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Wednesday, 9 May 1984
Page: 1798


Senator GRIMES (Minister for Social Security)(10.51) — Honourable senators will realise that these motions to disallow regulations made under section 17 of the Health Insurance Act and the Australian Capital Territory Medical Services (Fees) Ordinance have been on the Notice Paper for some time. I must say I am a bit surprised that Senator Baume has persisted with the motions in the light of events that have occurred in the last few months. I will briefly take up three points that Senator Baume made, points which seemed to me to be the three key points of his speech. They are three points that are frequently made in this place in the endless debates that we have on health matters. The first is the usual accusation made by Senator Baume and others that this Government has an ideological hatred of the medical profession, that it indulges in doctor bashing all the time and that it is obsessed with the medical profession in some way.


Senator Walters —Would you like a few quotes?


Senator GRIMES — I would have thought that that sort of interjection from Senator Walters hardly holds water. Of course, in the vigorous debates in this place and in the other place people make remarks about the activities of the medical profession. Senator Walters does exactly the same thing in regard to members of her political profession. I do not know whether she considers that that is an unusual thing to do. But I remind honourable senators that in the House of Representatives there are Dr Charlesworth, Dr Jenkins and Dr Everingham and in this place there are Senator Crowley and me, all of whom are members of the medical profession, all of whom have been in private practice, and on the other side there is Senator Baume.


Senator Peter Baume —Who also has been in private practice.


Senator GRIMES —He has been in private practice and a distinguished private practitioner. It is nonsense to suggest that doctors and everyone else in the Australian Labor Party are obsessed with the medical profession. Senator Baume's other argument was that this is the thin end of the wedge; that we have introduced price control, as he calls it, on this group of doctors and the next step will be controls on architects, lawyers, and God knows who else. I notice that Senator Townley is in the chamber. He must view this argument with some wry amusement in view of the fact that a government that he supported in this place introduced vigorous price control on certain aspects of the pharmaceutical dispensing industry in this country and that those price controls were left on, without allowing any increases, for a very long time.

Who are the price controllers in this Parliament? I ask honourable senators to look at the record. The people who are taking the ideological approach in moving this motion are members of the Opposition, including Senator Baume. They claim that they have an ideological opposition, except in the case of dispensing pharmacists, to any sort of price control on anyone. Their argument is 'Although there is no problem'-Senator Baume says there is no problem-'you should not do it. We are ideologically opposed to it; therefore, we are moving this motion of disallowance'. As I said, the Government's concern over lack of controls or private practice rights in public hospitals has been the subject of exhaustive debates in this place and in the other place in the last few months. This concern and the proposals that flow from it, which partly concern these regulations and the ordinance, were integral to the Government's moves to legislate and give effect to the Medicare program. The Opposition, including Senator Baume and Senator Walters, have had many opportunities to express their views on the Government's proposal regarding those private practice rights. They have exercised those opportunities endlessly in this place.

In March we introduced amending legislation into the Parliament as the result of extensive discussions with the Australian Medical Association and others in the medical profession due to concerns about this very problem, concerns which were expressed by those bodies. The amendments and the changes that were made effectively resulted in an agreement between the Government and the AMA that all parties should accept the current position pending the report of the Committee of Inquiry into Rights of Private Practice in Public Hospitals which is being headed by Professor Penington. I remind honourable senators that the regulations and the ordinance were before the Parliament at the time of that agreement. The AMA knew that. The regulations and the ordinance are part of the status quo arrangements which are part of the agreement with the AMA. After a long and sometimes very vigorous dispute the Government and the AMA reached an agreement which the Opposition now seeks to overturn by disallowing these regulations. In fact, on Friday of this week, the first meeting of the joint working party of the AMA and the Government is to be held to draw up a submission to the Penington inquiry under the terms of that agreement.

In other words, despite months of debate and negotiation, despite substantial concessions having been made by the Government, as mentioned by Senator Haines, despite the successful passage of the legislation and the existence of an agreement between the affected parties to accept the status quo, the Opposition now seeks to place further obstacles in the path of the Medicare program. The only result which the Opposition could hope to achieve by reopening this serious and divisive issue would be to inconvenience the public who have already suffered greatly during the doctors' industrial action. Despite past differences , the real irony of this situation is that the Government and the AMA are negotiating on the nature of the amendments to the list of items which the Opposition now wants to throw out. They are negotiating now. In other words, the Government agrees. The AMA agrees. I am sure that the public agrees that they do not want to be inconvenienced any further. Negotiations are proceeding. The only people who are out of step in this whole process are, in fact, members of the Opposition.

