulge.

SENATOR PATTERSON -Hopefully, we will see a resolution of those two issues. Thank you very much.

SENATOR HERRON -I refer to the last paragraph on page 202 dealing with program 6.2. I want you to explain to me what benchmark and tracking research has done to monitor the level of increased awareness, changed attitudes and positive intentions, et cetera. What has benchmark and tracking research done to monitor those outcomes?

MR MCNEIL -That is what we were discussing earlier in relation to Senator Walters's question about the baseline research done by Roy Morgan.

SENATOR HERRON -Some of my questions follow on from those of Senator Walters and are a follow-up to them. You mentioned before the 18 per cent drop in the number of claimable prescriptions which you attributed solely to pensioner drop-out. Was that drop-out as great as anticipated when pensioner co-payment was introduced, or was it less than the budgeted projections?

MR MCNEIL -The budgeted projection was for a 15 per cent reduction in pensioner scripts. The 18 per cent by itself is above that. However, as I mentioned this morning, there is the impact of hoarding. I do not know what the long term trends will be. I can say that overall the expenditure for the PBS came in broadly along with Budget expectations last year across the year as a whole. Whilst it is too early to be definitive about the effect of the pensioner co-payment, we would expect the final result to produce something similar to that 15 per cent estimate.

SENATOR HERRON -Does that then affect how much the Department owes pharmacists under clause 12 of the restructuring agreement?

MR MCNEIL -As we mentioned earlier this morning, that clause is in three parts . The first is in relation to the viability of pharmacists to meet a share of the costs of amalgamations and closures. The second part relates to whether there should be an increase in the EPA, for example, from a 10 per cent dispensing fee to a 20 per cent fee. The clause says that any amount beyond that would be a matter for consultation between the Government and the Guild. There is no obligation on the Commonwealth to do anything other than consult. There is no presumption that there would be any further payment made to pharmacists.

SENATOR HERRON -That was the implication of my question. So you could tell them to go jump, if you like?

MR MCNEIL -The Government has an obligation to consult and that is as far as its obligation goes. What the Government chooses to do is a matter of policy.

SENATOR HERRON -Does the Government have a policy?

MR MCNEIL -No consultation has taken place, so we do not know what the position is.

SENATOR HERRON -It has not occurred yet?

MR MCNEIL -It has not occurred.

SENATOR HERRON -In the other committee, figures were given which showed that the estimates of processed prescriptions were a bit out of date when drawing up the agreement. Was this agreement based on those figures?

MR MCNEIL -As we said earlier, the agreement was reached between the Government and the Guild prior to last year's Budget. So the agreement took place in the context of certain projections based on the parameters that applied to the PBS at that point. As we said earlier, the Pharmacy Guild was aware of press speculation about possible charges for pensioners. It was told that the Government may or may not be making changes in the Budget. The Guild was not given any details of what the Government would do but was told that, if it wanted to make an agreement in relation to remuneration and restructuring, it would have to do it based on its assessment of what it thought might happen to the program. Based on that, the Guild asked for the clause you just referred to which gave it additional benefits if the script volumes changed because of other changes in parameters. To the extent that the Guild asked for that clause, one could assume that it was aware of the potential of volume change.

SENATOR HERRON -It was mentioned previously that the Guild was not officially told. Mr Hamilton said it was unofficially aware. There was press speculation, but there was no communication with the Guild?

MR HAMILTON -We did not advise the Guild of any Budget decision. I should say that at the time the agreement was negotiated there was no formal Budget decision. We were in the middle of the Budget, so there was nothing to tell it in the sense of a decision. As Mr McNeil said, it was simply advised that it had to make its own assessment. That is why the clause was put in. I should say that, in all other respects as far as I am aware, the estimates that the agreement was based on were the current estimates. There was no misunderstanding on that basis.

SENATOR HERRON -Is the Department satisfied with the number of pharmacies handing in their approval numbers? Is that what you expected?

MR MCNEIL -At this stage, the number that have handed in their approvals is broadly in line with the expectation. The estimate made by the Guild was that the numbers that would probably do this would range between 500 and 1,000. The Government's expectation was in that range.

SENATOR HERRON -So it is not slower than that which was anticipated?

MR MCNEIL -No. In view of the recession, the numbers are perfectly reasonable.

MR HAMILTON -There are fewer amalgamations and more closures. In other words, we expected a slightly different mix between the two modes. The total is much as we expected.

SENATOR HERRON -How many pharmacists are being charged 22c for the processing of their claims? If you cannot give me the numbers, perhaps you could give me a percentage.

MR HAZELL -There are about 85.

SENATOR HERRON -That probably relates to page 203. Under the heading ` Pharmaceutical Restructuring Measures' there is a Budget estimate of $19m. The outcome was $13m. The estimate for 1991-92 is $46m. How is that explained? Is that because of the delay?

MR MCNEIL -It is simply a timing issue. At the time of the Budget last year, we expected to have the remuneration change in place by a certain date. There was a delay of about a month or two because the Pharmaceutical Benefits Remuneration Tribunal had to hand down a determination in accordance with the agreement. That had a compounding impact on the restructuring authority being established. It is simply a timing issue.

SENATOR HERRON -We discussed on the other committee the necessity for pharmacists to acquire a computer to lodge their claims and the various ramifications of that. I do not think we ever reached a final answer on whether pharmacists could be forced to acquire a computer. They cannot be forced to. It is just that, as I understand it-and I just wanted to clear this up-if they do not, they will have to do it manually themselves and be at the bottom of the queue in processing. Is that how it will work?

MR MCNEIL -Mr Hazell will elaborate on this point, but the requirement is that the claims be submitted in a computer transmission form. That does not mean that pharmacists have to buy computers. If they want to use a bureau service, that is their choice. There is no obligation to go out and purchase a piece of hardware.

SENATOR HERRON -The last sentence on page 204 says:

However, a relatively minor net saving will eventuate from a reduction in the volume of prescriptions.

That is a forecast. What do you base it on?

MR MCNEIL -That is saying that there are big savings against the pharmaceutical benefits scheme because the Government increased the pension to compensate pensioners. The net effect on Budget outlays between the PBS and pensions is a relatively minor saving overall.

SENATOR HERRON -But there has been an 18 per cent drop?

MR MCNEIL -Yes. There has also been a pension increase of $130 a year for every pensioner.

SENATOR HERRON -But paragraph 4 of page 209 says:

These benefits are a reduction of unnecessary over-prescribing of drugs which reduces the PBS costs and enables taxpayers money to be spent in worthwhile areas.

What evidence do you have for a reduction in unnecessary over-prescribing when you say that it will take two years to tell us whether there has been any change?

MR MCNEIL -That is a fair question. At this stage the main evidence is that the reduction is in prescribing rather than being able to break the benefits into necessary versus unnecessary prescribing. There are some preliminary signs that some of the early reduction relates to analgesics and the like. We will need a further 12 months before we can be definitive about necessary versus unnecessary.

SENATOR HERRON -To my thinking, we have never had any factual evidence about the volume of unnecessary prescribing. There have been three or four kleptomaniac patients, but their activities have never been able to be quantified. However, you now use that as a statement when you say that the benefits are the unnecessary overprescribing of drugs. It does not follow. You do not have the evidence to support it.

SENATOR WALTERS -You have spoken about the Roy Morgan Research Centre surveys and two figures are shown: $49,300 and $42,300. The document states that the expenditure of $49,300 is to conduct surveys to evaluate the impact of the pharmaceutical benefits scheme education campaign. There is also reference to an amount of $53,000 for Elliott and Shanahan for testing of concepts for the pharmaceutical benefits scheme education campaign. Could you give me a run down on what that is about? What was the difference between the survey carried out by Roy Morgan and that carried out by the other consultant?

MR HAMILTON -As I understand it, the Roy Morgan baseline survey was to test knowledge and attitudes about pharmaceutical benefits and about medication taking. The Elliott and Shanahan one was carried out as part of the development of the education campaign. In other words, we devised some possible education messages and Elliott and Shanahan were contracted to test those to see what people thought of them. The second Roy Morgan survey was to see the outcome of the campaign as it eventually took place. The surveys were conducted in three stages, if you like.

SENATOR WALTERS -Was just over $100,000 expended on testing?

MR HAMILTON -Some $53,000 eas expended. The first Roy Morgan survey was about establishing the baseline; the Elliott and Shanahan survey was about testing the concepts and the second Roy Morgan survey was about testing the outcomes.

SENATOR WALTERS -I only had two figures. Where did you get the third figure?

MR HAMILTON -The Elliott and Shanahan survey was the third, and two were carried out by Roy Morgan.

SENATOR WALTERS -Was the other Roy Morgan survey to do with medication charges ?

MR HAMILTON -The amount of $49,300 for Roy Morgan was for two surveys.

SENATOR WALTERS -Did you spend over $100,000 just on testing the education?

MR HAMILTON -It was spent in establishing a baseline of information, testing some concepts and evaluating whether the interventions worked. The campaign, itself, was a $10m project.

SENATOR WALTERS -Surely the survey was not to find out whether the intervention worked. Are you saying that the intervention has worked?

MR HAMILTON -Yes.

SENATOR WALTERS -I have been busily told that we will not know that for another 12 months, at least.

MR HAMILTON -We are talking about two completely different issues.

SENATOR WALTERS -Are we talking about whether the education has worked?

MR HAMILTON -This is an education campaign about the use and misuse of pharmaceutical drugs. It has no particular relation to the $2.50 issue.

SENATOR WALTERS -I reckon it has a lot to do with the $2.50 charge. In program 6, on page 174, the goal is stated as being to enable eligible patients to obtain access to appropriate health services at reasonable costs. When do you hope to meet your goal?

SENATOR MCMULLAN -I am sure that the officers can give all sorts of detail and significant statistical responses. If you are asking when we will achieve perfection, I assume that we will not.

SENATOR WALTERS -I did not say perfection; just the goal.

SENATOR MCMULLAN -To rephrase my answer: I would be surprised if we ever reached a stage at which the question of access and cost could not be improved .

SENATOR WALTERS -Are you telling me you have a goal that you never hope to reach?

SENATOR MCMULLAN -The goal is to continue to improve.

SENATOR WALTERS -The goal does not say that. The goal is very precise.

SENATOR MCMULLAN -If you think that is precise, we can debate it in the Senate . That is the only answer I can give.

MR HAMILTON -The goal is to enable appropriate health services at reasonable cost. In regard to the words `reasonable' and `appropriate', I would not pretend that one could not have a considerable debate about what is reasonable and what is appropriate.

SENATOR MCMULLAN -You could argue--

SENATOR WALTERS -You may say to me that the goal has been reached. I am not sure. You have not said that. The Parliamentary Secretary has said that it has not been reached and he does not think that it will be. It is up to you.

SENATOR MCMULLAN -You are entitled to paraphrase what I said in any way you like; but that is not what I said.

SENATOR WALTERS -We can see what you said in Hansard.

SENATOR MCMULLAN -Please do. I am advised, as you would expect, that there are a number of performance indicators with regard to subsidiary goals that go to make up that composite result. We can talk about those to the extent to which you wish. The goal is a necessary statement of the purpose for which the various elements of programs are brought together. I do not think it enhances the debate to regard it as an absolute or fixed point. I do not see how we can pursue that further. It is a statement of objectives and one would continue to wish to make greater access available at lesser cost.

SENATOR WALTERS -Was my question unreasonable?

SENATOR MCMULLAN -No. I am just not capable of giving a precise answer. I am happy to discuss it.

SENATOR WALTERS -I just feel that the goal could be better worded if you did not see that you are ever able to reach it.

SENATOR MCMULLAN -That may well be. I am not averse to a suggestion that the goal ought to be redefined in a more measurable way. That question is worth further consideration. I do not have the expertise to make a decision, or even to comment, on it today. I think that it is a reasonable point.

SENATOR WALTERS -In my view there is no point in having a goal unless it can be evaluated as to the reasonableness of reaching it.

SENATOR MCMULLAN -I understand the point. Without going to this particular case-it is not my area of expertise-in other areas you would have generalised statements of objectives towards which a number of subparts contributed and the subparts are measured. If you are saying that goals ought to be measurable , ideally I think that is correct. As to whether there is a more measurable standard that can be set up as the centralised goal or within the subparts is a question for the Department and the Minister which I am happy to raise.

MR HAMILTON -I shall add just two points. The goal can be seen as something that is all encompassing and somehow or other there is some absolute cost. In theory, one could say that the reasonable cost is that the average family should not have to spend more than X per cent of its budget on health costs. That has never been attempted as a statement, but it is perfectly possible. If agreement could be reached on such a statement, it would be one way of making it more precise. The national health strategy has just published a background paper on the private expenditure of individuals in Australia on health care which sets out how much out of pocket expenditure people are paying. It reaches the conclusions-if you like, a personal judgment of the authors of the paper-that by and large the amount being spent by most people and, particularly, by the financially disadvantaged is not unreasonable.

The other sense in which the goal is useful, though, is not in relation to that global view but, if you like, as a test against which particular initiatives can be judged. For example, the Government clearly took the view, in establishing a $2.50 pharmaceutical charge on pensioners, that that was not an unreasonable cost. If I might say so, $20 for a pensioner probably would be an unreasonable cost. To that extent, the goal is there as a measure against which program and policy initiatives should be judged.

SENATOR HERRON -Does that goal include the quality of the care provided?

MR HAMILTON -As I said earlier, there is at least as much debate on what appropriate might be as there is on what reasonable might be. Yes, it does encompass the idea of appropriate, good quality health services.

SENATOR HERRON -The word `quality' is not used once throughout the whole report.

MR HAMILTON -I believe it is encompassed in the word `appropriate'.

SENATOR HERRON -Is there any evaluation of it at all?

MR HAMILTON -Yes. There is a branch in Mr McNeil's division in the health care evaluation area that is precisely targeted to evaluating what appropriate interventions are in the areas where we subsidise.

SENATOR HERRON -Could you tell me what they are?

MR MCNEIL -I will ask Ms Ariotti to elaborate. I should also add that the national health strategy that was set up by the Government is, in fact, an evaluation of people's access to services.

SENATOR HERRON -I am not talking about access; I am talking about quality.

MS ARIOTTI -We have an array of activities to evaluate both new and existing technologies and health care interventions. We work very closely with the Australian Health Technology Advisory Committee. We commission our own research and collaborate in research that is being conducted within many of our hospitals around Australia. As you would know, the Australian Health Technology Advisory Committee is a subcommittee of the Health Care Committee of NHMRC.

The sorts of activities which we are undertaking range from the very large sorts of evaluations for very new technological intervention, such as positron emission tomography; interventions such as laparoscopic cholecystectomy and many points in between. I am very happy to make available to you the protocols for those sorts of activities that we are currently undertaking.

There are also other interventions currently paid for under the medical benefits schedule which we are looking at, both on our own account and in collaboration again with the Australian Health Technology Advisory Committee.

SENATOR HERRON -You have told me about availability of technology and access to technology; I am talking about general practitioner services, which are the vast majority of services. Have you any evaluation mechanisms as to the quality of general practitioner services?

MR MCNEIL -A general practice evaluation program was established following the review by the Senate Select Committee on Health Legislation and Health Insurance into vocational registration arrangements. An advisory committee deals with that. There is also a technical advisory group. A program of evaluation projects is being funded which goes across the sphere of general practice, including issues of quality. There is a programmed approach to evaluation taking place in relation to general practice at the moment. We are more than happy to provide you with a list of the projects which have been funded under that program to date.

SENATOR HERRON -Did they advise on the effect of a reduction of $3.50 in the refund for general practitioner services?

MR MCNEIL -No, Senator.

SENATOR HERRON -Do you think it might have been appropriate to ask them?

MR MCNEIL -I do not think it was appropriate to ask them what the position should be in relation to co-payment policy.

SENATOR HERRON -I did not ask about policy. I am asking about quality of service. You have told me that you have all those bodies lined up to evaluate quality, yet you did not ask them.

MR MCNEIL -We did not ask them about the effect of the $3.50 on quality. The advice coming to us is that there is a need to deal with the oversupply of general practitioners. The claim coming from the profession is that the current arrangements encourage the fast tracking of patients, which is counterproductive to policy in that the new arrangements are required to enable GPs to spend more time with their patients. The move towards vocational registration by the Government was one attempt to address that. The Government is proposing in this year's Budget to enter into further discussions with the profession and to develop further measures to help improve the quality of general practice in the long term.

SENATOR HERRON -I will come back to the oversupply question because I have other questions in relation to that. If you have not asked those advisory bodies, what procedures have you put in place for the monitoring of quality after the introduction of the $3.50 reduction and co-payment?

MR HAMILTON -That is one of the matters we will seek to discuss with the Royal Australian College of General Practitioners and the Australian Medical Association when they are prepared to discuss those issues with us.

SENATOR HERRON -You do not have any procedures in place yet, but the policy has been brought in by the Government. You are only going to talk about it after it has come in.

MR HAMILTON -It has not come in yet.

SENATOR HERRON -I appreciate that. It was brought down in the Budget, and there are no mechanisms in place. You were not to know when it was brought down that it would not come in on 1 November. That was Government policy. You are telling me that there was nothing in place to evaluate--

MR HAMILTON -The decision was to discuss with the college and the AMA, as soon as the Budget was brought down, a range of issues about the structure and quality of general practice. The fact that they have chosen not to talk to us is their decision.

SENATOR HERRON -But you still did not have anything in place. It was a policy decision of Government. It was brought in. There is nothing in place to evaluate it. The bodies that were to advise on it were not consulted beforehand, and there is nothing in place to tell what its effect will be in relation to quality.

