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Senate Select Committee on Health
16/04/2015
Health policy, administration and expenditure

MACKAY, Dr Ian, Private capacity

[10:44]

CHAIR: Welcome. Could I ask you to give the capacity in which you are appearing before the committee today.

Dr Mackay : I was contacted by Jason Threthowan from Barwon Medicare Local who suggested I might be appropriate to appear as I have been involved in other issues to do with the provision of local health care. I think that is probably the rationale behind his asking me.

CHAIR: Excellent. That is an introduction to you, in short. We do have a little information from you, but would you like to make an opening statement to the committee?

Dr Mackay : Sorry, I just flew in from Brisbane last night. What would you like me to comment on?

CHAIR: We will pass you the terms of reference so you can see that it is a fairly wide-ranging inquiry. In particular, we are interested in the regional nature of health-care delivery in this area. The key areas that have been raised with us include the impacts of the federal funding cuts on acute care, national partnership agreements, the changing conversation around co-payments, price signals and the impact of those in a regional area. That would be at least a start, but there are many, many more areas.

Senator DI NATALE: The freeze on Medicare rebates is the other thing.

CHAIR: That is part of the mix.

Dr Mackay : I first got involved in the local issues when there was the proposed closure of our urgent care three or four years ago on the basis of inadequate or unavailable funding that was not specifically aimed at keeping the urgent care open. Fortunately, we were able to keep it open and running the way it was with some adjustments to minimise the attendance of what was considered low-level, health problem patients through what should strictly be an urgent-care service. To that end, my particular clinic opened for a formal evening clinic. From a personal point of view, that was as much as shifting deckchairs on the Titanic because we already provide a 24-hour service, seven days a week, 365 days a year. So the provision of that evening clinic really was of no great benefit to us as such, but it was of benefit to the hospital and it did apparently allow the service to continue. Since then, I understand from CAH that they have obtained specific funding for at least this financial year for maintenance of urgent-care services. So I guess the ongoing provision of what we do is kind of moot, but I accept the premise quite readily that the urgent care should be reserved for urgent-care needs and that is not primary-care services, by and large.

CHAIR: Where is your practice in relation to the hospital, for starters?

Dr Mackay : Fifty metres from it. It is basically over the road.

CHAIR: So not too far away?

Dr Mackay : Not at all.

CHAIR: Is the population base of this area predominantly clustered around Colac?

Dr Mackay : I think the current population is about 10½ thousand and we have another nine to 10,000 in the district, so we are sort of the hub of that spoke. I guess there are 20,000 patients, by and large, that would utilise medical facilities within Colac.

CHAIR: That gives me some geospatial understanding of what you are doing. Secondly, you said you provide care 365 days a year and at all hours, but you changed and formalised access in an after-hour period and that changed how people started to use your service—is that correct?

Dr Mackay : With limited funding to run an urgent care, a significant amount of that urgent care on hospital figures—although some of them are a bit rubbery—was in the lower grades of health needs. For instance, kids would be coming in with an earache or something along those lines which is completely inappropriate for urgent care. Nobody is disagreeing with that. But we did not have the volume of those sorts of patients, to be perfectly frank, on a business model, to justify opening up for extended hours. With the assistance of Barwon Medical Local, which has helped us with after-hours funding, we have been able to move a significant number of, or most of, the up-to-mid-evening, low-need patients into the clinic. So we run an evening clinic from six until about nine, which is generally fairly well attended, and we take all comers for low-grade health problems—standard primary care health problems.

CHAIR: Is that self-selecting a part of community education—people know to go there—or is there a triage point, by phone or hospital, to direct people?

Dr Mackay : There is a mixture of the two. There has been an advertising program to say that there is now an extended primary care service from Monday to Friday at our clinic, and also the nurses at urgent care will triage in those hours as to what is appropriate to stay. Obviously they do not send people over to us with chest pain or a significant condition, but they will flick people with sprained ankles or colds or simple tummy aches or whatever—they will flick them over to the clinic, where they will generally be seen and that will be the end of it. So it decreases the use of urgent care for non-urgent cases. That is the theory.

Senator JACINTA COLLINS: What would you have done out of hours with patients, prior to setting up the evening sessions?

