Senator McLUCAS (3:56 PM) —The policy which leads us to be debating the Health Insurance Amendment (100% Medicare Rebate and Other Measures) Bill 2004 was announced during the election campaign on 6 September as a direct counter to Labor's new deal to save Medicare announced earlier on the same day of the campaign. It was a policy announced with one single intent, and that intent was to counter Labor's policy lead in health both during the campaign and more generally. It was not as a well thought through health strategy designed to deliver better health outcomes. It was a simple electoral fix aimed at blunting the evening news of that night, which would have been reporting very positively Labor's strategy to lift bulk-billing rates, to improve access to dental services for older Australians and to ensure cooperation between the various sectors of the health system so that health outcomes for Australians would have been improved. This bill reflects a political strategy, not a health improvement strategy.

It is interesting to note that when the Minister for Health and Ageing introduced the bill in the other place he repeatedly referred to increasing the rebate from 85 to 90 per cent of the scheduled fee. I understand that the Hansard had to be tidied up, but the tapes make it very clear that Mr Abbott was repeatedly saying that the increase would be from 85 per cent to 90 per cent. It begs the question: why? Why would he make such a fundamental error? Perhaps it was that the minister had a plan to do just that, to lift the rebate to 90 per cent not to 100 per cent, but when the strategy unit of the coalition saw Labor's new deal to save Medicare their 90 per cent strategy was just not going to cut the mustard, it was not going to shift focus away from Labor's new plan. So now we have a 100 per cent rebate on the Medicare scheduled fee, not because it is good health policy but because votes had to be shifted. It is also intriguing that the government took until 6 September to announce the policy, given the myriad of policy iterations that we have had over almost two years of this government.

People will recall A Fairer Medicare. They will remember it as a convoluted package. It was almost universally decried by doctors, hospitals and the allied health sector and, most importantly, by health consumers. It was a policy based on Mr Howard's first principle when it comes to Medicare in Australia, which is to pull Medicare right apart. He said it in 1993, and it is still there in his mind. Let us not also forget the advertising spree that occurred after A Fairer Medicare: $15.7 million was spent out of the health budget on telling Australians that Medicare would be fairer under this strategy. It was $15.7 million that would have been better used in delivering health services to Australians. But, as we all recall, A Fairer Medicare was to no avail. The polling was not good; it was not cutting through. So, not only did we did we lose the package, A Fairer Medicare, but the government threw out the minister and sent in Mr Abbott. Then, as you will recall, we got MedicarePlus, a slightly different set of strategies, but with a very similar outcome. The outcome was to be, and will be, a two-tiered health system, with a complex safety net which is extraordinarily expensive to administer.

You will also recall that MedicarePlus changed; it merged into a new title, Strengthening Medicare, without any clear explanation from this government as to why. The real reasons for this transition from MedicarePlus to Strengthening Medicare are very interesting. The word is that the focus groups that were asked to test the words `MedicarePlus' took the view that this policy title meant that the government was requiring that we would have Medicare plus more out of patients' pockets—and how right those focus groups were. This is exactly the government's policy position. With decreasing bulk-billing rates and increasing out-of-pocket costs a reality for all Australian health consumers, how could they come to a different view of the government's intention?

Let us also not forget the second round of advertising which ran almost right up to the announcement of the election. That lot cost us $20 million. I cannot count the number of people who expressed to me during that advertising campaign their annoyance at the repetition of that advertising campaign as it appeared on their television screens, in their newspapers and on their radios. It was an offensive waste of money that could have been better spent on health services. I am not the only one who thinks that; the people who spoke to me also think that. It was blatant political advertising that should have been paid for by the Liberal Party, not the taxpayers of Australia. In those two iterations of health policy, $36 million was spent on advertising trying to persuade the community that this government was interested in delivering quality health services to them. This expensive election commitment is recognised as poor public policy and inflationary. There is nothing in this legislation to ensure that any part of the $1.7 billion is handed on to patients, or that bulk-billing rates will increase.