MS BATMAN -We do have a monitoring strategy that we can put in place to monitor the impact of the 1 November changes. It is something that we are still working on. It is being developed at the moment, and it will require careful interpretation of the trends as they emerge. Early trends in particular will be difficult to interpret. We are currently working with the Health Insurance Commission to develop the data that will go into this.

I can tell you about some of the sorts of things we will be looking at. We will be looking at the percentage of services direct billed by State-Federal electorate and/or post code; we will be looking at scheduled fee observance, again by State-Federal electorate and/or post code; and we will look at the fee charged-average patient contribution per service-again by State-Federal electorate and/or post code.

We are considering doing it for a range of categories: out of hospital GP services to pensioners and other beneficiaries; out of hospital GP attendances to other people; other GP attendance items; other services by GPs; and other services under the Medicare benefits schedule. We will look at these services as trends before and after the change, and we will try to look at the historical use by cardholders and others. At the moment, we do not have data on cardholders. It is not something about which a distinction is made. It will take much longer to look at because we will have to look retrospectively once we are identifying cardholders.

SENATOR PATTERSON -Will you be able to identify from that the pattern of servicing by vocationally registered doctors versus non-vocationally registered doctors?

MS BATMAN -Yes, that will be part of this.

SENATOR PATTERSON -What can you say about grandfathered vocationally registered doctors versus recently registered vocationally registered doctors?

MS BATMAN -We will have information about the qualifications and experience of vocationally registered GPs.

SENATOR PATTERSON -It is graduates within the last 10 years, who I suppose were not grandfathered and were not on the vocational register, versus those who have gone on with RACGP or FMP training programs. That would be a good evaluation of whether your vocational registration has had any effect on servicing, would it not?

MS BATMAN -Yes. We have quite a few things in place to look at differentials between vocationally registered GPs and other GPs. That will be ongoing and will pick up the 1 November changes as well.

SENATOR HERRON -Are those criteria, about which you have just elaborated, about to be put in place or in place? Have they been in place in the past?

MS BATMAN -We already monitor a range of things in terms of use of the Medicare benefits schedule. We will continue that, obviously, but we are also looking at before and after the changes in different ways.

SENATOR HERRON -What has been the number of services per person in the last 12 months? I will appreciate that information because it relates to the Deeble paper that was just released, where the figures went up to 1989-90. We have no figures subsequent to those.

MS BATMAN -We might have some figures that go up to the end of the calendar year 1990.

SENATOR HERRON -I would like the latest figures on the service use per person.

MR MCNEIL -We have figures for 1990-91 which cover benefits and services per capita. There are a number of tables here. I am happy to provide you with these tables.

SENATOR HERRON -The simplest one is that the number of services per person in Australia has gone up 23 per cent in the last seven years. What happened in the last 12 months? There has been a steady and gradual rise. I think the Minister made a statement, which I have here.

MR MCNEIL -The problem is that the figures we have are comprehensive. As you would be aware, there was a significant restructuring into the pathology services table some time ago.

MR SAUNDERS -In 1990-91 there was an average of 8.52 services per head of population in Australia. I can provide the data for you State by State.

SENATOR HERRON -Has that plateaued or is it still rising?

MR SAUNDERS -We need to recompile the figures because of the pathology table that was introduced on 1 August 1989. There was a coning of items in the schedule. There was no reduction in the number of items for which pathology benefits could be paid. In essence, the figures I have here show 8.5 services per capita for the last three years. Pathology distorts the picture. We really need to take pathology out or, alternatively, recompile the figures, as John Deeble did in background paper No. 2 on medical services through Medicare, in which he estimated service growth as if the old pathology table had continued to apply.

I restate the point that with the coning of items in the pathology table that came in on 1 August 1989, unless you take the pathology services out then the trend can be misleading. I would certainly refer you to Deeble's paper which presents the data. This data here is on a data processing basis. Deeble's analysis is on the date of service basis. He has attempted to put the data on a consistent basis from 1984-85 through to 1989-90.

SENATOR HERRON -If there has been a plateau in the last 12 months, taking those figures out, then Deeble's figures are not accurate.

MR SAUNDERS -There certainly has been an unusual trend in the last 12 months. General practitioner attendances in 1990-91 over 1989-90 showed virtually no growth at all. That was highly unusual; we have never had a situation like that since the commencement of Medicare. One can only speculate as to why that may have happened. I am not sure of your suggestion that perhaps Dr Deeble's figures may not be accurate.

SENATOR HERRON -On Deeble's figures, that plateau will not be revealed. You have just stated that the number of general practitioners' attendances has not increased in the past 12 months.

MR SAUNDERS -Deeble's study only covered the period up to 1989-90.

SENATOR HERRON -That is the point I am making. I do not know whether the Minister is aware of that.

MR MCNEIL -The relevant figures are on page 185 of the explanatory notes. We have provided details of the variations in services by part of the schedule.

SENATOR HERRON -Could you give me those other figures too?

MR SAUNDERS -They will appear in our annual report, which is due for publication in the next six weeks.

MR MCNEIL -The figures on page 185 show that the total services volume for general practitioners under the sub-total fell by 0.5 per cent in the year ended March 1991. We have split up general practitioners between vocation, register and other. That almost static situation followed growth trends of 6 per cent, 6.2 per cent and 6.3 per cent in the previous three years for general practitioners.

SENATOR WALTERS -But you would expect that with an ageing population, would you not?

MR MCNEIL -Not of that order of magnitude.

SENATOR WALTERS -With an increasing population and an ageing population, what would you expect?

MR MCNEIL -We would probably expect a growth of about 2 per cent a year.

SENATOR WALTERS -And you got 6 per cent.

MR MCNEIL -In the three years prior to the last financial year the growth was 6.2 per cent and 6.3 per cent. Senator Herron used the term `plateaued'. I suspect that it is a pause rather than a plateau.

MR SAUNDERS -There was a very strong growth in brief attendances in 1989-90 over 1988-89. That was highly unusual. I do not know whether that was a by- product of the promotion of influenza vaccination in that financial year which led to an abnormally high level of attendances at that time. Perhaps 1989-90 is an artificially high plateau from which 1990-91 was projected.

SENATOR HERRON -You mentioned the extraction of pathology. The number of pathology services certainly increased but the percentage value of total Medicare benefits has decreased in that period. The value of services processed in 1985-86 was $408.791m out of a total Medicare benefits figure of $2,693m. The value of services processed in pathology in 1989-90 was $555.124m out of a total Medicare benefits figure of $3,805,359m. In 1985-86 the percentage of total Medicare benefits devoted to pathology was 15.67 and in 1989-90 it was 14.58. The proportion of total Medicare benefits has decreased by one per cent between 1985 and 1989. Do you agree with that?

MR SAUNDERS -One needs to take account of the fact that pathology has not had scheduled fee increases of the order of other parts of the schedule and perhaps the relative proportion has declined on account of that.

SENATOR HERRON -A lot of smoke and fire has gone on about the increasing cost of pathology when the cost per unit service of pathology has actually decreased, taking into account the number of services provided and the proportion of total Medicare benefits that has been spent. You have just alluded to it, in that the refund has decreased in that period of time. Yet that is used by the Department as a major factor in restructuring. Do you have an answer to that?

MR MCNEIL -I point out that the restructuring to the pathology table, which is taking place now, is something which comes out of consultation between the Government, the Australian Association of Pathology Practices, representing the private pathologists, and the Royal Australian College of General Practitioners.

SENATOR HERRON -You tend to negotiate when you have a gun at your head.

MR MCNEIL -There was no gun at their heads. They were invited to consult about measures to improve pathology. It was their choice whether they consulted or declined.

SENATOR HERRON -But do you agree with the statement I have just made about the percentage decrease of total Medicare benefits and the fact that the unit cost has gone down in that period of time?

MR MCNEIL -I would agree that the unit cost has gone down. The question is whether the unit cost should go down even further. The consultation process with the pathology industry group and the Pathology College indicated that there is scope to improve the efficiency of the pathology sector-I hesitate to call it an industry. There are inefficiencies and structural weaknesses in too many collection centres. There are weaknesses with the wrong incentives in the system. The profession wants to help us address those which relate to encouraging overservicing, suggestions about kickback arrangements and the like. So the changes being made are being made to address structural problems which the profession agrees exist.

SENATOR HERRON -What evidence do you have for the overservicing in pathology?

DR NEARHOS -Our evidence tends to come from individual practitioners. We tend to track the number of practitioners who order above certain limits. The sorts of broad criteria we use are practitioners who order more than $10,000 worth of pathology per quarter. We have a ratio of pathology ordering. When we take the amount of pathology ordered over the total Medicare benefits they are paid , we get a ratio. If the ratio is greater than 0.3 we tend to look at those more carefully. We have arrived at those figures by studies we have done comparing graduates from different universities. We find fairly accurately that practitioners who order above those limits are ones who are ordering excessive amounts of pathology. We have arrived at those parameters through assistance from various consultants we employ and from a close association with the College of Pathologists and the Australian Association of Pathology Practices. Just taking that a little further, we find that out of the 15,000- odd general practitioners and 12,000-odd specialists 3,000 GPs order approximately half the total pathology budget. So we are directing our attention to those 3,000 GPs who appear to order indiscriminately.

SENATOR PATTERSON -Is any university overrepresented in those 3,000? You said you could identify them by their university.

DR NEARHOS -Yes. I cannot tell you exactly. I cannot remember what they are now, but we have that information.

SENATOR PATTERSON -So there are some universities which are overrepresented?

DR NEARHOS -Yes.

SENATOR PATTERSON -Is that one, two or more?

DR NEARHOS -Probably more.

SENATOR HERRON -Have you done any work on seeing whether there is any association between that and bulkbilling clinics or bulkbilling unit service providers?

DR NEARHOS -The overservicing seems to occur whether the services are bulkbilled or not. A lot of medical practitioners who do not bulkbill their own services will expect the pathology they request to be bulkbilled.

SENATOR HERRON -Is that disproportionate? You are saying there is no association between bulkbilling general practitioners and the services that are bulkbilled for pathology? What I am asking-I am only speaking of Queensland-is whether there is a disproportionate use of pathology by people who bulkbill their patients for their services compared with those who charge for their patients.

DR NEARHOS -Where we have looked at individual pathology practice, we find that the ones who direct bill the majority of their patients tend to have more items claimed per episode.

SENATOR WALTERS -Not pathology services but general practitioner services.

SENATOR HERRON -In other words, there is an association between general practitioners who bulkbill patients for their own services and the number of pathology services that they perform on their patients as compared with the doctors who do not bulkbill but bulkbill for pathology services? Have I made that clear?

MR MCNEIL -Perhaps I could mention that in the National Health Strategy Background Paper No 6, Directions of Pathology, there is a section where some analysis was done by Dr Deeble in relation to the ordering of pathology varying between direct billing and non-direct billing-

SENATOR HERRON -I am aware of that. But Dr Nearhos has not substantiated that.

MR MCNEIL -The figures in here are based on an analysis of data by Dr Deeble.

SENATOR HERRON -That was two years ago.

SENATOR WALTERS -That is all old hat. You have got up-to-date information.

SENATOR HERRON -You told us about the reduction in the rebates two years ago.

MR MCNEIL -Certainly the data Dr Deeble was attempting to use was the latest available data on which he could carry out the detailed analysis. In relation to some of the other data, in terms of straight servicing, we do have up-to- date data. But at the time Dr Deeble was doing his work it was the latest available data that he could use. There is certainly no intention to draw an analysis based on old data.

SENATOR HERRON -I am not suggesting that.

SENATOR PATTERSON -I want to ask about these medical schools. Some medical schools have been identified as producing graduates who overservice. Has that been communicated to the deans of those medical schools?

DR NEARHOS -The analysis is still being done. It is being done by one of my senior medical advisers, and there are lots of other variables. The initial indicators are that certain graduates from certain universities appear to order more pathology. But there are other variables such as which hospitals they trained in as well. I really cannot tell you any more on it because that data is still being analysed; it is variable.

SENATOR PATTERSON -But you might be able to identify that graduates from X university who did their internship at Y hospital are more likely to do so than graduates from X university who did their internship at Z hospital; is that what you are saying to me? It could be the hospital that is the factor, not their pre-clinical training?

DR NEARHOS -That is right.

SENATOR PATTERSON -Because they usually spend a lot of their time often-not always-in clinical training in the hospital that they often go on to, especially if it is a large teaching hospital. When you have that information, if you do identify that it seems to be geared to the pre-clinical or to the internship time, what action will you take?

DR NEARHOS -We are getting much closer with the profession with regard to feeding back information such as that. We have medical advisers who conduct lectures at medical schools now. We are closely involved in the family medicine program. We are getting more closely involved with the College of GPs and feeding this type of information back to it.

SENATOR PATTERSON -I would like to see the results of that survey when it is finished. I would like the Committee to have access to those findings. At a briefing, the RCGP offered to consult with two medical schools when they were reviewing their curriculum. One failed to reply and the other said it was really none of its business, which I found very interesting.

SENATOR HERRON -We spoke before of the oversupply of doctors. I understand that the Macklin Committee, as part of its strategy, will be making a report. Recommendations were also made in relation to the Doherty Report. Has anything come out of the Doherty Report or has everybody just ignored it?

MR HAMILTON -There was a discussion last night involving the Minister and the Department and the deans of medical schools. The deans of medical schools reported that, in relation to the recommendations they had responsibility for, they believe the report had been implemented substantially. But Mr Wingett from our program support and development branch can talk more broadly about the Doherty report.

MR WINGETT -The report was very comprehensive. It was very far reaching and dealt with issues affecting the medical profession, ranging from the initial training of medical practitioners through to a range of work force supply issues. It involved not only government in that process but also the universities and colleges. It dealt with medical specialties, so it involved the specialist colleges. It involved just about everybody that we can think of who has a part to play in the development of medicine and its regulation at all levels and the way in which it broadly operates. It was not within the scope of any one person or group of people to pick up those recommendations and implement them. They were not those sorts of recommendations. They were too broad and they involved too many people.

So the Australian Health Ministers Conference arranged for a task force to be established that looked at the recommendations and referred them to the range of people who would be involved. Many of those people, in any event, gave evidence. They had a vested interest in seeing what the outcomes were and how they could improve medical practice as a result of the findings of the inquiry . So the way in which the inquiry was progressed was through the various parties having the respective parts of the report drawn to their attention and being asked to generally indicate how they proposed to work forward in pursuing the recommendations. I do not have responses in my mind, but many of them did respond and did indicate various strategies they were contemplating, if not to pick up the specific recommendations, to pick up the intent of some of them.

SENATOR HERRON -Who is going to pull it all together? Is it the Department's responsibility? There are all those disparate groups involved. Are you pulling it altogether at departmental level?

MR HAMILTON -As Mr Wingett indicated, the task force had the responsibility of ensuring that the relevant recommendations were referred to the responsible bodies. They considered the recommendations and they reported to health Ministers last year on the results.

SENATOR HERRON -So the States will be individually responsible for the implementation?

MR HAMILTON -Some of them. With some of them, there was an agreement that the States should attempt to take joint consistent national action in relation to things like the intern years and those sorts of things.

SENATOR HERRON -Numbers graduating from medical schools and so on, because they are State responsibilities?

MR HAMILTON -That last matter is something we very much want to discuss with the State education authorities and the deans of medical colleges. Some of those discussions have already started.

SENATOR HERRON -So this is a sort of ongoing saga, as it were, like Blue Hills ?

MR HAMILTON -I am afraid so.

SENATOR HERRON -Hopefully, somewhere along the line something will happen.

MR HAMILTON -We are committed, as part of the general practice package, to ensure that it happens.

SENATOR HERRON -What about the overseas doctors? That is a Commonwealth responsibility. Is any action being taken or are any discussions taking place in relation to the immigration of overseas doctors? This is in relation to health; I am not talking about Noosa.

MR MCNEIL -As the Government indicated in Budget Related Paper No. 9, the question of overseas immigrant doctors is one matter which we addressed as part of the package of measures in consultation with the profession.

SENATOR HERRON -Budget Related Paper No.9 says:

. . . have some impact on the quality and distribution of general practice through . . . measures to be developed in consultation with the medical profession and other relevant groups to reduce the supply and address concerns about the distribution of medical practitioners . . .

Has anything taken place in relation to that? Is there anything concrete in train, or is it a pious hope or a gesture of good faith?

MR HAMILTON -We have been discussing that matter with the AMA over the past year or so very specifically. We indicated at Budget time that we wished to bring those discussions to a conclusion as part of the overall package on general practice. The AMA wrote to the Minister just last week and the relevant sentence in that letter says that, in addition to the problem of unnecessary expenditure generation, the presence of too many doctors necessarily results in deskilling of at least some of the work force. The AMA goes on to say that it wishes to discuss that matter with us. We will be taking that matter up, but we wish to take it up as part of the overall package.

SENATOR HERRON -I take it then that you believe that the number of medically qualified immigrants is a problem in relation to the cost of the provision of health care?

MR HAMILTON -It is part of the problem, but the number of doctors graduating through the medical schools is another part of the problem.

SENATOR HERRON -I think you said in another part of the report that there is an association between the number of doctors and the provision of services and therefore the cost?

MR HAMILTON -Yes. The AMA, from what I read out, obviously accepts that point.

SENATOR HERRON -That paragraph that I read out also refers to addressing concerns about the distribution of medical practitioners. What actions are being taken in relation to the problems of maldistribution, in that 23 per cent are outside the capital cities and provincial towns?

MR WINGETT -The Government last year made one step in that direction by introducing the rural health support, education and training program. There was $1m appropriated last year and $5m this year. The intention of that program is to seek to attack the training aspect with a view to ensuring that medical practitioners do have the appropriate training opportunities so that the differences between rural practice and urban practice do not present a barrier.

