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Community Affairs Legislation Committee
28/02/2018
Estimates
HEALTH PORTFOLIO
Australian Sports Anti-Doping Authority

Australian Sports Anti-Doping Authority

[11:20]

Senator FARRELL: Mr Sharpe, you might recall, last time you came to estimates, you hadn't long been in the role. Given that you've now had several months at the helm, are there any general observations or updates you'd like to provide to the committee on ASADA's important work?

Mr Sharpe : Yes, thanks, Senator. I think last time I presented in evidence a statement about my vision for ASADA, working on the previous work of the prior CEO and the team. Certainly, the four months that I've been there have given me a lot of time to look at that work and body of reviews that were done into ASADA, as well as a number of submissions that were made to the Wood review into integrity of Australian sport. Our focus is very much still within the themes of that statement that I presented in evidence—that we are focusing very heavily on enhanced intelligence for the organisation, enhanced education and enhanced awareness, as well as enhanced engagement with the sporting codes. That work has progressed from that statement, in conjunction with previous reviews and directions of the former CEO.

Senator FARRELL: Thank you, Mr Sharpe. In previous estimates sessions we've talked about the cost recovery contract that ASADA has been negotiating with GOLDOC to provide antidoping services for the Commonwealth Games. You'd be familiar with that, I'm sure. At the last estimates hearing—and still at the time of the response to my question on notice No. 1178, which was answered on 15 January—those negotiations were ongoing. Have those contract negotiations now been completed?

Mr Sharpe : A contract has been completed with GOLDOC. It's with the lawyers at the moment. We have agreed on the terms of that contract. It has not been signed at this point, and it is pending—it is imminent. That contract will be signed once WADA has approved the standard of how the doping program will be delivered at the Commonwealth Games—which I believe, again, is imminent.

Senator FARRELL: Imminent?

Mr Sharpe : Imminent—as in days.

Senator FARRELL: Are you happy with the arrangements; can you provide—on notice, if necessary—basic details of the contract, obviously nothing operationally sensitive; just what services will be provided; and the cost of providing those services?

Mr Sharpe : Yes, absolutely. That contract is separate to previous funding in the lead-up to the Commonwealth Games and is specific to the delivery of an antidoping program at the games. What that contract will outline are the services provided by ASADA, which include our ability to deliver an investigations capacity and an intelligence capacity, as well as testing missions throughout the games.

Senator FARRELL: Okay. ASADA made a submission to the Wood review into the integrity of Australian sport, and that review, as I understand it, will feed into the government's plan to establish a national sports integrity tribunal of some sort. Is that your understanding?

Mr Sharpe : My understanding is that we put a submission forward for the Wood review to consider all aspects of integrity in sport and identify what body would be an appropriate model for Australia.

Senator FARRELL: Could you summarise ASADA's submissions to the review.

Mr Sharpe : Certainly. There were a number of submissions put to the review by ASADA, and they relate particularly to legislative change in streamlining processes, to ensure that the processes of ASADA in looking at cases were much more efficient and much more effective than the current time frames taken, and also to—

Senator FARRELL: Sorry to interrupt. How would you see that working?

Mr Sharpe : Well, to streamline processes. When an investigation is commenced, there are a number of processes to go through until the end result. There are appeal tribunals. There's the Court of Arbitration for Sport. Also, in the lead-up the CEO forms reasonable belief of a particular case. It goes back and forward to an Anti-Doping Rule Violation Panel, which is statutorily independent, and that occurs a number of times in the process. So it's certainly around streamlining that process, still with oversight, to ensure that the process is much more efficient for athletes.

Senator FARRELL: Was the basis of that consideration the episode with Essendon? Was that part of your thinking in making that streamlined?

Mr Sharpe : Obviously Operation Cobia, which was the Essendon matter, formed part of submissions. There are learning outcomes from every operation and every athlete we deal with. Certainly the need to ensure that the process was much more effective for athletes was key to that consideration.

Senator FARRELL: If your submissions were accepted by the review, you would have seen that process happen a lot more quickly?

Mr Sharpe : Across all cases that we deal with, yes, that would be our submission—that we refine the system, streamline it and make sure it's much more independent and transparent.

Senator FARRELL: Yes. Does ASADA have a particular position on the idea of a national sports integrity tribunal?

Mr Sharpe : Yes, certainly we do. We support a national sports integrity tribunal and that independence from all process.

Senator FARRELL: Did ASADA's submission to the Wood review include any concerns about the government's public position that it would be left up to sports to opt into a national sports integrity tribunal?

Mr Sharpe : ASADA's position was that a national sports integrity tribunal would definitely have a role that would fit within ASADA's remit and process. We supported that tribunal and the independence of that tribunal.

Senator FARRELL: I refer to page 146 of ASADA's 2016-17 annual report. There's been an increase in supplier costs that seems to be largely attributable to increased spending on contractors, recruitment, training and travel. Could you please walk us through what has been behind the increased expenditure in these areas.

Mr Sharpe : Certainly. There are a number of reasons behind that, relating to our ability to deliver the Commonwealth Games, our contract services around IT and IT security being critical. Just for more specifics for you, I'll hand over to the chief financial officer to step you through those.

Mr Fitzgerald : Some of the increased expenditure around contractors is the fact that during the year we had a number of staff vacancies, so we're using labour hire arrangements to cover off on those.

Senator FARRELL: Just on that point of contractors, are there any integrity risks in having that many contractors on board?

Mr Fitzgerald : We have a protected security framework in ASADA which means that all contractors who are brought on board are subject to the same conditions as ongoing staff. For example, all of them will have a baseline security assessment, which is risk management of those circumstances.

Senator FARRELL: You're satisfied that you've covered the integrity risk potential?

Mr Fitzgerald : Yes, we're satisfied.

Mr Sharpe : Senator, I might add that part of that also, as an independent audit committee that sits across ASADA, risk, policy frameworks and IT, is to ensure we have that independence and auditing ability throughout our processes.

Senator FARRELL: Thank you. Could you perhaps give us some more detail of what's behind the increased expenditure on recruitment and training?

Mr Fitzgerald : The increased expenditure on recruitment and training primarily relates to the use of outsourced recruitment agencies to undertake recruitment for us. For example, one of the activities that we've been undertaking is a significant increase in our casual workforce around the country. For example, we've used an independent recruitment company to undertake that activity for us.

Senator FARRELL: ASADA's file list for July to December 2017 published in accordance with Senate continuing order No. 12 includes the item 'ASADA domestic travel policy review'. Are increasing travel costs behind that review?

Mr Sharpe : I can address that. That related to, as a CEO, me wanting to align ASADA more heavily with tighter restrictions around the use of travel for our senior executives, albeit only three of us. That related to a decision I made that the senior executive will travel and won't receive travel allowance; they will use their credit card from an accountability point of view.

Senator FARRELL: That file list also included the item 'Implementation, secure file site to support Commonwealth Games task force'. Could you please explain what this secure file site is and its purpose?

Mr Sharpe : I will pass again to the chief financial officer. That relates to our ability to maintain security of information. We will be setting up an operation centre on the Gold Coast, outside of our usual working environment. We're taking all steps to ensure that that environment, whilst temporary, maintains the same level of security as what it would in the ASADA office. I invite Mr Fitzgerald to add to that.

Mr Fitzgerald : That particular subject is related to the operations of the pre-games task force, which ASADA is operating. It is the mechanism by which we can securely allow access to information through other participants in the task force without compromising our protected security framework.

Senator FARRELL: Who are they? Are you able to—

Mr Sharpe : This is one of the first task forces pre a Commonwealth Games. We have 14 representatives of different international federations and national antidoping organisations from around the world. They include the likes of Canada, the rugby association, New Zealand and a number of others. The South African Institute for Drug-Free Sport, the UK Anti-Doping organisation and the GOLDOC committee have a position on that. It's a task force leading to the games to target athletes prior to them arriving in games competition.

Senator FARRELL: If an athlete has been targeted, does that information go to that group? Is that where the information goes through to?

Mr Sharpe : That group is actually a task force that is looking at a number of things—how we develop a targeted testing plan for high-risk sports or athletes. It's distributing the tests that we will do leading to the games and a number of other issues around how we will conduct ourselves jointly. Offshore, we've done just over 500 tests on international athletes, and coordinating that response is done through the task force.

Senator FARRELL: That completes my question on ASADA. I did have more sports questions but, as you know, Mr Scullion kept interrupted me, so I will put those on notice.

Senator McKenzie: Well, I'm here now. I'm happy to answer those questions, if you'd like, Senator Farrell. It's up to the Chair, of course.

CHAIR: It's up to the committee.

Senator SIEWERT: How long do you think it's going to take?

Senator FARRELL: I will put the questions on notice.

Senator WATT: Why don't you get into it and we'll see how quick the answers are?

Senator McKenzie: We will see how we go. I will keep my answers efficient.

Senator WATT: Why don't we give Senator Farrell at least 10 minutes and see how he's going in getting answers to his questions?

Senator FARRELL: Thank you. Minister, I read an article by Latika Bourke, a very good journalist at the Sydney Morning Herald, the other day in which Senator Reynolds called for mixed gender professional sporting competitions. Do you recall that article?

Senator McKenzie: I haven't read the article, but I do recall seeing a tweet about it

Senator FARRELL: You're aware of the issue?

Senator McKenzie: Yes.

Senator FARRELL: As you know, I've personally been a supporter of increased women's participation in sport from girls at the grassroots level. Of course, my own team, the Adelaide Crows, won the inaugural AFL women's league. Of course, we've also had the outstanding Matildas' performances and a lot of other performances in between. Did Senator Reynolds consult you or give you a heads up before making that public proposal?

Senator McKenzie: No. She may have contacted my office, but I'm not aware.

Senator FARRELL: Do Senator Reynolds's remarks reflect government policy in this area?

Senator McKenzie: I think around the running of codes it's usually a matter for sporting bodies themselves. I don't think we live in a country where government dictates to sports how they run. Government doesn't have a policy per se.

Senator SMITH: Senators have the freedom to raise good ideas or different ideas.

Senator FARRELL: Look, I'm sure your backbenchers have plenty of good ideas, but what I'm asking you—

Senator McKenzie: They do, Senator Farrell.

Senator FARRELL: I'm asking you, do her comments reflect the government's position on this?

Senator SMITH: They don't need to.

Senator McKenzie: The government doesn't—

Senator FARRELL: Senator Smith, I appreciate your intervention. Now that you're here—

Senator SMITH: I've been watching the television, Senator Farrell.

Senator FARRELL: I was seeking to represent your interests earlier in the discussions with Ms Beauchamp.

Senator SMITH: I saw that. Thank you very much.

Senator FARRELL: After I've finished this question, I'd like to come back, now that Senator Smith is here, and find out what the next hurdle is that we have to jump before we do get that in camera briefing on the National Sports Plan—if you can give some consideration to that question.

Senator McKenzie: I like the way you're using the athletic metaphors of 'hurdles' and 'jumping', Senator Farrell.

Senator FARRELL: Thank you.

Senator McKenzie: It shows that you're being a good shadow minister for sport. As I said to you earlier, neither the Australian government nor, I'm sure, any of the state governments can dictate, do dictate or have a strict policy on how various national sporting organisations run their own competitions. I think AFL, Cricket Australia, Tennis Australia and Netball Australia would have some concerns if ministers of sport wanted to intervene in how they operated their sports.

Senator FARRELL: Yes, of course. Senator Reynolds has already intervened in Rugby Western Australian, hasn't she, by conducting an inquiry into their decision to delist a team in Western Australia. Do I take it from your comments that what Senator Reynolds said is not government policy?

Senator McKenzie: I think what you can take from my comments is that federal governments of all persuasions don't take strict policy positions on how sports are run in this country. I think if you look back on former Senator Lundy's time in this portfolio you'll find that—I would be very, very surprised if the Labor Party had a sports policy platform that told AFL, rugby, cricket or tennis how to run.

Senator FARRELL: We're not going back into history; we're talking about the current government's policy.

Senator McKenzie: I think I've been pretty clear, Senator Farrell.

Senator FARRELL: Can I paraphrase you and say—

Senator McKenzie: As long as it's not verballing me.

Senator FARRELL: No, I'll paraphrase you: Senator Reynolds's comments on mixed-gender professional sporting competitions do not reflect current government policy?

Senator McKenzie: I think Senator Reynolds was putting forward her views on a public issue for debate, as she is absolutely entitled to.

Senator SMITH: Senator Reynolds was calling for a debate.

Senator McKenzie: That's right.

Senator SMITH: That can hardly be, even to Labor—

Senator McKenzie: It is part of our role as senators, I think.

Senator FARRELL: Last Friday, Minister Pyne on Sky News criticised our Olympic organisers, saying that they:

… always overpromise what they’re going to deliver and then underdeliver it at the actual Olympics …

That's a somewhat harsh assessment, I think. But then he also said:

We’ve just announced more money … for the Winter Olympics team.

I know you've made some far more positive and encouraging remarks about our Winter Olympians that were reported in The Australian. Why did you delegate this apparent funding announcement to Minister Pyne?

Senator McKenzie: I haven't delegated any funding announcement to Minister Pyne. You may be referring to the AOC, which is completely independent of government. Obviously, I don't necessarily agree with that, if your comments about Minister Pyne's reflection on our Winter Olympics team are correct. I think our athletes go out and do their very, very best for our nation in every single event. We had some great results at the Winter Olympics. Even though she came 33rd, our female cross-country skier was an Australian first. It was a best for our nation. It was an Australian record to come 33rd in the world in cross-country skiing. So whether it is that, whether it is Jarryd's silver medal or whether it's our aerial team who had such high aspirations but when it came to the event weren't able to get into the medal tally, that is just sport.

Senator FARRELL: So you would say Minister Pyne is wrong when he says our Olympics were overpromised and underdelivered?

Senator McKenzie: I wouldn't choose to reflect on our Winter Olympics results using the same language.

Senator FARRELL: I am not sure he was just talking about the Winter Olympics. I think he was—

Senator McKenzie: The AOC, as I said before, is an independent body and it runs our Australian Olympic teams, both winter and summer. I don't have any capacity to influence the AOC.

Senator FARRELL: Minister Pyne is saying we overpromise and underdeliver. I take it as sports minister you are disagreeing with him?

Senator McKenzie: What I am saying, Senator Farrell, in the context of our Olympic athletes is that every single man and woman who competed at the Winter Olympics in Pyeongchang have done their very, very best for their nation. They have some fantastic stories of trials and tribulations that they overcame to be there. I had the opportunity to meet many of their parents while I was there and I heard of personal sacrifice at the family end. A lot of them have to live overseas for many years to have access to the sort of training facilities they need to participate in those events. So that is what I am saying.

Senator FARRELL: That is all terrific information—

Senator McKenzie: Happy to help.

Senator FARRELL: but I don't think Minister Pyne is talking about the athletes per se. He is talking about the Olympic organisers and he is saying the Olympic organisers overpromise and underdeliver. I take it you disagree with that proposition.

Senator McKenzie: What I am saying, again, is that the AOC—

Senator FARRELL: Minister Pyne has decided to talk on your portfolio area. He has decided to buy into the Olympics. You are the minister. Can I take it that you do not agree with Minister Pyne that our Olympic organisers overpromise and underdeliver?

Senator McKenzie: I don't think I can add any more to the fifth time you have asked that question than I already have.

Senator FARRELL: All I wanted was a straight answer. Thanks, Minister.

[11:45]

CHAIR: Let's move on to 4.1.

Senator SINGH: I have questions on the Medicare Benefits Schedule review. The 2017 MYEFO, which was released just before Christmas, I think, on about 18 December, included net savings of $409 million over five years from the MBS review. I just want to know what 'net savings' actually means. Presumably it means total savings from the review minus the spending of the review, but—

Mr Cormack : The net savings referred to are in fact the net outcome of some saves and some re-investments as a result of the MBS reviews that have been completed and considered by government. So the short answer is yes. But they don't include the actual costs of running the program. They are saves and spends in MBS outlays.

Senator SINGH: Do you mean it's capturing the net savings of the entire review so far?

Mr Cormack : That have been considered by government to date at MYEFO.

Senator SINGH: So is this measure on top of earlier savings?

Mr Cormack : Yes, there was a small amount. I might ask Mr Weiss to give the background, but I think there was a smaller save in an earlier economic update.

Mr Weiss : There was a saving of, I think, $5.1 million that was announced—I think it was the 2016-17 budget—from the deletion of some obsolete items that the MBS review had identified.

Senator SINGH: So this is the net savings of the entire review on top of that?

Mr Weiss : That's correct.

Senator SINGH: What are the total savings, not the net savings, from this review so far?

