Senator STEPHENS (11:02 AM) —The Medicare inquiry has given a unique voice to those who participate heavily in Australia's health care system. As Senator McLucas said this morning, the committee received 265 public submissions and heard from a wide range of experts including state governments, health administrators, academics, doctors, nurses, students, carers and of course patients. So, as Senator Barnett said, this has been a very productive inquiry.

The report of the inquiry, Medicare—healthcare or welfare?, highlights the concerns that were raised with us in response to the terms of reference. Firstly, on the current health of Medicare, the committee found that all evidence indicates that Medicare is ailing, struggling to provide access to affordable, effective and timely primary health care for all Australians. Bulk-billing rates are declining and the out-of-pocket costs of seeing doctors are increasing. This results in major pressures on accident and emergency systems in local hospitals and is forcing many families and low-income earners to neglect their health, often with serious longer term consequences.

The A Fairer Medicare package proposes changes to the current system of billing that, on the surface, do not appear to be particularly radical, but which will fundamentally change the way in which Medicare works and its role in Australia's health care. The key elements of the government's proposal are a system of incentive payments for practices that agree to bulk-bill all concession card-holding patients and the capacity for participating practices to receive rebates for all their patients directly from the HIC.

At a philosophical level, the government package amounts to a decisive step away from the principle of universality that has underpinned Medicare since its inception, and the committee does not accept the government's argument that, because everyone continues to be eligible to be bulk-billed and receives the same rebate, universality is preserved. This argument is disingenuous and ignores the reality of the incentive system that the government seeks to put in place. In practice, a GP will receive more public money to treat a concession card holder than they will for treating a non-concessional patient. The fact that the incentive payment has a different label from the rebate payment is of minimal practical significance, particularly given the direct rebate of funds to the practice. Therefore, A Fairer Medicare is about a return to a welfare system.

At a practical level, the policy is focusing on guaranteeing bulk-billing of concessional patients in a way that is quite simply unnecessary, since the majority of these people are, in all likelihood, already bulk-billed. The committee is inclined to agree that the package essentially focuses on a solution to a problem that, in fact, does not exist. Far more serious are the practical ramifications of the proposals. If put into effect, the scheme will trigger a fall in bulk-billing for all those who are not concession card holders. Inevitably, problems arise at the boundaries of the entitlement, and many Australians in genuine need of bulk-billing, including many working families and those with chronic illnesses, will fall just outside the threshold of concessional status. These people will face both more gap payments and, overall, a rise in the level of such payments.

In terms of Australia's health care system, general practices have a pivotal role. There is evidence that general practices are struggling under the load of a changed emphasis to preventative health in Australia. Doctors, nurses and practice managers reported on the complexities of blended payment programs, such as the practice incentive payments and enhanced primary care schemes, and we have recommended that these schemes be evaluated and simplified to eliminate administrative processes, forms and reporting and to strengthen professional practice. Of course, the changes in Australia's health care system are also reflected in the increasing health care needs of our ageing population, the growth in chronic illness and the moves away from hospital based care.

Again, the role of doctors and health professionals is critical to new health care service models, but Australia is experiencing a continuing shortage of general practitioners. Medical graduates are not choosing a career in general practice, as Senator Lees said. They report to us that they see few incentives and high risks involved in being a general practitioner. They watch their colleagues struggle to juggle the demands of practice management, long hours, few locums, limited opportunities for professional development and increasing costs of insurance, technology and equipment, and they make their choices accordingly.

The changing profile of the medical profession—with an increasing number of women graduates, doctors choosing to practise part time and an increasing dependence on overseas trained doctors—means that community expectations of doctors being on call 24 hours a day, seven days a week, 365 days a year are no longer realistic. There are simply not enough doctors in our health system. The committee welcome the government's proposal for 234 new bonded medical school places but, again, as Senator Lees says, recommend that the students be able to begin working off their bond period during their postgraduate training. We heard compelling evidence that it is quite unrealistic for these students to enter bonds and still be bonded 10 years later.

The committee is also concerned about Australia's increasing dependence on overseas doctors to meet our doctor shortages. As Senator Lees said, this is not the solution to our problem, but overseas trained doctors experience many difficulties in accessing medical practice in Australia. They are disadvantaged in the migration assessment process, the rules for gaining recognition are complex, the number of places for AMC examinations each year are limited, accreditation processes with professional colleges for specialists are particularly difficult and doctors who face language and distance barriers lose their skills and reduce their chances of ever being able to get back into the work force. In fact, it has been described to the committee as a `closed shop'. But there is genuine concern about the extent to which Australia should be relying on overseas trained doctors, suggested by some experts as an indication of a major policy failure. There is an ethical issue here: should Australia as a First World country be recruiting doctors from overseas and draining the expertise of other, often developing, countries? The committee is worried about offering strong incentives for GPs in poorly serviced countries to migrate to Australia while we have our own young people queuing for places. Such a policy is surely a failure to all concerned.

The committee view the requirement for all practices to opt in to the General Practice Access Scheme to access HIC Online as both unrealistic and unfair. While the government's proposal is named A Fairer Medicare, in fact it is not fair—and this is just one aspect of the program that creates inequity. Technologies should be available for everyone. We support the role of practice nurses, but again this should not be based on signing up to the GPAS. Instead, we recommend they be funded on the basis of need, supporting doctors in busy practices.

The committee heard strong evidence about the important relationship between oral health and general health and the desperate plight of the hundreds of thousands of people in Australia waiting for dental care. Some of these stories were particularly distressing. The committee has recommended that the Commonwealth recommit to a shared funding model with the states and territories to provide dental assistance, especially for high needs groups. In relation to allied health care, the committee is keen to see greater coordination of efforts in current initiatives, including the More Allied Health Services Program, primary health care teams and shared access to resources.

The idea that the government's package provides an effective safety net by differentiating between concessional and non-concessional patients is not borne out. Medicare must continue to act as a properly funded public insurer, and patients are paying significant out-of-pocket costs to access health care. The government's proposal would cause greater confusion for patients most in need of safety net arrangements. The committee therefore recommends that the existing safety net arrangements be expanded rather than changed. In conclusion, the inquiry raised the important issue of the need for a broad based debate on the nature of Australia's health care needs, and Senator Allison has spoken to that recommendation. But this area of policy is too important to be approached in such a piecemeal fashion. There is far too much at stake. The committee is therefore recommending a new national health reform body. I commend the report to all senators and others who are interested in the future of health care in Australia, and I thank all of those who have been involved in producing it.