SENATOR HERRON -The other thing in Budget Related Paper No.9 concerns the number of acute hospital beds per thousand of population. It is stated that the number is higher in Australia than the optimal level of bed provision set by health planners. Is the Macklin Committee inquiring into that as well?

MR HAMILTON -Yes. The next issues paper that comes out will be in relation to hospital services. That will be coming out shortly.

SENATOR HERRON -Is it true that 85 per cent of the population go to a doctor less than 10 times a year?

MS BATMAN -I think so. Are you referring to GPs?

SENATOR HERRON -Yes. In Audit Report No. 32 of the Auditor-General, one of the key findings was that there is need to develop a strategic plan for a comprehensive and systematic review of the Medicare benefits schedule under chapter 4. Is any action being taken in relation to the review of the Medicare benefits schedule?

MR MCNEIL -The review of the Medicare benefits schedule at the moment takes place under the auspices of the Medicare benefits consultative committee which involves us and the AMA and other groups as appropriate. The priorities which are set for the review of the schedule come out of that process through consultation with the profession.

SENATOR HERRON -I am completely aware of that. The statement by the Auditor- General was that there is a strategic plan-the key word-for a comprehensive and systematic review, not an updating. Is there a strategic plan for a comprehensive and systematic review?

MR MCNEIL -Not as such. There are a number of review activities taking place, and the Government has made changes in relation to a number of areas of the schedule in this year's Budget in relation to general practice, pathology and radiology.

SENATOR HERRON -Was that a part of the strategic plan?

MR MCNEIL -There is no strategic plan per se.

SENATOR HERRON -Has the Department got anything in train to set up a strategic plan for a comprehensive and systematic review?

MR MCNEIL -Following the audit report, consideration is being given to whether there should be such an approach.

SENATOR HERRON -The Auditor-General thought so.

MR HAMILTON -The Auditor-General, in that report at least, had a particular view as to the nature of the medical benefits schedule and how it should relate to the costs of medical practice. It is a view that is not necessarily accepted by the Government. That is the basis for those sorts of recommendations.

SENATOR HERRON -By the Government or the Department?

MR HAMILTON -I believe by the Government.

SENATOR HERRON -Also in those key findings it was stated that there should be action in respect of a number of important recommendations made by the Layton Medical Benefits Review Committee in 1985 and the Auditor-General said they had not been finalised. That is in chapter 5. That is the Government's view on the Layton Committee too, is it?

MR MCNEIL -The Layton Committee reports, parts 1 and 2, contain numerous recommendations, some of which the Government decided to proceed with, some of which it did not. The sort of examples which were raised by Commonwealth audit have been reconsidered by the Minister and no further action is required in most cases. For example, it is recommended that we should remove benefits for gender reassignment therapy. There are no specific benefits in the schedule for gender reassignment.

SENATOR HERRON -So you agreed with the ones you wanted to agree with and took no notice of the ones you did not?

MR MCNEIL -It is normal for a government to decide which recommendations it will and will not accept.

SENATOR HERRON -I move to obstetric services. The increase in value of benefits for obstetric services between 1985-86 and 1989-90 went up by $3.4m. Part of the Layton Committee's report related to the provision of obstetric services and the introduction of the $500 fee which I think we alluded to at the Supplementary Estimates hearings. It comes back to whether the Department believes there should be a comprehensive and systematic review. I am trying to point out that there are apparent inequities in the Medicare benefits schedule which are not being addressed in a comprehensive and strategic manner .

MR HAMILTON -We are certainly interested in pursuing ideas such as the resource based relative value study and we have indicated to the AMA many times that we are prepared to do that. At this stage we have not managed to get agreement with the AMA to proceed on that. That, I believe, would provide a very good basis for considering a review of the schedule. As I say, we have yet to reach agreement on proceeding with such a study.

SENATOR HERRON -Yet the Department is reviewing obstetric fees under the schedule in relation to rural services.

MR MCNEIL -It is in the context of requests from the profession to remove the differential we have at the moment in the schedule for differentiation between specialist and general practitioner levels of benefits for the same service. Obviously, that issue in relation to obstetrics is of particular concern to doctors in rural areas, where the chances of a GP being involved in obstetrics are far higher than in an urban area. We are looking at possible restructuring of the obstetrics item in the context of moving to difficult, straightforward or some other classification rather than specialist versus general practitioner classifications. We are having consultation with the profession about that type of approach. It is too early at this stage to say whether such a change will occur.

SENATOR HERRON -Was there consultation with the profession in relation to the $500 midwifery fee?

MR MCNEIL -There is no $500 midwifery fee that I am aware of. The program is in Mr Slater's area, but the $500 was an estimated saving that would come out of the medical benefits arrangements if births were handled in a different way . As such, it was to be a contribution towards the States. How the States were to use that money in terms of what payments they would make for midwives would be a matter for the States in the same way the Commonwealth hands over very large amounts of money to the States for the hospitals system but has no say in rates of pay for nurses or doctors. It is simply a contribution to a program for the State to carry out. There is no Commonwealth government $500 fee for midwives.

SENATOR WALTERS -I have quite a number of questions. Can Senator McMullan tell me what is happening with the $3.50? I do not suppose the Department has a clue.

SENATOR MCMULLAN -There is nothing to indicate to the Committee that has not been indicated publicly. There is a discussion going on.

SENATOR WALTERS -When are we likely to hear the result of it?

SENATOR MCMULLAN -There was a date set for the conclusion of that review, which was public.

SENATOR WALTERS -What date was that?

SENATOR MCMULLAN -I do not know.

SENATOR WALTERS -Could the Department tell us that date?

MS BATMAN -Early to middle October.

SENATOR WALTERS -So it could start up still on 1 November?

SENATOR MCMULLAN -Yes.

SENATOR WALTERS -So we have not got a health policy yet?

SENATOR MCMULLAN -That is a rather sweeping response; we have not finalised that element.

SENATOR WALTERS -It is a fairly important element.

SENATOR MCMULLAN -If you want to trade comments about who has and has not got a health policy, there is another place to do it.

SENATOR WALTERS -It is important for a government to have a policy; it is not quite so important for an Opposition to have a policy.

SENATOR MCMULLAN -That is a matter for the voters to judge, and they have done so excellently.

SENATOR WALTERS -Can you tell me when the last scheduled fee rise was?

MR MCNEIL -The last scheduled fee rise was 1 November 1990.

SENATOR WALTERS -When is the next one due?

MR MCNEIL -The Government's announcement in the Budget was that the fee rise will take place from 1 November 1991.

SENATOR WALTERS -And is that the 3.75 per cent?

MR MCNEIL -It was 3.57 per cent.

SENATOR WALTERS -What was the inflation rate during that time?

MR MCNEIL -I would need to check official figures; I do not have that figure with me.

SENATOR WALTERS -I am sure that someone in the Department would know, because if you set a figure at 3.57 you would know what the inflation rate was for that year, surely.

MR MCNEIL -The fee rise that applies to medical fees is a matter for judgment by the government each year.

SENATOR WALTERS -I understand that, but it probably has some vague bearing on inflation.

MR MCNEIL -We will try to find a CPI figure over a comparable period, but a lot of other cost increases and funding arrangements-whether wage rises for workers or grants to the States-are not based purely on CPI.

SENATOR WALTERS -I understand that. Could you tell me what the percentage increase in average weekly earnings was in that period of time?

MR MCNEIL -From November last year to November this year. I do not have that figure with me.

SENATOR WALTERS -A phone call would get that for me.

SENATOR MCMULLAN -That is published regularly by Treasury. You would not be able to get a November to November inflation figure because it is not measured monthly, it is measured quarterly.

SENATOR WALTERS -Let us leave out the inflation figure. Just give me the average weekly earnings percentage in that time.

SENATOR MCMULLAN -As far as I know, I think that is made available monthly. If not, we can get a close approximation.

MR MCNEIL -The latest estimates I can give are that the consumer price index in 1991 moved by 5.3 per cent, award rates of pay by 1.9 per cent and average weekly earnings by 5.0 per cent.

SENATOR WALTERS -So average weekly earnings in that period increased by 5 per cent and the schedule fee by 3.57; is that right?

MR MCNEIL -Average weekly earnings cover more than just price increases. They cover changes in volume, changes in overtime rates--

SENATOR WALTERS -I understand all that. I am just asking: am I correct?

MR MCNEIL -Yes.

SENATOR MCMULLAN -When I look at the figures, I see that it is not for exactly the same period because they would not be available for exactly the same period. The figures quoted are for the financial year 1990-91 and when you take into account more current quarters the figures may not be so high.

SENATOR WALTERS -When can you find out the comparable figures for me?

MR SAUNDERS -Can I just make a general comment? There are a number of ways of working out year on year movements in economic indicators. One can average four quarters year on year or, alternatively, one can take the index number for the particular indicator series-say, as at the end of June or for the June quarter of a particular year-take the index number for the same economic indicator 12 months later and take the percentage change. You are obviously going to end up with a different answer depending on which technique you use. The CPI year on year figure that I believe Ian McNeil has quoted is arrived at by averaging figures year on year. The indicator series that has been used in recent years for determining fee increases or for making recommendations to government on fee increases has used the approach of taking the index number for the June quarter of the previous year, and Treasury's estimate of the index number for the June quarter of the following year, taking the percentage difference. The calculations themselves, the percentage increase figures, are actually issued by Treasury, and those numbers are then fed into and used to adjust a fees index year on year. So the argument in favour of the approach that is used for estimates purposes is that by using that technique you are determining a fee increase for the following year that more closely accords with the economic conditions applying at the time that that adjustment is made . I guess if you are averaging figures over quarters you will tend to even out trends. The trends that have been evident in the CPI over the last six months are obvious.

SENATOR WALTERS -That just comes back to the average weekly earnings of 5 per cent, and the schedule fee is 3.57 per cent.

MR HAMILTON -If I may say so--

SENATOR WALTERS -It does not matter what other indicators you want to use, et cetera.

SENATOR MCMULLAN -I do not think that average weekly earnings, if you do not mind my saying so, is a sensible comparison. None of these is a perfect fit, but I suppose the closest comparison is award rates; that is, the fee schedules for doing a similar amount of work. Average weekly earnings take in a whole lot of other factors. Award rates are the fees set for doing a fixed amount of work, and that has gone up by 1.9 per cent. I am not sure if that analogy is all that comprehensive an assessment of what the rate for setting a Medicare schedule would have been, but it is a closer comparison of how one sets the rate than would be either the CPI or average weekly earnings.

MR SAUNDERS -A number of people write in from year to year and suggest that medical fees should move in line with movements in the consumer price index. The costs of running a medical practice-I guess medical practitioners are obviously a significant proportion of a practice's costs-are wages and salaries. To my knowledge, wages and salaries have not moved in recent years in line with movements in the CPI.

SENATOR WALTERS -This is exactly what I was saying. Is it not more appropriate perhaps to have average weekly earnings, a wage, or something like that? Can you give me the average weekly increase of the nursing profession?

MR MCNEIL -Perhaps we can give you a table which graphs CPI, AWE and average fee earned by doctors. The average fee earned picks up volume changes, the same as AWE picks up volume changes, and has moved basically in line with AWE over the last five years.

SENATOR WALTERS -I am not talking about average earnings of doctors, I am talking of the schedule fee.

MR MCNEIL -If you are using AWE you are looking at activity as well as price.

SENATOR WALTERS -What has been the increase for a trained sister?

MR MCNEIL -I do not know, Senator.

SENATOR WALTERS -But your Department has to know that in order to take into account or to recommend an increase in the schedule fee. Many doctors are already paying that for their trained sister in the surgery.

MR MCNEIL -Fees are based on applying broad parameter movements to an outdated cost structure in relation to medical fees. We do not go through and cost the number of nurses per practice and what happens with nurse wage rises.

SENATOR WALTERS -No, I do not think you do, either. If you could send me that paper I would be pleased. Can you tell me why the time allocated for bulk billing payments will be extended from seven to 10 days, according to the Budget?

MR MCNEIL -It is a judgment by the Government about what is an appropriate time to make a payment in.

SENATOR WALTERS -So the Government will not hand them out in a week as it used to; it is hanging on to them for a bit longer.

MR MCNEIL -It is a cash management decision of the Government.

SENATOR WALTERS -I suppose if the doctors are silly enough, like the chemists were, to become socialised, that is fair enough. There is a redefinition of professional services to deal with services that are supposedly not medically necessary. Can you tell me how this will be policed? Who is on the committee and how will it work?

MR BAILEY -The change in the definition of professional service will bring forward, into section 3 of the Health Insurance Act, the notion that a service must be clinically relevant in order to attract a Medicare benefit. While that notion has been implicit in the legislation, it has never been expressed explicitly. It will give more strength to existing mechanisms, such as medical services committees of inquiry, so that a panel of doctors can make judgments as to whether or not services that have been rendered are clinically relevant . In the past, in a strictly legal sense, in order to attract a benefit a doctor merely had to be in physical attendance of the patient in order for the legislative requirements to be met. The introduction of the notion of clinical relevance changes the explicit legislative provision before a Medicare benefit is attracted for that service.

SENATOR WALTERS -That is not what I asked you.

MR KENNEDY -You asked how the process would work.

SENATOR WALTERS -I asked how it would be policed and who would be on the committees.

MR KENNEDY -The committees that will review these medical practitioners where there is some doubt about whether services are clinically relevant will be medical services committees of inquiry and they will comprise medical practitioners. The Health Insurance Commission would be better placed to advise you on how the process will be policed.

DR NEARHOS -With regard to applying the new definition of professional service in which it is mentioned that a service has to be clinically relevant, that is, a service which is in accordance with what is generally accepted by the medical profession, the Commission recognised that the only way to do that was to work closely with the medical profession to determine what was appropriate .

In that regard, we have now employed consultants in all the major specialties and we are in the process of employing a panel of GP consultants who will be appointed by early November. So we are currently processing those applications . They will guide us on what is appropriate medical care. Clearly, we do not have the powers to determine that. But through our consultants, who are closely affiliated with their various colleges, we will be able to tap into what is accepted within the medical profession as being proper medical practice and care.

SENATOR WALTERS -How much will the whole process cost the taxpayer?

DR NEARHOS -Not very much.

SENATOR WALTERS -That is not an answer for Estimates.

DR NEARHOS -We employ our consultants in accordance with a contract that we have within the Commission, which incorporates a non-disclosure agreement so they can look at the data as we see it and look at the problems as we see them . We employ them on the basis of $80 an hour up to a maximum of $550 a day. With the GP panel, we will have the panel meeting here in Canberra about every second month and producing a report from that. I would envisage that they will meet once every second month, that is, $550 a day each, plus there may be some ongoing work back in their own practice for which we would pay them about $80 an hour.

SENATOR WALTERS -Can you tell me how much it will cost? I want to know how much taxpayers' money is going on this scheme that I think is just unbelievable? I would also like to know how much you expect to save as a result of this?

DR NEARHOS -I expect that, regarding general practice, it will cost less than $40,000 a year for consultancy fees; I would say closer to probably $30,000 a year. I would envisage that would pale into insignificance next to the savings that we could achieve through applying proper standards of practice to how we pay benefits.

SENATOR PATTERSON -Are these the sorts of issues that Senator Peter Baume, when he was Senator Peter Baume, raised about doctors praying with patients and then making Medicare claims?

DR NEARHOS -Yes.

SENATOR PATTERSON -You say there is a $10m saving to be achieved. It is an awful lot of doctors praying with their patients. They must be doing other things that are not clinically relevant as well.

SENATOR WALTERS -Who is to say whether it is clinically relevant? Praying with a patient may be very clinically relevant.

DR NEARHOS -Ultimately, it is a medical services committee of inquiry which determines that. If we suspect something is not clinically relevant we refer it to a panel of peers, which would be a medical services committee of inquiry .

SENATOR WALTERS -What does a doctor put his claim in under; is it not a consultation?

DR NEARHOS -Yes.

SENATOR WALTERS -Then what makes you think or suspect that it is not clinically relevant?

DR NEARHOS -When we analyse unusual servicing patterns of practice we get information on what is going on in that practice, and that includes talking to the practitioners, and we find out the type of practice that they are doing. For example, a practitioner may be treating his patients following certain investigatory tests that are not generally accepted. For example, he might be doing glucose tolerance tests on every patient who walks through the door, and he finds an abnormality in every case and treats the patient with vitamins, minerals or some other supplement. That is not in accordance with accepted medical practice.

SENATOR WALTERS -How will you prove that?

DR NEARHOS -When we suspect it-and we only have to have a reasonable degree of suspicion to refer it to a committee of peers to have it determined--

SENATOR WALTERS -But there would be an appeal mechanism?

DR NEARHOS -Yes, a medical services review tribunal.

SENATOR WALTERS -Then how in the heck would you prove that in a court of law?

DR NEARHOS -This relates to the arrangements for dealing with suspected excessive servicing.

SENATOR PATTERSON -What other sort of professional services will be excluded? We have talked about some of the ones that Senator Peter Baume raised in the last Estimates when he was here. Would you have a problem, for example, with a doctor who was trained in homoeopathy who is using homoeopathy and more traditional pharmaceuticals under the pharmaceuticals benefits scheme? Would there be a problem drawing a line between those services that are deemed to be clinically appropriate or relevant?

MR KENNEDY -The legislation does not specify or deem any particular service to be inappropriate. The legislation merely says that it is in accordance with accepted medical practice, and that will be an opinion given by the committee of peers who are medical practitioners.

SENATOR PATTERSON -In Britain, for example, homoeopathy and traditional medicine are practised together much more often than they are in Australia. Will that committee be representative of a broad range-and how would you do that-of medical practitioners who stretch across what the community would accept in terms of taxpayers reimbursing acceptable medical services, and in some way tease out the ones that 90 per cent of us would agree are not acceptable in that broad sense? Is that what you are hoping to do through this ?