Mr Cormack : What has been reported in the economic updates are the net saves. That's the figure that we work from, which is the $409 million you referred to.

Senator SINGH: So you can't reveal the total saving?

Mr Cormack : The way the MYEFO was prepared was with a series of nine particular reviews, and the summary of all of that is 409 million.

Ms Beauchamp : Can I just put that in context. We're looking at a program of over $23 billion. It's going up. The purpose of the review, which is happening over a long period of time, is to look at waste, as Mr Weiss says, obsolete items and the like and make sure it is contemporary. So, until we finish the review process, we won't have a net savings or spend figure there. I just wanted to mention that.

Senator SINGH: I didn't ask for the net savings; I asked for the total savings.

Ms Beauchamp : That's what I'm saying—the review process is not complete.

Senator SINGH: Right, but you're able to come up with a net savings figure—

Ms Beauchamp : So far.

Senator SINGH: Mr Cormack already said he is basing that on the total savings from the review minus the spending of the review, so you must have a total savings figure. Otherwise, how you would come up with the net savings figure?

Ms Beauchamp : I think the MYEFO was very clear about the savings that have been achieved so far as we continue to roll out the review process.

Senator SINGH: I will try once again. What are the total savings from the review so far?

Mr Cormack : The figure that has been brought to book in MYEFO—and that goes back to 2016-17—is net savings of $409 million over the five years of the program, plus the $5 million that was covered in a previous economic update.

Senator SINGH: Are you saying that the net saving figure over the last four years, plus the $5 million from the earlier savings, is the total savings figure?

Mr Cormack : That's correct.

Senator SINGH: That's the total savings figure?

Mr Cormack : Yes, to date.

Senator SINGH: What MBS items or groups of items have those savings come from?

Mr Cormack : I'll step you through this, from the Mid-Year Economic and Fiscal Outlook—

Senator DI NATALE: Sorry, can I seek clarification. You're saying $409 million is savings to date?

Mr Cormack : Over the forwards, yes, that's right. That's the net savings that have been identified, recognising that there would be saves and there would be some reinvestments within the MBS items. The net saving over five years from 2016-17 is the $409 million that's reported in MYEFO, plus the additional $5 million that was reported in a previous budget update.

Senator DI NATALE: Thank you.

Senator SINGH: The items?

Mr Cormack : I'll talk through them at a heading level and I've got colleagues here who can take you down to the detail. The first one is addressing different variations in billing of medical consultations. The second is reducing unnecessary bone densitometry testing. The third is consistent billing for tonsillectomy and adenoidectomy—

Senator SINGH: Sorry, I will stop you there. I've got the list in front of me as well of the nine groups that you've got in the MYEFO measure. I guess what I'm interested in is the breakdown between those nine groups. We're talking about the savings, so—

Mr Cormack : As I said before, we are working to a net combined savings of $409 million. We haven't got a breakdown for you. We can take that on notice, but the figure of $409 million is the net outcome across those nine items plus, of course, the $5 million that was previously recorded—recognising that this is a figure going forward, and recognising that the implementation of these individual measures will take some time and there will naturally be variations over time. The figure that was published in MYEFO is a net save of $409 million over the five years.

Senator McKenzie: That's been reinvested—I think that needs to be clarified.

Mr Cormack : Of course, yes. It's been totally reinvested back into the budget bottom line for health.

Senator McKenzie: For health.

Senator SINGH: So we've got a list there of those nine items. You've identified that the total saving less the total reinvestment is a net saving of $409 million. You'd be aware, I'm sure, of the concerns about this cost-saving exercise. Doesn't the fact that you haven't kind of given us a firm total saving confirm that there is a concern out there?

Mr Cormack : Can I clarify something that you've said. This is not a cost-saving exercise. The $409 million plus the other smaller amount has been put back and reinvested in the health portfolio. So this is not a cost-saving exercise; this is about ensuring the appropriateness of care. This was informed by expert clinicians who trawled through the evidence on these particular items over a period of several months, years in fact, and have identified what is the best way to value these particular items. It's about overall improvement in quality and it's extracting maximum value out of the MBS. It is not a cost-saving measure, and whatever savings are been identified—and we've identified $409 million in MYEFO—are already back into the health portfolio to deal with other budget growth and budget pressures.

Senator SINGH: If it's about quality and you're saying it's not a cost-saving exercise, I understand that changes to urgent after-hours items make up most of these savings. Is that right?

Mr Cormack : It certainly is a significant component, and I think that that exercise, in particular, was very much identified by the clinicians, by the clinical groups. The College of General Practitioners and the AMA, as well as the taskforce itself, saw this as an opportunity to ensure, first up, quality care—that's what this is about—and also to identify opportunities for where the money that could be identified through these items being reset and revalued—because they had been in place for a number of years. I just identify for you that we had seen growth of 157 per cent in the use of these items between 2010-11 and 2016-17. So clearly, from the point of view of the doctors themselves and the experts that have engaged in this process, there was something to identify here in terms of whether we could get better value, ensuring good quality after-hours access—we've certainly done that through this exercise—and whether we could get better value than allowing a program to run at a growth rate of 157 per cent effectively over a six-year period. That's been the whole purpose of the exercise: to focus on quality of care and re-invest the saves from that into the health portfolio more broadly.

Senator SINGH: Just to confirm, on notice, could you provide a breakdown of the savings of the MBS review so far by item or group, and also by year?

Mr Cormack : We'll certainly take that on notice.

Senator SINGH: What's the total amount of spending that has been recommended by the review and implemented by government?

Mr Cormack : What sort of spending are you talking about? Do you mean expenditure on new items, or do you mean the program-related expenditure to administer the MBS review process itself?

Senator SINGH: I would like a breakdown of the spending on the items. So, yes.

Mr Cormack : We'll certainly take that on notice, because it's part of the same request that you've put. I have colleagues here who can also take you through the amount of funding that has been allocated to this exercise itself. We can give you a sense of what's been allocated in budget, what's been committed and spent today, if that's what you're interested in; or we can take that on notice as well.

Senator SINGH: If you have those figures on you, that would be good.

Mr Simpson : There is a $44 million budget allocation in the last budget for the Medicare review. That's evenly split between administered funding and departmental funding. To date, there has been some $18 million spent on the review. $18 million of administered funding has been on the review.

Senator SINGH: To date in this financial year?

Mr Simpson : No, since the review was started in 2015.

Senator SINGH: I understand there are also MBS review recommendations for new amended items that the government has not yet implemented, like to introduce a new item for remote kidney dialysis. How many of those types of recommendations are outstanding?

Mr Cormack : We can give you a bit of a rundown on the progress in terms of recommendations, but you're right: what we've bought to book in MYEFO is those that have worked their way through the system and have been subject to formal government decisions, because these do require formal consideration. There are others that are at varying stages of finalisation. Some are still out for public consultation, some are in the stage of refinement, and some are under active consideration by government as we speak.

Senator SINGH: Could I have on notice a list of all the outstanding recommendations, as well as the cost of each of those?

Mr Cormack : We're happy to take that question on notice.

Senator SINGH: I'd like to get back to the review itself and the total spend on it so far, in terms of its conduct—the cost of departmental resources, the use of consultants, that type of thing.

Mr Cormack : We'll be happy to go through those. I'll ask Mr Weiss and Mr Simpson to give you the details of those.

Mr Weiss : As Mr Simpson said, the administered spending has been $18.4 million.

Senator SINGH: I'm looking for a breakdown between the department and consultants, and between years.

Mr Weiss : In terms of the breakdown of that, of the $18.4 million, approximately $2.1 million has been spent on the clinical committees themselves.

Mr Cormack : Just before Mr Weiss goes on, that is the essence of the review. The costs to the committees are, in fact, large numbers of expert clinicians in different speciality and subspecialty areas who have committed a significant amount of time to be able to contribute to this process. That is pretty much where the evidence base comes from to make the necessary recommendations for subsequent government consideration.

Mr Weiss : Approximately $0.9 million has been spent on consultants to the review, $15.2 million on contracts for services, and a little over $200,000 for what are classified here as other expenses.

Senator SINGH: What does that mean? Various? All and sundry?

Mr Weiss : Stuff like printing, travel for committee members, booking fees, taxi fares, that sort of stuff.

Senator SINGH: The MYEFO measure also says that that $409 million in net savings 'have already been reinvested by the government in Medicare'. When did the government reinvest the savings, and in what?

Mr Cormack : The reinvestment is part of the broader economic update process. When the government publishes its update with a series of estimates, variations and measures and spends and saves, it's dealt with within the context of that particular economic update.

Senator SINGH: So what budget measure reinvested these savings?

Mr Cormack : There isn't a direct, specific link between every element that is saved and every item that is spent. I can perhaps ask our budget people to more broadly explain the way these things work. Generally speaking, the way we approach an economic update, either MYEFO or a budget, is that we identify at a whole portfolio level a consolidated list of items for investment or expenditure, and then we identify a series of offsets.

Senator SINGH: Which items? Which new or amended items were listed?

Ms Beauchamp : It's probably easier to look at the global figures. When we were quoting Medicare and MBS figures this morning, we spoke about a 3.9 per cent increase. From 2016-17 to 2017-18, there was an extra $887 million invested in MBS. That is the sort of reinvestment we're talking about. When we talked about the global figures this morning, we spoke about a five per cent and a three per cent increase in the total health budget. Obviously balancing expenditure and savings is a key part of that.

Senator SINGH: It says in the MYEFO that it has been reinvested by the government in Medicare. I'm not talking about the total health budget; I'm talking about Medicare. That's what it says: the $409 million in net savings has been reinvested into it.

Ms Beauchamp : I just mentioned a figure of $887 million just on MBS additional expenditure this year.

Senator DI NATALE: Does that come from unfreezing the rebate? Is that the bulk of that?

Ms Beauchamp : Unfreezing the Medicare rebate? I'd have to take that on notice. I'm not too sure what the details are.

Senator DI NATALE: Mr Cormack? Would the bulk of that come from unfreezing the rebate—that increased Medicare expenditure?

Mr Cormack : I would have to take the precise detail of that on notice or have one of our budget colleagues come along. In essence, the $409 million covers multiple updates and covers issues such as re-indexation and, as the secretary has said, the significant growth in Medicare. The money has been—

Senator DI NATALE: So that investment is basically saying, 'We're unfreezing the rebate that we froze.' And you consider that a reinvestment?

Mr Cormack : You can term that the way you wish to.

Senator DI NATALE: Accurately.

Mr Cormack : We will take the detail of that on notice.

Senator DI NATALE: Will you be able to provide that today?

Mr Cormack : We'll take the question on notice and see what we can do about getting back to you.

Senator SINGH: Given the large amount of savings in urgent after-hours items, has the government reinvested any money in after-hours primary care?

Mr Cormack : There is a range of measures already in existence in the after-hours space. I think it's important to note that the measure certainly made no change whatsoever to the reimbursement arrangements for vocationally registered general practitioners or registrars undergoing a training program. There was no change whatsoever to the after-hours reimbursement arrangements in rural and remote areas. What was put in place was a focus on quality of care, based on the recommendations of the MBS review committee and with the full backing and support of the college and the AMA. This was an opportunity for the government to be able to extract maximum value out of the health-care system to ensure that we continue to meet obligations around providing affordable, accessible after-hours services—and that is what we have in place—but also to identify opportunities to reinvest in the overall health portfolio. That's what has happened in this instance.

Senator SINGH: I'm trying to work this through. By my account, there has been $27 million in new and amended MBS items in the last two budget updates. You have the $16.4 million in the 2017 budget, as it is written there, and $10.6 million in the 2017 MYEFO. $406 million in net savings minus $27 million in these new amended listings leaves $382 million. Where has that money gone?

Mr Cormack : I think we have answered that question. There is no $300-odd million-dollar gap. This money has been reinvested back into Medicare and into the health-care system. We will come back you with a more detailed outline of that. There is no gap that has been created as a result of this reinvestment exercise.

Senator SINGH: Just in response to Senator Di Natale, did the government reinvest the money in that 2017 budget measure into Medicare Benefits Schedule indexation?

Mr Cormack : I think that has been taken on notice.

Senator SINGH: I'm entitled to ask it specifically.

Senator McKenzie: It has been taken on notice twice.

Senator SINGH: But I'm asking it differently.

Mr Cormack : I'm going to give the same answer. It is really the same question just asked differently. We will come back you with a response on notice that outlines—

Ms Beauchamp : The bottom line is that there has been an increase in expenditure on MBS. It is additional expenditure from government through the health portfolio and specifically MBS. In terms of the breakup of that additional expenditure, I think we have already taken that on notice.

Senator SINGH: I just can't see how you can call it reinvestment.

Senator DI NATALE: It's one thing to say you have unfrozen something, where the costs of it are actually going up. It's another thing to say you're reinvesting the money in Medicare.

Ms Beauchamp : I think we have taken it on notice. When you look at the bottom line of the budget papers, there is increased expenditure across the health portfolio of 3.5 per cent in forward estimates each year, and there is an increase in expenditure on the MBS.

CHAIR: Can I throw in a question on this topic? My understanding of the MBS review is it is linked to clinical outcomes as well. It is actually about benefiting patients.

Mr Cormack : That's correct. The MBS review process—there are over 5,700 items on the schedule. Many have been largely unchanged and unmodified since the schedule was created. There have been significant advancements and improvements in the practice of medicine. There have been significant technological changes and breakthroughs. As a result, over that time we have created new items and have applied a rigorous evidence test through our MSAC process to new items. There was a significant body of work to deal with the existing 5,700-odd items. The MBS review process brings the experts together. They go right back through the items, looking also at the rules in relation to the way those items are used, align them with modern practice, bring forward evidence that has emerged since those items were first listed, and then make a series of recommendations for simplification, change and modification of values that are then subsequently considered by government.

Senator DI NATALE: On the $409 million, I didn't quite hear quite how much of that saving was from the after-hours item numbers.

Mr Cormack : We said that we would come back on notice.

Senator DI NATALE: I flagged with the department a couple of days ago that I would be asking this specific question, and I was told that you would be prepared with an answer.

Mr Cormack : The figure we have available for the current financial year is in the order of $24 million, and for 2018-19 it's in the order of about $70 million.

Senator DI NATALE: And over the forwards?

Mr Cormack : I don't have that figure in front of me.

Senator DI NATALE: I did request that. I said I would be asking this question.

Mr Cormack : We will certainly be able to get that to you on notice.

Senator DI NATALE: We have $24 million and $70 million. Do we expect that number to increase significantly over $70 million over the forwards?

Mr Cormack : The $70 million would reflect the first full year of implementation. Obviously there will be some changes that will occur, but we imagine that that would be a baseline for future years.

Senator DI NATALE: So we're really looking at well over half of the $409 million coming from the after-hours access.

Mr Cormack : It certainly would be in that order, yes.

Senator DI NATALE: That is basically that anybody who is not a GP or in a GP training program will have their rebate reduced by, I think, $27 to $100 from tomorrow, and then from 1 January to $90. Is that correct?

Mr Cormack : Yes.

Ms Beauchamp : I think we have also protected the level of rebates that currently apply for rural and remote areas.

Senator DI NATALE: That's Monash 1 or 2. It will apply to one or two.

Ms Beauchamp : Yes.

Mr Weiss : The rebates for those doctors who are affected drop from $129.80 to $100 from tomorrow.

Senator DI NATALE: So there's about a $30 reduction tomorrow.

Mr Weiss : And then another $10 on 1 January.

Senator DI NATALE: Can you indicate what the rationale for the proposal was? Tell me what the thinking behind the proposal was.

Mr Weiss : The task force looked at the after-hours items. There are 28 after-hours items in total, and they focused on the four urgent after-hours items. The task force identified very strong growth in services that did not seem to have a good clinical basis. They identified that most of the growth occurred in the sociable hours period rather than the unsociable hours period. There was much higher growth in urgent services than in non-urgent services. There was strong evidence that not all of the services being billed as urgent services were truly urgent services. There was a high concentration of the growth in particular areas of Australia, rather than being uniform across the country, and that coincided with the emergence of new business models in those areas.

Senator DI NATALE: New business models or businesses?

Senator McKenzie: New business models.

Senator DI NATALE: What does that mean?

Mr Weiss : Private sector medicine, essentially.

Senator DI NATALE: I'm just getting to this question of, sure, they've grown, but the fact that they have grown doesn't mean they're being rorted. It may be that they're meeting an unmet need. The fact that they have grown in areas where new businesses have developed to meet that need doesn't mean that those services are necessarily being provided without a good rationale behind them. You would expect Medicare to open. You would expect—

Mr Weiss : The taskforce's ultimate conclusion was that the current model for urgent after-hours MBS rebates supported low value care and did not represent value for money for taxpayers. They made recommendations for changes on the basis of that.