The regulation which Senator Baume is concerned about specifies the list of items for which it is intended that no more than the schedule fee will be charged. As Senator Haines pointed out, that schedule fee was increased only last week by up to 9.02 per cent in the report of the 1984 medical fees inquiry by the Deputy President of the Australian Conciliation and Arbitration Commission, Mr McKenzie. That was in addition to an interim increase of 4.3 per cent which was granted in March this year. I point out that those were substantial and extremely generous increases decided by independent arbitration. There is no justification for doctors to charge more than the schedule fee. In fact, the Commissioner made special mention of the no extra claims commitment of the centralised wage fixing principles under which those increases were awarded. The Government fully endorses that view. Doctors should remember that they cannot receive the benefits of the wage fixing principles without also meeting the obligations that are attached to them. The increases came on top of recent evidence that, even in comparison with other professionals, doctors are doing extremely well for themselves.

The most recent issue of the journal 'Community Health Studies' presented evidence suggesting that private medical practitioners are the highest paid group in Australia and that they had retained that position relative to many other professional groups. The Opposition's lack of knowledge and expertise in health matters is blatantly evidenced when it seeks to disallow these regulations which specify diagnostic services as those for which it is intended that a schedule fee must be charged. It is quite clear, even to some elements of the profession itself, that they are the services which most require some form of control. It is not only in this country that the professions and the Government realise that. In its evidence to the Jamison Committee of Inquiry into the Efficiency and Administration of Hospitals in 1980, the Australian Association of Surgeons said:

There are cases of patients tested to the point of exhaustion for reasons entirely unknown to their principal medical attendant. There is little doubt that many of these diagnostic testing procedures represent an unwarranted invasion of privacy inflicted on the patient and many of them cause unnecessary suffering and hardship. Their cost to the community is almost inestimable.


Senator Peter Baume —But, Senator, would you agree that this is part of a teaching hospital? It is not a financial incentive.


Senator GRIMES —Of course I agree, but financial controls are part of the controls. Senator Baume knows that. All that Senator Baume and the Opposition can hope to achieve through these negative and obstructive procedures is, in fact, to add confusion, to harass and to inconvenience the public and generally to abort the months of effort of all concerned parties to reach an agreement on key segments of the arrangements. The arrangements will place some controls over the use of publicly funded hospitals to generate substantial private incomes. I remind honourable senators that publicly-funded hospitals in this situation generate substantial private incomes. Deficiencies in the existing private practice arrangements have been identified. Doctors generate costs in hospitals and utilise public facilities which, for services outside that hospital, they would have to provide from their own resources. There must be adequate accounting and control of those costs and the use of those facilities.

Receipt of medical benefits income by staff specialists under rights of private practice provides them with an additional income above and beyond their hospital salaries. This additional income is generally accrued during the same working hours over which those salaries are payable. This double payment argument would be equally valid where the time booked and paid for sessional services to hospital patients was used by visiting medical officers for their private practice activities. It is not clear whether in all cases there is an appropriate relationship between sessions allocated and public patient workloads . It is a matter that has been of concern to all concerned with the delivery of medical services in this country.

In the diagnostic areas there may be little, if any, direct specialist-patient contact. Without that patient audit-something which is of great concern to the more right wing of the ideological medical profession-there is substantial scope for generating additional services, as was mentioned in the submissions to the Jamison inquiry. In many cases, the provision of those high technology services is dependent on the investment of public funds in public hospitals and facilities in those hospitals. There is a lack of detailed knowledge even in the States about the practical outcomes of some of the arrangements in terms of the numbers of services provided, the substantial incomes generated and the use to which part of the funds are put. Some hospitals seem unable or unwilling to introduce effective monitoring or control measures because they too stand to gain from the rendering of services in that area. There is a lack of incentive for cost consciousness on the part of those doctors requesting and those providing diagnostic services. Generally, a potential for fraud and overservicing exists because of the lack of adequate administrative controls and peer review processes. For example, in many instances there is no clear point at which specialist, as opposed to non-specialist, services are required.

Payments to the States for hospitals systems are made through the Commonwealth- State tax sharing arrangements. Those payments were derived from the former hospital cost sharing arrangements. It follows that the Commonwealth is, in effect, continuing to meet a substantial share of the salary costs of hospital staff. In the absence of controls over facility charges and the way in which they are applied, new equipment which may be purchased from the trust funds may, in fact, lead to an increased potential to generate additional services and revenue from medical benefits. That situation may impact on the capability of State authorities to implement the rationalisation of technological services. There are also possible conflicts of interest relating to the treatment of public versus private patients. The arrangements create inequities between States, hospitals and specialists. The restriction on earnings of full-time specialists compared with the currently unrestricted returns to visiting staff creates an anomaly which significantly affects the ability of hospitals to retain full-time staff.