DR NEARHOS -What is and is not acceptable medical practice is a grey area. It also changes from time to time.

SENATOR PATTERSON -How do you make sure you select the committee so that it is fairly broad in its approach?

DR NEARHOS -The committees have represented on them four medical practitioners , who are appointed after consultation with the AMA, and one government appointee, and they are actively practising medical practitioners.

SENATOR PATTERSON -So it is with the AMA and not AMA and RACGP?

DR NEARHOS -No. The committees of inquiry have nominees from the AMA.

SENATOR PATTERSON -How did you arrive at a saving of $10.6m if we are not clear what services presently are being reimbursed which will not be reimbursed in the future?

DR NEARHOS -That will relate to using new mechanisms of detection of problems as well. Through the use of our consultants we can apply a broader range of parameters to our data. Rather than using fairly crude mechanisms for detection, we are using more sophisticated mechanisms.

SENATOR PATTERSON -But that has not told me how you got the savings of $10.6m. Is that a guesstimate of how many services you think are being given that are not clinically relevant?

MR KENNEDY -I am not certain, but my recollection is that an assumption was made that it would be a certain percentage of total services and that was applied to the outlays. It was an estimate.

SENATOR PATTERSON -So it is a long shot or a short shot-we do not know.

MR KENNEDY -I would not suggest there was any great precision to it.

SENATOR HERRON -It was a figure plucked out of the air.

MR KENNEDY -It was our best estimate.

SENATOR HERRON -But you do not have any criteria to establish it.

DR NEARHOS -It is based on what we have seen in the reduction of servicing by individual practitioners following counselling. So it is based on the reduction we have seen by tracking quite a number of practitioners.

SENATOR HERRON -How many?

DR NEARHOS -In the series we did it was 34.

SENATOR HERRON -That is 34 out of 16,000 GPs.

DR NEARHOS -Yes; 34 that were a problem.

SENATOR HERRON -That is very statistically relevant!

SENATOR MCMULLAN -I think the officer is saying that they were 34 who displayed a characteristic common to the characteristics of the people to whom this program is designed to apply.

SENATOR PATTERSON -Were these 34 using services that were not clinically relevant, or were they really over-servicing? There is a difference. Senator Baume outlined things that really could not be called medicine by even a long stretch of the imagination. But, on the other hand, I think somebody was talking about giving people glucose tolerance tests every time they walked through the door. A glucose tolerance test is a legitimate medical test-it might not be appropriate to use at that time; but that is a very different thing. Here I thought you were getting at people engaging in a service that really could not, in all honesty, be called a medical service.

Is that what you are getting at, or is the $10.6m really about people who are not carrying out proper medical servicing plus those who are in fact providing services that one might expect from the local priest or someone else -maybe flotation therapy for people who have been exposed to furry penises? That might not be considered by medical practitioners to be a legitimate form of rehabilitation for a patient who has seen a furry penis. Are you trying to get at the two things, or just the latter?

DR NEARHOS -It is both of those things; it covers anything that is an inappropriate type of servicing.

SENATOR PATTERSON -So it is not just clinically relevant in that it is a medical service; but, rather, clinically relevant to the condition that the patient presents with, is that correct?

DR NEARHOS -Yes, that is right.

SENATOR PATTERSON -I can now see why you get the $10.6m figure. When I thought it was about people using services that were really not medical in that sense , I thought that the $10.6m was a bit over the top.

DR NEARHOS -It covers all of them, senator.

CHAIRMAN -We will vary the attack a bit and bring on Senator Walters from the southern end.

SENATOR WALTERS -I have some questions about the MRI. I was given information earlier that Medicare does fund MRI. Could you explain what the funding is for that?

MR MCNEIL -The Government has provided capital funding assistance to the States to enable the purchase of a number of MRI machines in the public sector . It has included an item in the Medicare benefits schedule which covers a professional fees component associated with using this equipment, but it has limited it to those hospitals approved under the program. When the MRI first came onto the scene the Government announced that it wanted to evaluate it. It referred the MRI technology to the National Health and Technology Advisory Panel and, pending the outcome of the evaluation by NHTAP, the Government decided it would restrict the availability of this equipment through the public sector to a certain number of machines.

The NHTAP issued a final report in relation to MRI which concluded that it had advantages in relation to certain diagnostic procedures concerning the spine and the head. It also recommended that Australia move to about 17 units. In this year's Budget the Commonwealth Government has decided that it will move to funding 18 units Australia-wide-which is roughly one per one million people. It will be providing that equipment through grants to the States.

SENATOR WALTERS -At the moment, as you would know, the waiting list for those funded hospitals is so long that it is virtually impossible to wait that period of time for any acute work. Therefore, people are going off to private MRI units and paying very large sums of money to have their MRI's done. What justice is there in that and what assistance can be given?

MR MCNEIL -The Government has decided that Australia should have only 18 units funded through the taxpayer, based on the advice of the expert panel-the National Health and Technology Advisory Panel-which recommended that Australia needed only 18 units and that we should not be funding more than that. The Government has accepted those recommendations and it will fund 18 units. A number of units are already in place and a number of approvals have already been given for further expansion in the public sector.

Pending some of those units becoming available-for example, in New South Wales there are delays in ordering a second public machine-the Commonwealth has agreed to using hospital enhancement program money to purchase services from the private sector in order to augment requirements. But the Government has made it clear that it will be funding 18 units and that is all.

SENATOR WALTERS -How many units are in Australia at the moment?

MR MCNEIL -In terms of public and private units, I think there are currently 11 funded public ones and a number of private units-I am not sure of the precise number; I think it is about 11 or 12.

SENATOR HERRON -Do you have any idea how many are on order?

MR MCNEIL -I think the best figure we have seen is that about another 10 or so private machines are on order.

SENATOR HERRON -That will make about 33 in Australia.

MR MCNEIL -Yes, if the private operators persist in obtaining them.

SENATOR HERRON -Is there a policy in relation to medical benefits or refunds for MRI? Is there a deliberate policy not to fund MRI?

MR HAMILTON -Mr McNeil has indicated that we will fund 18 nominated units and we will not pay any sort of benefit for any unit over and above that which is not part of the 18 units which were agreed to be funded.

SENATOR HERRON -So they are public units.

MR HAMILTON -Not necessarily.

MR MCNEIL -The funding will be through the public sector. It might well be that, in some cases, States will choose to actually purchase private sector services rather than install the equipment. NHTAP recommended that the equipment be given to hospitals with an accredited training neurosurgical facility. That creates a slight problem in places such as Queensland where the number of public hospitals which meet that criterion is very small. In places like Queensland there may be a need to look at having one of the public machines located in the private sector.

SENATOR HERRON -That is in fact occurring. That is why I question the criteria used in terms of refund in a State like Queensland where you have such a decentralised population, yet you are making this decision. In effect, the Commonwealth is putting it onto the particular State to contract out those services to the private sector.

MR MCNEIL -If it so chooses.

SENATOR HERRON -So it is not the Commonwealth's intention to provide a scheduled fee or private provision of MRI.

MR HAMILTON -That is correct; not unless it is one of the ones subcontracted from the States.

SENATOR WALTERS -Could you give me a list of the MRI units and where they will be located?

MR HAMILTON -Do you mean the 18?

SENATOR WALTERS -Yes.

MR HAMILTON -The States have to nominate and they have not yet done so. We know where the existing ones are.

SENATOR WALTERS -If the States are nominating where they go, that means the States have some input that is not totally funded by the Commonwealth. Is that right?

MR HAMILTON -If they are part of the public hospital system, obviously the States have some input.

SENATOR WALTERS -Are you expecting some State finance to be included?

MR HAMILTON -As part of the State hospital funding, yes. We are making a capital contribution out of the hospital and house program and have benefited from that.

SENATOR WALTERS -So it is not totally funded by the Commonwealth?

MR MCNEIL -Certainly the machines that have been funded to date have been at about 80 per cent capital cost by the Commonwealth. We have picked up the costs through the schedule of the private patients professional service component. The States have picked up the costs of the professional component for treating public in-patients, which is part of the normal hospital arrangements.

SENATOR WALTERS -What I am obviously trying to get at is this: if the States cannot afford the extra funding, what happens? Do the units not go ahead?

MR MCNEIL -The contribution for the capital cost of these additional expanded opportunities will come out of the hospital enhancement program, which is coming from the Commonwealth. There is not a requirement for the States to put in a 20 per cent contribution for the new units.

SENATOR HERRON -What were the criteria used for determining the number? You say one per million.

MR MCNEIL -The suggestion that came out of the recommendations from NHTAP was that there should be one provided on the basis of hospitals with a teaching capacity for neurosurgery which, in its view, equated with what Australia needed, which was about 17 units. The Government has turned that 17 units into 18, allowing for population growth, and has worked on an allocation to the States and Territories. It is treating New South Wales and the ACT as one and Victoria and Tasmania as one in terms of allocating on the basis of one per million.

SENATOR HERRON -Will those criteria alter according to the demand, for instance, for the use of MRI as a diagnostic tool?

MR MCNEIL -MRI will need to be under constant evaluation. There will be a further reference to AHTAC-the Australian Health Technology Assessment Committee-which superseded NHTAP. The technology has potential to be used for other implications beyond heads and spines. There is a suggestion that it is very good in relation to joints. So the technology will need to be constantly evaluated. Similarly, if there are further developments in relation to the unit price and operating costs of the equipment through further technical enhancement which brings the unit price down, that may well change the relative value of using MRI versus CT.

SENATOR HERRON -So the numbers are not immutable?

MR MCNEIL -They are fixed until such time as the Government takes another policy decision which may flow from a further review by AHTAC.

SENATOR WALTERS -I have a paper here called Microeconomic Reform-Occupational Regulation from the Tasmanian Government. The emphasis throughout the whole paper is on standards. It lists all the boards of various organisations and groups such as the legal profession, the medical profession, accountants, veterinary surgeons, travel agents, rehabilitation providers, ministers of religion, radiographers and hairdressers-the lot. It says of micro-economic reform:

The standards set by registration should be the minimum needed to meet community concerns. To exceed those minimum standards would deny consumers access to a lower but acceptable quality and a wider range of services, likely to be delivered at a lower cost because of a larger number of providers . . . . Some Registration Acts make provision for the open-ended setting of regulations relating to ethical and moral standards of conduct, as well as technical standards. There is a major risk in this approach in that, because ethical and moral standards are very difficult to define precisely, such regulations when administered with the force of law by elite peers can tend to exclude from operation some practitioners whose services would be of a standard acceptable to the community at large.

A preferable approach is to:

. First, set such standards only when seen as absolutely necessary and where other parts of the law do not provide adequate consumer safeguards; and

. Secondly, use legislation rather than statutory rules to establish as clearly as possible minimum accepted standards of behaviour for particular occupations.

It continues:

Peer setting of superior behavioural standards can supplement the statutory basis through the self-regulation . . .

The whole idea is that ethical and moral standards set by boards can be too high. Is that completely foreign to you, or do you know anything about it?

MR MCNEIL -I am not aware of that report.

MR HAMILTON -It is a Tasmanian report. We are not particularly aware of it. Work is currently going on under the Special Premiers Conference on mutual recognition of professional and technical qualifications. Mutual recognition very much is not about upping the standards and registering what is not required to be registered, but simply making mutual recognition between the States. That is the Commonwealth's interest in it; it is not about setting any particular level, but setting national standards.

SENATOR WALTERS -The general idea behind this paper is that standards set by the various boards are just too high. It says that very clearly.

MR HAMILTON -That is a view being put in that paper.

SENATOR WALTERS -Do you agree with that general philosophy?

MR HAMILTON -There is a danger in the approach that standards can raise, but that is not a matter that the Commonwealth is involved in, so I do not think it would be appropriate to comment.

SENATOR WALTERS -I just wondered whether that was the approach being taken by the Commonwealth, particularly when you have a look at how it is bringing ophthalmologists down to the level of optometrists.

MR HAMILTON -I do not accept that as the statement of what we are doing. We are simply saying that the fee for benefit purposes that we pay for ophthalmologists for refraction testing should be the same as what we pay to optometrists because it is the same work. There are many other things ophthalmologists do which optometrists do not do for which the former get a higher fee.

SENATOR HERRON -Do you not think there is a margin for skill with the ophthalmologist as opposed to the optometrist in terms of diagnosis?

MR HAMILTON -Not for pure refraction testing.

SENATOR WALTERS -That is what I am indicating that this is all about-that there is not that margin for skill and that it is a general downgrading of all the professions. I thought you may well be familiar with it and be abiding by it.

MR HAMILTON -Not particularly. We simply believe that a rebate for the same work done by the two groups is appropriate.

SENATOR WALTERS -Can you tell me the total cost of the national health strategy last financial year and how it was made up-for example, the administration, running costs, travel, salaries and so on?

MR HAMILTON -We answered a question on notice very recently on that topic, so we may have the text of that answer.

MS ARIOTTI -In response to question on notice No. 821 from Dr R.L.Woods, the Minister gave a response that listed the number of people employed by the national health strategy, their names, employment level, salaries, et cetera, plus details on all the consultancy costs associated with the national health strategy. We can make that available to you today.

SENATOR WALTERS -Can you tell me whether Jenny Macklin is a full time member of staff?

MR HAMILTON -She is a ministerial consultant for the Minister for Health, Housing and Community Services.

SENATOR WALTERS -I could not find her on this list.

MR HAMILTON -She is a ministerial consultant; she is not a member of the Department.

SENATOR WALTERS -So she is a full time member of staff?

MR HAMILTON -Of the Minister's staff. She is a consultant.

SENATOR WALTERS -Not of the Department's staff?

MR HAMILTON -She is not a member of the Department. She is a consultant to the Minister under the Members of Parliament (Staff) Act.

SENATOR HERRON -An independent contractor?

MR HAMILTON -Precisely a consultant under that Act.

SENATOR WALTERS -So she is a consultant on the ministerial staff?

MR HAMILTON -That is correct.

SENATOR WALTERS -Is she a ministerial adviser?

MR HAMILTON -That is correct.

SENATOR WALTERS -She is not being paid especially for this report.

MR HAMILTON -That is the work she was doing. She is employed a consultant by the Minister under the Members of Parliament (Staff) Act to direct the work of the national health strategy.

SENATOR WALTERS -Could you tell me her salary?

MS ARIOTTI -Her salary is $79,955 per annum plus a car and superannuation, as noted in our answer to question on notice No. 821.

SENATOR WALTERS -I am sorry, I have not read that.

MS ARIOTTI -I can make it available.

SENATOR PATTERSON -I have some questions about Budget Paper No. 1, although I am not sure whether that is the right numerical reference. My papers refer to page 373-2. It refers to the reorganisation of the existing medical adviser functions using sophisticated computer programs for early detection and counselling of inappropriate GP service patterns. What does this mean in practical terms? Is that what Ms Batman was talking about before or is it something that is quite different?

DR NEARHOS -This is different.

SENATOR PATTERSON -Could you explain it? It means nothing to me in that form.

DR NEARHOS -I referred to it earlier. It relates to using a technology called neural network, an artificial intelligent system, whereby we can apply a large number of variables that are determined by our consultants in each specialty. We apply these variables to our data for practitioners in each particular subcategory of a speciality. For example, a neural network we developed to start with in optometry had about 16 or 17 different variables determined by an optometrist whom we employ as a consultant. It is a process whereby a computer system learns to recognise these patterns. It recognises them with a very high degree of accuracy, as compared with what our consultant would.

SENATOR PATTERSON -What sort of pattern?

DR NEARHOS -It picks out practitioners about whom we may be concerned with a high degree of accuracy, which was previously impossible. It allows us to apply a fair degree of intelligence to the way in which we analyse our data and applying the parameters determined by our consultants in picking out people that we need to have a closer look at.

SENATOR PATTERSON -Are you saying, if there are categories A, B and C and a practitioner or a service provider does A and B or A and C, that it would not be picked up; however, if the practitioner does A, B and C, the neural network would signal that that is a problem because it would not be a typical process to carry out those three referrals, given a particular diagnosis?

DR NEARHOS -Put simply, that is right. Those variables-A, B, C and D or however many there are-are ones that one of our learned consultants would determine in accordance with what is proper practice.

SENATOR PATTERSON -Is that the basic data being used, compiled from Medicare claim forms?

DR NEARHOS -Yes.

SENATOR PATTERSON -I am interested to ascertain whether it was the foretelling of a computer systems transaction between doctors and the Health Insurance Commission.

DR NEARHOS -No. It is purely a more sophisticated and fairer way of analysing the data we already have with a much greater degree of accuracy, because we can apply all these parameters within a particular specialty.

SENATOR PATTERSON -Are you including general practitioners as a specialty group?

DR NEARHOS -Yes.

SENATOR PATTERSON -When doctors who are overservicing are detected, who sits on those committees of inquiry? Are these people different from those on the clinically relevant committee?

DR NEARHOS -The committees are the same. Committees are set up in each State consisting of five actively practising medical practitioners. Four of the practitioners are appointed after consultation with the AMA and the other is a government appointee. A chairman is appointed in each committee. If a case is referred to it, following information that we put together where there is a reasonable degree of suspicion that there is a problem, the Committee will look at the information presented to it and determine whether a hearing will be conducted.

The Committee may choose not to have a hearing. It may feel that the information is not of a degree that would cause it any concern. If it decided to hold a hearing, that hearing is held in private. The doctor is invited to present details of management of patients covering the individual cases which have been referred to the Committee. The Committee is also able to appoint consultants as members of the Committee from any particular speciality that is relevant to a practitioner.

SENATOR PATTERSON -On an ad hoc basis as a member of that particular hearing?