Senator DI NATALE: Did the department as a result of this change do any modelling or any work to try and anticipate what would result in terms of these after-hours services being delivered?

Mr Weiss : I wouldn't call it 'modelling', Senator. Obviously, as part of the costing process for this being considered by government, there were estimates of the costs developed. I think, by and large, the savings that were estimated from that did not assume reductions in services. The savings by and large came from the reduced rebates that would be available for services, but also some switching of services that were being billed as urgent services and being paid at 129 dollars 60 or 80 cents to more appropriately classified services either in the after-hours period or the next day, for example, in doctors' rooms.

Senator DI NATALE: Are you aware of the National Home Doctor Service reports that they have contacted patients in New South Wales, Queensland, Tasmania and Western Australia, advising patients of imminent closures?

Mr Weiss : Yes.

Senator DI NATALE: You are aware of the reports?

Mr Weiss : Yes.

Senator DI NATALE: Are you concerned that those closures will mean reduced access to after-hours care?

Mr Cormack : In terms of the preparation of this measure, a lot of that work was undertaken by the MBS review process. We had a very close look at underlying need. We also need to acknowledge that there are a range of other pre-existing services in those areas that will be used, and we don't see that this change will adversely impact on service delivery.

Senator DI NATALE: How do you square off that with the National Home Doctor Service? Are they the biggest provider of this after-hours service? How do you square off the fact that they are now sending letters to patients saying that they are planning closures—the first closures are in Perth, Hobart, Albury and Townsville, with more expected—with your view that it won't have an impact on after-hours access?

Mr Cormack : Senator, I guess what we can say there is that in virtually all of the areas identified there are already other existing providers. A lot of the work that had been generated by a number of businesses, not just this one, was work that could otherwise have been dealt with within normal hours and probably will be dealt with within normal hours. What we were seeing here with a number of these services was practices such as very aggressive advertising of service arrangements and also arrangements such as pre-booking. I think the notion that you ring up to pre-book an urgent medical assessment and that that was actively encouraged by some of these providers would indicate to me that—

Senator SMITH: Isn't this provider under investigation? I might have heard incorrectly—

Mr Cormack : I am talking more generally about the practices. That is what I said. I am talking generally about the practices that have been identified both through this review process—

Senator DI NATALE: Have you identified any practices outside of after-hours care where there has been inappropriate billing? This is a yes or no question.

Mr Cormack : Yes.

Senator DI NATALE: So, is that an argument to be cutting Medicare rebates in hours or is it an argument to be addressing inappropriate billing practices?

Mr Cormack : It is an argument to be addressing inappropriate billing practices, and the way that those inappropriate billing practices can be addressed can be done in a number of different ways.

Senator DI NATALE: Reducing the rebate?

Mr Cormack : They can be done through normal compliance activities and through education activities.

Senator DI NATALE: That's what you're doing in care provided in normal business hours. That is the approach you take, but you have taken a different approach here. You have basically slashed the rebate for a number of providers.

Mr Cormack : Senator, let's go back to the beginning here. This is an evidence based review led by clinicians who are calling for a fundamental re-evaluation of many items on the MBS. They undertook painstaking research. They looked at the evidence. They looked at all the information that was available to explain and identify very significant growths in practice that were completely out of kilter with other growth in the MBS schedule.

Senator DI NATALE: If you have a new item number—

Mr Cormack : We take the advice of clinical experts, Senator.

CHAIR: I've had some requests from other senators to quickly deal with a few issues before lunch.

Mr Cormack : The advice we took—

CHAIR: Sorry, Mr Cormack. Senator Smith, can you keep your questions to five minutes?

Senator SMITH: Yes.

Senator DI NATALE: Sorry, I haven't finished.

CHAIR: We will be going back to this after lunch.

Senator DI NATALE: I've probably got two more questions.

CHAIR: I have just had a request from senators who have to deal with this issue before the lunch break. We can come back to you after lunch.

Senator DI NATALE: Sure.

CHAIR: Senator Smith and then Senator Singh.

Senator SMITH: Mr Cormack, can you talk briefly about the compliance activities. Was anything revealed through the compliance activities?

Mr Cormack : Senator, I will ask one of my colleagues to join the table.

Senator SMITH: Brevity will be rewarded, because I am under instructions for five minutes.

Mr Cormack : I will ask the relevant officer to explain.

Senator SMITH: Did the compliance investigations reveal anything? Have any doctors been sent to the independent professional standards board, for example? Is any provider under investigation?

Mr Cotterell : Since September, we have been having a look at the top claiming providers of urgent after-hours items through our Practitioner Review Program, which reviews practitioners for potential inappropriate practice. We have looked at the top 29 claimants of urgent after-hours items. We have interviewed 28 of those 29. To date, as of this morning, five have been referred to the Director of the Professional Services Review.

Senator SMITH: Five of 28 that have been interviewed have been referred to the independent professional standards board?

Mr Cotterell : To date.

Senator SMITH: Meaning you expect more to be? That is not a fair question. The investigation of the compliance review is not yet completed. Is that a true statement?

Mr Cotterell : That is true. The investigation is ongoing. One provider is being investigated for fraud. I can't give you more details on that.

Senator SMITH: There is a second theme to my question. Mr Cormack, you talked about the review having been called for by clinicians themselves. When we think about the key stakeholders here in terms of doctors' groups, what is their attitude? Are they supporting the approach?

Mr Cormack : In short, yes. Certainly, the MBS review team is, because they recommended it, and the relevant medical colleges and the AMA have supported that.

Senator SMITH: My understanding is that rural, regional and remote services are 'quarantined'. Is that correct?

Mr Cormack : Unaffected by it.

Senator SMITH: So there's no change to the rebate.

Mr Cormack : No change to that.

Senator SMITH: I am happy to defer to other senators.

CHAIR: Okay. We have five minutes before the lunch break. Senator Singh.

Senator SINGH: I just have some questions on 4.2, hearing.

CHAIR: We are moving to hearing, are we?

Senator SINGH: Yes, that is what I had five minutes on. That is my five minutes, and then you can come back. Okay?

Senator SMITH: Senator O'Neill ruined it for you, Senator Singh, I'm afraid. We acted in good faith at the beginning of the Senate estimates hearing this morning.

Senator SINGH: It is the chair we are going through, not the other senators.

CHAIR: My understanding from your request is that you had five minutes of questions on 4.1.

Senator SINGH: No; on hearing.

CHAIR: I am sorry. I didn't realise that. We will stay on 4.1. Senator Rice, you have the call.

Senator DI NATALE: I'll just round off. I'll be quick. The Australian Healthcare and Hospitals Association have indicated that they have concerns about the impact on emergency departments, given there are something like two million people who use after-hours home doctor services. Can you provide us with assurance you don't expect the changes to lead to increased pressure on emergency departments?

Mr Cormack : No, we don't believe it will lead to increased pressure on emergency departments.

Senator DI NATALE: You don't believe based on what?

Mr Cormack : Based on the advice that was provided to us throughout the review process, the advice of experts and the analysis that was undertaken. This is a different sort of clientele. Mr Weiss might be able to reflect on that.

Mr Weiss : The task force actively considered this question, because it was an issue that was raised in the feedback they were getting, although the task force was, in their words, not convinced by the argument that the increasing use of urgent after-hours attendances has led to a reduction in business to hospital emergency departments. They also made the point that in the task force's opinion it was not appropriate to compare the level of care or the cost of a hospital ED presentation with an MBS-funded urgent after-hours home visit, given the differences in the level of care available between a hospital and a doctor visiting a home.

Senator DI NATALE: But you would expect that they'd be similar presentations in many instances.

Mr Weiss : The task force's very clear conclusion was that they did not believe that there would be an impact on emergency departments from their recommendations.

Senator DI NATALE: In the interest of finishing up and giving Senator Rice some time, my final question: are Albury and Townsville both classified as regional 3 to 7, or are they 1 or 2 under classification?

Mr Weiss : I think they're 2 under the classification.

Senator DI NATALE: We talk about rural and regional communities being exempt, but under this change Albury and Townsville will both be subject to the reduction in after-hours rebates.

Mr Hallinan : Yes.

Senator SMITH: Mr Cormack, it's my understanding that the approach the government has adopted is in fact softer, more moderate, than the recommendations that have been proposed by the task force itself. Is that correct?

Mr Cormack : That's correct.

Senator SMITH: And can you demonstrate that in one or two ways?

Mr Cormack : Mr Weiss might have the comparison.

Mr Weiss : The task force recommended that doctors who work predominantly in the after-hours period should not be able to claim the urgent rebate paid at $129.80. Instead, they would be able to claim only the non-urgent rebate, which was $74.95, I think. That would have affected every doctor who worked predominantly in the after-hours period. The only recommendation where the government differed from the task force's recommendations was on that one, where instead of the differentiation between the hours in which doctors predominantly work there is a differentiation between the qualifications of the doctor and the region in which they work.

Senator SMITH: And for patients, there are still alternative mechanisms for them to get 24-hour care, isn't there?

Senator DI NATALE: The George Christensen approach—

Senator SMITH: I would be the last person to ask about George Christensen's approach, Senator Di Natale!—with all due respect. Sorry, Mr Cormack.

Mr Cormack : As I said, there are still those not affected by this for the after-hours period. Of the total 28 items in the after-hours period, only four were under review. The remaining 24, which were for the non-urgent services after hours, no change whatsoever.

CHAIR: Thank you very much.

Proceedings suspended from 12 : 29 to 13 : 31

CHAIR: We will resume this hearing of the Community Affairs Legislation Committee. We are still in outcome 4.1: medical benefits, and Senator Rice has the call.

Senator RICE: I'm interested in getting some information and exploring the issue of how abortion procedures are reflected in the MBS, in particular in the interests of getting good data on abortion procedures, which is clearly a fairly topical issue at the moment, with the situation in Tasmania.

Ms Beauchamp : I might ask Mr Cormack to help with that.

Mr Cormack : As you would be aware, the Commonwealth does not have a responsibility for the delivery of these services. They're predominantly a state and territory government responsibility. The Commonwealth contributes indirectly in two ways. There are a number of MBS items that can be used as part of a termination procedure. Also, through our contributions to the states through the National Health Reform Agreement—the public hospital agreements—whatever the states do in that context within the public hospital sector, the Commonwealth is providing a financial contribution to the operation of the state hospital systems. In terms of data availability on this, we would need to take on notice what we can actually pull together, because the items have a number of different applications, and we just need to have a look at our datasets a bit more closely, so I'm happy to take that on notice for you.

Senator RICE: I'm particularly interested in the fact that I'm told that there are four different item numbers which can be used which cross over. I'm just wondering, given the review of the MBS, whether there is consideration being given to making these items more specific so we can have data that's specifically for abortion procedures. At the moment, I'm told that the most common one that's used is 35640, which is a D and C, a curettage with or without dilatation, which covers a whole range of procedures.

Mr Weiss : Mr Cormack's right: there are items on the MBS that can be used for the surgical termination of a pregnancy. But they are not exclusively used for that; they can be used for other purposes as well. The data that we collect for Medicare doesn't go in and isolate the particular reason why the item was used. The data on what proportion of those items is being used for abortion versus for what is being used for other purposes is invisible from an MBS data point of view.

Mr Cormack : I think the other key point is that the legal status of terminations is a state and territory government responsibility and, as you would be aware, it varies significantly across the different states and territories. So we don't really have a direct line of sight, in terms of data, data collection and data availability, because it will also be defined differently in different states.

Senator RICE: But, given that it's legal in some states and not in others, my question remains: would there be consideration given to reviewing the numbers so that you could actually have better data on where abortions are being performed within the public health systems?

Mr Weiss : The intention of the MBS review is over the life of the review to have reviewed all 5,700-plus items on the MBS, so these items will be reviewed by the end of the review.

Senator RICE: In relation to the criteria for that review, would the need to be getting data that more accurately reflects abortion rates in the public health service be under consideration in the review?

Mr Weiss : It could be, but the review is clinician led. In a sense, where the review goes is where the review goes. They will seek input from a whole lot of different parties. If it is an issue that is of interest in the general community, then certainly I would expect it to come up as part of the submissions that are provided to the review. That will help them focus their attention on which items and which aspects of those items they think are fit to be amended in some way.

Senator RICE: It sounds like you're acknowledging that the MBS items at the moment don't reflect abortion rates in the public health service.

Mr Weiss : That's correct.

Senator RICE: But there are attempts to use that, particularly if you are looking at the need for non-surgical abortion services—the situation in Tasmania where we've got the main private provider having left the state. Do you accept that it would be better to have a better handle on and a better understanding of the rates of abortions that are being provided?

Mr Cormack : As a matter of general public policy, the more detailed an understanding you have about the needs of the population you're running your services to deliver to the better. And having a rich, broad source of consistent national data is clearly more of a help than a hindrance. But there are certainly a number of areas of the health system where we would like to have better data on many things. Clearly this is an area where there could be some utility in having better quality data. But it's not confined to terminations; there are many other aspects of health need that—

Senator RICE: Absolutely, but I am particularly focused on pregnancy terminations and the need to have good data. I would have thought, given that it's a controversial and quite sensitive issue, having good data to underpin decision-making would be essential. Is there any integration of the other data that's collected in hospitals, the ICD-10-AM dataset, with MBS data with regard to terminations?

Mr Cormack : We are certainly very interested in linking datasets. There are a number of bodies of research that are underway at the moment that link the hospital datasets, which I think are generally better quality in terms of the range and level of information about individual clinical conditions. We have entered into arrangements with state and territory governments and with research bodies to look at linking the information we collect from public hospital data collections, such as ICD-10, and the MBS and PBS, but it's not routinely done. Indeed there are very significant privacy and legislative arrangements in place that limit the ready use and availability of that linkage of the two datasets.

Senator RICE: So it's proceeding slowly.

Mr Cormack : It's done. It's often driven by a research requirement. The state and territory governments have initiated some of that. The Commonwealth has in other instances. But we don't and we are not legally able to have an enduring linked dataset for the purposes of ongoing interrogation. We have legislative restrictions on the extent to which MBS, PBS and other datasets can be stored and linked routinely.

Senator RICE: That is generally across the board for clinical data?

Mr Cormack : Yes, that's the case.

Senator RICE: Moving on in terms of abortion services, I am wondering why providers of abortion services who deliver decision based counselling as part of their service can't access MBS item numbers.

Mr Cormack : Really, the legislation that governs the use of identifiable data is pretty tight and pretty strict. However, as I mentioned before, in the context of research there is a capacity for any individual organisation or researcher to make an application to access de-identified—

Senator RICE: I'm not talking about research; I'm talking about providers—providers of abortion services who are delivering counselling as part of their service and they can't link to an MBS item number.

Mr Cormack : They can apply. They can apply to the department, and it would need to be more or less set in the context of a research exercise, and many of them do. Many service providers do make applications to the department for access to some of our more sensitive datasets, such as the MBS and PBS. What I'm saying is that it's not routinely made available because the law does not permit it to be stored and accessed in a way that those datasets can be readily linked and retrieved. It can be used for public policy purposes, but there does need to be an application from the organisations to access that data, and if an application were to come through it would go through our ethics approval process and we would make a determination based on that advice and consistency with the relevant legislation.

Senator RICE: I think you are still not getting my point. It is that you have providers who are providing termination counselling services and it's not reflected—there's not an MBS item number for that.

Mr Cormack : That's right.

Senator RICE: Why is that the case?

Mr Cormack : Because those services are not the responsibility of the Commonwealth and the reason—

Senator RICE: Because they've been provided within the public health system?

Mr Cormack : The Commonwealth funds a portion of public hospital costs. That does not give us an entitlement to data collected by the state and territory governments. To the extent to which a state based counselling service in the family planning space wants information about the level of termination activity that's being undertaken within the state, they can make an application to the state and territory governments for that which occurs in the public hospital settings.

Senator RICE: The point of the question, which I am asking on behalf of somebody who is providing this counselling, is that there should be an MBS item in terms of then having Commonwealth funding for that service.

Mr Cormack : That's a decision for government. There isn't an item specifically for that. We have identified a number of items that are used, but not exclusively for the purposes of a termination. Were there to be a separate item created solely for the purposes of termination, that would be a matter that would require a government consideration. At the moment it's not under consideration and we don't have an item. The items that we use are used for other things as well.

Senator RICE: So basically there's no specific Commonwealth MBS item number for terminations—

Mr Cormack : No.

Senator RICE: And, at this stage—

Mr Cormack : And it's not under consideration.

Senator RICE: Not under consideration at all?

Mr Cormack : Certainly not that we're aware of.