I remind the Senate that the concerns now being expressed by the Government are based on the findings of a number of previous inquiries-and there have been many previous inquiries-into this issue. The Committee on the Applications and Costs of Modern Technology in Medical Practice recognised in 1978 that the supply of technology services can be influenced by the basis for remuneration of the practitioners and concluded:

Fee sharing arrangements between salaried doctors and hospitals in the States should be uniform and formalised at a national level, and that provision should be made for hospitals to audit services provided and revenue generated by their salaried doctors.

The Jamison Commission of Inquiry into the Efficiency and Administration of Hospitals, in considering private practice arrangements in public hospitals, made the following recommendations in 1980:

There should be an urgent review by each of the employment authorities of rights of private practice in hospitals with a view to limiting its scope, consistent with the underlying intent of the contract between an individual patient and a doctor.

. . . steps be taken to phase out over a period of years the right of private practice for full-time salaried specialists.

The inquiry also emphasised the need for greater awareness by administrators and governments, as well as doctors, of the medical value and costs of diagnostic services provided within public hospitals.

In 1981 the Working Party of the National Standing Committee (Hospitals Agreement) concluded that modification of the private practice arrangements for salaried specialists was required. In particular, there was emphasis on establishing a uniform policy across Australia on the rights of private practice for salaried specialists because of the need for control over double payments, accountability of public moneys, prevention of funds being used to promote excessive recruitment advantages from other States and Territories, and support for individual States in their attempts to provide internal control.

The third report of the Public Accounts Committee of the Parliament of New South Wales, in April 1982, having earlier given consideration to the exclusion of all private practice from public hospitals, recommended, firstly, that in the event of the continuation of a right of private practice for salaried specialists a uniform approach to private practice rights be adopted which would limit private practice income to, say, 20 per cent of salary. It also recommended a review of the facility charges levied on private income by hospitals to more accurately reflect the cost to the hospital of services provided to staff specialists as well as tighter controls over trust fund arrangements. It recommended in relation to visiting medical officers treating private patients that the Health Commission examine the feasibility of extending facility charges to all visiting medical practitioners and, in concert with other State governments, New South Wales sought the agreement of the Commonwealth Government to modification of medical benefits schedule fees to identify clearly a non-professional component in medical benefit fees. This report also recommended that, as a condition of appointment, all visiting medical practitioners be required to charge no more than the medical benefit schedule fee for medical services provided to private patients in public hospitals.

The 203rd report of the Joint Committee of Public Accounts on medical fraud and overservicing, which was published in 1982, in reviewing some possible legislative reforms drew attention to a proposal to permit medical practitioners to participate in the medical benefits scheme and to have their fees subsidised by both government and funds only if they were registered medical practitioners for purposes of the Health Insurance Act. The report referred to 'a form of contractual relationship' involving the Commonwealth and these doctors. On the advantage of this approach it said:

. . . breach of contract is much easier to prove, and would emphasise that medical benefits arrangements impose certain obligations on doctors to abide by the rules.

Doctors should be in a position to abide by the rules. They can abide by the rules only if those rules exist. The aim of Senator Baume's efforts today is to get rid of those rules.

The Government's basic view is that it has an overriding responsibility to ensure that the $2,000m in Medicare benefits paid annually is wisely and properly spent, and that the public hospital system is adequately equipped to manage the resources provided by the taxpayer. Looking at the sorts of findings I have quoted here today, and the sorts of findings which have come from many committees, I do not believe that the Government's actions can be considered to be unreasonable.


Senator Peter Baume —Have you considered the section 17 matter?


Senator GRIMES —I am going to answer that. The current position regarding payment of Medicare benefits for prescribed services in public hospitals is that benefits are being paid in all States and Territories except Queensland. I stress that the only State in which neither appropriate laws nor agreements and arrangements currently exist is Queensland. That raises the question about which Senator Baume expressed concern. I think the best way to clarify Senator Baume's problem is to point out that under section 17(1)(a) of the legislation, Medicare benefits are payable where there are either doctor-hospital agreements, as there are in Tasmania and the Northern Territory, or fee control legislation, as there is in Western Australia, New South Wales, South Australia and Victoria. The Minister for Health, Dr Blewett, has made declarations under section 17 to enable these benefits to be paid. The only State where neither of those conditions apply is Queensland, and we know what the situation is in Queensland. So under the legislation and under the declarations by the Minister for Health, those benefits in fact can be paid.