DR NEARHOS -He is appointed as a consultant and has the same degree of protection as does any other member of the Committee.

SENATOR PATTERSON -Does that person have a vote? What happens if three people out of the six committee members agree that the doctor has done something wrong and three do not? What is done then?

DR NEARHOS -Decisions are not usually taken by way of a vote. A consensus is usually formed. The consultant cannot vote but the other members can vote, and the chairman has the casting vote. I believe that in most instances there is not a need to take a vote, but the members can.

SENATOR PATTERSON -What are these committees called?

DR NEARHOS -Medical services committees of inquiry.

SENATOR PATTERSON -What happens when somebody is found to be doing something wrong according to these medical services committees of inquiry?

DR NEARHOS -The Committee makes a recommendation to the Minister. The Committee can find that a number of services that have been presented to the Committee are not reasonably necessary; that is, that they are excessive services. For those services that are excessive, it can be determined by the Minister that the money will be repaid.

SENATOR HERRON -How many doctors have been referred to MSCIs in the past 12 months or the past financial year? The corollary is: how much money was paid back and what was the cost of the MSCIs?

DR NEARHOS -There are approximately 15 practitioners.

SENATOR HERRON -Fifteen out 35,000 doctors in Australia?

DR NEARHOS -Yes.

SENATOR HERRON -How much money was repaid?

DR NEARHOS -I cannot tell you exactly. It is not a lot of money.

SENATOR HERRON -How much?

DR NEARHOS -I cannot tell you exactly, sir.

SENATOR HERRON -Could we find out?

DR NEARHOS -Yes. It varies between $600 and, say, $30,000 in each case.

SENATOR HERRON -Fifteen by $30,000 at the most is $450,000. What was the cost of running MSCIs?

MR HAZELL -I do not have that cost, but I can get that for you. We have them in the budget. I am just looking for a summary of the outcomes of the committees. I know that I have a table here.

SENATOR MCMULLAN -While the officer is looking for it, could I make the comment that, although this is a perfectly appropriate line of inquiry, it does not lead us to a very satisfactory cost-benefit analysis. Setting up a body to assess whether people have been misusing a service and recovering the money is likely, as you would have imagined, to have a deterrent effect on other factors that are not measured by prosecutions and recoveries. That does not mean that the point is irrelevant. I am not in any way criticising the questioning. I am simply using the opportunity to make a generalised extra background comment about it.

MR HAZELL -The number of people referred to committees of inquiry last year- that is, 1990-91-was 16. The outcome in terms of finalised determinations is 78,000, close to 79,000, but it is not uncommon, as I think Senator Walters referred to before, for there to be appeal processes hanging off the end of these. At the end of the year, there was $180,000. The committees had completed their finding, but the doctor had appealed the finding and those appeal processes are still in action.

SENATOR HERRON -How long have the MSCIs been in existence?

MR HAZELL -They are a longstanding feature of the legislation.

DR NEARHOS -The basic structure goes back to about 1954.

SENATOR HERRON -That is an enormous deterrent. It has been in existence for 27 years. The deterrent value is that 15 out of 35,000 doctors have been prosecuted.

SENATOR MCMULLAN -It is like elephant powder. It shows how well it is working. There are 34,885 not doing it.

SENATOR HERRON -I suspect that. What has been the cost of running the MSCIs in the last 12 months?

MR HAZELL -I will have to get that figure for you. I do not have it with me.

SENATOR HERRON -Could you make any guesstimate? How many are on the committees in each State?

DR NEARHOS -Five.

SENATOR HERRON -Do they meet in each capital city?

DR NEARHOS -Yes.

SENATOR HERRON -Is there anybody outside the capital cities?

MR HAZELL -By and large, they meet in the capital cities. There are eight committees: two in New South Wales; two in Victoria; and one in each of the other States. They do not meet continuously. The costs are by way of fees for their sittings. I can get you those costs.

SENATOR HERRON -I would like to see that. It would be an interesting comparison to see how cost effective they are, considering the deterrent value of 27 years in that it has produced 15 doctors and $78,000.

SENATOR MCMULLAN -Not 15 in that time; 15 last year.

SENATOR HERRON -I appreciate that it was in the last 12 months, but there has been a cumulative deterrent of 27 years producing that effect.

SENATOR MCMULLAN -I do not want to be flippant, but the fact that there are very few people being detected as abusing the system is more logically an indication that it has been successful than that it has not. I accept that it does not prove either.

SENATOR HERRON -How many were detected 27 years ago? If you are talking about deterrent value, if there has been no increase in detection in 27 years-

SENATOR MCMULLAN -I think the taxpayers would express profound concern if we said we had no mechanism for assessing people who are abusing the system, even if there were only one detection every five years, and I agree with them.

SENATOR HERRON -I will come back to it when I have an answer as to the cost of the MSCIs.

MR HAZELL -The value of the determinations is limited to the services that the committees are asked to look at. That is limited in order to make the committees manageable. When these functions were transferred to the Commission just after the introduction of Medicare, there was a big backlog in committee action, largely brought about by the size of the reference. The point I am getting at is that the committees can only make a determination in respect of the services that are presented to them. The figure is not necessarily indicative of the total amount of excessive servicing that may have been going on.

SENATOR HERRON -I think the Minister made the point: it is like the umbrella and the elephants-Minister in loco parentis.

SENATOR PATTERSON -I have some questions with regard to practice grants. Are practice grants actually in existence? Have they been tried?

MR HAMILTON -No. That is partly what we announced. We wish to talk to the medical profession about the development of practice grants.

SENATOR PATTERSON -Could you give us some sort of outline as to what we would expect to see? Would they be a bulk amount of money, including X-ray referrals and pathology tests?

MR HAMILTON -No. There are two quite separate issues. I can appreciate that the words may be confusing. There are practice grants and practice budgets. The things you were referring to then followed more the idea of practice budgets, where we say that on a trial basis we will consider, in consultation with the profession, giving to GPs who are interested in trialing this an amount of money for them to have control of for pharmaceuticals and diagnostics. That will be an amount of money that they, as it were, have to spend on pharmaceuticals and diagnostics. That is practice budgets. Practice grants are grants that we would make to general practitioners for the clinical services they provide through their practices.

SENATOR PATTERSON -Let us go back to practice budgets. If I were a highly efficient practitioner and you had estimated what my budget should be, given the nature of my general practice, would I be able to order some other services for my patients, such as the service of a dietitian or some other service, within that because I felt that would increase the efficacy of my general practice?

MR HAMILTON -Certainly, you could order them out of the practice grant. That is precisely the idea of practice grant: the general practice would be able to use that for a range of services that it thought relevant. The practice budget, if I can make the distinction, is very specifically for diagnostics and pharmaceuticals. They are under the practice budget; that is precisely one of the thoughts in mind.

SENATOR HERRON -If they did not spend the budget, would they get that in income?

MR HAMILTON -In effect. That is the grant they have for the running of their practice, including the amount they wish to have for their own reimbursement.

SENATOR HERRON -It is along the lines of the system in the UK?

MR HAMILTON -It is broadly in line with that, but the details of it have to be talked through with the profession, of course.

SENATOR PATTERSON -The practice budget you would keep, but the practice grant you would not keep if you had not spent it, would you? I may decide not to give extra service to my patients.

MR HAMILTON -You are going into areas that we have not finalised. We have not had discussions with members of the profession yet because they do not want to talk to us at this stage about these things.

SENATOR PATTERSON -I could see an incentive not to give extra services if I could keep the money at the end of that time.

MR HAMILTON -The patient would no doubt judge the quality of that service and practice.

SENATOR PATTERSON -When are you expecting the trials to begin?

MR HAMILTON -As soon as we can have discussions with the profession and reach some agreement on the broad parameters. We would like to see practice grants in place by July next year.

SENATOR PATTERSON -Are you envisaging things that doctors would be expected to comply with if they were in receipt of a practice grant?

MR HAMILTON -That is the sort of thing we would like to talk about with the profession. They would be complying with protocols that, for example, the Royal College would establish and agree to rather than anything the Government would impose.

SENATOR PATTERSON -With the Budget, if they ran out of, say, pathology tests or X-ray referrals before the end of the year, what happens to the patients?

MR HAMILTON -That is precisely what we want to trial and talk through with the profession. They are some of the issues that the UK is grappling with that we also want to grapple with. I could not give you a definitive answer on that.

SENATOR HERRON -I would like to put on record the direction in which you are leading. The July issue of the College and Faculty Bulletin of the Royal College of Surgeons of England states:

Surgical throughput and workload will inevitably form the basis of many contracts agreed between the Provider Units and Purchasing Authorities. At present District and Unit Managers are in the process of clarifying `job plans ' or `job descriptions' with their consultants'; this necessarily involves a consideration of the workload element.

Some guidance on workload has recently been issued . . . in which it is clear that management are charged with the duty of ensuring that a Providers' offer of services are both realistic and deliverable. It is therefore of fundamental importance that we have a justifiable view of the work that can be achieved by a consultant firm.

Is that what you envisage?

MR HAMILTON -There is nothing in our proposals that go as far as the Budget holding initiatives in the UK, for example. They go to hospital based services as well. We are much more modestly toeing the water because there are issues that have to be thought through. We are only talking about it in relation to diagnostics and pharmaceuticals. Some of the same issues arise but not as acutely.

SENATOR PATTERSON -In the latest changes to the pathology industry announced in the Budget, it is stated that in the next two years the number of specimen collection centres will be halved. How is the Department planning to achieve this?

MR MCNEIL -A process has been established in consultation with the profession to look at licensing the number of centres and to have a phased production. Procedures are being developed now in consultation with the profession about precisely how that will be done.

SENATOR PATTERSON -So you have not determined which specimen collection centres will go, which ones will stay and what the criteria will be?

MR MCNEIL -Not yet.

SENATOR PATTERSON -Have you taken into consideration how rural communities will continue to have access to adequate pathology services?

MR MCNEIL -The access in relation to rural communities will be taken into account in looking into the allocation of the number of collection centres which will remain.

SENATOR PATTERSON -I hope that the lessons from the Pharmacy Restructuring Authority will be taken into account when this occurs and we do not have a period of confusion up until approvals are given. Do you get approval for a specimen collection centre?

MR MCNEIL -At the moment there is no approval but there will be a requirement under the licensing arrangements for approvals. Those procedures are being developed in consultation with the profession. The objective would be to have it run as smoothly as possible.

SENATOR PATTERSON -There were some lessons to be learned from that other exercise.

MR MCNEIL -In relation to the essential pharmacy allowance, I acknowledge that .

SENATOR PATTERSON -It is different in a way but it is similar in that you are trying to reduce the number. It would be interesting to see how that exercise goes. Could you supply the figures for the number of collection centres in both urban and rural areas currently?

MR CANDLER -The short answer is no. We hope that we will be able to fairly shortly-it should have happened today-in that we have written to all approved pathology authorities, that is, effectively the owners of pathology laboratories, asking them what they have by way of collection centres. We are trying to find out the nature of the collection centres that are out there and how formal they are. We understand that some have quite formal arrangements where there are leases of premises, a sister arrangement, and a formal correction mechanism. In some other cases-if I can use something fairly pejorative-they are little more than a cupboard in which samples are collected . There is that sort of anecdotal evidence around. We are trying to establish precisely what is out there.

In consultation with the interim working party-which will hopefully become a tripartite body in due course-we are working up a definition of `collection centre' to reflect an appropriate collection centre, consistent with what is the actual industry practice, of a reasonable standard.

SENATOR PATTERSON -I am going to labour the rural issue because when I was newly elected, in every country town I went to there were great concerns about having a registered pathologist on the premises. Some little country hospitals had pathology units but they had a visiting pathologist, not a person there all the time. I cannot remember the details of it but it was obvious that when a decision was made to do it, which occurred before I got into Parliament, that change had not been thought through in terms of the effect on rural communities. Is this more a city problem than a rural problem that we are currently addressing?

MR CANDLER -It is fair to say that it is largely a city problem with, as it were, massive collection centres concentrated around GPs' surgeries or areas where there are a number of GPs' surgeries, providing an office front to compete for the patients. The problem is not entirely restricted to the suburban areas. There are a number of so-called category five laboratories which are actually run by a GP. There is anecdotal evidence to suggest that the creation of that category five laboratory is to enhance the GP's income rather than to provide a genuine service that cannot be provided by a large practice with proper collection facilities. There is no need for a collection centre in those areas. If the GP takes the sample or the specimen it can quite quickly be delivered to a major laboratory and the result returned to him.

SENATOR HERRON -Will rural areas be affected? For instance, in Toowoomba there is only one pathologist who has a collection agency out of all the little towns around there.

MR CANDLER -The question that has to be asked is: are those scattered collection centres necessary? Would it be adequate and more efficient for the GPs in those outlying areas to take the samples and have them collected by a courier service rather than have another step in the process of the patient going to the GP in the collection centre and the sample then going from the collection centre to the pathology laboratory?

SENATOR PATTERSON -Will city and rural collection centres all be expected to pay the same $1,000 licensing fee?

MR CANDLER -Indeed. That is where it is going at the moment. It is subject to consultation through the working party.

SENATOR HERRON -So that pathologist in Toowoomba, for instance, would have to pay a license fee for Pittsworth, a town not far away, if he wished to continue, otherwise he would have to provide a courier service. Is that what you are saying?

MR CANDLER -There would be an economic judgment for him to make-whether it was better to maintain the collection centre and pay the licensing fee or run a courier. There is no guarantee that he would get a license for that.

SENATOR HERRON -So the alternative is that patients in Pittsworth would have to drive to Toowoomba?

MR CANDLER -The alternative is for the GP in Pittsworth to take the samples and a courier would come from the laboratory to collect them, or an arrangement is made to get the samples from the GP's surgery to the laboratory . It does not necessarily have to be a courier physically coming to get them. There may be an arrangement for their transportation that is independent of a laboratory courier; an agent of the laboratory could be doing that courier work.

SENATOR HERRON -That would be an added cost then to the pathologist?

MR CANDLER -It would be an added cost, but it is in the transaction fee that is available. If you look at the incentives that are in the current arrangements where each fee for service has overheads and courier costs built into it, you will see that the provision of the actual pathology service-where there is an episode of several services-is getting compensated for that overhead possibly three or four times, whereas now the fee for the service is actually reduced but there is the transaction fee; that overhead is being specifically compensated for.

SENATOR HERRON -So the rural solo pathologist is not at a disadvantage compared with the city pathologist?

MR CANDLER -I do not want to answer that definitely and affirmatively. I think not, but it is one of the things we are talking through with the consultative body at the moment.

SENATOR HERRON -It has not been determined yet?

MR CANDLER -Not definitely determined, no. I think it is one of those things that has to be worked through.

SENATOR HERRON -Not determined yet?

MR CANDLER -Not determined.

SENATOR PATTERSON -In the House of Representatives legislative forward program for the week 11 to 14 November, there are some Bills referred to. One is called the health levy collection Bill and the other is called the health levy assessment Bill.

MR HAMILTON -I assume they are the annual taxation Bills. They are part of the income tax package, the Medicare levy part of the income tax package that has to reimpose the rate of tax each year. They are Treasury Bills, in other words. Such Bills are usually called the Medicare levy. This year they are being called the health levy. I do not know why.

SENATOR PATTERSON -It is the same thing but with a different name?

MR HAMILTON -Yes. It is the annual imposition of the Medicare levy.

SENATOR MCMULLAN -It may be that the Bill will not have a different name. Sometimes it is given a shorthand description in that particular document.

SENATOR PATTERSON -It is referring to the same thing?

SENATOR MCMULLAN -Yes.

SENATOR PATTERSON -I have a number of questions to ask about the review of professional indemnity arrangements for health care professionals. What is the level of funding for the review of professional indemnity arrangements for health care professionals?

DR HARMER -In the 1990-91 Budget, the Government has provided an amount of $ 444,000 for the review.

SENATOR PATTERSON -What are the aims and objectives of the review?

DR HARMER -I can provide the terms of reference to you.

SENATOR PATTERSON -Could you give them to members of the Committee so that we can read them. Who are the members of the review and how are they chosen?

DR HARMER -There is an advisory committee for the review. It comprises a representative from the ACTU and health unions, the Australian Health Ministers Advisory Council, consumer organisations, the Australian Medical Association and the Commonwealth Government.

SENATOR PATTERSON -What is the timetable for the review?

MR HAMILTON -I think that the review has been asked to provide a report for the Health Ministers meeting in March. Certainly, in terms of the Commonwealth timetable, it is to feed into the next Budget timetable, so it will be in the first few months of next year.

SENATOR PATTERSON -Do you know what consultations have taken place with health care professionals?

MR HAMILTON -I am not aware of the detail. I know it has started. There is the advisory committee that Dr Harmer has mentioned. There is a process in place whereby the officers of the Department go around and talk to them. I could not name the ones they have already talked to. I will see if we can provide a list.

DR HARMER -The AMA, the people from the ACTU health unions and the relevant consumer organisations will all be extensively consulted. The $440,000 for this exercise will provide for a very considerable amount of consultation with the profession. There has been quite a lot of cooperation so far.

SENATOR PATTERSON -Will there be consultation? Will it be appropriate for consultation to take place with a professional group such as physiotherapy?

DR HARMER -I do not think any group will be excluded. I am not sure whether physiotherapists as a group are particularly targeted for consultation.

SENATOR PATTERSON -Does it include indemnity arrangements for all health care professionals or is it focussing on doctors?

DR HARMER -It will include all professionals, not just doctors.

SENATOR PATTERSON -So that list you gave me of the people with whom you are going to consult is a shortened list. I imagine you will be consulting with the APA-

MR HAMILTON -Yes. That was the advisory committee.

SENATOR PATTERSON -Dr Harmer mentioned three groups and said that there would be consultation with them.