Senator RICE: But you do have abortion services being carried out in public hospitals where the other less-than-satisfactory item numbers are attached to it because the procedures are being carried out in the public health system. You agree with me that seems rather messy and really means that we don't have good understanding at all of the rates of abortions that are being carried out in the public health system?

Mr Cormack : We haven't sought to ask that question and we don't have responsibility for that service. It is a state and territory government responsibility. They set the laws that permit or don't permit and the conditions under which those services are made available, and it's really a matter of state and territory government responsibility predominantly, and hence we've not considered the matter.

Senator RICE: I had another question about telehealth abortion consultations having an MBS item number, but, given that there isn't an MBS item number—full stop—that would be even further beyond the pale, by the sound of it.

Mr Cormack : It's not a matter that's under consideration by government.

Senator RICE: Thank you. Thank you, Chair.

[13:45]

CHAIR: Can I confirm with all senators that that is it for 4.1? In so far as officers are not required for later items, I'm happy to release those officers attached to program 4.1. We'll move on to program 4.2. Senator Steele-John, you have to call.

Senator STEELE-JOHN: I did, I did. Thank you very much, Chair. I'm not sure who best to pitch this to, but I expect it would be anybody in relation to hearing services. Shall I just give you a moment to finish your rearranging?

Ms Beauchamp : We're getting the key people here.

Senator STEELE-JOHN: I will give you a sec then.

Ms Beauchamp : They're here. Ask, and ye shall receive.

Senator STEELE-JOHN: I'd like to follow up on some questions that my colleague Senator Siewert put to you last October, relating to the House of Representatives Standing Committee on Health, Aged Care and Sport's inquiry into hearing health and wellbeing in Australia. Have you got that or are you aware of that report? I've got the title here, if that's helpful.

Ms Buffinton : We are aware of the House of Representatives report.

Senator STEELE-JOHN: Wonderful. Senator Siewert asked the minister when the government would make a response to this report. The answer that you gave at the time was that you would endeavour to provide the response within six months. We're just about at the six-month deadline now, so I'm wondering if you might be able and give an updated time line for the tabling of that response?

Ms Buffinton : We did say six months. We'll be fairly close to that. The fact is that we're responding on behalf of a cross-portfolio, so in addition to the Department of Health there's the Department of Education and Training, the Department of Social Services and the Department of Human Services, as well as the agencies of Safe Work Australia, Australian Hearing and the National Disability Insurance Agency. We're taking the lead, but we're requiring all the input to come in and be cleared through those departments, so if it's not March it will be April. It's on track for that sort of time frame.

Senator STEELE-JOHN: Alright. Wonderful. It's great to get some clarity on that. Secondly, I'd like to draw your attention to recommendation 4 of the report, which relates to including audiology and audiometry services for access to the free interpreting service delivered through the TIS, which is the Translating and Interpreting Service. I have a particular interest in this recommendation, as the exclusion from the FIS is a barrier to hearing impaired people communicating with their elected representatives and generally participating in democracy, really. Would you be able to comment on either of those aspects for me?

Ms Buffinton : In terms of the recommendations and the response to government, I think we'll leave it at: the government will be making its response within the next month or two. I think we'll leave it for that response.

Senator STEELE-JOHN: Have you come across situations where it has been a challenge for people who are hard of hearing or vision impaired to engage with you because of the inability to access Auslan interpretive services through the FIS?

Ms Buffinton : As far as the Auslan policy goes, that actually sits with the Department of Social Services, which has the disability policy. The part that we look after at the Department of Health is Auslan for medical appointments.

Senator STEELE-JOHN: So they're the NABS scheme.

Ms Buffinton : Yes. The broader Auslan and what is provided by Commonwealth and what's provided by state and territories is a policy matter for the Department of Social Services.

Senator STEELE-JOHN: I thought it would be, and I'll be following them up tomorrow. Could you give me a bit of information on the NABS scheme. How many people access that per annum? I am happy for you to take that on notice if you don't have that figure in front of you.

Ms Buffinton : I think we'll have to take that on notice.

Senator STEELE-JOHN: Additionally to that, if you could give me, perhaps, how many people have accessed it over the last, say, seven years and the number of interpreters, either employed or engaged through that scheme, that would be great. That will probably do me for now, if that's okay. Finally, recommendation 6 of the report, point 2, goes to the need to build on existing projects such as HEARsmart and Know Your Noise to promote safe listening practices in the music industry among young people. I'm wondering if you could give me any idea of any trends that you see in relation to hearing health among young people that you have been able to identify as relating to unsafe noise practices.

Ms Buffinton : I think I would have to take that on notice. As far as us running the Hearing Services Program is concerned, certainly we are all concerned. As you've got an ageing population, obviously, and people living longer, we have a higher incidence of hearing loss in society. Given those practices of younger people listening to music and so forth, we're aware of the need for education campaigns. That is something that comes through not only the House of Representatives but a number of reports and recommendations. That's why the minister on 10 February had a consumer roundtable to meet with all the key people in the hearing community, to listen and understand what their priorities were. He acknowledged there were a range of reports and recommendations, and so he's called for the development over the next 12 months of a road map on hearing, being quite clear on the key areas, which include issues like stigma and reducing causes for hearing loss in the first place, and then having a road map over the next seven years—short term, medium term and long term—and what's the destination. That is something that he discussed and commissioned on 10 February.

Senator STEELE-JOHN: Wonderful. Thank you very much for that. It's very useful.

Ms Beauchamp : Senator, you were asking for a number of program statistics. I have just gone on the website myself to have a look under hearingservices.gov.au, and it actually provides a number of program statistics for the past few years, broken down by all sorts of things. If you have a look at that, and then get back to us with any other questions on notice, that would be good.

Senator STEELE-JOHN: All right. I will do that. Thank you very much.

Senator WATT: I have just a few quick questions. Sorry, Senator Steele-John. You were asking questions about a report. Which report was that?

Senator STEELE-JOHN: It was the Still waiting to be heard report.

Senator WATT: Okay. I've just got a few questions about a different report—that's the PwC report Review of services and technology supply in the Hearing Services Program. I understand that just before Christmas the government released that PWC report. Can you just very briefly summarise the recommendations of that report for us.

Ms Buffinton : We, as the department, commissioned PwC to do an undertaking on the analysis of the service items and fee schedules of the Hearing Services Program and the supply arrangements for hearing technology. This work was to look at the efficiencies of the current arrangements in preparation for providing the NDIA with information on pricing and services to develop their plans. The recommendations and the findings from those reports are currently being considered by the department, and it's going to form part of a thematic review we're about to begin which is in preparation for the NDIS next year—a whole range of legislation that we need to be looking at because we didn't take into account the NDIS. So we'll be conducting that review between now and September this year.

Senator WATT: Okay. So when do you expect the government is going to respond to that report—by about September?

Ms Buffinton : Yes, as part of that thematic review outcome.

Senator WATT: Recommendation 2 of that report suggests changing the minimum hearing loss threshold. Could that lead to a restriction in eligibility criteria for consumers who are accessing government subsidised services, with almost one-third becoming ineligible?

Mr Morgan : Obviously the report does recommend lifting the threshold to a level more commensurate with what it is internationally, a level the research suggests is more consistent with other programs. That is something that will be considered. There have been no decisions made on that. But, by definition, lifting the threshold would reduce the number of people who are eligible, yes.

Senator WATT: And what are those people supposed to do if they lose that eligibility for government subsidised services—pay for themselves?

Mr Morgan : My reading of the report is that it is the view of the authors that assistive hearing technology is most effective at a higher level. So their recommendation is that it be lifted given that there are people receiving the technology now for whom it's not particularly effective. That's what they're putting forward. That's something we'd have to look at.

Ms Buffinton : That's purely their report to us. There has been no decision.

Senator WATT: Recommendations 6 and 7 contain changes to an unbundled model and pricing structure. Could that lead to changes in service levels if it's adopted?

Mr Morgan : Potentially it could. You would need to work through the mapping of what we have now through to what's proposed. What's proposed is a smaller number of categories and more flexibility within categories. There are a range of recommendations that would change the levels of services, but I can't give you a clear answer on how it maps through.

Ms Buffinton : That's really what we're going to be doing between now and September.

Senator WATT: And recommendation 8 would see the removal of the subsidy for partially subsidised assistive hearing technology. Could that lead to increases in out-of-pocket costs for consumers and reduce choice for those who are accessing government subsidised services?

Mr Morgan : Again, that is a recommendation to us. I would preface every question by saying that these are recommendations that are still being looked at.

Senator WATT: If adopted, could it lead to increases in out-of-pocket costs and reduce choice? I suppose it would have to.

Mr Morgan : In terms of reduced choice of technology that is subsidised, there's a sort of companion recommendation to raise the quality of the fully subsidised technology that would be available, so that a broader range of people would have access to a higher set of fully subsidised technology, while taking away the subsidies on the partially subsidised technologies. Those two go hand in hand, but that is how they've proposed it.

Senator WATT: If the recommendations of the report are adopted, would that generate savings in the Hearing Services program?

Ms Buffinton : That's just conjecture at this stage. We haven't gone through it and come to any conclusions yet or done the economics.

Senator WATT: I get 100 per cent that there's a decision pending and the government hasn't, at this point, adopted all the recommendations. But what I'm asking is: if those recommendations are adopted, will that generate savings?

Ms Buffinton : If we end up with higher quality devices, that then becomes dependent on the cost of the devices. Even though there may be smaller volumes, they will be at a higher price. So I don't think we can say that yet.

Senator WATT: Can you rule out any savings in the program?

Mr Morgan : The PwC report includes some indicative costings, and those costings have a range. I don't think there are savings under any of the options. My recollection is that, if all proposals were adopted, their costings suggest an increase in the cost of the program.

Ms Buffinton : This year our Hearing Services program budget is going up by six per cent. In the forward estimates it goes up by two per cent, five per cent and four per cent at this point.

Senator WATT: Is the government looking at expanding the eligibility criteria to recognise the broadening need in the community outside the current criteria?

Mr Morgan : Criteria for what?

Senator WATT: Eligibility for subsidised assistance.

Ms Buffinton : As part of the thematic review, and looking at our interplay with the NDIS, there is nothing where we are looking at restricting or changing the access at this stage. As part of the thematic review, the whole program will be looking at what the eligibility is. There are no plans at this stage for restricting services. The undertaking for things like going into the NDIS is that we are going to continue providing services through to the NDIS. For those who don't go into the NDIS there will be continuity of support and the voucher scheme will be continuing right into the forward estimates.

Senator WATT: Thank you.

CHAIR: Senator Rice, do you have anything further on Hearing Services?

Senator RICE: No.

[14:02]

CHAIR: Insofar as they are not required later, we are happy to release program 4.2, Hearing Services. That means we are now moving to item 4.3. Just before we do that, Senator Leyonhjelm, do you want to try your question? I suspect it will have to be taken on notice.

Senator LEYONHJELM: My questions come under 4.3. But I am not sure. To begin with, would it be fair to say that medical abortions, by which I mean RU486, which is on the PBS, pose a lower cost to taxpayers than surgical abortions, which are covered by Medicare? Would that be accurate?

Mr Cormack : I would have to take a closer look at that. I don't have the answer to hand as to the relative cost-effectiveness of that. But Ms Shakespeare, who looks after our pharmaceutical arrangements, might be able to shed some light on that.

Ms Shakespeare : Mifepristone, also known as RU486, has been assessed through normal processes around PBS listing to ensure it is cost effective. I don't think you can directly compare the two interventions. Mifepristone can really only be used in very early stage pregnancy—I think it is up to about 50 days—whereas the surgical procedures can be used in different stages of pregnancy.

Senator LEYONHJELM: Are you perhaps able to take on notice, within the limitations of the date and what you have just said, a relative cost assessment of the two?

Ms Shakespeare : We can certainly provide the costs—the PBS listing price for Mifepristone and the MBS items that would be relevant.

Senator LEYONHJELM: Yes, please do take that question on notice. On a like-for-like basis—same stage of pregnancy, same stage of termination—would it be true to say that the medical approach costs less, or more, than a surgical approach?

Ms Shakespeare : I don't have that data here with me on costs. We will need to take that on notice.

Senator LEYONHJELM: Yes, please do take that question on notice as well. I don't know the brand name of RU486; you were using it, but I did not catch it, so I will just use that term for now. Do you know how many GPs prescribe it?

Ms Buffinton : What we would have is script numbers, which we could provide. Again, I would have to take that on notice; I don't have the script numbers here with me. I'm not sure whether we could identify how many particular prescribers had written those scripts. I would need to check on what data we do collect.

Senator LEYONHJELM: Are there limits on GPs being permitted to prescribe it?

Ms Shakespeare : Within the context of the circumstances in which it is appropriate to prescribe.

Prof. Murphy : I think there is a training package for people to prescribe this drug, so they are generally people who have been through a course to prescribe it.

Senator LEYONHJELM: They need to do a course? A GP can't just prescribe it?

Prof. Murphy : I believe so, but I would have to check that for you.

Senator LEYONHJELM: Fine, I'm happy to get that information on notice. What I'm looking for is any constraints that the government imposes on the use of this as an alternative to surgical abortions—whether it is a constraint that they need to do this training or a choice on the part of the doctors as to which approach they think is more important.

Mr Cormack : That is an important point. At the end of the day, these are clinical decisions for the treating medical practitioner. The government does not get involved in the clinical decision-making of a doctor in the consultation the doctor has with their patient. Our role in the availability of MBS items and indeed the PBS is to make sure there is evidence to underpin the item, and guidelines in place where needed. At the end of the day, this is a clinical decision between the patient and the doctor.

Senator LEYONHJELM: I respect that, and I don't disagree that that is how it should be. My impression was that there was a fairly significant limitation on the number of GPs who were permitted to prescribe the medical approach and that that was therefore limiting the options available to women who don't go to those particular GPs. That is where I am heading with this line of questioning.

Prof. Murphy : If the GP wants to prescribe it, and is willing to prescribe it, it is not too difficult to get authorised. But they have to go through the training package. Complications can come from prescribing this drug. You've got to use it in the right circumstances. So it is up to the willingness of the GP to want to take that on and get authorised.

Senator LEYONHJELM: Can you provide me with the number of GPs who have gone through that course and are, therefore, permitted to prescribe this medical approach?

Mr Cormack : We will have to take that on notice.

Senator LEYONHJELM: Of course. That is fine. Thank you.

CHAIR: Senator Rice.

Senator RICE: My questions are about testosterone—in particular, Primoteston, a short-acting injectable form of testosterone that was removed from the PBS with effect from 1 February. I am told it was the manufacturer's decision to withdraw the product citing commercial reasons. What is the process for manufacturers withdrawing products from the PBS for commercial reasons?

Ms Shakespeare : They would need to advise the departments that they were withdrawing their listing and give us the date they wish it to be taken off the PBS. We do have conversations with manufacturers around the reasons for that. We look to see if there are alternatives available to patients. As you can imagine, there are many drugs—particularly in formulary 2, where we have multi-branded competition for medicine—so medicines are both coming onto and leaving the PBS all the time.

Senator RICE: In this instance, you would have checked that there were alternative products. Is there any pressure on a manufacturer to continue to provide the product?

Ms Shakespeare : We would have a look at that to see if there were alternatives. Even if there are not alternatives we cannot require a manufacturer to continue to provide medicines through the PBS. But it is one of the things we would talk to them about.

Senator RICE: I understand that Primoteston is a preferred product for transgender men, because it is short-acting and injectable, whereas the other testosterone products that are available are not nearly as suitable. Does PBAC take any steps to ensure that there is an equivalent product available instead of this product?

Ms Shakespeare : The PBAC is generally not involved in decisions by companies to take their products off the PBS. That is something that is communicated by and actioned by the department.

Senator RICE: In terms of the uses to which this product was being put, and the other testosterone products not being as suitable, is there any role that government takes to try to find an alternative product that would be available on the PBS?

Ms Shakespeare : Any company that wishes to bring forward another brand or a new medicine to treat a condition can apply at any time to do so, and we will consider that application. We do not have any capacity to require companies to continue to list their medicines, though.

Senator RICE: Even if not requiring—even facilitating or encouraging companies, given that it seems there is now a gap for a product that was being used quite successfully and effectively and that the other products that are now available aren't as appropriate for the transgender men who were using this form of testosterone.

Ms Shakespeare : I am not sure whether or not the company is still providing that through the private market. That may be the case here. We could check on that for you.

Senator RICE: If you could. Even if they are, it would mean that, because it wasn't available on the PBS, any concessional arrangements for having that product wouldn't be available. So, it presumably would mean a price increase for people where were using it.