Dr Mackay : Prior to setting up the evening sessions, we would have just attended urgent care. Urgent care—

Senator JACINTA COLLINS: No, I am sorry—I thought you said earlier that you operated 24 hours. Would they have rung an after-hours phone number? This is your patients.

Dr Mackay : Our clinic patients—yes.

Senator JACINTA COLLINS: Your clinic patients—would they have rung an after-hours number and maybe received some advice over the phone or ended up with a home visit? What sort of care, other than attending casualty, would have occurred?

Dr Mackay : There are a number of layers to our telephone message. Originally it just got put through to the doctor, which, at three o'clock in the morning when someone is wanting to make appointment for the next day, is completely inappropriate. So we have a number of layers for them to get through, from nurse-on-call to ringing casualty to ringing urgent care, and the nurse may give some advice, and, if that is inappropriate, then it gets through to us. So the direct calls generally come from people who have attended in urgent care, from the nursing staff, or from patients who have gone through those hoops to get through to the doctor if they have something that they really want to discuss with whoever is on call, as opposed to the nurse on call or the triage nurse in urgent care.

Senator DI NATALE: Just give me a bit of a flavour of the clinic. How many GPs are at the clinic, just roughly?

Dr Mackay : There are about 10 or 11.

Senator DI NATALE: I am just trying to get a sense of the size of it.

Dr Mackay : It is a big clinic.

Senator DI NATALE: It is a big clinic, yes.

Dr Mackay : It is a teaching clinic.

Senator DI NATALE: Do you have trainees through the clinic as well?

Dr Mackay : Yes, we have a whole vertical curriculum, from two medical students to anything up to four registrars to overseas trained doctors to nursing students who come through our treatment group. So it is fairly—

Senator DI NATALE: Yes, it is substantial.

Dr Mackay : And there is value in doing that. If you do not get involved in teaching then you cannot complain when the next generation is not very good.

Senator DI NATALE: Well, that is a social responsibility as opposed to a financial—

Dr Mackay : Absolutely; yes.

Senator DI NATALE: It is not really a financial decision. And there is obviously a high level of integration with the hospital.

Dr Mackay : Yes.

Senator DI NATALE: And now we have what was Barwon Medicare Local—and I understand you were active within that organisation; I do not know what it is now and whether it is still the Barwon and South West—

Dr Mackay : Primary health care, yes.

Senator DI NATALE: Primary Health Network; is that what it is called?

Dr Mackay : I am not sure of the name, but I know that it is basically the same. I had not caught up with the name yet.

Senator DI NATALE: What difference has that made? Obviously, with the issue of the after-hours care or the urgent care, they play a very active role there. What other things have they helped you do in terms of the services you offer?

Dr Mackay : Barwon Medicare Local?

Senator DI NATALE: Yes.

Dr Mackay : They are a good intermediary. They are useful—it has changed a little bit. When we had the divisions of general practice, our Otway division at the time was truly rural based. So their whole culture and ethos was aimed at the specific requirements of a country practitioner. You would know that their needs are very different from the city needs, very different. I was a little bit dubious when the current Medicare Local was formed that we were kind of on the periphery of that area—most of the GPs were going to be in Geelong, essentially urban GPs—and that the particular differences between the two groups of GPs were not going to be recognised. I was pleasantly surprised that they were quite aware of the different needs that we have and I have found Barwon Medicare Local to be inclusive rather than exclusive. I have been quite impressed. They have been quite understanding that we are very different. So it has been good.

Senator DI NATALE: Yes, they have been probably one of the better performing Medicare Locals; hopefully, in this new incarnation they will be as effective. There was the issue with urgent care, and they got involved there. Can you give me some other practical examples of things they might have helped you with?

Dr Mackay : Education, medico political information, assistance with the after-hours grants, those sorts of things—as an intermediary really between us, who are head-down bum-up most of the day, and government, other organisations and the bureaucracy. They have been very good.

Senator DI NATALE: So trying to help join up the system a bit better?

Dr Mackay : Absolutely. Very much.

Senator DI NATALE: Tell us a bit about the impact of the freeze. You are not a bulk-billing practice? There are not many of them in this neck of the woods. I should say: you are not a solely bulk-billing practice?