MR HAMILTON -As an example.

SENATOR PATTERSON -That is what I am saying. Will that list be extended? You said that list was the list from which the committee was formed. Dr Harmer, you gave me three groups that will be consulted with. Could you provide the Committee at some stage with the rest of the health professional groups that will be consulted?

DR HARMER -We certainly can. To clarify the previous misunderstanding, what I read to you before were five groups which were on the advisory committee. That is not meant to be inclusive of all the groups we will be consulting. Clearly , quite a lot of other groups will be consulted.

SENATOR PATTERSON -I realise that. I asked you which groups will be consulted. You gave me three groups. I want to know whether that will be extended. We have clarified that so we need not go any further. Does the Department have an estimate of unnecessary costs which arise from the practice of defensive medicine?

MR MCNEIL -No, there is no specific estimate. There are suggestions made by members of the medical profession that the practice of defensive medicine results in people ordering more tests than they need to in order to be safe in case legal action is taken. Also, some concerns have been expressed by obstetricians about their potential costs and suggestions have been made that people are reluctant to stay in the field of obstetrics because of fear of medical law suits. But there is no figure around as to what the cost might be.

SENATOR PATTERSON -I have got some questions about financial and staffing resources. We are jumping all over the place because we started at the back and went forward. I apologise for that. There is an expected increase in the running costs of subprogram 6.1. Could you explain why. What factors are involved in that increase?

MR HAMILTON -Largely, it is the money that has been provided to us to develop, negotiate, consult and implement the new general practice arrangements. It has been provided to the Department and Health Insurance Commission. We have additional staff for it. We have money for the consultations and a range of other activities. Ms Batman is heading the task force which has been established with that money to do that work.

SENATOR PATTERSON -I want to ask some questions about the vocational register of general practitioners. How many general practitioners are currently on the vocational register?

MS BATMAN -As at 9 September 1991, there were 8,444 on the register and another 72 applications were being processed.

SENATOR PATTERSON -Is that in line with the predictions at this stage?

MS BATMAN -When the vocational registration arrangements were introduced, we imagined that there would be between 10,000 and 12,000 GPs eligible for vocational registration.

SENATOR HERRON -Out of a total number of how many GPs?

MS BATMAN -The exact number is very hard to know, but we thought at that stage that there might be 90 to 95 per cent of GPs. It is hard to tell because we are not sure; not everybody that uses the time tiered items, that did not have a speciality, is in fact a general practitioner. You cannot assume that anyone who is not a specialist is a GP, so knowing exactly how many doctors would be eligible-

SENATOR HERRON -That is 95 per cent of what number? You must have a number if you have a percentage.

MS BATMAN -The figure of 10,000 to 12,000 was estimated by the college as the number that would be eligible and it estimated that that would be 95 per cent of those in general practice at the time. This was in 1989.

SENATOR HERRON -So you have 8,000?

MS BATMAN -8,500 at the moment.

SENATOR HERRON -Of the 10,000 to 12,000?

MS BATMAN -Yes.

SENATOR PATTERSON -What procedures has the Commission taken to make corrections to the vocational register which was not really very satisfactory in April?

MR HAZELL -The problem that was referred to at the time was the fact that we were providing information about all the practice locations that were open when an inquiry was made on the register. As events have shown, some of those practice locations were inactive and hence the address information on them was not relevant to the present environment. We have set up a mechanism whereby the information that is provided relates to the principal practice location that the doctor is currently using or has currently used over the preceding three months. That address is the address under which the doctor is claiming in that particular period. We believe that to be an accurate address.

SENATOR PATTERSON -Would you say that the vocational register is now accurate and up to date?

MR HAZELL -It is accurate in the sense that on the register we have all the practitioners that have been advised to us by the College. It is up to date in the sense that in response to inquiries about the register we are able to provide information about the most frequently used address that that doctor is using. Hence it should be correct.

SENATOR PATTERSON -Are there still entries on the register that do not identify a practice address?

MR HAZELL -I was not aware that there were any that did not identify a practice address. Could you be a bit more specific? There were some entries that related to inactive providers. Is that what you were referring to?

SENATOR PATTERSON -Yes, or an address that would be expected to be a practice address. Are there any still left with post office boxes, such as those which were in the last list?

MR HAZELL -Those addresses are still on the file. We will be contacting particular practitioners to take positive action to close off those practice locations, but the action that we have taken should not see those addresses being reported at the moment.

SENATOR PATTERSON -Or a case where a doctor's address is listed as a hospital address, which is obviously not where their general practice is.

MR HAZELL -As I said, the address that we are using is the address in which the practitioner is advising us that he is making his claims on.

SENATOR PATTERSON -But I thought the purpose of it was that, say, if I am moving to a new district and I want to change my doctor, I can go along and find out who is on the vocational register of doctors from Medicare and that will list the person's name as being at a hospital.

MR HAZELL -I am not aware whether the principal address of any practitioner on the register is at a hospital. I can look at that and report back to you, but I am not aware that that is the case.

SENATOR PATTERSON -I thought there was some mention that we would be given an up-to-date list every three months.

MR HAZELL -I provided a list to the Senate at the end of June and I would be looking to do the same again at the end of this month.

SENATOR PATTERSON -So it was tabled in the Senate, was it?

MR HAZELL -I sent it to the President of the Senate and said that it had been requested by the Senate Estimates Committee. What has happened to it since then, I do not know.

SENATOR PATTERSON -Senator McMullan, do you know whether it has been tabled?

SENATOR MCMULLAN -I will find that out for you.

SENATOR PATTERSON -I was looking out for it.

SENATOR MCMULLAN -I have to confess that I was not, but I will now find out.

SENATOR PATTERSON -I would have thought you would have noticed when it went through, being Manager of Government Business.

SENATOR MCMULLAN -Having enjoyed the committee of inquiry into that matter so much, yes, but I will see what I can do.

SENATOR PATTERSON -What instructions are issued to employees in Medicare offices regarding lists of vocationally registered general practitioners? If I come in and say, `I live at postcode No. 3138 and I want to know the doctors in that area', what directives have been given to the officers in the Medicare offices?

MR HAZELL -We drew their attention to the stationery on which to provide that information in response to the matter that was raised on the last occasion. We drew their attention to the initial instructions that were issued when the vocational register came in, namely, that when they could satisfy the inquiry there and then by the provision of a handwritten document which listed the practitioners for that location, they should do so. When the list was too large, they should not be selective but initiate a computer produced list for the patient.

SENATOR PATTERSON -I have not surveyed this myself, but I was advised that somebody went into a Medicare office and asked for a list of vocationally registered doctors at one postcode and was given a computer print-out list of nine doctors. On the same day, the same question was asked and a list was printed out that said there were no vocationally registered practitioners located in the locality with the same postcode.

MR HAZELL -If you give me those reports, I can check that out, but it seems rather strange to me. Are you talking about two computer produced reports saying that?

SENATOR PATTERSON -Both are dated 1.8.91. One of them lists eight or nine vocationally registered practitioners with their addresses, and the other has nothing on it.

MR HAZELL -If I could have a copy I will investigate it, by all means.

SENATOR PATTERSON -I said to you that it was somebody else who did that, not me. But have you done any random checks of Medicare offices to see how accurate the lists are which are coming from those offices?

MR HAZELL -No, I have not done that, but I have taken some action to see what the level of inquiry is. We are averaging only seven to eight inquiries per day across Australia, so I did not pursue the matter any further than that.

SENATOR PATTERSON -I would have thought, given all the advertisements in the Women's Weekly and the durability of those, that people would still be hankering to find out who the vocationally registered doctors were.

MR HAZELL -The only way staff can get access to the information is via the system. I counted the number of transactions coming through the system.

SENATOR PATTERSON -Do you think people are making a decision on the basis of whether somebody is vocationally registered or not or do you think the community is not aware of that any more?

MR HAZELL -I think the increase in the number of vocationally registered doctors is now such that people have probably sorted out their access problems , by and large. I suggest that is possibly the case.

SENATOR PATTERSON -Are vocationally registered GPs still required to provide home visits and after hour services?

MS BATMAN -Yes. There has never been an absolute requirement that vocationally registered GPs provide either of those two services. They must be predominantly in general practice. Some of the indicators of being predominantly in general practice are that doctors provide services away from the surgery where appropriately required and provide services after hours. It is not an absolute requirement and there are cases where it would not be appropriate.

SENATOR PATTERSON -Those are two indicators. What are other indicators that somebody is in general practice?

MS BATMAN -The definition is that the general practice provides-if I can remember all the adjectives-continuing, comprehensive, whole person care. That is the definition.

SENATOR PATTERSON -Does it also stipulate over a certain time? Is it two days a week or does it say how often that care must be provided?

MS BATMAN -It varies. If you are talking about whether people are eligible to be on a vocational register as part of the grandparent arrangements, the requirement is that they do two sessions a week in general practice. Once they are in general practice, it relates to the proportion of their clinical time charged under the Medicare benefit schedule in which 50 per cent of that time must be predominantly in general practice.

SENATOR PATTERSON -If you expect that one of the indicators of providing a general practice is to provide services away from the clinic-

MS BATMAN -Where it is appropriate or requested.

SENATOR PATTERSON -Would entrepreneurial clinics be in that category? Do most of them provide services away from the clinic? Do they do home visits?

MS BATMAN -I think it probably varies. I am not too sure exactly what you mean by an entrepreneurial clinic.

SENATOR PATTERSON -I mean one of the bulkbilling ones that stays open all night and has glitzy pianos, plastic flowers and all the other trappings that I have seen in some of them as I have driven past.

MS BATMAN -I am not sure of the details of any particular practices and whether they provide home visits.

SENATOR PATTERSON -If the ones that close down at midnight do not provide home visits and those types of things, what happens? Who polices that?

MS BATMAN -The question is one for the College of General Practitioners.

SENATOR PATTERSON -So the College is the one to say doctors should not be on the vocational register?

MS BATMAN -That is right. It is the only body which can advise the Commission that a practitioner is no longer predominantly in general practice and should be removed from the register.

SENATOR PATTERSON -Has it asked for many to be removed?

MR HAZELL -At the moment, no. We have, however, in the last two to three months devised a process whereby, when certain practices come to our attention , we will pass that information on to the College to investigate and make a determination. At the moment, that is limited to an examination of a practitioner's service profile; the selection criteria are not in our sense suggesting to the College that this particular person is not in general practice but simply that this is a particular practitioner whom they may wish to pursue.

For example, one of two selection criteria that we use is the number of specialist consultations used by the general practitioner being greater than the number of general practice consultations. That, of course, would apply only where the particular practitioner had specialist consultations but was not solely engaged in specialist practice. The other criterion is where the percentage of general practitioner consultations is less than about 45 per cent of all the services rendered by the practitioner. As I say, these are simply flags, if you like, to the College to say that, in accordance with what one would normally expect predominantly in general practice, these are practitioners that it should look at. To date, it has not come back. It is only about a month since we referred the first set of information to the College. There were about 50 doctors involved in that.

SENATOR PATTERSON -The College has not recommended anybody being taken off the vocational register since its inception?

MR HAZELL -No. I think we reported last time that we were working up the process I have just described in order for there to be a review of doctors who appeared not to be predominantly in general practice. It is about a month since we provided that information. Perhaps it is not unreasonable that in that time the College has not come back to us.

SENATOR PATTERSON -Will you be systematically providing that sort of information to the RACGP.

MR HAZELL -Yes. The arrangement is that we will provide it on a quarterly basis. We will do the analysis quarterly and provide that to it.

SENATOR PATTERSON -Is that a new arrangement?

MR HAZELL -Yes.

SENATOR PATTERSON -Did it have anything in place to monitor vocationally registered doctors' performances before this?

MS BATMAN -They were responding to complaints and information given, and were investigating doctors-a small number, I understand-before this process was put in place.

SENATOR PATTERSON -But would people who felt that they had not received appropriate service from a vocationally registered doctor approach the RACGP or approach the Department on a hot line first?

MR HAZELL -I suppose they could do either.

MS BATMAN -It would be the College.

MR HAZELL -The College would make any determination.

SENATOR PATTERSON -I know that, but if I am Mrs Bloggs, I go to a doctor, I cannot find the doctor there at night, the doctor will not come to visit me, the doctor has advertised as a vocationally registered doctor and is getting taxpayers' money at a higher return than a non-vocationally registered doctor, I will not think of contacting the RACGP; I am more likely to contact the government, to contact the Department.

MS BATMAN -If the Department got anything like that, we would certainly pass it on to the College for investigation; I am sure the Commission would do the same.

SENATOR PATTERSON -How many of those complaints have you had? Any?

MR HAZELL -I cannot recall any specific complaints that have been directed to us.

MS BATMAN -Nor can I.

SENATOR PATTERSON -Given all the advertising and the money you have spent on advertising, have there been any surveys-I suppose we could use Mr Morgan's buyers-on the public's knowledge of the fact that there is a differentiation between general practitioners?

MS BATMAN -The Department has not done any.

SENATOR PATTERSON -I would expect that you would find that it is almost zilch and that the reason there are not complaints is that people do not know what service to expect from a vocationally registered doctor. A lot of taxpayers' money was spent on those initial advertisements in Women's Weekly, New Idea and wherever else the system was advertised. I would have thought a quick spot check of how effective that advertising had been would have been worth while. If people do not know, they are not making a choice. That is presuming that vocationally registered doctors are better. I debate that, especially for grandfathered vocationally registered doctors, but if we presume they are better and we are paying more for those doctors, we would have presumed that people were making a decision on that basis and that you would be able to tell me roughly the knowledge that people in the community have of the difference.

MS BATMAN -It is part of introducing the vocational registration arrangements. We also introduced the general practice evaluation program that I spoke of earlier. That currently has about 20 projects funded under it and slightly more ceding grants under the same program. One of the projects that we are funding is called `Patient knowledge, opinion, satisfaction and perceived choices in primary health care service provision'. It is looking at the knowledge, opinion, satisfaction and perceived choices that Australians make in using both primary health care services, especially those provided by GPs. I am not aware of the precise protocols and methodologies of this study, but I imagine that, given the context, vocational registration would be one of the variables that will be looked at. The completion date is July 1993 for this particular one.

SENATOR PATTERSON -It would seem to me that we could assess whether people knew that there was such a thing as a vocationally registered doctor?

MS BATMAN -It is a much more sophisticated project than that.

SENATOR PATTERSON -But in the interim we do not know whether people are making a choice on the basis of whether a person is vocationally registered?

MS BATMAN -The point that Mr Hazell made before-the fact that there are now 8, 500 GPs registered-means that it is not quite such an issue and that patients do have an indicator when they get a Medicare rebate; that the rebate they get for VR services is higher than the rebate for non-VR services. So perhaps they might not know why.

SENATOR PATTERSON -I bet they do not know why. With regard to debt recovery in the HIC, does the HIC have debts-people that owe it money-rather than the HIC owing money?

MR MURRAY -I am not sure what you mean by debts. Could you expand it a bit?

SENATOR PATTERSON -Do people owe the HIC money?

MR MURRAY -Yes.

SENATOR PATTERSON -What sort of people?

MR MURRAY -The ones you are interested in are people who have been over paid benefits. Is that the sort of thing you are interested in?

SENATOR PATTERSON -I am interested in everyone who owes the HIC money, but would that be the biggest category?

MR MURRAY -No. On the Medicare side, we do not have many debts. They are very small amounts. The reason I am hesitating is because the amounts that are involved, in the totality of the money that we deal with, are very small. They would not be in the tens of thousands; they would be less than that.

SENATOR PATTERSON -This is in overpayments?

MR MURRAY -Yes.

SENATOR PATTERSON -Do you know the exact figure?

MR MURRAY -Not offhand; I can get it for you.

SENATOR PATTERSON -Do you know what the debt recovery was last financial year?

MR MURRAY -I do not have it with me.

SENATOR PATTERSON -If you could provide that for me, I would be interested. The program performance statements refer to savings of $163.9m in 1991-92 and $306.1m in 1992-93 for the introduction of the co-payment which was announced in the Budget. How were these savings arrived at?

MR HAMILTON -Are you just interested in the co-payment figures? The total figure of $166.6m for 1991-92 is made up of an estimate of $112.4m for a reduction in the rebate; $63.2m for a reduction in utilisation; an additional cost of $10m in relation to the safety net-giving a total of $166.6m in 1991- 92. Equivalent figures for 1992-93 are $247.1m for rebate reduction; $155.2m for utilisation and a cost of $34m for the safety net-giving a total of $368.3 m.

SENATOR PATTERSON -What is the percentage reduction expected in GP services if the $3.50 co-payment is introduced? The Budget must have had an expectation of the decrease.

CHAIRMAN -We have two documents to table: the Health Care Access, table 62, and the Consumer Panel of Australia Service of the Roy Morgan Research Centre Pty Ltd on prescriptions-consumer usage and prices paid, February 1991. If there is no objection, those documents will be tabled.

MR HAMILTON -We can give an estimate of the number of services estimated to be reduced this year. I cannot give you an estimate in the longer term because that depends on the precise nature of the package in relation to practise grants, changes in supply and those matters that we have to negotiate with the profession.

SENATOR PATTERSON -Could we have that figure for this year?

MR HAMILTON -Yes. We shall attempt to find that now.

MR MCNEIL -The reduction in services is about 7 per cent in the first year.

SENATOR PATTERSON -Given that there has not been some hiccup, I presume that if I had asked `What percentage of reduction in GP services would have been expected in the next financial year? `I would have got some sort of answer. What figure was projected? We have guesstimated lots of other things without lots of information. What was the figure that you had in your estimates for the next financial year?