Ms Shakespeare : We will have to check on the price, if it is still on the private market, as well.

Senator WATT: Regarding the recent announcement about the high-dose flu vaccine, in short the announcement was that the high-dose flu vaccine will be added to the National Immunisation Program in 2018. Has that listing been to PBAC yet?

Ms Shakespeare : Yes, it has.

Senator WATT: When did that happen?

Ms Shakespeare : It was considered by the PBAC out of session in January in this.

Senator WATT: How often do they consider these sort of listings out of session?

Ms Shakespeare : That is really at the determination of the PBAC chair. In this instance the chair decided that this needed to be considered out of session because of clinical issues, and received a request from the Chief Medical Officer, who may wish to elaborate, asking for this to be dealt with expeditiously.

Senator WATT: Professor Murphy, did this consideration out of session come at your instigation?

Prof. Murphy : Yes, it did.

Senator WATT: What prompted you to seek that?

Prof. Murphy : Because last year we experienced a very bad flu season, as you know. We had significant burdens of disease in the over-65s and there was evidence over the last few years of declining vaccine efficacy in the over-65s. That was one of the factors leading to the bad flu season last year. So, we felt the need to get into Australia, and get registered and approved, two vaccines that would replace the over-65 vaccines. The two vaccines have an enhanced immune response in the elderly and have been used in small part in other countries for a few years but have not been available in Australia before.

Senator WATT: Did you have any discussions with the minister, or his office, about getting PBAC to consider this out of session?

Prof. Murphy : Discussion with the minister was about the need to do things better in the elderly flu vaccination space. We explained to the minister that we were keen to explore these new vaccines. It was not just the PBAC; TGA had to register these vaccines as well. There was definitely an expedited process.

CHAIR: Regarding the declining efficacy of the previously available vaccines, is it understood why?

Prof. Murphy : It's an interesting question. Historically, people over 65—I hesitate to use the word elderly now—have a poorer immune response to vaccines. For some reason, in the last years we've seen that to be even worse in relation to the flu vaccines. The vaccine protectiveness last year was probably the lowest we've seen in the elderly. It does seem to be in decline and we don't quite know why. Last year was also impacted on by a strain shift in one of the flu viruses. We were certainly concerned about the burden of disease in the elderly last year.

Senator WATT: I understand that at PBAC's March 2018 meeting the new listing of the vaccine is listed for consideration. Is this still going to happen?

Prof. Murphy : The vaccine was on the agenda for March, but considered out of session. Is that correct?

Ms Shakespeare : It is considered out of session—

Senator WATT: So it won't need to go in March now.

Prof. Murphy : No.

Senator WATT: And am I right that this listing only applies to over-65s?

Prof. Murphy : Correct. It is not recommended for under-65s. It's only a trial vaccine. It's only got one B strain in it, and two As. Elderly people tend to get As and not Bs, but younger people get more Bs, so the conventional quadrivalent vaccine, with two As and two Bs, is the recommended vaccine for the under-65s.

Senator WATT: Is that the reason this one hasn't been listed for kids, for instance?

Prof. Murphy : No, it hasn't been listed for anyone under 65. It is not even registered for anyone under 65.

Senator WATT: And that's why?

Prof. Murphy : Yes.

Senator WATT: I have some questions about pertussis vaccine, a vaccine for pregnant women. We have discussed this before at estimates. There have been numerous PBAC recommendations for pertussis vaccines for pregnant women. Can you confirm that there's still no listing of the pertussis vaccine for pregnant women on the National Immunisation Program?

Prof. Murphy : We expect a listing. At the moment, PBAC has finished their process. They have given final approval. The last process is a decision of government to list, and the timing of that listing. Government has made a commitment to list all recommendations from PBAC. That final decision of government will be made hopefully relatively soon and then it will be announced.

Senator WATT: How long ago did PBAC give the final approval? Does July 2016 sound about right?

Ms Shakespeare : I think that was when the initial decision may have been. However, PBAC is considering this at its meeting in March. Further advice has been requested from ATAGI.

Senator WATT: PBAC will consider at its March meeting the recommendation for listing of the pertussis vaccine?

Ms Shakespeare : Further information that was requested from ATAGI by the PBAC around the pertussis vaccines will be considered at the March meeting.

Senator WATT: But has PBAC actually already given final approval?

Ms Shakespeare : It made recommendations about particular products and then sought further information from the group of experts, including state and territory experts, around vaccines, to look at the schedule, I understand, around pertussis vaccinations.

Senator WATT: I don't think I have had an answer yet as to when PBAC gave its final approval for the listing.

Ms Appleyard : I will get the date for you in relation to when the decision for pertussis vaccines were given. What I can say is further advice was requested by the PBAC from ATAGI in relation to the clinical place of pertussis—all of the pertussis vaccines on the schedule, including maternal pertussis. ATAGI went away, considered that advice and provided it to PBAC in December. That decision of PBAC was announced, I believe, in February—that there was no further work to be done in relation to the pertussis schedule. So the maternal pertussis vaccine is able to be listed, and no other pertussis schedule points have been removed.

Senator WATT: Did you say when that decision was made?

Ms Appleyard : That was in December last year.

Senator WATT: In December last year, 2017?

Ms Appleyard : That's correct.

Senator WATT: So the government is sitting on that recommendation at the moment, and it's a decision—

Ms Appleyard : So the way it works now is there's a lot of work that needs to be done in relation to listing the vaccine on the vaccine determination, also procuring the vaccine, and putting a program in place. That work is underway at the moment.

Senator WATT: Is it correct that we're almost up to two years since PBAC recommended the listing of the combined diphtheria, tetanus and acellular pertussis vaccine called Boostrix for immunisation of women in the third trimester of every pregnancy? I understand it was recommended in July 2016. Is that correct?

Ms Appleyard : Yes, that's correct.

Senator WATT: Is there a reason that hasn't been made available?

Ms Appleyard : The answer I gave before was that Boostrix and there was another one—I think it is called Adacel—and they were both recommended for maternal pertussis vaccination. But the Pharmaceutical Benefits Advisory Committee did ask ATAGI to look at the place of the maternal pertussis vaccine in the entire schedule. Because what happens is, if you add another vaccine to the schedule, it might mean you can take a vaccine off at another schedule point if it's not needed. It's really important to look at the whole schedule and say, 'Okay, we've got, for argument's sake, seven points at which you can get vaccinated against pertussis. Is that all necessary? That's a consideration that ATAGI went away and undertook.

Senator WATT: ATAGI provided the information that PBAC requested about Boostrix back in March 2017?

Prof. Murphy : But then PBAC asked for more information.

Senator WATT: About Boostrix?

Prof. Murphy : They went back and added some more information, which was provided, and which was finally considered at the December meeting. They did provide initial information and there was another round of information requested.

Senator WATT: What is the total amount currently being paid by the states and territories to cover these vaccines while the review is taking place?

Ms Appleyard : I don't have that information with me. I have to take that on notice.

Senator WATT: If you could, thanks. You said you're expecting a decision from government sometime soon?

Prof. Murphy : Yes.

Senator WATT: Do you have any time frames, roughly?

Prof. Murphy : I would not want to pre-empt a decision of government. I would hope it would be relatively soon.

Senator WATT: Can I go back very briefly on flu vax. Are you able to guarantee this new flu vaccine for elderly people will be available in time for this year's flu season?

Prof. Murphy : There are two different vaccines. One is a high-dose vaccine, another is what is called an adjuvanted vaccine, which has a chemical to boost the immune system. We have no indications from the companies that they will not be able to provide it. It's been a stretch for them at short notice to provide but they have not given us an indication they won't have just over three million doses, 1.6 million of each, available in April, which is the recommended start of the vaccination program.

Senator WATT: My last question is on the expenditure overall of the PBS. The most recent PBS expenditure and prescriptions report has details for the financial year 2016-17. What was the actual spending on the PBS in 2016-17 taking rebates into account?

Ms Shakespeare : The 2016-17 net figure, sourced from the annual report, is $8.79 billion.

Senator WATT: How does that compare to the previous financial year?

Ms Shakespeare : In 2015-16 it was $9.13 billion.

Senator WATT: So it fell by about $300 million?

Ms Shakespeare : My maths is not good!

Senator WATT: Around about. And how does actual spending on the PBS compare with actual spending in 2010-11? Have you got those figures there?

Ms Shakespeare : I'm sorry, I don't.

Ms La Rance : We've got back to 2012-13.

Senator WATT: Do you want to take me back to that?

Ms La Rance : If we go back to 2012-13 would you like the net number?

Senator WATT: Yes.

Ms La Rance : The net is $8.317 billion. Shall I give you the years in between, 2013-14?

Senator WATT: Sure.

Ms La Rance : So 2013-14 is $8.611 billion and 2014-15 is $8.350 billion.

Senator WATT: At $8.79 billion you're almost back to 2013-14 levels, which were $8.611 billion. What have been the major changes that have reined in that spending from $9.13 billion in 2015-16 down by about $300 million?

Ms Shakespeare : There're some particular issues in those two years that need to be considered when comparing the two numbers. They are timing issues around a series of medicines that were listed in 2016 to treat hepatitis C, which had high public prices and also revenue arrangements associated with them. Some of the revenue was not paid back to government in the financial year in which it was incurred, so we had higher expenditure, and then some of the revenue associated with that expenditure falling into the 2016-17 financial year. It is quite difficult to say these are normal PBS trends. We do have some timing issues and particular medicines listings that are distorting the numbers to some extent there.

CHAIR: I would like to ask one follow-up question to Senator Watt's earlier line of questioning on the listing of vaccines. To you, Minister, has there have been any change to the government's policy on the listing of PBAC recommendations?

Senator McKenzie: No. We're 100 per cent committed to listing all the recommendations from the PBAC.

Senator GRIFF: Whilst we're on PBS, I'd like to go back briefly to my earlier question to you today, Ms Shakespeare, regarding the Pharmaceutical Society payment of $829,906 for updating its professional practice standards and code of ethics. You stated your belief that it related to work on biosimilars. I have since reviewed the code of ethics and there's no mention of biosimilars at all. There's just one mention of biosimilars in the professional practice standards. So it does not appear that that relates to biosimilars.

What I was able to find though is that it looks like there was another payment of almost $5 million given to the Pharmaceutical Society for guidelines for new and expanded pharmacy programs, and I imagine that was the item that referred to biosimilars not the $829,906?

Ms Shakespeare : No. That's a different project. The contract with the Pharmaceutical Society for revision of the professional standards is around ongoing support for pharmacies for new and amended pharmacy programs. Part of the six community pharmacy agreements, which was updated at 1 July last year, included a range of new payments for pharmacy programs, provided to the community through community pharmacies. The PSA is developing education and training support materials for pharmacists to assist in the rollout of those programs. That is what the additional payments are for.

Senator GRIFF: So 'biosimilars' was incorrect; okay. As we covered off this morning, you're going to provide a breakdown for other payments made to other entities on similar lines?

Ms Shakespeare : Yes, certainly. We'll look at similar payments that may have been made to other types of professional groups, like nurses.

Senator GRIFF: Thank you.

CHAIR: Do we have any further questions on program 4.3?

Senator SMITH: I've got one. I'm interested in exploring, briefly, what's been achieved through the life saving drugs initiatives of the government to date. At a high level, can you explain what achievements have been secured as a result of this government's approach?

Ms Shakespeare : The Life Saving Drugs Program, as it's currently operating, is supporting 410 Australians with very rare conditions to access medicines. The government's also recently responded to a review into the Life Saving Drugs Program, at the end of January. It announced there would be a series of improvements made to the program. Those are going to take effect from 1 July this year and will respond to recommendations made by an expert group of clinicians and consumers that reported to government. There will be a definition of 'rare disease' introduced under the program to provide greater clarity to companies that may be looking to bring medicines forward to the Life Saving Drugs Program. There will be further guidance provided to companies around how to make applications. There will be guidance provided around how medicines can be shown to be life extending—where they contribute, in particular, to a reduction in disability that is likely to extend a patient's life span. There will also be an expert panel set up to advise the Chief Medical Officer, who advises the minister about medicines that should be funded under the Life Saving Drugs Program.

Senator SMITH: How many new medicines have been agreed to under this government?

Ms Shakespeare : Most recently, there was a medicine listed to treat mucopolysaccharidosis type IVA; a medicine called elosulfase alfa. That was funded from August last year.

Senator SMITH: What is the total number of new medicines that have been agreed to under this government?

Ms Shakespeare : There are currently 13 medicines funded under the Life Saving Drugs Program. If I look back to everything that's been listed since around 2013, there's taliglucerase, to treat Gaucher's disease, which was listed in 2015-16. There is Vimizim—the elosulfase alfa I just mentioned. There is a medicine called alglucosidase alfa, which was listed in 2014-15, to treat juvenile late-onset Pompe disease; that same medicine was then subsequently listed to treat adult late-onset Pompe disease. Another medicine, listed in 2015-16, is nitisinone, to treat hereditary tyrosinemia type 1.

Senator SMITH: Can you give us an example, perhaps for the last three drugs, of what the drug would have cost if it hadn't been listed and what the drug now costs as a result of the listing decision?

Ms Shakespeare : We can provide that information, but I don't have it here with me. We will need to take it on notice.

Senator SMITH: In that case, why don't we do it for all 13 drugs—what the cost would have been prior to listing and what the cost is now. If we go back a period, how does that compare with decisions taken by the previous government?

Ms Shakespeare : There are medicines that were listed between 2007 and 2013. Again, I can run through those from my list.

Senator SMITH: Just the quantum is fine.

Ms Shakespeare : It looks like six.

Senator SMITH: Not 16 but six?

Ms Shakespeare : No, sorry. One of them was 2004-05.

CHAIR: Are we just talking about the Life Saving Drugs Program here, or are we talking about all PBS listings?

Ms Shakespeare : I was just talking about the Life Saving Drugs Program. I think we have five or six. We'd have to confirm that.

Senator SMITH: So, in the six years of the previous government, there were five or six drugs listed and, in the four or five years of this government, there have been 13?

Ms Shakespeare : No, the total listed is 13 since 1999-2000.

Senator SMITH: Okay. And you will provide a total of what the patient cost would be prior to listing and post listing?

Ms Shakespeare : Yes.

Senator SMITH: Great. Thanks very much.

CHAIR: I have a really quick one, and you can take this on notice if you want to. Can you give us an idea of the scale of PBS listings as a whole versus the Life Saving Drugs Program. How many drugs would have been listed on the PBS as a whole over a similar period of time, in this term of government?

Ms Shakespeare : In the current term of government, since this government has been in government, there have been about 1,600 PBS listings.

CHAIR: One thousand six hundred? Goodness gracious!

Ms Shakespeare : PBS is obviously a much larger program than the Life Saving Drugs Program.

CHAIR: Yes, absolutely. Thank you very much. Is there anything further for program 4.3? If not, insofar as officers are not required for later matters, we will release them.

Ms Beauchamp : Sorry, we've just got in some further information that Senator Smith asked for. I just found it.

Ms Shakespeare : We will need to take it on notice. These ones are the PBS listings.

Ms Beauchamp : So we'll come back to you on the Life Saving Drugs Program listing and, in particular, the elosulfase alfa, which was the most recent.

[14:37]

CHAIR: Okay, we can release 4.3 insofar as they're not required later—I'll keep saying that—and we'll move on to outcome 4.4, private health insurance.

Senator WATT: How much will private health insurance premiums go up by on 1 April this year?

Mr Cormack : There is a 3.95 per cent increase in premiums as an average. It varies from fund to fund.

Senator WATT: What does that mean in dollar terms, say, for an average single and an average family?

Mr Cormack : We're just getting you those figures, Senator.

Ms Shakespeare : On average, a single policy is $1.40 a week and a family is $2.75 a week.

Senator WATT: Do you have those in annual figures?

Ms Shakespeare : I'd probably need a calculator. I'm sorry.

Senator WATT: For single we're probably talking $70-odd a year and for a family probably about $130 year or something like that. You've given the average, but what's the highest premium increase in percentage terms that you're aware of from 1 April?

Mr Cormack : The largest is 8.9 per cent, I think. I'm just triple-checking. Yes, it's 8.9 per cent.

Senator WATT: Are you able to say which fund that is?

Mr Cormack : Yes, it's Health Care Insurance Ltd.

Senator WATT: Are there others above eight per cent?

Mr Cormack : No.

Senator WATT: What does that mean in dollar terms?

Mr Cormack : I'd have to have a look at their base rates, and we'd need to take that on notice. I don't have a listing of their premiums and, of course, they've got different products as well.

Senator WATT: Could you come back to me with a calculation similar to what you've done for the average to get to $70 per annum, roughly, for a single and $130-odd for a family. Could you work out what that is on 8.9 per cent.