Dr Mackay : Yes, we are a private practice but we do obviously have a significant percentage of bulk-billing. We bulk-bill children, healthcare card holders and pensioners. My personal opinion is that I agree with the principle of a price signal. I agree with that. I do not have a problem with the principle. I have a problem with the implementation of that signal. My opinion is that, if there is going to be a price signal, it should be clearly seen to be coming from government—and not the politically soft option of pushing it onto the GPs. But the principle of it I have sympathy with. When Richardson brought it in in 1995—

Senator DI NATALE: Or suggested it.

Dr Mackay : I think it lasted about a week. I thought that was a good idea. I think that, if people see that there is a cost for their services, then by and large they may take more notice of the advice that they are given and recognise there is some value in the time spent with them. There is a cost.

Senator DI NATALE: You talk about the implementation. Government only has blunt tools at its disposal. It could exempt healthcare card holders, but we all know that there are people who do not get healthcare cards who also face cost pressures.

Dr Mackay : Yes.

CHAIR: Particularly the chronically ill.

Senator DI NATALE: Yes, and often it is people who have a high burden of disease. They might be on a number of meds. They might have kids. They might be struggling to pay their bills for education and in all sorts of other areas, and health ends up becoming one of those things that people feel is a little more discretionary. Are you concerned at that level; that we just do not have the ability to be able to target the groups that you are talking about with a price signal?

Dr Mackay : Yes and no. I guess when people go to pick up their prescriptions, there is a price signal there. They are paying five dollars something or other—

Senator DI NATALE: And some people do not pick up their scripts because of that price signal.

Dr Mackay : I do not think there are a lot of people who do that—anecdotally, at ground level. I do not think that that happens a lot. There is a cap on how much they are expected to pay. But there is a principle there of price signal. And how big a price signal should it be? I do not know. I guess I go a bit beyond—the object to me of a price signal is less about generating income to pay for Medicare; it is more that patients take more notice and responsibility and participate. When we went through medical school, the doctor was supposed to provide the best care that he could; the patient was supposed to listen and be a true partner in that interaction. That no longer happens. I think, if someone has some degree of effort required to be involved in that doctor-patient relationship, whether it is a cost or whatever it is, that to me would be the ultimate benefit—if they really took notice of what was happening.

Senator DI NATALE: What you are saying is: put aside the tool, but the aim is to try and get people to engage more in their own health care and to be more active participants in their own healthcare rather than sitting back, going to see the GP, and expecting it all to—

Dr Mackay : Yes: 'Don't think about it. It's free. I'll go. It's not a big deal.'

Senator DI NATALE: I think most people would agree with that aim. I suppose the question is: what is the right tool to get there. That is always where the difficulty is. Tell me about the freeze in rebates. Does that have an impact on your practice? I suppose it has only been around for a little while.

Dr Mackay : The proposed freeze—on 1 July.

Senator DI NATALE: To 2018, I think.

Dr Mackay : Again, I can understand what the rationale is—if Medicare is an ever expanding monster. But on the other hand I can see it as a soft political option: 'Okay, if we can't get a co-payment through then we will just freeze the rebates and we'll achieve the same thing'. It is inevitable that costs rise, award rates rise; what exactly are we supposed to do? We will have no option but to increase our fees. That is not being greedy; it is not being unreasonable. It is just the way it is.

Senator DI NATALE: An economic reality.

Dr Mackay : It is an economic reality.

Senator DI NATALE: But in terms of how you would model that out, what proportion of your billing would be bulk-billing, just roughly.

Dr Mackay : I think, from my practice manager at the moment, somewhere around 72 or 73 per cent, maybe a bit more, are bulk-billed.

Senator DI NATALE: Is it that high?

CHAIR: Yes. It is pretty high.

Senator DI NATALE: I suppose it reflects the demographics of the community.

Dr Mackay : Absolutely.

Senator DI NATALE: It is not a particularly wealthy area.

Dr Mackay : Yes.

Senator DI NATALE: If you are talking about 70 per cent of your services being bulk-billed, and let's say we are freezing rebates, it is basically a real cut in your income over time. If you decide to continue to bulk-bill those patients, it is those non-bulk-billed patients who are going to bear the brunt of the freezing rebates, isn't it?