Labor has concerns about this legislation, its impact on Medicare and the government's long-term commitment to 100 per cent Medicare. There seems to be some confusion in Minister Abbott's mind about the intent of the bill, beyond the confusion of whether it is a 90 per cent or 100 per cent rebate. When he introduced the bill in the House of Representatives, he said that 100 per cent Medicare will make visiting the doctor more affordable, but there is nothing in this bill to ensure that any part of the $1.7 billion is handed on to patients. He refuses to give any guarantees that this bill will boost bulk-billing. `Decisions about bulk-billing,' he says, `will be up to individual doctors.' Somewhat conversely in his second reading speech he said:

Well there may be, but this bill spends $1.7 billion with absolutely no guarantee that there will be. He said:

But in fact it is doctors who will benefit from this measure, with no guarantee that any patients at all will benefit. To quote Mr Abbott, the government has invested `a great deal of money' over the past 12 months to boost GP incomes. And that is possibly true. When Labor asked his office and the department for justifications for his claim that doctors' incomes will increase by $20,000, we found that there is no evidence to be had. It appears that he just conjured this figure out of thin air.

In the meantime, the AMA is urging members not to let this increased rebate take them back to the `treadmill of bulk-billing'. It is disappointing that the President of the AMA, Dr Glasson, has trumpeted `the beginning of the end of bulk-billing'. But, sadly, he is right, and while the AMA might be pleased that the government is helping them discard bulk-billing as a relic of the past, the Australian people are not. I note that Dr Glasson's view about bulk-billing is not shared by all doctors, particularly by many GPs. Other doctor groups and many individual GPs have expressed their disappointment with the position of the AMA and their desire for the retention of bulk-billing, especially at high levels. A recent survey of GPs, however, has shown that more than 80 per cent are now charging a standard fee in excess of $40, so even under the best of circumstances, patients will still be out of pocket. A second survey has found that more than 80 per cent of GPs now bulk-bill only some of their patients. The consequences will be that fewer people will get the medical care they need because they cannot afford to visit the doctor. More people will miss out on preventive health checks and too many people will end up in our emergency departments at public hospitals.

The decrease in GP attendances has concerned me for a long time. Over the life of the last parliament, six million fewer GP attendances occurred than were projected. This is a statistic that should have us all concerned. Why is it that people are not going to their doctor? In my view, the answers are fairly clear. They go to the availability of a bulk-billing doctor and the out-of-pocket costs that the consumer will have from visiting a non-bulk-billing doctor. Is it that we are looking into our pockets and purses and not finding the average $40 up-front fee and making the decision that the annual check-up can be put off for a while, that the Pap smear can wait, that the prostate check-up can also be put off and that we might get through this winter without a flu shot? Nobody prefers to have a Pap smear or a prostate check-up, and the additional disincentive of finding $40 for the pleasure of doing so may be the answer to those six million fewer GP visits that the statistics bear out. This statistic should be of concern to us all, and in my view it has a direct correlation to the availability of bulk-billing doctors and to the out-of-pocket costs. In fact, the forward estimates for this bill support the fact that GP attendances are decreasing. There is no growth factored into the forward estimates, with less spending in 2007-08 than in 2005-06.

Somehow this government has managed to spend $1.7 billion in a rash election promise which lacks both effective health policy outcomes and sound economic principles. As if to highlight the lack of economic credibility, the forward estimates also omit the costs of the provision to increase the fees paid by the Department of Veterans' Affairs for GP services from 100 per cent to 115 per cent of the equivalent Medicare fee—$83 million was just forgotten. Veterans with the gold card and their GPs might have reason to be concerned if this funding is not forthcoming.