Mr Cormack : Yes, we can do that.

Senator WATT: I am aware of some consumers being told that they'll have increases much higher than the average and even higher than the 8.9 per cent. We've had one person in Queensland write to us noting that their premiums will increase by almost 25 per cent this year, which would mean a $770 increase for them in their private health. How is it that someone could be facing a 25 per cent increase if the highest you're aware of is 8.9?

Mr Cormack : We'd have to look at their particular circumstances. There could be a whole range of reasons. They could be changing products, there could be other factors—we'd have to have a look at the individual circumstances. We publish the average increases that are provided to us by the funds, and they're the figures that we're working off.

Senator WATT: Obviously, depending on their needs, people can get different policies that cover them for different things—

Mr Cormack : That's right.

Senator WATT: but, to the best of your knowledge, is the 8.9 per cent figure you gave me the highest increase for any kind of policy that someone might have?

Ms Shakespeare : That's also an average. It's an average increase across the products that that insurance fund offers.

Senator WATT: Wow! So they or other funds could very well be imposing increases above that, depending on the product?

Mr Cormack : Yes, because an insurance fund can be offering a large number of different products to suit individuals' needs. They supply to us an overall average increase for their premiums, but some of the funds will have large numbers of products, with variable increases.

Senator WATT: I may not have been making myself clear before. When I was asking about the highest premium increase that you're aware of, I wasn't necessarily asking for an average within a fund. Do you have any details about the highest increase that any fund is charging for any policy?

Mr Cormack : Not to hand. We'd have to take that on notice.

Senator WATT: But you do have access to that information?

Mr Cormack : We can certainly request that, and we'll take it on notice.

Senator WATT: Okay. Could you come back to me, in percentage and dollar terms for an average single and an average family, with the highest increase for any one product.

Mr Cormack : Okay.

Senator WATT: Are you aware of any increases of around 25 per cent for particular products?

Mr Cormack : I'm not aware of any. That's not to say it's not the case. There are a large number of policies out there—thousands, in fact.

Senator WATT: Is anyone else at the table aware of those kinds of increases? No? Are you able to give a guarantee that premium increases will be lower than four per cent next year?

Mr Cormack : No. It's not our job to guarantee the response of the market. These are companies that have to assess their risk and price their products. What the government does is enable, through policy settings, those sorts of factors that are going to mitigate against increases. It's the job of the government and the department to do that. We're not in a position to guarantee what funds will or won't charge in the future.

Senator WATT: It's the job of the government to do that, so, Minister, are you able to give any guarantee that average premium increases will be lower than four per cent next year for private health?

Senator McKenzie: I think the fact that the average rate of premium increases, at 3.9 per cent, is the lowest in 17 years, much lower than under the last Labor government—

Senator WATT: Does that give you confidence that premium increases next year will be lower than four per cent?

Senator McKenzie: I hope so.

Senator WATT: But no guarantees can be made?

Senator McKenzie: What we're doing is reforming the whole system. There are still a few reforms that we want to achieve going forward with private health insurance. There are things like making sure rural and regional Australians can package up their travel and accommodation. Incentivising younger Australians to be more healthy is a good thing in an insurance system. There are a range of reforms we've already conducted. We've got a suite of reforms we're hoping to continue to do to keep insurance premium increases as low as possible.

Senator WATT: Has the department done any modelling on expected premium increases next year?

Mr Cormack : No.

Senator WATT: None at all?

Mr Cormack : No.

Senator WATT: Do you normally do that kind of modelling? It's purely set by the market?

Mr Cormack : No. We have a look at different policy options that come up throughout the year. Obviously, the government has just announced a package of reforms. We had a close look at the drivers of that, but we don't routinely model the billing and premium-setting behaviours of the individual funds. There are a lot of factors at play there. Of course, AHPRA has a role in the overall prudential regulation and supervision of the funds.

What we can say is that reforms have been already introduced—and I think they're obviously well-known. For example, the prostheses list reductions are very significant—$1.1 billion over four years. The funds have all committed to ensuring that that fully passes through into premiums. Other initiatives have been announced, such as discounts for under-30s and for excess level changes. All of those things are going to have a dampening effect on rate increases. Also there's been a lot of work on standardising the descriptions so that consumers can exercise choice—and informed consumers exercising choice have a positive impact on the market. Probably most significant is the categorisation of products into consistent terminologies, which was announced in the package of reforms. All of these reforms can be expected to dampen the increasing premiums year on year, and, indeed, the current year increases have demonstrated that.

Senator WATT: Have you done any modelling on what the expected impact on premiums is of this package of reforms?

Mr Cormack : We haven't done any specific modelling; however, through the course of the reform work that we did we did a lot of analysis of the various factors. We remain very confident that the main policy settings that are driving cost increases and premium increases are in the process of being addressed by this package of reforms.

Senator McKenzie: Are you aware of the Deloitte modelling?

Senator WATT: No.

Senator McKenzie: I know that Deloitte did some modelling of the two per cent cap and the removal of the low-cost policies, which I think is the ALP's policy. They saw that that would actually increase premium prices by 16 per cent.

Senator WATT: Increase premiums?

Senator McKenzie: Yes.

Senator WATT: Could we get a copy of that modelling?

Senator McKenzie: I think if you contact Deloitte. If it's in the public domain, I can get it to you.

Senator SMITH: Just on that point, Mr Cormack, I understand AHPRA has expressed a view as well about caps. Are you aware of that view?

Mr Cormack : Yes, we are aware of that view. AHPRA just made some very specific comments, which are in the public arena, that identified the importance of continuing with reforms, that the reforms that are in train are the primary way to manage future premium increases and also that, in its role as the prudential regulator, to be mindful that the capital adequacy of each fund varies very significantly—

Senator SMITH: Because they're insurers?

Mr Cormack : That's right, indeed. I think AHPRA's comments are on the public record.

Senator WATT: Minister, I understand that, in the Deloitte modelling you referred to, Deloitte modelled the impact your own government's policy to remove junk policies. What did you say the modelling was?

Senator McKenzie: The two per cent cap and the low-cost policies as one.

Senator WATT: Yes—low-cost, or 'junk' policies. Are you sure about that? I'm told that the Deloitte modelling didn't model the effect of that two per cent cap.

Senator McKenzie: Commissioned by—sorry? Mr Cormack?

Mr Cormack : The Deloitte modelling was not in response to the two per cent cap proposal by the ALP that was in the public arena. The modelling undertaken by Deloitte was in relation to the categorisation of products into gold, silver and bronze.

Senator WATT: Yes.

Senator McKenzie: And the low-cost policy—

Senator WATT: And so it didn't have anything to do with the two per cent cap?

Mr Cormack : As far as I'm aware, it wasn't in the public arena then.

Senator WATT: Okay.

Mr Cormack : Essentially, it was about re-categorising and modelling the impact of that, and also about making a strong case for the maintenance of a basic product, or a low-cost product, in the market to ensure that the change to gold, silver and bronze did not result in increases.

Senator WATT: And they modelled that the effect of that would be a reduction in premiums? What did they find?

Mr Cormack : I'll get Mr Maskell-Knight to take you through the detail, but, essentially, the modelling was comparing moving all products to a three-tier categorisation of gold, silver and bronze versus the conversion of all products, effectively, to a gold, silver, bronze and basic—essentially, to a four-level arrangement. The conclusion from the modelling was that to eliminate that lower tier by moving all products into a three-tier classification would have led to a significant increase in premiums.

Senator WATT: Okay.

Mr Cormack : Essentially, that is information that was considered by the private health ministerial council and it was taken into account in the recommendations.

Senator WATT: Am I right in saying that the government has ended up deciding not to pursue the removal of what are known as 'junk' policies?

Senator McKenzie: Well—

Mr Cormack : The government has decided to adopt gold, silver, bronze and basic as the four tiers, to ensure that there is consistency and choice, and so that consumers are able to compare products across different insurers. The low-cost products play a very important part in the overall insurance market. The low-cost products enable people to make a judgement about their own level of risk, often at a time when they are younger or where their financial circumstances would allow them to make a proper risk based choice to opt for lower-cost products. It keeps them in the private health insurance system and enables them to avoid lifetime health cover levies, which would apply if they did not have compliant policies in place before they were aged 30.

It gives them an entry point and then they are able to make informed choices about increasing their level of cover. And the way that they're able to make informed choices is by having consistent product classifications across those three tiers. The basic products also contribute to the risk pool. The premiums that are paid for low-risk consumers—low-risk insured populations—contribute to an overall price-dampening effect across all of the insured population, particularly in a community rated insurance product arrangement. So they actually play a very, very important role. And that's why the government have decided to retain a four-tier rather than a three-tier product classification arrangement.

Senator WATT: Just to round out this private health insurance stuff quickly: you mentioned in passing that one of the changes being made is in prostheses?

Mr Cormack : Yes.

Senator WATT: I think it's expected that that's going to generate savings of about a billion dollars?

Mr Cormack : Yes.

Senator WATT: That's over five years?

Mr Cormack : Four years.

Senator WATT: Four years?

Mr Cormack : Yes.

Senator WATT: Has there been any modelling of what the likely effect of that change will be on premiums?

Mr Cormack : I'll see if one of my colleagues has got some better information about that, but the private health insurers themselves have indicated that that would have a significant impact on their ability to keep premiums as low as possible, and they would fully pass on the savings that they would be achieving through reductions in the prostheses list prices—pass them fully on through to their insured. And that looks like it's exactly what's happened with the lowest premium level that we have had—

Senator WATT: But no-one's done any modelling, whether it be yourselves or insurers, to determine what the likely effect of that will be in percentage terms or dollar terms?

Mr Cormack : The insurers have certainly done the necessary work that they need to do. When you look at the model of private health insurance, the biggest single driver of the outcomes for them is the number of claims and the size of those claims. If you can take $1.1 billion out of the cost of claims—and that's precisely what the prostheses changes have done, and, through an agreement with government, the funds have agreed to fully pass that on—it's pretty simple mathematics.

Senator WATT: I understand what you're saying. The thing I'm concerned about is that we often hear claims from the private health insurers that things will make a significant difference, but trying to pin them down on a figure or a percentage is well-nigh impossible. If they have done any modelling of that for you, could you please table that for the committee?

Senator SMITH: To be fair to those who have argued for prostheses reform over the last 12 to 18 months, they were talking about $800 million worth of savings that could have been achieved, so those who have argued for reform have attempted to put a cost on it in the past.

Senator WATT: Sure, but what I'm looking at is the impact on premiums, rather than the dollars saved.

Ms Shakespeare : What the insurers had told us is that each $200 million in lower benefit payments equates to about a one per cent downward pressure on premiums.

Senator WATT: So, in very broad terms, a saving of—did you say $200 million per year?

Ms Shakespeare : Not per year. This is just benefit reduction.

Senator WATT: If we are talking about $1 billion over four years, in broad terms, that should amount to about a five per cent dampening, which is different to—

Ms Shakespeare : That's the advice from the insurers.

Senator WATT: Okay. We'll wait and see. I have some quick facts-and-figures-type questions, which hopefully you'll have the answers to. What was the overall net increase or decrease in insured persons for the December quarter?

Mr Cormack : Hospital cover is 45.6 per cent of the population—covered for hospital—and that is 11,306,000 people for the December quarter.

Senator WATT: What's the increase or decrease?

Senator DI NATALE: Is this general?

Mr Cormack : No. This is hospital.

Senator WATT: It sounds like we might need general as well.

Mr Cormack : General is 13,535,000.

Senator DI NATALE: How does that compare to the previous years?

Mr Cormack : In the case of general, that's up from 13,509,000. In relation to hospital cover, that is down. In 2016-17, December, it was 11,319,000. For 2017 it's 11,306,000.

Senator WATT: Can you also give me the figures for the previous quarter, the July to September quarter?

Mr Maskell-Knight : The September quarter figure for hospital was 11,319,000, so it's a reduction of 13,000.

Senator WATT: In hospital coverage?

Mr Maskell-Knight : Yes.

Senator WATT: If you were to exclude the age group zero to four years, what would be the net increase or decrease in insured persons from the December quarter to the previous quarter?

Mr Cormack : I think we might have to have a closer look at that. We'd have to get back to you on that.

Senator WATT: The concern is that some of these numbers are a little skewed by babies being born and added to family policies.

Mr Cormack : Sure.

Senator WATT: and then not actually making any claims on the policies.

Mr Cormack : I think the point is that the calculation of all this is an AHPRA responsibility. They do the counting of this stuff; we're just reporting them. If a child is born into a family that's covered by family insurance, the risk is increased to the overall pool—another insured person increases the risk to the pool. I think that the point in talking about these numbers is that the government has recognised there is a need to ensure that the level of private health insurance coverage stabilises and starts to increase again. That's the policy objective of these reforms—to ensure there is no further decline in the level of covered populations. That's precisely what they're seeking to do. AHPRA simply counts the numbers.

Senator WATT: Okay.

Senator DI NATALE: Do you have the previous quarters for hospital cover?

Mr Maskell-Knight : Yes. I've got quarterly numbers from December 2016.

Senator DI NATALE: Yes. Could you just give us those?

Mr Maskell-Knight : December 2016 was 11,328,000—which is 46.5 per cent of the population.

Senator DI NATALE: Yes.

Mr Maskell-Knight : Then March was 11,354,000—that's 46.3 per cent; June was 11,319,000, which was 46 per cent; September was $11,319,000, which was 45.8 per cent; and December, as we've said was 11,306,000—which is 45.6 per cent.

Senator DI NATALE: The trend is sort of slowly down, but not a significant decrease. But it's still a decrease, nonetheless.

Mr Cormack : Yes, it certainly is. That's part of the reason for the reforms that have now been put in place.

Senator WATT: What was the age group with the biggest net decrease in the December quarter?

Mr Cormack : We'll have a closer look.

Senator WATT: Yes, if you could just take that on notice? Just to wrap up: has there been any modelling done by the department on the effect of Labor's proposal for a two per cent cap on policies?

Mr Cormack : No.

Senator WATT: No modelling? And no external modelling commissioned?

Mr Cormack : Not by us, no.

Senator WATT: Okay.

Senator DI NATALE: Any other work apart from modelling? Modelling often has a very detailed meaning in these estimates.

Mr Cormack : No. We haven't done any additional work on that proposal.

Senator McKenzie: I think the AMA made some comments around greater out-of-pocket costs to patients, as a result of the two per cent—

Senator WATT: But there'd be nothing the government could say that's based on work that the department has undertaken itself?

Senator McKenzie: No.

Senator WATT: Okay, that's it for us on PHI.

CHAIR: I don't know if an answer to this even exists, but it's the issue of private patients in public hospitals. Is there any premium impact from that? Has anyone quantified it?

Mr Cormack : Look, it's been an area of growth in premium payouts from the private health insurers. It's off a pretty small base, but there has been a significant increase in the amount of privately insured episodes in public hospitals. That's certainly a matter that some of the insurers have raised throughout the course of the private health insurance reform work. It's something that I guess both the department and the insurers will keep an eye on.

Senator DI NATALE: Is it quantifiable, though? Is it—

Mr Cormack : Yes, it is. Charles can give some stats on that.

Mr Maskell-Knight : You have to make a whole lot of assumptions about a whole range of things, as in all of these things. But, broadly speaking, if you assume that the rate of growth of privately insured patients in public matched privately insured patients in the private sector over the last five years, then premiums would be about half a per cent a year lower.

CHAIR: Okay, interesting. Thank you very much.

Senator DI NATALE: Just on that point: has any work been done on that specific issue by the department?

Mr Cormack : Certainly, the minister has had a number of conversations with his ministerial colleagues and put out a discussion paper last year in relation to different options for dealing with private patients in public hospitals, and we've contributed to that work. We had submissions from the state and territory governments. In the context of the next healthcare agreement, the draft heads of agreement proposes some joint work between the Commonwealth and state governments to look more closely at this.

Senator DI NATALE: What incentive is there for state governments to do anything other than see the trend continue? It's good for them, isn't it? It's good for their budgets. I don't see what the incentive is that would compel state governments to want to act on this.

Mr Cormack : The point here, Senator, is the parties have agreed—the Commonwealth and the states have agreed to have a closer look at that.

Senator DI NATALE: A closer look—yes.

Mr Cormack : There is evidence, and the general concerns would be that, if there's any suggestion the patients are being unduly influenced or coerced to make a choice—

Senator DI NATALE: There's a clear trend. It's not that people suddenly realised: 'We should start using our private health insurance cover in a public hospital.' Something is going on structurally to cause that trend, and I can't see anything other than some level of compulsion, because the incentive for state governments would be to reduce their hospital costs, and one way to do that is to defer that cost to other funders.

