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Friday, 3 April 1998
Page: 1963

Senator FORSHAW (10:17 AM) —The Health Legislation Amendment Bill (No. 2) 1997 seeks to amend the National Health Act 1953 and the Health Insurance Act 1973. There are also minor changes to the Social Security Act 1991 and the Veterans' Entitlements Act 1986. A range of matters is encompassed within the bill, and some of the changes to the health insurance legislation are substantial. The primary aim of the legislation is to regulate insurance products, particularly those that threaten the community rating basis of private health insurance.

The opposition is generally supportive of the provisions in the bill. However, there is one particular matter that we are opposed to—and an amendment in my name has been circulated—and that is schedule 2 of the bill. I will deal with that in more detail a little later, but schedule 2 of the bill is that section which would remove the guaranteed 35-day provision for payment of acute care rates for patients in private hospitals.

As I said, the opposition is generally supportive of the bill. For instance, the provisions which relate to the simplification of the billing system and the establishment of agreements between hospitals, practitioners and health insurers, which will provide greater information to patients and doctors about extra expenses, are matters that we are supportive of. We are hopeful that the legislation will work particularly to minimise gaps. We also note that underpinning the legislation is a commitment to ensuring that the professionalism of doctors is respected. In this regard, I just mention in passing the model at Melbourne Hospital.

The bill also renames the Private Health Insurance Commissioner, who is henceforth to be called the Private Health Ombudsman—or maybe that should be `Ombudsperson'. In any event, we support that provision within the bill, as long as that office will make regular reports and the office has the opportunity to highlight issues of concern within the public domain.

On a number of occasions, we have seen situations where, with the establishment of an ombudsman's office, whilst intended to have independence and be there as a public watchdog, quite often, particularly when they focus on matters of public concern, they suffer the brunt of government or the bureaucracy in seeking to limit their effectiveness. As I said, we are supportive of the establishment of the office but we put the government on notice that we will be watching very closely to ensure that the office has, and is able to exercise freely, impartially and independently, the powers that it is given.

As I said at the outset, the main area of concern for the opposition in this bill is the clauses which relate to the removal of what is known as the 35-day rule in private hospitals. I refer to the document produced by the Information and Research Service of the Parliamentary Library and I will outline in the Hansard and for the benefit of the public and senators just what the current position is. The document on the bill states:

Benefits may be paid under the Health Insurance Act 1973 at an acute care rate and also at a lower rate to a nursing home type patient . . . occupying a hospital bed. The Act presently defines a nursing home type patient as `including a hospital patient who has been in care for a continuous period exceeding 35 days but does not include a patient that has been issued with either a 3A determination or a 3B certificate' . . .

A 3B certificate is a certificate issued by a medical practitioner certifying that the patient requires acute care.

That is the current position. The documents continues:

The Bill proposes that the present definition of a nursing home type patient be repealed and replaced with a new definition, under which `a nursing home patient is a patient in a hospital who is included in a class of person identified by the Minister by written notice but does not include a patient that has been issued with either a 3A determination or a 3B certificate.

The Act presently requires that benefits be paid at an acute care rate for the first 35 days of a patient's hospitalisation regardless of whether acute care is actually provided. Measures in this Bill propose that this provision be removed and replaced with a regulation `that provides for determination of benefits to nursing home type patients at an appropriate level and structure (including that acute care benefits are paid when acute care is provided)'.

To summarise that, this bill removes the current requirement that the benefits be paid at the acute care rate for the first 35 days of a patient's hospitalisation in a private hospital, regardless whether acute care is provided or not. In other words, currently the level of care may be more akin to the care provided in a nursing home situation, but for the first 35 days of that patient's stay in the private hospital acute care benefits are applied.

We believe this provision has worked well as it ensures, firstly, no detriment to the patient and, secondly, appropriate funding for the hospital through the Medicare system. We are very concerned that removing this current guarantee will severely affect patients. For instance, having been hit as hard as they have been by this government over the last 12 months or more, particularly in respect of the changes to the nursing home arrangements and then further changes late last year when the government recognised that its proposals were simply not going to work, we now have a situation where elderly people particularly could be admitted to a private hospital and, because they are classified to receive a level of care more appropriate to a nursing home, even though they are not in a nursing home, may end up having to pay the difference between the charges of the hospital and the level of benefit paid for the stay in hospital.

The ultimate winners from this proposal are the health insurance funds. It seems that this government is bending over backwards to assist the private health insurance funds at the expense in some cases of patients such as the ones that I am referring to. We do not believe that this measure is fair or equitable for the patients concerned. As I said, the problem with this section of the bill is that it will result in elderly people being forced to have out-of-pocket expenses because they cannot get entry into a nursing home at that particular time or they are on a waiting list and also because they cannot be covered for the full cost of care in the private hospital for those 35 days if this provision is removed.

We understand that the health funds really do not want to pay acute care rates for patients who normally would be in need of nursing home care but who are admitted to, and staying in, a hospital. The health funds, naturally, argue that the difference between the nursing home subsidy and the acute care rate, which can be substantial, should not be subsidised by the health funds. Whilst that argument is understandable from the perspective of the private health funds, as I said, the real outcome of changing or removing the current guarantee will impact most severely upon the patients.

For instance, under this provision a person admitted to a private hospital for specific medical reasons—they may have had a heart attack or a stroke—may within a week or two be reclassified as being non-acute. In that case, because the level of benefit payable drops—in some cases by as much as $400 a day—that patient may ultimately have to foot the difference. The government says that this affects only nursing home type patients, but we are concerned—and concerns have been expressed by such groups as those involved in schizophrenia awareness—about the impact of this upon persons with severe physical or intellectual disabilities.

Yesterday the Prime Minister announced a package whereby the government would fund to the order of $270 million improvements particularly for carers, persons looking after older people or disabled people within the home. As we have pointed out, this injection of funds is really just putting back into the system money that had been taken out previously. We regard it as somewhat hypocritical that, on one hand, the government is making a major play about the injection of some $270 million into the system and yet, on the other hand, it is seeking to remove a provision which could substantially impact upon the very people that the government claims it is concerned about.

We have seen over the past 12 months or even longer that the attitude of this government is to make the elderly pay more and pay more often simply to get appropriate nursing home care. The provision to remove the 35-day guarantee is of the same vain. Once again it strikes at the very people least able to cope.

We are concerned that the age care assessment team could determine that a person needs a hospital bed and that subsequently that person could need to be moved to a nursing home but because of the delays and the procedures for reclassifying that person as a nursing home patient while still in the hospital our estimate is that out-of-pocket expenses for such a person could amount to many thousands of dollars before they actually get admitted to the nursing home. On the top of other charges that have been introduced by this government that is very substantial.

We ask the government to reconsider its position on this provision and support our proposal to remove schedule 2 from the bill. That would, in turn, maintain the position as it currently is. That is the major and critical issue that we believe needs to be amended in this bill. As I said at the outset, we support the remaining provisions of the bill.

I finish on the note that we continue to express our grave concern at this government's attitude to the most important issues of health care, the maintenance of Medicare and the adequate provision of nursing home accommodation, which our elderly citizens are entitled to. They should not be financially burdened in the way that this government is seeking to do. In the committee stage I will move the amendment that has been circulated in my name.