MR HAMILTON -We provided the Committee with a break-up of the estimates in terms of the projected financial effect of the reduction in the rebate, the projected reduction in utilisation and the extra cost to the safety net. This was indicated in Budget Related Paper No. 9 and the Government intends to consult with the profession to deal with the oversupply of GPs and to assist the profession in improving the quality of general practice. We will provide full details of any agreements with the profession and the cost of individual measures once agreement has been reached.

Consultation with the profession will be within the financial parameters set down in Budget Related Paper No. 9. But, in the meantime, we are not prepared to provide the planning assumptions made in relation to individual measures, as the Government believes that would prejudice those consultations.

The estimates for the reduction in the rebate and the copayment are based broadly on the work of Professor Richardson for the National Health Strategy, on his work on the effect of co-payments.

SENATOR PATTERSON -How much did it cost for him to prepare that paper?

MR HAMILTON -I am not sure if we have the figure. I will see if we can get it.

MS ARIOTTI -The consultancy fee for Professor Richardson to prepare that paper was $5,000.

SENATOR HERRON -Just to follow on from that, how did you arrive at the $3.50 if you are basing it on Professor Richardson's paper? Why not $3 or why not $4 ?

MR HAMILTON -That was a Government decision. The actual figure was arrived at in the course of the Budget process. I am not at liberty-

SENATOR HERRON -You just said it was based on Richardson's-

MR HAMILTON -No. The effect of any fee, whatever it would be on utilisation, the estimates, on reduction in demand and supply response was based on Richardson's-

SENATOR HERRON -He said that the broad parameter was that patient co-payment had no effect.

MR HAMILTON -He did not say that.

SENATOR HERRON -He said beyond 40 per cent it does.

MR HAMILTON -He said it had a certain effect. He was looking at a co-payment in the context of no measures to restrict the supply response. The Government package, of course, has significant measures to lessen the supply response.

SENATOR HERRON -But you are not prepared to tell us how you arrived at the $3. 50?

MR HAMILTON -Not at the $3.50. It was a government decision in the Budget context. I cannot go into how that figure was arrived at, no.

SENATOR HERRON -Are you prepared to, Minister?

SENATOR MCMULLAN -No.

SENATOR PATTERSON -He is not the Minister.

SENATOR HERRON -The Minister in loco parentis.

SENATOR MCMULLAN -Do not stop him. It is the closest I might get. I enjoy it.

SENATOR PATTERSON -We have the advice that has been given, using taxpayers' money, to assess what the reduction in GP services will be, and the presumed savings must have been based on some estimate which included the reduction of GP services from the co-payment as well as other changes that were occurring through practice budgets and practice-what are the other things called?

MR HAMILTON -Practice grants.

SENATOR PATTERSON -Obviously they were factored in, but you are saying it is a Government decision for us not to have that information of the estimate of the second year's decrease in GP services in the 1992-93 year?

MR HAMILTON -We have provided the figure that, for example, in relation to 1992-93 the total effect of the copayment measures will be $68.3m. The figure for all other measures is, in next year, a cost of $67.6m. The net effect, therefore, with administration added in is $306m. So the total figure of $67.6 m cost in the year 1992-93 will change to a $53.8m saving in 1993-94 and a $ 220.7m saving in 1994-95. That is the bottom line-if you like, the negotiating brief we have to discuss with the College and the AMA to achieve those figures in relation to all the other measures. The precise break-up is a matter, of course, where figures were estimated, but the precise break-up is a matter about which the Government has given us flexibility in negotiation. To say what the break-up in the Budget was would obviously prejudice those negotiations, as I said before.

SENATOR HERRON -Was that a result of the policy determination or was it your objective to achieve those savings?

MR HAMILTON -No. We put forward a number of measures which we believed could achieve those savings. We said we should not be held to the precise measures because that is a matter we genuinely need to consult on with the profession. The Government said, `Fine, that is the bottom line. These are the sorts of measures as announced in Budget Related Paper No. 9. That bottom line will be achieved. How you precisely achieve it is a matter for consultation'.

SENATOR HERRON -What other measures could you achieve?

MR HAMILTON -Measures in relation to practice budgets, practice grants, restrictions on supply, ways of encouraging doctors to leave the profession, but precisely the balance between those various matters is a matter for negotiation within the bottom line.

SENATOR PATTERSON -So you did have some guesstimates about the various contributions of those factors. But the question I ask again is: are those figures not available to us?

MR HAMILTON -The make-up of those totals that go to make that total figure I gave you is not available.

SENATOR PATTERSON -In what way would it prejudice the negotiations with the profession?

SENATOR MCMULLAN -It seems fairly straightforward that if you say, before you enter into discussions, that the likely relative significance of the components is A, B, C, D or E, you are quite clearly disclosing in advance a matter that is, I guess, a bargaining position. But also I would assess you are putting a bit of rigidity into a system where you want a bit of flexibility. It may be that the assumption is you will save $20m here and $30m there, but we would be equally happy to do it in reverse. Putting the figures out now may well provoke people to think that we are locked into that sort of option. So I think it is a fairly normal situation for a government, entering into bona fide negotiations with representative groups, to not say to them in advance that this is the precise break-up we want to achieve, because that would be misleading. We are prepared to look at variations within those parameters so long as we achieve the final outcome.

MR HAMILTON -I quoted a rather large number of figures earlier. It might be helpful to the Committee if I actually table the piece of paper I was quoting from.

<INC.DOC>

The document read as follows-

GP SAVINGS ESTIMATES (OUTTURN BASIS)

91-92 92-93 93-94 94-95

1. COPAYMENTS

Rebate reduction... 112.4 247.1 275.2 277.0

Utilisation... 63.2 155.2 185.5 223.8

Sub-Total... 176.6 402.3 460.8 500.9

Safety Net... (10.0) (34.0) (39.0) (37.0)

Total... 166.6 368.3 421.8 463.9

2. OTHER MEASURES... (67.6) 53.8 220.7

3. ADMINISTRATIVE

Dept/HIC... (2.7) 5.4 8.4 11.9

TOTAL SAVINGS... 163.9 306.1 483.9 696.5

</INC.DOC>

SENATOR PATTERSON -I do not accept the excuse, but I do not suppose there is much else I can do. What was the anticipated rise in the number of services performed by GPs attempting to maintain their incomes? I suppose you will only give me the figure for this year on that as well.

MR MCNEIL -There is no estimate made for GPs' increase in services to try to maintain their incomes, as you have referred to. The way the estimates for the Medicare program as a whole are done takes into account previous trends in growth in services and fee drift.

SENATOR PATTERSON -Did you do that? Is that done?

MR MCNEIL -The underlying basis for the estimates prior to the saving measures being applied by the Government was based on those trends.

SENATOR PATTERSON -Given those trends, what is the expected increase, or was there an expected increase for this financial year in the number of services performed by GPs in attempting to maintain their income?

MR MCNEIL -The estimated growth assumption is 7.3 per cent across the board, across all services, covering both service volumes and fee drift. That covers the move from lower to higher.

SENATOR PATTERSON -I did not hear the second part-fee providers, and what was the second thing?

MR MCNEIL -Fee drift, the movement from lower to higher value services, so it is not necessarily a volume change. That is a measure which covers all changes in the system, including population growth, but not necessarily doctors trying to maintain their income. We do not have any separate estimate of doctors trying to maintain their income.

SENATOR PATTERSON -If bulkbilling were unavailable, what would be the impact of the number of services initiated by those GPs? Do you have an estimate of that?

MR MCNEIL -We do not think there would be much difference whether direct billing was available or not. Your question is premised on the belief that direct billing encourages more services.

SENATOR PATTERSON -So you are saying you do not think there would be any effect if bulkbilling were available?

MR MCNEIL -The work done for the National Health Strategy, by Dr Deeble and by Professor Richardson, has not shown any connection between direct billing and service growth.

SENATOR HERRON -Has there been any work done in your own Department in that regard?

MR MCNEIL -We have looked at that. You might recall that the audit report you raised earlier suggested there was a relationship between the growth in direct billing and growth in services. We have tried to replicate that data and we cannot. When we in fact plug in the service volumes and population figures there is no correlation between the growth in direct billing and the growth in total numbers of services over that period. The only thing we can get a direct correlation with is the growth in doctor numbers.

SENATOR HERRON -Dr Nearhos, have you done any work in this regard in relation to services and direct billing centres?

DR NEARHOS -No, Senator.

SENATOR HERRON -Is there any reason why you should not? I would have thought that you would have the facility in your Department to do that.

DR NEARHOS -We tend to look at the individual practitioners who are excessively servicing, rather than look at the broad parameters of it. We have supplied data to the Department and to Professor Richardson for their analysis, but we have not done any ourselves.

SENATOR HERRON -Would it be easy to do?

DR NEARHOS -Our resources are not keyed to do that.

SENATOR HERRON -What do you mean by that?

DR NEARHOS -We have a lot of other work to do in looking at individual practitioners and their servicing patterns.

SENATOR HERRON -You have reported 15 in the last year who have gone to an MSCI .

DR NEARHOS -Fifteen have actually gone to an MSCI, but a lot of other work is being done in counselling providers as well.

SENATOR HERRON -I want to come back to the Budget saving. What happens if the Caucus Committee reports adversely to the Department and it is accepted by the Government? How does that affect the Budget Estimates in regard to the amount of money saved?

SENATOR MCMULLAN -It is a pretty hypothetical question. The closest I can get to providing a helpful answer is to say that my recollection of the brief to the Committee is that any changes it makes have to deliver an outcome equal to that as outlined in the Budget.

SENATOR HERRON -Is that because Treasury has told the Department that is how much needs to be saved?

SENATOR MCMULLAN -It is because the Caucus told the Committee that that was its brief.

SENATOR HERRON -How was that sum arrived at?

SENATOR MCMULLAN -The figure for the Budget was just outlined by Mr Hamilton and the subsequent decision was simply that the structural integrity of the Budget had to be maintained and, therefore, the decision had to maintain that.

SENATOR PATTERSON -The Caucus committee will obviously have access to some of the calculations which we will not have access to in order to make an assessment about whether pumping up some other part of the program to reduce GP services could counteract the co-payment reductions.

SENATOR MCMULLAN -I have no idea.

SENATOR PATTERSON -It would have to have some information upon which to base its decisions, would it not?

SENATOR MCMULLAN -Firstly, that is not a matter to which I am privy and, secondly, it is an internal matter for the Party committee and it is not under scrutiny here.

SENATOR PATTERSON -How many non-GP services per annum cost more than $120? Do you have a figure for that?

MR HAMILTON -Cost to whom?

SENATOR PATTERSON -The benefit is more than $120.

MR HAMILTON -We will have to take that question on notice.

SENATOR MCMULLAN -We will press on and the officer will give you an answer to that. While the officer is looking for that answer, I will go back to a previous matter. I am advised that the Health Insurance Commission material relating to vocational registration, which was provided to the President, was provided to the Committee in July and I understand it was distributed to Committee members at that time.

SENATOR PATTERSON -Was that distributed to Community Services and Health Committee members?

SENATOR MCMULLAN -No, Estimates Committee members.

CHAIRMAN -I am afraid that we agree with that.

MR SAUNDERS -Getting back to your question, Senator, none of the hospital- defined general practitioner attendance items, as such, in the schedule have a schedule fee under $120. However, there are some prolonged attendance items at the back at part 1 of the schedule-items 161, 162, 163 and 164-all of which have a schedule fee above $120. There are some family group therapy items at the back of part 1 of the schedule as well. None of those items have a schedule fee above $120.

SENATOR PATTERSON -Are all of these services out-patient services?

MR SAUNDERS -The prolonged professional attendance items are defined on a patient in imminent danger of death. So I would take it from that that they would be more than likely to be services rendered in a hospital or they would certainly affect a person in imminent danger.

SENATOR PATTERSON -Is it possible to get a breakdown of those services? You can take the question on notice.

MR HAMILTON -Yes, Senator.

CHAIRMAN -I will make clear what happened with the vocational register. As I understand it, the Department provided it to the Committee to give to the President. The President was to table it, but he has not done that.

SENATOR PATTERSON -The reason I asked whether it had been tabled was that the last copy I got was in confidence and I could not publish it, which meant that nobody else could look at it but me. Because the other copy I got came from the Committee and because it had not been tabled, I wanted to know the status of that document.

CHAIRMAN -It is public, but it has not been tabled.

SENATOR MCMULLAN -If somebody wants to table it here in order to facilitate things, that is not a problem for us.

CHAIRMAN -That might be the way to get over all of our problems. Is it the wish of the Committee that the Vocational Register of General Practitioners be tabled? There being no objection, it is so ordered. I think Senator Patterson put it in the correct way; it had been provided, but not tabled.

SENATOR PATTERSON -With regard to Medicare repayments or rebates, there has been a brochure circulated entitled something like The Medicare Safety Net. Is that still being sent to patients who are receiving a Medicare rebate?

MR HAZELL -No, it was discontinued shortly after the Minister announced that the decision was to be reviewed by Caucus.

SENATOR PATTERSON -Can you tell me what date you ceased sending it out?

MR HAZELL -I can get the date for you; I do not have it with me now. I think it was a couple of days after the decision when we thought we had better review it.

SENATOR PATTERSON -Yes, since there was information in there that may not be right. How many of these brochures were printed and what was the cost?

MR HAZELL -The cost was $25,000. The quantity was about two million.

SENATOR PATTERSON -Members of the Caucus committee might have the Greenies after them if they do not have the $3.50 charge for wasting trees. Were any other pamphlets prepared by the Department or the Commission on the assumption of a $3.50 charge?

MR HAZELL -Not by the Commission.

SENATOR PATTERSON -By the Department?

MR MCNEIL -Not by the Department.

SENATOR PATTERSON -So there is nothing else really to tell people all about it . What date was it supposed to be brought in?

MR HAZELL -1 November.

SENATOR PATTERSON -So you were going to do all the printing to tell people after that?

MR HAZELL -Clearly there are some logistical problems arising as a result of the action.

SENATOR PATTERSON -Has any money been spent on publicity material, even if it has not been printed, such as artwork and that sort of thing for the launching of the $3.50 fee?

MR HAZELL -There is work proceeding on artwork for brochures for claim forms, et cetera.

SENATOR PATTERSON -Had an advertising agent been given the task of selling it in Women's Weekly and New Idea, et cetera?

MR HAZELL -We are in the process of consulting for advertising agents. A brief has been given to them so that we can select an advertising agency, yes.

SENATOR PATTERSON -If the $3.50 fee does not go ahead, what do you think the cost would have been for all the plans and preparations that have gone into getting it ready for launch on 1 November that will now be wasted?

MR HAZELL -Probably about a quarter of a million dollars.

SENATOR PATTERSON -That includes the brochure that went out?

MR HAZELL -Yes.

SENATOR PATTERSON -It is quite an expensive change if we go ahead with it. Will we have the annual report by the end of the week?

MR HAMILTON -If possible. It is not quite in a form that I would be prepared to sign off as a report to be made public.

SENATOR PATTERSON -What about a draft?

MR HAMILTON -That is what I mean.

SENATOR PATTERSON -I really would have liked to have had it before we finished Estimates.

MR HAMILTON -I also would have liked you to have had it, but I am afraid it is not yet ready to be given to you.

CHAIRMAN -When would it be ready?

MR HAMILTON -I am not sure.

SENATOR PATTERSON -Has the fact that the $3.50 charge has been queried meant any changes to the annual report?

MR HAMILTON -No. The annual report is about our activities for last year.

SENATOR PATTERSON -Obviously, if the report is not ready, that will be an item that will be flagged in this Committee's report so that it is open for debate in the committee stage of the Estimates debate in the chamber.

SENATOR MCMULLAN -I understand your point. I agree with you both that it is highly desirable that annual reports should be available to assist Estimates committees. I am not absolutely sure of your point. I do not want to open a new debate. Do you want to debate the question of its non-availability or matters arising from the annual report which may not otherwise have been raised?

SENATOR PATTERSON -There may have been matters I would have raised had we had access to the annual report. We have already debated why it is not ready. You were not a part because you were not here. We have been jumping around all over the place to accommodate you, Senator McMullan. I have one question regarding that sexual discrimination case in South Australia. What was the actual overall cost of that? We paid $23,000 for so-called rehabilitation. What were the overall legal costs and everything else?

MR HAMILTON -The other costs were Comcare costs. I do not have the details of the legal costs, et cetera.

SENATOR PATTERSON -What would be your estimate of the overall cost?

MR HAMILTON -I would have to consult with Comcare.

SENATOR PATTERSON -Would it be in the order of $100,000 or $200,000?

MR HAMILTON -I would not have a clue. It would be foolish of me to try to give an estimate. I will see if we can get that from Comcare.

SENATOR PATTERSON -If the Committee could have the estimated cost of that, I would appreciate it.

SENATOR HERRON -What is the position with the new Medicare card at the moment? Where are we in relation to the reissuing and the authentication of the new Medicare card?

MR HAZELL -As of 8 September, we have issued 2.6 million cards covering five million people.

SENATOR HERRON -Is that as projected?

MR HAZELL -Yes. We planned to produce about 40,000 a day. It took us a little time to get to that level, but we are now producing about 200,000 a week.

SENATOR HERRON -It is anticipated that there will not be a recurrence of the situation of the patient we mentioned earlier who could get 31 cards.

MR HAZELL -The processes of renewal should flush those people out so they can be dealt with.

SENATOR HERRON -I have a question relating to the case mix development program . I see under the consultancies that an amount of $100,200 was granted to the Australian Council of Trade Unions for a project which aims to examine the effect of case mix on the health work force. Was that put out for tender?

MS ARIOTTI -No, it was not. But after a lot of discussion with other relevant trade unions, the ANF and some other related hospital and allied health unions , the ACTU formed a committee and took advice as to what it felt was required in order to assess the potential impact of the introduction of case mix and to working practices of the health industry or health workers in the hospital sector. So it was not put to tender.