Mr Cormack : My colleague Ms Edwards is more involved with the Commonwealth-state hospital agreement and can talk a little bit more about how that matter is being dealt with.

Ms Edwards : The heads of agreement has been entered into by some states already. We're still talking to states in terms of the next hospital agreement. It specifically sets out agreed terms that we would look at together going forward. It's a publically available document. Effectively, it's an agreement that says the parties will ensure that information and the process for patients electing to use private health insurance in public hospital emergency departments is appropriate, robust and best supports consumer choice—that is, going to the practices of people coming in to emergency departments. That's something that the states have already signed onto and have obviously committed to already. It's certainly an area we're interested in. In developing the agreement itself, we worked together to examine the underlying drivers of the growth in the number of private patients in public hospitals—the issues you were just talking to Mr Cormack about. We developed reform initiatives to improve admission policy and practices to support patient choice and deliver comprehensive data provision and more consistent financial reporting on private patients. You really just need to know exactly what's going on, what's driving it and what, if anything, needs to be done about it. And, thirdly, we need to examine the impact of historical changes to the original Medicare principles. That's about looking at the history of the agreements with the states and seeing whether the changes that have been made over time have had an impact on this. New South Wales and Western Australia have already signed to the heads of agreement. We're looking to engage with, hopefully, all states in the near future, and that work will set off really—

Senator DI NATALE: Is there any consideration given to tying federal funding with any of the changes that you've described?

Ms Edwards : Mr Cormack referred to a discussion paper that is out. It has a whole range of options that are being discussed with the states, the private health insurers and the various medical sectors, and all of those things are being considered. At the moment, we want to sit down with the states and think about what is driving this and what are the impacts on patient care and hospital practices, and then work out an agreed way forward. That is what is provided in the agreement at this stage.

Senator DI NATALE: I look forward to that with some interest. It's obviously an area of great change. Obviously, we're seeing a decline in coverage. What about average out-of-pocket costs per episode or service, both hospital and general?

Mr Cormack : There are some numbers we could look to, and we'll get to those in a minute, but Professor Murphy is chairing a ministerial committee on out-of-pocket costs and might be able to update you on the work that's being progressed there.

Prof. Murphy : The minister has convened a meeting of senior medical leaders, consumers and health funds to look at this issue. We've had one meeting. The minister's strong desire is to get better transparency for consumers. It's clear that all the medical leaders—AMA, college presidents and the like—agree that there is a problem with out-of-pocket costs, and that it's a problem that is confined to a small group of practitioners who charge fees that would not seem to be justified on the basis of the quality of care or the experience that they have. Everyone's keen to address that. One of the big challenges is that consumers are not really given the full information until they've had their first clinical encounter, and then they are locked into a clinical relationship and it's pretty hard to extricate themselves when they find out what the costs of procedures are. The challenge has been to get a much better mechanism providing proper information to consumers and referring general practitioners prior to the first clinical appointment. The group has agreed unanimously, really, that that's the major issue.

There is also some work to be done to try and make sure that hidden fees, such as booking fees and administrative fees which aren't linked to Medicare item numbers, are not used, and AMA and all the medical colleges support that challenge.

The group is meeting again soon and we will be considering some options to provide really good, transparent information, and, hopefully, that information will be able to allow consumers to identify and choose not to see people who don't seem to be charging fees that are reasonable.

Senator DI NATALE: Surely, that's really going to depend on the referring GPs. Once a GP makes a referral, patients are rarely in a position where they can challenge that referral on the basis of cost. Aren't you relying on the GPs to change their referral practices?

Prof. Murphy : We have engaged the GPs in this discussion. Many GPs say that they would love to have that information themselves—that they don't have the fee information. And, again, many consumers and the GPs would be happy to have a process where the GP can say, for example, 'There are four orthopaedic surgeons who I know can do a very good hip replacement. Here are their names and here is an open referral. You can do some homework,' and choice can come into that. The GP, obviously, has oversight as to the quality and selection, but I think GPs, in the main, are perfectly happy to provide patients with a choice of names so that they can then use additional financial information to improve that choice.

Senator DI NATALE: Have we got any information on out-of-pocket costs, particularly average out-of-pocket costs for both hospital and general?

Mr Maskell-Knight : In the AHPRA data that was released last week or the week before, for the December quarter 2017 the average out-of-pocket for a hospital episode was $291. That's an increase of 6.1 per cent from 12 months earlier. For general treatment, the average out-of-pocket was $48.90, and that's an increase of 0.5 per cent from the corresponding quarter 12 months ago.

Senator DI NATALE: Why the big increase in hospital out-of-pocket costs? Six point one per cent is a pretty big whack.

Mr Maskell-Knight : Again, this is AHPRA data, so we don't have visibility of what underpins that. You should note, though, that that includes excesses, so the extent to which more people are opting to take out an insurance product with an excess would flow through into those numbers.

Senator DI NATALE: Are you making an assumption there—that it's people downgrading their cover to allow policies with a greater excess? Is that a fair assumption?

Mr Maskell-Knight : That's an observation that it's going on.

Senator DI NATALE: That's happening?

Mr Maskell-Knight : Yes.

Senator DI NATALE: You're noticing that?

Mr Maskell-Knight : The AHPRA data over a long time shows that, yes.

Senator DI NATALE: A trend where people are reducing—

Mr Maskell-Knight : We can observe correlation, if you like, but we can't know causality.

Senator DI NATALE: So I understand that better, you're saying that there's been a discernible trend over a long period of time. One of the things we talked about was coverage. We didn't talk about people downgrading their cover. Have you got any evidence about that, in regards to hospital and general treatment? Can you make—

Mr Maskell-Knight : On notice, we can provide the long-term trend and the proportion of policies that have got an excess.

Senator DI NATALE: Where the level of cover has changed and the excess has increased.

Mr Maskell-Knight : Yes.

Mr Cormack : On the positive side, the proportion of services for which no gap was paid is 88.1 per cent. So the work needs to focus, and that's what Professor Murphy was—

Senator DI NATALE: But many of those services won't be—I mean, we're talking about hospital treatment costs here, aren't we?

Mr Cormack : These ones are the medical component, which is also covered by insurance. That's why Professor Murphy's work is really important. If you've got 88 per cent of services covered by a no-gap arrangement, you can then focus on the 12 per cent that aren't.

Senator DI NATALE: Yes, except, if it's about excess, people downgrading their cover and increasing their excess is not going to make any difference; they're going to be paying more out-of-pocket costs, aren't they?

Mr Maskell-Knight : But the other side of that is that people choose to pay more when they get sick and pay less during the year.

Senator DI NATALE: Sure. But, if their experience is that they take out private health insurance to reduce their costs and then they find they've got a big whack associated with an episode of care then I would have thought that's going to make that experience a lot less satisfactory for them. There's also the question of complaints. I remember when we spoke last time there was a significant increase in customer complaints. Have you got the latest figures regarding customer complaints?

Mr Cormack : We'll see if we can get that for you.

Ms Shakespeare : I think there was some data out today—which we don't have.

Mr Cormack : PHIO keep the data on complaints, and we'll just see if we can dig that up for you. There was a report that came out today on that, I think, which I personally haven't had a look at as yet.

CHAIR: Is that a publicly available document.

Mr Cormack : Yes, there was a public release today.

Senator DI NATALE: So you'll be able to provide that information?

Mr Cormack : Yes.

Senator DI NATALE: Then, perhaps on notice, could you look at trends with the complaints over time as well.

Mr Cormack : Sure.

Senator DI NATALE: Can I draw your attention to a letter that practice managers are receiving from Bupa. Are you aware of a communication from Bupa, where Bupa are indicating to practices that, as of 1 July 2018, depending on a customer's level of cover, they will no longer pay minimum benefits towards procedures like hip and knee replacements, cataract and eye lens procedures, renal dialysis, pregnancy, IVF, gastric banding. Are you aware of that?

Mr Cormack : I was made aware of that. We received some communication—probably the same one that you have—and we're just assessing what's happening with that particular—

Senator DI NATALE: It's pretty remarkable that—firstly, can you explain how they cannot pay minimum cover? I would have thought, by definition, minimum cover is the minimum you pay.

Mr Maskell-Knight : There are several concepts here: one is exclusions and one is restrictions. If you're buying low-price cover, you're going to have one or the other. Restrictions are where an insurer says, 'Yes, we'll cover you for hips, but we'll only pay the minimum benefit level.' As a result, if you go to a private hospital, you'll find that your cover leaves you with very substantial gaps. The other thing insurers do is say, 'We just won't cover you for hips.'

Senator DI NATALE: At all?

Mr Maskell-Knight : Yes. My understanding is that a number of insurers have had a policy of having restrictions, and my assumption is they've now decided it is clearer if they just say, 'We're not going to cover those things.' Under the act the only things that need to be covered are episodes of psychiatric care, rehabilitation care and palliative care.

Senator DI NATALE: That's right. They were under the recent reforms—yes?

Mr Maskell-Knight : No, that was in 1994.

Senator DI NATALE: What were the recent reforms relating to mental health?

Mr Maskell-Knight : The recent reforms relating to mental health, as I said, are that if someone has low-price cover which has restrictions on mental health, they can upgrade and receive full cover from the time of the upgrade rather than serving a waiting period of two months.

Senator DI NATALE: That was just about waiting periods?

Mr Maskell-Knight : Yes.

Senator DI NATALE: So you can now get hospital cover from Bupa that excludes hip and knee replacements, cataracts, renal dialysis, pregnancy, IVF, and gastric banding, which is a big chunk of why you'd want to have hospital cover. That's taking junk policies to a whole new level. That's like the Big Mac of health insurance, isn't it?

Mr Maskell-Knight : Bupa's late coming to this. There are lots of other insurers that already offer policies that do exactly that.

Senator DI NATALE: When Bupa say, 'no longer pay minimum benefits,' what you're saying is that, effectively, they're not going to provide any cover for those services.

Mr Maskell-Knight : They're changing it from restricted cover to excluded, yes.

Senator DI NATALE: To a complete exclusion?

Mr Maskell-Knight : Yes.

CHAIR: Senator Di Natale, given the department said they just received the letter and they've taken on notice to provide further information, and given we're 35 minutes behind schedule at the moment—

Senator DI NATALE: We've been talking about health reforms and—

CHAIR: I'm not taking the call off you, I'm just saying.

Senator DI NATALE: The whole point of these reforms was to make the experience of people with health insurance a much more satisfactory one, because we're seeing people decreasing their cover, and then there's a letter from Bupa to a bunch of customers, saying, 'If you need some of the most commonly and routinely performed hospital procedures that are done, they won't be covered through us.'

CHAIR: We understand your perspective. You made it very clear. But do you have questions for the department, otherwise Senator Griff—

Senator DI NATALE: I'm trying to understand what the letter actually means. Do you have concerns, if this is the case? Are there any actions that the department can take?

Mr Cormack : I think the best thing to say is, if it's a non-compliant product, it's a non-compliant product and they won't be able to sell it in a way that attracts the rebate and all that sort of stuff.

Senator DI NATALE: What would make it noncompliant, in this setting?

Mr Cormack : I don't believe that any of those changes that they're making would make that a non-compliant product.

Senator DI NATALE: So, this as product that will continue to attract the rebate, a public subsidy, for hospital cover that excludes some of the most routinely performed hospital procedures?

Mr Cormack : But the individual has a choice. The individual may be looking for a more affordable product that enables them to commence a lifelong practice of maintaining their private health insurance at a price they can afford.

Senator DI NATALE: It won't cover them for the most important stuff they need to have done.

Mr Cormack : It'll cover them for many things.

Senator McKenzie: Senator Di Natale, if you're a 28-year-old with a reasonable BMI, who hasn't played netball or football, you're probably not going to need a knee or a hip reconstruction.

Senator DI NATALE: Unless you get pregnant.

Senator McKenzie: If you're planning to get pregnant then you won't pick that policy.

Senator DI NATALE: Some people don't plan to get pregnant. You should know that.

CHAIR: Senator Di Natale, I did say I'd give Senator Griff a go before the break. So, can we go to Senator Griff for a bit, and then we'll come back to you?

Senator DI NATALE: Sure.

Senator GRIFF: Thank you, Chair. I'll just ask a few questions, seeking clarification, on the review of the Australian government rebate on natural therapies for private health insurance. The government relied heavily on this review to determine that PHI rebates should be removed for, I think, 16 natural therapies from April. The review's main job was to conduct a literature review of the clinical effectiveness of natural therapies. Why was this solely a literature review, and why didn't the review go straight to the source material, where possible?

Ms Beauchamp : I'll ask the Chief Medical Officer to answer.

Prof. Murphy : This review was chaired by my predecessor, so I wasn't directly involved. This was done under the normal NHMRC processes of standards of evidence. The literature is the normal source of evidence in terms of trial evidence of efficacy. Going straight to the source—the world of anecdotal information—is not evidence. The gold standard evidence of efficacy of a therapy is a randomised control trial, comparing that therapy with a placebo or another treatment. As the review concluded, the lack of evidence is not proof that the therapy is ineffective; it's just that there is no evidence available that these are effective treatments for health conditions, which is essentially what we're talking about. It doesn't necessarily mean that they don't make people feel better or calmer or relaxed or enjoy their life more. But ultimately private health insurance was meant to respond to the treatment of health conditions, and the review terms of reference were to look at that. They concluded that there was no credible scientific evidence that these therapies were of benefit in improving health conditions on the basis of normal NHMRC processes.

Senator GRIFF: Given different standards of evidence were relied upon for different modalities, and given the limitations of the review and that fact that for some therapies it was stated that it was unable to draw any real conclusions about the effectiveness, doesn't that mean that this review should not be relied upon for any type of policy decision as such?

Prof. Murphy : Well, if you are going to introduce a therapy, a health treatment, you can't say that the lack of evidence of its efficacy means that it should be reintroduced. You've got to have positive evidence of efficacy to introduce something. I think the review was very clear that many of these therapies have not developed in an environment of evidence based medicine, and therefore you would not necessarily expect the evidence to be available, but I think that, in an environment where we are supporting the use of evidence based treatments, the lack of evidence is a problem. If evidence appears in the future, that's a different matter. But I don't think the standard was different; it's just that for some of these therapies there is no evidence.

Senator GRIFF: With regard to naturopathy and herbalism, why did the review look at the health service delivered rather than the pharmacological effect?

Prof. Murphy : I think it was because it was almost impossible to separate those health services into their component parts. I think it was not practical, because each of those areas of therapy has a wide variety and variability in their products. Again, I wasn't there at the review time, but the conclusion was that it was the only practical way to look at those.

Senator GRIFF: Has the department received any feedback from private health insurers that desire to keep the rebate for these 16 natural therapies?

Ms Shakespeare : I suppose that there have been some general issues fed back to the department about the value of being able to provide cover for these treatments as an attraction for younger people to take out private health insurance. But I don't think the insurers are lobbying very strongly to keep these types of services retained under general treatment products.

Senator GRIFF: I have just one last question. The review was unable to complete an assessment of Ayurvedic medicine within the time frames—that's on page 14. Does the department intend to complete the assessment of the clinical effectiveness of Ayurvedic medicine?

Prof. Murphy : I'm not aware of any plans to do further work.

Senator GRIFF: On notice, that would be great.

Senator McKenzie: Chair, can I please seek the call. Senator Di Natale, I don't know if you were referring to me personally in your comments.

Senator DI NATALE: No, I wasn't.

Senator McKenzie: Right. Well, I would ask you to withdraw.

Senator DI NATALE: Obviously, I'm sure you're aware of what I was referring to.

Senator McKenzie: I would like you to withdraw, irrespective of that.

Senator DI NATALE: I am happy to withdraw.

Senator McKenzie: Thank you.

CHAIR: Thank you, Minister. Is that it for 4.4?

Ms Shakespeare : If I may, I have some information now in response to one of Senator Di Natale's earlier questions about the recently released report on private health insurance from the Commonwealth Ombudsman. The report shows that, for the period from October through to the end of December 2017, complaints about private health insurers were 940 in total, which was 22 per cent lower than the same period the year before.

Senator DI NATALE: Could you please read those numbers again.

Ms Shakespeare : For the quarter 1 October to 31 December, 27, there were 940 complaints to the Ombudsman. That was 22 per cent lower than the corresponding quarter in 2016, which had 1,204 complaints.

Senator DI NATALE: So that's the corresponding quarter. The quarter previous to that?

Ms Shakespeare : That's what I've got here today. The Ombudsman is probably best placed to take questions.

Senator DI NATALE: So you're basically saying there's a 22 per cent reduction from this quarter to the corresponding quarter, but you haven't got any data in the intervening quarters?

