Senator LUDWIG (Special Minister of State and Cabinet Secretary) (9:50 AM) —I thank senators for their contribution on the debate on the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009. This bill amends the Health Insurance Act 1973 to enable the Minister for Health and Ageing to determine by a legislative instrument the maximum benefit payable under the extended Medicare safety net for each Medicare benefits schedule item.

I note that this bill was considered by the Senate Community Affairs Legislation Com-mittee, which recommended that the bill be passed. Firstly, I think it is important to highlight that all services that are currently covered by—and we will use the acronym—EMSN will remain covered. All patients will still be able to receive the standard Medicare rebate for all Medicare services, and of course all people will still be eligible for the EMSN benefits. There will be no age restriction on accessing IVF services nor will there be a restriction on the number of treatment cycles that a patient can receive. And contrary to some media reports leading up to the budget, no cancer services are affected by these changes.

Caps are being placed on some Medicare items to discourage doctors from charging excessive fees for these Medicare services. This directly responds to issues that were highlighted in the Extended Medicare safety net: review report 2009. The current nature of the safety net means that doctors feel a little pressure to moderate their fees. The report noted some significant findings. For example, the fees charged by obstetricians for out-of-hospital services increased by 267 per cent between 2003 and 2008. The fees charged for ART services have also increased significantly, with the report noting that fees charged out of hospital increased in the order of 62 per cent. These increases are over and above inflation and well in excess of the increases in the fees charged for other services. If this trend continues, many services will become unaffordable, even with the assistance of the extended Medicare safety net.

The report identified areas where there were large increases in the fees charged for a service where the majority of the EMSN benefit was going to doctors rather than helping patients or had a very high safety net benefit per service. The new caps will apply in these areas: obstetrics; assisted reproductive technology, including IVF; hair implantation; the injection of a therapeutic substance into an eye; one type of cataract operation; and, one type of varicose vein treatment. The committee also suggested that there should have been additional consultation on the development of the bill. I note that there have been detailed discussions with the medical profession over the last five years and the medical profession itself has acknowledged that the fees charged by doctors have increased unreasonably in some areas and that this was a result of the safety net. Of course, some doctors also recommended that caps or upper limits be placed on the amount of funding provided through the safety net for some services.

It is also worth noting that the Australian Greens suggested that the bill be amended to include a review to be tabled in parliament no later than 1 July 2011. We will continue to closely monitor the effects of the extended Medicare safety net, but do not believe a re-view after one full year of these changes will provide a reasonable analysis of the impact of the bill. The opposition, Senator Fielding and Senator Xenophon have moved an amendment to delay consideration of this bill until after the final draft regulations are tabled.

In relation to IVF, the model is clear. Currently, a typical IVF cycle costs around $6,000, yet there are doctors who charge in excess of $10,000 per cycle. The patients of specialists who charge $6,000 or less for a typical IVF cycle will not be worse off under these changes. Today, on the day of introduction in the house, the minister tabled the draft regulations. At that time the minister also indicated that we would be working with the profession and consumers to restructure the IVF items to better reflect modern practice.

I advise the Senate that the new item structure for ART services has now been finalised. The new structure better reflects modern clinical practice and will benefit patients as it redirects benefits to the more technical and expensive services through a reduction in its outlay for treatment cycles that are not completed. From 1 January 2010, ART patients receiving a typical cycle of ART treatment will receive a much higher standard rebate for the service. This will benefit all patients, not just those who qualify for the extended Medicare safety net benefits. Importantly, the new structure shows that patients charged at the average and median fees for a typical cycle will not be worse off as a result of this measure. In fact, many patients will receive higher Medicare rebates. This measure will still result in the same level of savings as announced in the 2009-10 budget.

The opposition treasury spokesperson clearly stated at the Press Club on 20 May:

So we expect the opposition will support the sensible measure that creates a mechanism for the government to responsibly manage expenditure on the extended Medicare safety net. With expenditure on the EMSN in 2008 being $414 million—a 30 per cent increase on 2007—these changes are necessary to assist in keeping the safety net sustainable and providing a continuing benefit for patients. I commend the bill to the Senate.

Question put: