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Wednesday, 2 March 2011
Page: 999


Senator ABETZ (5:04 PM) —At the request of Senator Fierravanti-Wells, I move:

That the Health Insurance (Eligible Collection Centres) Approval Principles 2010, made under subsection 23DNBA(4) of the Health Insurance Act 1973 , be disallowed.

Quality health care is a vital public policy goal for the coalition and it should be such for this parliament. We want quality care delivered in a manner that does not waste money or lead to overservicing. In fact, it was those considerations that motivated the Labor government some two decades ago, in 1992, to introduce a regulatory framework in relation to pathology collection centres. It was this Labor framework in 1992, which was updated by the coalition about a decade later, that has now been junked by the government without any consultation with the sector.

The regulatory framework introduced by Labor was designed what was then the exponential growth in approval pathology collection centres. The regulations served their purpose well. But Labor’s recent decision, without any consultation, to remove the regulations has seen a growth of 46 per cent in the number of such centres in just the last eight months. The numbers have grown from 2,426 collection centres to 3,536. That is an extra 1,110 collection centres, a 46 per cent increase, in just eight months.

Everyone must acknowledge this as wasteful and also unsustainable. This growth has been driven not by customer or patient demand or good health care but by the commercial considerations of—if I might say so—certain general practitioners. All the new collection centres—and I stress this: all 1,110 of them—are in GP surgeries, adding a cost of about $100 million to the service. This impacts on research and on quality of service. It has seen the closure of laboratories in regional and rural areas and staff redundancies. What is more, the smaller providers are now being muscled out by the bigger players.

The position the coalition is proposing will overcome those bad outcomes and save the taxpayer money. It is in fact a savings measure. The Royal College of Pathologists of Australasia supports the coalition position. The Australian Association of Pathology Practices supports the coalition position. Indeed, if Labor were to support our position, they could reduce their flood tax by at least $100 million, if not more.

Labor claim that these regulations offend the National Competition Policy. It seems that they pick and choose. If they were so serious, so concerned, about the National Competition Policy, one could ask: why are they not removing the regulations surrounding pharmacies and the whole host of other medical services? Indeed, it is very interesting, given the Labor Party’s backflips on a whole host of issues in recent times, that they seem to have adopted in relation to pathology services the view that the market—to coin a phrase—should rip.

But this is a situation in which we are dealing with government funded services. It stands to reason that it will cost more the more that you drive the availability of it, especially the unviable ones, which will cost so much to provide. I am talking about those new service centres that previously did not exist that have not been demanded by patients or indeed by good health care. The 46 per cent increase has simply been commercially driven, and that of itself may not be a bad thing, other than that we are in fact talking about the expenditure of a lot of taxpayer money.

In relation to this disallowance, which comes quite late in the piece given that these changes were introduced on 1 July last year, but given that these changes have been made, we can see the disaster the policy has been with this 46 per cent increase in the collection centres. We can also see the blow-out in the costs. I would have thought, given the bitter experience the government has suffered by this failed policy as a result of its lack of consultation, it may now be minded to say, ‘Look, yes, let’s disallow this particular regulation and go back to the drawing board.’

Some concern has been expressed as to what will happen to those 1,110 that have been licensed since this regrettable decision. We cannot do anything about that; they are licensed, they are in the marketplace and they will be able to continue for the 12 months for which they have been licensed. A suggestion has been made that somehow they would no longer be licensed. That is not the case; their licences, as agreed, would continue.

I will make a few other observations and also refer to the Australian Financial Review article of 21 September 2010 which, on page 47, reported that ‘costs for all providers have soared’ since the restrictions were removed on 1 July 2010. That was the experience already in September, some two or three months after the change was made. Now, with the experience of another five months on top of that under our belt, we can say that the costs for all providers have absolutely soared and the cost to the Australian taxpayer will simply be so much greater.

The coalition does not support the sort of piecemeal approach that was adopted by the government. There was no appropriate consultation in relation to this. There will be increased patient costs, and that is going to undermine a very important sector of our health service providers and run the risk of cost blow-outs for the health budget. We have now been told that the minister will make cuts and changes to pathology funding in this year’s budget. That was just reported today. The minister said that this would have to happen if appropriate savings are not identified by the sector. Well, if she wanted appropriate savings, she could have identified those herself by not disallowing this regulation.

There is a risk that, if more collection centres continue to open, it will be difficult to wind back the costs of providing services if an alternative arrangement is agreed. The coalition is not opposed to a change in regulation, but it needs to be subject to proper consideration and review to avoid unintended consequences for patients. Put simply, if the cost of providing these services is going to blow out, as it already has, as has been reported in the media, then who cops it? The taxpayer and the individual patients.

Pathology services have had the benefit of being one of the few services that are substantially bulk-billed. I am not sure if I can put my finger on the figure, but, if my memory serves me correctly, about 85 per cent of services in pathology are currently bulk-billed. I think I am getting a nod of agreement in relation to that. Make no mistake. With an impost of over $100 million being imposed by this unfortunate decision, there will be more services, there will be more bulk-billing, but also there will be the temptation for these service providers to have a gap which individual patients will have to pay.

There has not been a suggestion that doctors are not seeking pathology services because of a lack of collection centres. There has been no demand that there should be more pathology services or suggestion that pathology services have not been sought by general practitioners. Indeed, they have been and we have seen a growth rate in them above the growth rate in the population. But they have been contained in a way that does not lead to overservicing. Once there are these extra 1,000-plus collection centres, there are the overheads that the pathology companies have to pay for. And who is going to pay? Either the taxpayer or the patient. And there was no demand for that to occur.

I simply say to Labor: if you do not want to listen to me on this, that is fine; I accept that. Listen to your predecessors in 1992. The rationale they provided in 1992 remains valid and proper today.