Dr Mackay : It may or may not. I have read stuff where you may be able to charge a bulk-bill patient a fee on top of the bulk-billing, which is—

Senator DI NATALE: So that is not allowed at the moment?

Dr Mackay : No, it is not allowed. But I have read that it is being considered.

Senator DI NATALE: But it is something that is being considered; you are right. Let's assume that it does not happen. Let's say that they cannot get that through the parliament, because that requires legislative change; that is, they are not allowing you guys, because you cannot at the moment, charge a small fee on top of the bulk-bill amount. Let's assume it is not going to happen, how else would you look at basically coping with that cut to your wages?

Dr Mackay : To be honest, my partners and I have not had a huge discussion about it, for the simple reason that personally I do not believe it is going to go ahead.

Senator DI NATALE: You do not think the freeze will continue?

Dr Mackay : No. I think the pressure will build, much as it did with the co-payment, and it will be ditched. That is what I believe. But if it were to occur, then there are three options: you decrease staff and services; you put the proposed co-payment on a bulk-billed patient or everybody to spread the load; or you hit the private patients for the drop-off. I cannot see any other way we could do it.

Senator DI NATALE: Do you have a sense about which way you would be leaning if that was to occur? I do not want to get you in trouble with your partners.

Dr Mackay : No, I am here as an individual. I am loathe to hit those that cannot afford it. Our practice philosophy has never been to make the most money first and then whatever happens after that is a benefit. We provide a service first, and the income follows. If that were to ever change, then I would leave that practice. So I am not entirely sure which way we would go. We would be really in a sort of moral conundrum there. We have a responsibility to our staff; we have a responsibility to provide the service level that we are now; and yet that has to come with a cost. So there will have to be some fee charged. In all honesty, I really do not know. There may be a differential co-payment. As you were alluding to, there are a lot of people on healthcare cards that are liquid cash poor but asset rich. We would perhaps have to look at that and try and differentiate those healthcare card holders who could financially pay.

CHAIR: Would that be a system where you would have to have people set up a loan drawing down against their house to pay for their medical care?

Dr Mackay : It may be. I do not know. I am not a financial person but I am aware that there are healthcare card holders and there are healthcare card holders. Currently we bulk-bill all of them.

CHAIR: In the country situation, that would particularly be the case because often people who have land holdings might have those assets but might be very anxious about having to establish loans to pay for what Australians have generally considered an essential service, which is access to a healthcare professional.

Dr Mackay : I do not think there is any easy answer.

Senator DI NATALE: I agree with you. I do not think it is a state secret that there are negotiations going on at the moment and that the AMA is involved. I think there is a good chance we will see a decrease in the length of time the freeze in rebates occurs. The government and the AMA together will support a policy that allows you to charge now a small fee on top of the bulk-billing. At the moment, you cannot; you have to charge full fee. If that were to happen, would you expect that your bulk-billed patients would be charged a small additional fee?

Dr Mackay : I think there is a possibility that it would occur.

Senator DI NATALE: I think that is probably the feedback we have got from others. What does that do to bulk-billing rates? It is hard to see bulk-billing continuing on in the circumstance where you have got doctors allowed to charge a small fee and you still have the freeze in rebates that might continue for another year rather than the two or three that are predicted. Do you think it is likely that bulk-billing rates would drop?

Dr Mackay : I think they would, particularly if it was set in concrete that it was going to be for four or five years. If it was only going to be for a year or two then I do not know whether there would be a big impact. Because, realistically, every organisation can make efficiencies and we are no different to that. So if the prospect is only for a freeze for a year or two then it would not have anywhere near an impact as it may otherwise. You have got to set things in motion. You cannot just all of a sudden hit somebody with a significant increase. It would be a creep.

Senator DI NATALE: But you could charge your bulk-bill patients $5 under this proposal?

Dr Mackay : Yes.

Senator DI NATALE: It seems to me that the biggest break on bulk-billing, the thing that protects bulk-billing is that doctors are not allowed to do that at the moment. If we change that legislation then what we would see would be a lot of bulk-billing practices and services start to charge small amounts and, as you say, potentially increase them over time. Would you agree with that?

Dr Mackay : I would imagine that the corporates that run most of the bulk-billing clinics have a significantly better scale of efficiency than we would. I really could not comment on their financial approach. They would perhaps be looking at other item numbers to supplement any decrease in income, for instance, the chronic disease item numbers and those sorts of things.