SENATOR HERRON -It is specifically aimed at the effect of case mix on the workers?

MS ARIOTTI -In the hospital sector, yes.

SENATOR HERRON -Meaning the nurses?

MS ARIOTTI -Nurses, allied health professionals and medical practitioners.

SENATOR HERRON -So the Nursing Federation was not asked?

MS ARIOTTI -The Nursing Federation was involved in developing the protocol for that project and sits on the advisory committee for that project.

SENATOR HERRON -Could any other body have been approached for that? Since it was not put out for tender, I assume that was the determination of the ACTU.

MS ARIOTTI -Let me make myself clear. The ACTU is actually auspicing a project . I understand that there was a tendering process where three particular groups of people were invited to discuss with the advisory committee convened by the ACTU the sort of activity they would undertake to explore the issues.

SENATOR HERRON -Has that been determined?

MS ARIOTTI -Yes, it has. The first component of that project has been completed and we have a draft report before us.

SENATOR HERRON -Who was that by?

MS ARIOTTI -If I recall correctly, the consultant is Mr James Taylor.

SENATOR HERRON -Is that the successful tenderer?

MS ARIOTTI -I would like to take that on notice and get back to you with the full details of the entire process, if you would like.

SENATOR HERRON -Yes, I would. While I am on consultancies, what is the AFAO? It is not in the glossary of terms.

MR HAMILTON -Australian Federation of AIDS Organisations.

SENATOR HERRON -An amount of $22,050 is listed for a video that shows sensual pleasuring as an alternative to penetrative sexual behaviour and reinforces safe sex behaviour.

MS ARIOTTI -That is not on the case mix development program.

SENATOR HERRON -That has been tendered through the AIDS program?

MR MCNEIL -Yes. That is all I have on the case mix development program.

SENATOR HERRON -There is a disparity on page 184 under the subheading of ` average patient contribution per service by broad type of service' and the column headed `general practitioner'. There is a disparity in relation to the increase of the percentage change in dollars per service in relation to operations as opposed to assistance at operations. There has been an 11.9 per cent change in relation to operations, yet a 24.1 per cent change in relation to assistance. Could you explain why that has occurred?

MR MCNEIL -These measures are the average patient out of pocket cost. They will vary as different medical groups change their billing practices. The actual dollar change is fairly small. In the case of operations, it has gone up from $17.95 to $20.08, which is a $2.13 increase. The assistance at operations charge has gone up by a similar amount in dollar terms, but because it is on a lower base it produces a higher percentage change. This simply reflects the fact that those doctors billing under those items have increased their charges.

SENATOR HERRON -That is based on charges, not refunds?

MR MCNEIL -This is an average patient contribution; in other words, these figures are based on a comparison of the average charge by the doctor less the rebate. These are the average patient out of pocket costs.

MR CANDLER -For in hospital services, it is the difference between the fee charged and the scheduled fee. For services rendered outside of hospital, it is the difference between the fee charged and the benefit paid. We assume, in doing the calculations, that for in-hospital services people would have private health insurance and would get a 100 per cent rebate where a medical practitioner has charged at or above the scheduled fee.

SENATOR HERRON -That probably also explains, in part, that a lot of assistance at operations is not needed. Therefore, the fee would be higher for operations where assistance is needed. The assistance fee is 20 per cent of the operation. Under program 6.1, on page 190, it is stated:

The feedback of information to individual practitioners on pathology requesting has produced substantial reductions in ordering in many cases. However, the achievement of savings of the order of $20m per annum . . .

How did you estimate those savings of $20m per annum?

DR NEARHOS -It was based on pilot programs which initially showed an approximate 24.3 per cent decrease for 51 practitioners who were counselled. This was shown in follow-up studies of other practitioners as well. It seemed to be a fairly consistent decrease of about 25 per cent following counselling of practitioners regarding their pathology requesting. I referred to these people earlier as being the ones who were ordering above the set parameters of more than $10,000 per quarter, a ratio of greater than 0.3 of pathology requests compared with the bulk benefits they receive.

SENATOR HERRON -It is an extraordinarily low sample-51 practitioners?

DR NEARHOS -That was a trial. It has been shown to be fairly accurate in follow-up studies that we have done.

SENATOR HERRON -On how many doctors?

DR NEARHOS -In the past year, we have counselled 468.

SENATOR HERRON -Do you want to enlarge on that?

DR NEARHOS -No.

SENATOR HERRON -On page 192 I see that there are some services and technologies under evaluation by the Australian Health Advisory Committee, including the quality of life measures in gallstone lithotripsy treatment. Is that continuing?

MS ARIOTTI -Yes, it is.

SENATOR HERRON -At what cost?

MS ARIOTTI -The cost has been $35,000 to the National Central for Health Program Evaluation at Monash University and it is to undertake a cost utility analysis in the assessment of gallstone lithotripsy.

SENATOR HERRON -Is it still to occur?

MS ARIOTTI -No. The gallstone lithotripsy evaluation has been funded by one of the other branches in the Health Care Access Division. It is an ongoing evaluation. The most recent component, funded via the AIH, has been doing the socioeconomic assessment of gallstone lithotripsy.

SENATOR HERRON -Has it been going on for some years?

MS ARIOTTI -Yes, it has. From my recollection, it has been going on for the past year to 15 months.

SENATOR HERRON -Is it intended to curtail it because of the advent of laparoscopic cholecystectomy?

MS ARIOTTI -No, although it clearly causes some problems. The rubber diffusion of the percutaneous techniques means that, even in its own right, it is difficult to evaluate the laparoscopic cholecystectomy on a randomised trial. There are those sorts of complications. At this stage there are no intentions to curtail it.

SENATOR HERRON -Skipping over to page 197, it refers to bringing the payment for refraction testing by ophthalmologists into line with that for optometrists. How much is expected to be saved from that? In other words, what will be the reduction in payment to ophthalmologists?

MR MCNEIL -The estimated saving from change to refraction testing is $3.8m this year and $7.04m next year. It is about $3.8m this year and nearly $7m in a full year.

SENATOR HERRON -Why is it nearly double for the year?

MR MCNEIL -That is because of the full year effect. It only applies from 1 November this year.

SENATOR HERRON -Most of my other questions are related to breast cancer screening, which is detailed on page 213 under `National Program for the Early Detection of Breast Cancer'.

SENATOR MCMULLAN -That is actually subprogram 6.3. I just want to clarify that everybody has finished with subprogram 6.1. If that is so, we can happily go on to subprogram 6.3.

SENATOR HERRON -I think that we skipped subprogram 6.2 before.

SENATOR MCMULLAN -We did that before.

SENATOR PATTERSON -Senator Herron and I have discussed the questions on breast screening. He will ask the questions that each of us would have asked to try to condense the questioning.

SENATOR HERRON -I have specific questions in relation to breast cancer screening. What has been the process in setting up the national breast cancer screening program?

MR SLATER -The process that has taken place is as follows: the Australian Institute of Health had a cervical and breast cancer screening unit which ran a number of pilot programs. As a result of the report from that unit, it was agreed-and announced by the Prime Minister in 1990, just prior to the election -that $64m would be allocated for a national breast cancer screening program to be undertaken in consultation with the States.

SENATOR HERRON -And the 1990-91 estimate is $13,400,000?

MR SLATER -That is right.

SENATOR HERRON -Who was chosen to participate in the committee established by the Commonwealth and what are the qualifications and experience of those people involved in the breast cancer screening programs?

MR SLATER -The chairperson is Dr Margaret Dean, who is a medical specialist adviser in the Department. The members are as follows: Professor Martin Tattersall, Professor of Cancer Medicine at the University of Sydney; Dr Vivian Lin, who is the Director of the Program Development and Review Division at the Health Department of Victoria; from Queensland, Ms Jennifer Muller, who is the Coordinator of the Women's Cancer Prevention Unit; from South Australia, Dr Margaret Dorsch, who is the Director of the South Australian Mammographic Screening Program; from Western Australia, Ms Valerie Gardner, who is the Acting Manager of the Women's Cancer Prevention Unit; from Tasmania , Dr Alison Reid, who is the Deputy Chief Health Officer from the Department of Health; from the Northern Territory, Dr Francis Quadros, who is also from the Department of Health and Community Services; and from the Australian Capital Territory, Mrs Helen Sutherland, who is the Acting Director of Client and Community Policy at the ACT Board of Health.

From the Australian Cancer Society, we have Mr Colin Furnival, from the Wesley Medical Centre in Auchenflower, Queensland-he is a surgeon; from the Aboriginal and Torres Strait Islander Commission, we have Ms Sharon Payne, Social Support Policy Branch; from the Consumers Health Forum, we have Ms Leonie Short, Department of Nursing, University of New England; from the AMA, we have Dr Michael Wertheimer; the public health representative is Dr Alistair Woodward, who is the Chairman of the Department of Community Medicine at the Royal Adelaide Hospital; from the Royal College of Pathologists, we have Dr Julienne Grace; from the Institute of Radiographers, we have Mrs Kay Collett; from the Royal Australasian College of Radiologists, we have Dr Peter Wilson; from the Royal Australasian College or Surgeons, we have Mr Ian Russell; and from the Royal Australian College of General Practitioners, we have Dr Barbara Jones.

SENATOR HERRON -The second part of my question was: who has had experience in breast cancer screening programs? I am aware of Dr Dorsch, Dr Furnival and Mr Russell. Has Martin Tattersall had any experience in breast cancer screening? Could you tell me who they are rather than counting the numbers?

DR DEAN -The total is nine. I will go back over them.

SENATOR HERRON -Are these people who have had experience in breast cancer screening programs?

DR DEAN -Professor Martin Tattersall, who is Professor of Cancer Medicine; Ms Jennifer Muller, who is the coordinator of the women's cancer prevention program in Queensland-

SENATOR HERRON -Are you saying that she has had experience in breast cancer screening?

DR DEAN -Yes. She has been responsible for setting up and doing accreditation. She has done a lot of work on the screening program. She is not a cancer specialist.

SENATOR HERRON -That is what I am asking. Has anybody, apart from those three whom I have named, actually been personally involved in the screening programs ?

DR DEAN -Certainly they are personally involved in the screening program. Margaret Dorsch is also personally involved in the screening program. They are not cancer specialists in that they do not treat cancer.

SENATOR HERRON -Some of them do.

DR DEAN -Yes, but, for instance, Dr Margaret Dorsch does not treat cancer. She has been intimately involved with the cancer screening program.

SENATOR HERRON -Has consideration been given to overseas experience in programs already set up in some Australian States? There are screening programs going on, for instance, in Queensland.

DR DEAN -Are there two questions there?

SENATOR HERRON -Was consideration given to overseas experience? We seem to be setting up our own programs when all the work has been evaluated over in the Ukraine and Scandinavia, for example.

DR DEAN -We have had one report based upon the literature from overseas as well as Australian experience. Pilot programs were set up in Australia. The report was a composite of overseas and Australian experience.

SENATOR HERRON -What is the delay in setting up the program due to?

MS FURLER -When the Prime Minister announced the establishment of this program in March 1990, he announced the Commonwealth allocation over three years for a program that would be essentially phased in over five years. It was never really contemplated that the program would be easy to establish or would be established very quickly, simply because of the length of time it would take to bring all of the States, professional bodies and interested parties to a common point where they could agree on policy and swing their existing activity where screening was in place-for example, in Queensland, South Australia and Western Australia-under the priorities or philosophy of the national program.

There were very different situations experienced in the States-Western Australia, South Australia and Queensland. For example, Western Australia's State-led program involved recruitment and screening, but it certainly did not involve assessment. In Victoria and New South Wales, we only had established pilot projects under the evaluation phase. In the other States and Territories , nothing existed comparatively.

There was a considerable time needed for successful development of a national approach, including the development of a national consultative mechanism with the National Advisory Committee and its working parties; with the establishment of a minimum data set; and with agreed definitions, plans for training and evaluation and accreditation guidelines. From October 1990 through to January 1991, $40,000 was offered to every State and Territory because we realised that the States needed time to progress negotiations or assess the feasibility. In February 1991, $11.4m was offered in two parts-10 per cent to be made available to States and Territories upon their signing of the participation agreement and 90 per cent of the allocation available to them in 1991 to be made available after their State plans, which were agreed on by the Commonwealth and the States.

As far as national money is concerned, in 1991 $2m was available for data management, training and education, but it was simply inappropriate for this money for professional training and computing to be spent prior to agreed training and evaluation plans and agreement over a minimum data set. Drafts of training and evaluation plans are in hand and are to be submitted to the November meeting of the National Advisory Committee for agreement.

Just by way of summary, I would like to run through the things that have been achieved over the last 12 months. The establishment of the National Advisory Committee in itself, which has been a terribly important negotiating-

SENATOR HERRON -Have there been two national advisory committees?

MS FURLER -This is the one that Mr Slater was talking about the composition of .

SENATOR HERRON -This is the definitive one?

MS FURLER -Yes.

SENATOR HERRON -Was there a previous one?

MS FURLER -Not at far as I am aware. It has been necessary to add some additional members onto that committee as it became clear that we really did require the first hand input of members from the royal colleges that Mr Slater mentioned.

There has been agreement over minimum data set and common definitions. A funding formula for the cost share phase of the agreement has been agreed on. Agreement to participate has been achieved with five States. Development of State plans are under way and draft accreditation guidelines, which have required considerable work, were sent out today for consideration by the working party.

SENATOR HERRON -Is that a function of this national advisory committee?

MS FURLER -Yes.

MR HAMILTON -I should clarify one point. This is the only committee that has been established to implement the national program. There was a steering committee in relation to the pilot projects. That is probably the one you were referring to.

SENATOR HERRON -That was sent out today?

MS FURLER -Yes, the draft accreditation guidelines.

SENATOR HERRON -Was it considered that the directors of the public program form a working party to deal with problems that they saw in implementation or is that a function of that advisory committee?

MS FURLER -That is a function of that committee. All the State managers are represented on that committee. The committee has established a number of working parties in areas of data and evaluation and education and training accreditation. There is a mix of people from the professional associations mentioned and from State managers involved in those. Every State manager was involved in the funding formula working party which was established and has recently done this work.

SENATOR HERRON -Has the problem regarding criteria for screening been overcome ? For example, New South Wales was saying that screening should only be done with women 50 years and over. In Victoria, and perhaps Queensland, it was below that. Has that problem been resolved now?

MS FURLER -It is in the process of being resolved. The issue of whether or not to include women aged 40 to 49 has been contentious. We are finding that all the States and Territories are willing to cooperate in this regard.

SENATOR HERRON -What is the total cost of the national breast cancer screening program to date?

MS FURLER -A total of $1.045m.

SENATOR HERRON -As far as the national body is concerned, the actual screening is done by the States anyway. Has there been any cost to the Federal Government in relation to screening of patients?

MS FURLER -Through this program?

SENATOR HERRON -Yes.

MS FURLER -I do not think any has been spent to date through this program on screening.

SENATOR HERRON -I take it that it is accepted that that advisory committee is aware of reports that there is potential for breast cancer screening programs to do more harm than good in terms of the detection rate being six per 1,000 and the anxiety that it causes and the number of unnecessary procedures.

MS FURLER -I understand that these issues were thoroughly examined by the screening evaluation coordination unit in the work that it was funded to do in the phase prior to the establishment of this national program. The report that it submitted to the Australian Health Ministers Advisory Council goes into this issue in some detail but considers that the benefits to be achieved under a national screening program far outweigh some of the economic costs and some of the personal costs to the women involved.

SENATOR HERRON -That has been resolved now by that advisory committee; is it not still being debated?

MS FURLER -As far as I know, it is not being debated.

SENATOR HERRON -How many screening units are projected to be established altogether around Australia over that five-year period? I would also like to know where they will be located and how many in each State and Territory.

MS FURLER -This national program is based on projected requirements for screening and assessment units to the extent of between 117 and 176 screening units by 1994-95 and a total of between 13 and 26 units in 1994-95. However, it is important to realise that the actual number put in place at the end of this period will depend very much on the planning which is currently under way within every State and Territory. It will be the case that we are not necessarily talking about a discreet centre. We may instead be talking about an assessment service being offered from a number of sites.

SENATOR HERRON -Does that include private clinics as well as public clinics based on public hospitals?

MS FURLER -It does. The exact nature of the private public mix depends very much on the State plans that are being developed. It is matter for the States.

SENATOR HERRON -And it will be policy as to whether there is a rebate for breast cancer screening for the future?

MR BANSEMER -Yes.

SENATOR HERRON -How much did you say has been spent on breast cancer screening to date?

MS FURLER -An amount of $1.045m.

SENATOR HERRON -Do you expect that that will be spent?

MS FURLER -Yes.

SENATOR HERRON -It is projected and so you are on track?

MS FURLER -It was necessary to seek agreement from the Department of Finance to rephase the program and agreement was obtained from it earlier this year.

SENATOR HERRON -My last question relates to stoma appliances.

It is in relation to the transfer of the Department of Veterans' Affairs beneficiaries. What is occurring in relation to stoma appliances for veterans at the moment? Is it still being done through the repatriation hospitals at the moment? We are awaiting a decision of the transfer to the State public hospital systems.

MR STEVENS -There has been a transfer of Veterans' Affairs stomatees to our program. They are being assisted via stoma associations throughout the States.

SENATOR HERRON -Are the stoma therapy associations taking over from the Veterans' Affairs hospitals?

MR MCNEIL -That is correct.

SENATOR HERRON -Has that occurred yet?

MR STEVENS -Yes, it has occurred.

CHAIRMAN -Thank you very much. I thank all the people from the Department for their answers.

Committee adjourned at 6.44 p.m.