Even in Queensland the State is currently moving slowly to negotiate appropriate agreements with affected doctors. Unfortunately, it would seem at the moment that the Queensland Government has as little interest in resolving this matter as it has in meeting the health needs of the people of Queensland. All its attempts so far have been aimed at scoring cheap political points against the Federal Government, regardless of the adverse effect and hardship which may be inflicted on the people the Queensland Government purports to represent. The Queensland Government has caused problems and should realise that once again its attempts to distort and misrepresent the Medicare arrangements have been unsuccessful. Because of the Queensland Government's liking for these tactics, the Queensland people are the ones who are being forced to suffer needlessly. It disturbs me to see Senator Baume and his colleagues using that sort of tactic in this place.

The Government has made several concessions to the AMA, but the current guidelines still provide for some monitoring and regulation of the exercise of private practice rights, apart from the schedule fee aspect. The disallowance of the regulations could, in effect, upset the current arrangements with the AMA and upset the current arrangements with the State governments. If the motion to disallow the Australian Capital Territory Medical Services (Fees) Ordinance were successful, the effect, as Senator Baume said, would be to remove fee control and again cause the Government to consider whether the existing declaration allowing payment of Medicare benefits could be sustained. One of the bases of that declaration was that the schedule fees were required to be charged. They were required to be charged under the legislation.

It is clear from Senator Baume's remarks in a previous debate on the health insurance amendment legislation, which we passed in this Parliament not long ago , that he was generally supportive of the amendment which allowed State legislation to substitute for the individually signed agreements. Having shown his support for State legislation in that debate, he now seeks to disallow the Australian Capital Territory ordinance, which puts him in direct conflict with his argument at that stage, because this is the equivalent of State legislation. However, I suppose we have to accept that the Opposition finds itself in this position every now and again. The 203rd Report of the Joint Committee of Public Accounts, which I quoted from earlier, referred to a form of contractual relationship between the Commonwealth and individual doctors. I remind Senator Baume that this Committee was chaired by the honourable member for Bradfield (Mr Connolly). It included Senators Lajovic and Watson from this chamber. Those members of the Opposition were signatories to the report that made these recommendations. We now find that those two honourable senators are in the unfortunate position of arguing against similar recommendations which this Government is attempting to implement, is implementing, and will continue to implement.

We are faced with this situation: Disallowance of the regulations and the ordinance could mean a reversion to a situation where the agreed position reached between the Government, the State governments and the medical profession , represented by the AMA, could be placed at risk. Medicare benefits could be payable but not necessarily with the controls that, for all the reasons that have been outlined in this debate and previous debates, the Government believes are necessary. To my mind, given the protracted negotiations that have taken place, given the full and open debate that has taken place, given the fact that we have passed legislation to achieve what these regulations and this ordinance achieve, and given the fact that we now have peace in the area and an agreement, it is a mischievous action to persist with these disallowance motions. The basis of the accord reached with the AMA was that the status quo would remain pending the development of a joint AMA-Government submission to the Penington inquiry. That submission is being put together and a meeting is to be held this Friday. Both parties clearly would have to reconsider their positions if the ground rules under which that agreement was made were to be altered in this way by the Opposition.

In relation to the Australian Capital Territory ordinance, quite frankly, it is difficult to see the Opposition's responding. Medical benefits and fees are set by an independent body. It is equitable that charges for services in public hospitals, particularly, I emphasise, where publicly-funded equipment and staffing resources are used by the doctor, are in accordance with that independently arbitrated fee level. In fact that equity inherent in this proposal is recognised by many doctors. The Government's view however-I think it is a reasonable view-is that this issue should not be left to the whim of individual cases. The regulations and the Australian Capital Territory ordinance are both clearly integral facets of the proposal to place some controls over private practice in public hospitals, a concept which has already been considered and given legislative effect by this Parliament. The Government and the AMA have given undertakings to maintain the existing situation.

The major concern in all these debates has been that taxpayers' funds are spent responsibly and that patients can be reassured that some overall monitoring and control of the services they receive are being undertaken. It is of a very great concern that these publicly-funded hospitals using publicly-funded facilities, used by publicly-funded medical practitioners, by and large, assisted by publicly-funded staff should have the very moderate controls of the type we now have. The absolute basis of those controls, the ground rules, should be that the fees charged are the schedule fees which are the result of negotiation and arbitration. I reject Senator Baume's disallowance motions. I think he is being mischievous. He may just be seeking another attempt to take part in the endless ideological debates on health services we seem to have in this place. I believe he will not succeed in this process. For the sake of peace in the medical profession and in the negotiations between the medical profession and the Government, and to ensure that the Penington inquiry proceeds as normally and as peacefully as possible, I believe that these regulations and this ordinance should stand.