CHAIR: Dr Mackay, I go back to comment you made about hitting a point where you said, 'If the business changed and the way I interact with my patients changed to such a point that it all came about the money, I would walk away.' Can I let you know that we have had that reality as a major concern for access to doctors in rural settings put to us as was one of the outcomes of this significant proposal to change Medicare and the fees paid because there are so many doctors who were in rural and regional's settings who are older practitioners who come from a different sort of generation of medicine. That 24/7 community care model we were hearing about is not so much a part of the new generation of doctors coming through. The financial pressure that doctors are feeling being pushed down on to them and the push for change from the federal government are so significant that there is actually a workforce threat to rural and regional parts of Australia. Could you see that being the case based on this push point for people in their 50s and 60s who go, 'It is just not worth it.'

Dr Mackay : I have had this sort of discussion with my son actually, who is toying with the idea of what he is going to do. I think the financial changes will hurt but it is not going to be Armageddon and the end of all things. We make changes. We streamline our organisations. Yes, your income may not go up at the CPI rate for a couple of years. But I am the first to admit to that, quite frankly, I am in the top one per cent income within the country and I really do not have a right to complain. That is not the issue as far as I am concerned.

What does concern me is the associated increase in bureaucracy that comes along with these changes and that is what I find more than anything hard and tiring. I said to Matt, 'If you want to do something in health whether it be veterinary, medical or dental then pick something where there is no government intervention,' purely for that reason—it just gets too much.

CHAIR: There is a bit of exhaustion from change management going on as part of the scene the whole time. I know that you have urgent care here. One of the major concerns about putting another barrier between people and their doctor whether it is a price signal, co-payment or whatever shape it comes in, is that people who are not willing to take out a loan against assets in the country find that the only place they can access health care then becomes an emergency department in a hospital. Do you concede that that is a pathway that will increase for some people if further price signalling is sent?

Dr Mackay : I guess that is the inevitability. From talking to some of the secondary and tertiary hospital A and E specialists, that is their concern. It is not going to happen in this sort of facility where it is essentially an extension of our private practice to see patients in urgent care. It does not come under state funding as such, other than this ex-gratia grant that the hospital has got for this year. But, yes, in theory, I think there would be a possible flow to A and E departments if there was some form of price signal.

However, with some form of price signal applied, I think the usage of primary care services would change significantly. For instance, I saw a young family with a three-year-old child a couple of weeks ago. This child in its short life had attended the clinic on over 130 occasions over the period of its life, essentially with nothing other than a runny nose or not being quite as active today. It was seen by good practitioners within the clinic. The education would go through continuously yet the vast majority of this lady's attendances with her child were completely unnecessary. Yes, there may have been some parental anxiety but the message was just not getting through to her or her partner, who was sat with his head down because he was being forced to come. You could see he did not think that they needed to be there but his wife had said that they should come.

They may take more notice of the advice that they are given if they think, 'Good heavens—it's going to cost me $4.60 to see the doctor. What exactly did he say?' That, to me, would be the benefit. I would hope that, with support, her frequency of attendance with this child would drop significantly and she would just recognise that the kid had a viral upper respiratory tract infection. Therefore the cost—as in the true bulk-billing cost—would be very different to her cost after the price signal. There is a significant amount of overutilisation of primary services, in my opinion.

CHAIR: We have actually been hearing the contrary—that there would be a very significant health impact on people who would not attend because people do not have the skills to self-diagnose, to know whether they need to see you or not. To address the issue that you have raised—and I think it is a very, very significant one—one of the suggestions that we have received is to move to blended payment models where you would have an opportunity for not just fee-for-service but access to primary health care. Perhaps that might run a flag up and you would say, 'This woman may need some help with managing anxiety or childcare services.' Primary services are delivered much more cheaply through allied health professionals, and that might begin to address the long-term needs of the community. It sounds like that little family—mum, dad and the child—might need something quite different from a visit to the doctor, but that is the place they are seeking help because that is the only place they know to go to seek help at the moment. So the complex nature of these things is certainly being aired in the hearings. Thank you for coming along and for the work you do here in Colac.

Proceedings suspended from 11 : 16 to 11 : 42