This legislative increase in the Medicare rebate from 85 per cent to 100 per cent will mean an additional rebate of $4.60 for a standard 15-minute GP consultation. Across all GP services the average additional rebate is $5. Where the service is bulk-billed this is in addition to the bulk-billing incentives of $5.10, or $7.65 for concession card holders and children under 16. The government argues that this package provides a benefit to those patients whose doctors do not bulk-bill, but that is only true if the doctor hands on part or all of the increased rebate. The average out-of-pocket cost of seeing a GP who does not bulk-bill is now $15.24. If the GP hands on all of the additional rebate to the patient, the average out-of-pocket cost will be around $10—that is, $15.24 less the $5. But there is nothing in this proposal that requires the GP to do so, and the expectation from most health economists is that GPs will absorb the additional rebate, albeit over time.

The passing of this legislation will pose some very difficult questions for GPs. GPs do not like having to change their charging regimes, and I understand that; they have already had to make significant changes over the last three or four years, and they do not like doing it. That is for a good reason: their patients do not like change. Their patients want certainty; they want to know what they are going to be charged when they attend the doctor. Patients do not like repeated changes in the billing practices occurring. But I am afraid this legislation does not give certainty to doctors in determining what their billing practices may be into the future.

Many GPs have welcomed the Howard government's 100 per cent Medicare package, but there is concern that the level of indexation does not match the increase in doctors' costs and that the benefits of the package will erode over time. Despite requests, the Department of Health and Ageing has not supplied the Labor Party with details of how it has arrived at the annual cost of the measure. It has indicated that the figures are indexed by the current WCI5 index of around two per cent a year and has admitted that the number of GP visits will continue to fall over time. The department has confirmed that it has not modelled the effect of this package on GP incomes—that is, the department has not chosen to make any assumptions on what percentage of the rebate increase GPs will absorb into income and what they will pass on to patients. If a GP who sees an average of 7,000 patients per annum—that is the national average—kept the full rebate increase, their income growth would be around $35,000. Minister Abbott has been quoted as saying that this package will increase GPs' incomes by about $20,000. That means that he is expecting doctors to keep around $3 and hand on $2 to their patients. But apparently the department has not conducted modelling that can be analysed or tested.

Last month the AMA announced their annual recommended fee schedule, which is from a higher base but indexed at 3.41 per cent. A survey conducted in November for a GP journal found that 52 per cent of GPs were planning to increase their fees, with more than 80 per cent of GPs surveyed now charging a standard fee in excess of $40. Doctors groups will continue to push for higher indexation and for implementation of the recommendations of the Attendance Item Restructure Working Group, which would better reward GPs for longer consultations. But Mr Abbott has already indicated that there will be no major health reforms, no MBS restructure and no more money. Realistically, with the election over there will be no more attention paid to Medicare until the next election looms.

Labor will support the technical amendment made to this bill to correct an error in drafting with respect to the eligibility for the Medicare safety net. We will also support the provision that will ensure that the current relativity between the payments to GPs for gold card holders and everyone else is maintained and not eroded. However, as I said earlier, we note that the bill does not specify the cost of this measure.

Labor has serious concerns about the long-term impact of the central provision of 100 per cent return on rebates on Medicare itself and on patients' out-of-pocket costs. I think we have made the case that this is poor health policy and it is poor economic policy. It is also this government's excuse so they will not have to address needed health care reforms in primary health care delivery, no matter how crucial that issue is.

We note that the bill does not stipulate what services will be covered in the schedule that will be brought to the Senate in regulation form, but it amends the Health Insurance Act 1973 to enable a Medicare benefit of 100 per cent of the schedule fee to be paid for certain services, as described in regulations. Can I say that Labor will be looking very closely at those regulations when they come before the chamber, to ensure that the government's policy position is adhered to and that the policy is applied equally to all items.

The Howard government, however, can claim that this measure is subject to an election mandate, given its high exposure in the election campaign. We can hope that at least in the short term some patients may experience a benefit from the measure because their GP will pass on some, or hopefully all, of the rebate increase. For this reason Labor did not oppose this measure in the House of Representatives and we will not oppose this measure in the Senate today, but we do want to record in some detail our very real concerns about the bill. It is the government's mandate, however, and they must take full responsibility for its consequences.