Ms Shakespeare : That's right. We tend to compare by quarters because there can be seasonal impacts on complaints and the use of private health insurance.

Senator DI NATALE: Okay. On notice, can you take the complaints over the previous two quarters as well.

Ms Shakespeare : Okay.

Senator DI NATALE: Thank you.

CHAIR: Okay. That's it for program 4.4, I believe.

Senator DI NATALE: I just have one more. This is about APRA and profits, up 7.3 per cent over the past 12 months. Is that right—average profits in the industry are up 7.3 per cent?

Mr Maskell-Knight : We don't have that number here. We've got the latest APRA report, which shows that the net profit after tax for the year ended December 2017 was $1.42 billion. That compares with 1.32 for the corresponding 12 months earlier. On the back of the envelope, that would be about seven per cent, but there may be a more accurate seven per cent number that we don't have here.

Senator DI NATALE: A seven per cent increase over the last corresponding year?

Mr Maskell-Knight : Yes.

Senator DI NATALE: Let's just assume that that roughly seven per cent figure is correct. Has the department done any work to look at linking premium increases to profits?

Mr Cormack : We haven't done any work on that. In fact, it's really the job of APRA to assess all of these matters and the reasonableness of premium increases because the circumstances of funds will vary from time to time. It's also important that some of the revenue or the profit, if you like, that has been extracted is from other activities, such as investment activities, rather than the difference between claims and premiums. We haven't done any further work on that. We've not been asked to do any further work on that. It's really more in the realm of the prudential regulator to keep an eye on that.

Mr Maskell-Knight : There is just one comment to make. The net margin that APRA reported for the most recent 12 months for insurers was 5.16 per cent. The net margin for the previous corresponding 12 months was 5.21 per cent.

Senator DI NATALE: Sorry?

Mr Maskell-Knight : The net margin has barely moved, but, to the extent to which it has moved, it has gone down.

Senator DI NATALE: Thank you.

CHAIR: Insofar as you are not required later in the program, we release 4.4, Private Health Insurance. I believe, Senator Watt, you have finished on outcome 4. But Senator Griff, you still have some questions. Senator Di Natale, do you still have some questions?

Senator DI NATALE: I had some in 4.6, which is Dental.

CHAIR: You have question on 4.5, Senator Griff?

Senator GRIFF: Yes.

[15:03]

CHAIR: I call the officers in relation to medical indemnity. Senator Griff, you have the call.

Senator GRIFF: I would like to ask a couple of questions regarding practitioner performance and complaints. Present notifications to AHPRA only occur if a patient makes a complaint or if peers make a notification under the mandatory notification regime of AHPRA, which is obviously for serious misconduct or dangerous practice. That's very much a reactive approach for managing practitioner performance and harm. What proactive approaches exist for ensuring that practitioner quality is maintained at a high standard? What are you looking at?

Mr Cormack : I'll need to get another colleague to the table to speak on this. I think you're talking about national workforce regulation here rather than medical indemnity; is that right?

Senator GRIFF: Strictly—

Mr Cormack : I accept that they're not unrelated, but we'll probably need to ask—

Senator GRIFF: It comes down to, unless there's a complaint, there's no form of checking, unlike an example in New Zealand, where there is quite a robust system of peer review, for instance. In Australia, it's only when there's a complaint, when there's something serious, when you're able to determine that someone shouldn't be practising.

Prof. Murphy : I think I should start ahead of my colleague. There are robust systems of peer review for specialists in every public hospital and in every private hospital, and practitioner aberration is often picked up in the public hospital system. Most private hospitals now have proper quality control systems, medical advisory committees and processes to identify. The colleges also have mechanisms, and every one of the states and territories have health complaints commissioners to whom various complaints can be made by people. So it's not just the AHPRA process, but Mr Hallinan can give you more information.

Mr Hallinan : As Professor Murphy was saying, there are credentialing processes that happen on site for practitioners. In addition to that, there's a program of continuing professional development that's administered through the medical regulatory process. There is the complaints mechanism as well that you've identified. Beyond that, I think the Medical Board is currently or has recently released a new policy to look at credentialing practitioners as they're practising as well. I'll have to find the details of that though; it's happened in the last 12 months.

Senator GRIFF: Could you provide that on notice. But my understanding is, for instance, that peer review in private hospitals is totally voluntary, not mandatory.

Prof. Murphy : It's progressively becoming mandatory. There is no—

Senator GRIFF: It's either voluntary or it's mandatory; it's not progressively.

Prof. Murphy : The management of those hospitals is making them mandatory, and all of the big private hospitals now have pretty good processes. I agree that it's not regulated as a mandatory process, but right across the private hospital sector now there are developing strong processes. Medical appointment and prudential—

Senator GRIFF: Would you support regulation?

Prof. Murphy : The regulation of private hospitals is largely in the state and territory space at the moment. They have the regulatory authority over those.

CHAIR: Senator Griff, we are diverging into outcome 2 here, so can we try to clean up outcome 4, because we are already almost an hour behind.

Senator GRIFF: The department isn't considering introducing mandatory peer review at this stage.

Prof. Murphy : As Mr Hallinan said, all the medical colleges have a process of continuing professional recertification and development. The easiest way to get it is to have a peer review process. You can get most of your points, and a lot of the practitioners in those colleges are, undertaking a peer review process to get their CPD and their approval. It is a regulatory requirement from the Medical Board that you participate in a continuing professional development program, and they are increasingly strongly featuring peer review processes as well. The other thing to say is that AHPRA has certainly upped their game. They are very much aware of the need to be more responsive to complaints. I think they are exploring a range of other options to ensure safety, particularly of aging practitioners, into the future.

Senator GRIFF: Regarding the New Zealand experience, looking at the New Zealand Orthopaedic Association, they actually mandate that their orthopaedic surgeons are visited by their peers every two years to assess their theatre and clinical performance, and that significantly helps to ensure a high standard of quality. When you have a look at, for instance, the private hospitals, there's really a bit of a conflict there, because specialists earn the money, so they don't necessarily want to turn them away either. So having a system like that which operates in New Zealand would seem a sensible way to move forward.

Prof. Murphy : Again, it's open to the professional colleges to do such a thing. For example, the cardiac surgical society, which is a society of the College of Surgeons, has an individual surgeon outcome database where each surgeon's performance in cardiac surgery is assessed and reported back to that surgeon, to the head of unit and to the hospital each year. So there are a range of those college led things that are developing. Most of our orthopaedic surgeons—in fact, all of them pretty much—participate in the Australian joint registry, which publishes every year—

Senator GRIFF: An excellent register.

Prof. Murphy : the outcomes of their joint replacement. So a number of those things like New Zealand are in place in Australia.

CHAIR: We'll move on to dental.

Senator DI NATALE: I was going to suggest that we might have to set one up for medicinal cannabis, but that would be a very bad pun!

[15:39]

CHAIR: We can release program 4.5 insofar as you are not required later in the day. Program 4.6 is dental services. Senator Di Natale?

Senator DI NATALE: I have some general questions about their Child Dental Benefits Schedule, and about utilisation of the scheme. Can you give me some up-to-date information on that?

Ms Edwards : On utilisation of the scheme?

Senator DI NATALE: Yes. Have you a figure on how many kids will have benefited from the CDBS in total since it started?

Ms Edwards : Since it started in 2014, about 2.2 million children. Bear in mind, of course, that quite a lot of those children would be accessing the scheme every year.

Senator DI NATALE: So it's not 2.2 million children in total?

Ms Edwards : It's 2.2 million children in total, but it equates to a bit under a million or a bit over a million each year, as many children would have dental services each year under scheme.

Senator DI NATALE: I'm talking about unique individuals.

Ms Edwards : Unique children is 2.2 million, approximately.

Senator DI NATALE: What's the most recent data you have?

Ms Edwards : In 2017 we have had 1,060,463 children utilise the program. Given that it's still early in 2018, those numbers might rise as claims are made later, but that's an indication for the 2017 calendar year at this point.

Senator DI NATALE: What about the cost for that year and how that compares to previous years?

Ms Edwards : For 2017-18 we have $331.6 million, which is up from $319.4 million in 2016-17. I am checking if that is actual or if that's the budget.

Ms Cole : That's the budget.

Ms Edwards : They're difficult numbers for me to get in my head because it's done on a calendar year and then budgeted. That's the budget for this year.

Senator DI NATALE: So you're expecting it to increase by about $12 million. What is the government doing to promote the scheme apart from writing to everybody who is eligible? Is there anything else?

Ms Edwards : Writing to everyone who is eligible. We have launched a social media campaign to try to get the message out further through that avenue. You would be aware that letters also go from the Department of Human Services to providers. In addition to that, we have done a process of having flyers available in GP offices so that parents or guardians of children attending a GP would find out about the scheme in that way. Those are the key new elements we have this year. We are seeing in increased take-up of the scheme year on year.

Senator DI NATALE: Good. Can you tell me about the split of states and territories and the utilisation by public versus private providers? Do you have that information?

Ms Edwards : We would have to take that on notice. We do know that about 81 per cent of children are seen every year—that's a global figure.

Senator DI NATALE: You mean under this scheme?

Ms Edwards : Under any scheme for seeing a dentist. That would be a mix of children accessing the scheme, children accessing the free services provided by states and territories in schools and so on, and parents taking their children to the dentist out of their own pocket or under private health insurance. But we don't have the split available. We can take on notice whether we can provide that.

Senator DI NATALE: I would be interested to know the utilisation of the public versus private providers.

CHAIR: We will suspend briefly and return to continue program 4.6 on dental services.

Proceedings suspended from 15 : 44 to 16:00

CHAIR: We will resume the hearing. Ms Beauchamp, did you have some further information for the committee about a previous answer?

Ms Beauchamp : Yes. Senator Di Natale asked about consultation with the drug council over the drug trials that the Department of Social Services is running. I'd like Dr Lisa Studdert to correct the record in terms of the consultation that has taken place.

Dr Studdert : Senator, this morning you asked about the consultation with ANACAD and I've since had a clarification on that. After the announcement of the trial at the budget last year, ANACAD did discuss the package with officers from the Department of Social Services on a number of occasions: in May, at their regular meeting; in August last year; and again in November.

Senator DI NATALE: May, August and November?

Dr Studdert : Yes.

Senator DI NATALE: Was that a formal engagement?

Dr Studdert : They were scheduled meetings.

Senator DI NATALE: They have, what—quarterly meetings?

Dr Studdert : Yes.

Senator DI NATALE: This was just part of their quarterly meeting?

Dr Studdert : Yes. Officers from the Department of Social Services attended and had consultations with them.

Senator DI NATALE: Specifically on the trial?

Dr Studdert : On the details of the trial, yes.

Senator DI NATALE: This was November of last year?

Dr Studdert : Yes, correct.

Senator DI NATALE: Is any of that information available?

Dr Studdert : No. The consultations and advice that ANACAD provides is confidential to government and officers of the government.

Senator DI NATALE: And officers of government? So, in November, as part of their routine or quarterly meetings, they met with the Department of Social Services?

Dr Studdert : It was a scheduled meeting, and, as I said, the information we have is that officers attended from DSS.

Senator DI NATALE: How often do they attend those meetings?

Dr Studdert : It would not be normal that they would attend. The council sets its agenda, and I would have to suggest that you ask DSS about more specific details on that discussion.

Senator DI NATALE: And was this prior to the legislation being debated in the Senate? I can't remember when the legislation came up before the Senate.

Dr Studdert : Again, that would probably be something to ask DSS.

Senator DI NATALE: I suppose the subsequent question is, given the legislation was defeated in the Senate, whether there have been any discussions about changes to the trial?

Dr Studdert : Again, I would have to refer that to our colleagues.

Senator DI NATALE: Okay. Thank you.

CHAIR: Thank you very much for that clarification. We'll return to program 4.6, dental services.

Senator DI NATALE: I wanted to go to the national partnership agreement on dental services. Could you please provide me with an update on the national partnership agreement and, in particular, how much federal money is going into public dentistry at the moment? I'd like to have the most up-to-date figures you've got.

Ms Edwards : Obviously we've have talked about the Child Dental Benefits Schedule.

Senator DI NATALE: Yes.

Ms Edwards : This is for adults. There's $242.5 million allocated to that national partnership agreement for the financial years 2017-18 and 2018-19.

Senator DI NATALE: That's total?

Ms Edwards : That's total. So it's $107.8 million in 2017-18 and $134.8 million in 2018-19. I should add that $77.5 million was also allocated to extend the previous agreement for the first six months of 2017—for that interregnum period—and then the new agreement began on 1 July 2017. All states except for the state of Queensland have now entered into the national partnership agreement, and we're continuing to talk to Queensland.

Senator DI NATALE: With the exception of Queensland?

Ms Edwards : Correct.

Senator DI NATALE: And have you only got the next two years?

Ms Edwards : That's what the agreement covers at this point, yes.

Senator DI NATALE: How does that compare to the previous agreement?

Ms Edwards : It's a reduction from the previous agreement.

Senator DI NATALE: Of how much?

Ms Edwards : About 30 per cent. I've probably got the exact numbers if you'd like them.

Senator DI NATALE: If you can provide me with those numbers, yes.

Ms Edwards : I beg your pardon, we'll take it on notice, but it's approximately 30 per cent less than the previous years.

Senator DI NATALE: What are the current waiting lists for public dental services by state and territory?

Ms Edwards : We don't have those figures yet under the new agreement; we only have old figures under the previous agreement.

Senator DI NATALE: What are the figures up until the end of the previous agreement?

Ms Cole : We have provided them in answers on notice from the previous Senate estimates.

Senator DI NATALE: Are these effectively the same questions I asked at the last estimates?

Ms Cole : Yes, that's correct. We don't have any updated figures from those that we provided at the last estimates.

Senator DI NATALE: When will you get updated figures?

Ms Cole : We're dependent on the states and territories providing that data, and they have not provided anything beyond that at this time.

Senator DI NATALE: Sorry, you've asked them for the information?

Ms Edwards : They're required to provide it under the agreement, but they haven't provided it at this point.

Senator DI NATALE: Why?

Ms Cole : Under the agreement, the structure of the agreement is essentially that, once they sign, they need to provide an activity plan and certain amounts of data so that we can monitor the additional services that are able to be provided. Only one state to date, I believe, has provided its activity plan. The funding, however, is related to the period in which the activities are delivered, so it's essentially sort of retrospectively paid, if you understand what I mean.

Senator DI NATALE: Not really.

Ms Edwards : Effectively, the infrastructure for the national partnership agreement is not yet fully in place. States haven't provided the plans and so on required. Therefore, the obligation to provide data hasn't kicked in yet, but neither will payments flow until that stuff is in place.

Senator DI NATALE: When we're talking about waiting lists, for example, for this quarter, is that going to be under funding from the previous agreement?

Ms Cole : What we're explaining is that we don't have any data for the current agreement period because—

Senator DI NATALE: Which is from when to when?

Ms Edwards : From 1 July 2017 to 30 June 2019.

Ms Cole : But we haven't provided any funding either yet because the data hasn't been provided.

Senator DI NATALE: So how are those services being delivered?

Ms Edwards : The states will be providing services and, in due course, they'll the provide relevant documentation to set up the infrastructure, provide us the data they're required to provide, meet milestones and demonstrate they've met milestones, and payments will flow.

Senator DI NATALE: So they just draw down on their own budgets and pay for it over the six months?

Ms Cole : Yes, we presume so, and then retrospectively seek the funding from us.

Senator DI NATALE: And then basically try and get some money from you guys to cover the costs?

Ms Cole : Yes.

Senator DI NATALE: How do they know what services to provide? For the six months of last year, they've been rolling out the program, but they haven't had any certainty about what funding is going to come from that?

Ms Cole : No. The agreement actually specifies the additional services to be delivered by each state and territory. It provides a figure—

Senator DI NATALE: But that wasn't signed at the start of the financial year last year.

Ms Cole : But it has been in negotiation for some time.

Senator DI NATALE: But how do they deliver six months, or eight months now, of services when an agreement's just been struck? How do they know what they're delivering if they don't know what funding they're going to get from you?

Ms Cole : They have known for some time the quantum of the funding and the services—

Senator DI NATALE: That's actually been in dispute for some time as well.

Ms Cole : The agreement with the states and territories is retrospective. They have understood for some time the offer from the Commonwealth and they also understand that they have to provide certain data and reports in order to get that funding.

Senator DI NATALE: It doesn't seem like a particularly rational way of providing services that you're asking the state to provide—

Senator McKenzie: Be accountable.

Senator DI NATALE: No, the states are providing dental services that are federally funded. They've been providing them for six months not knowing how much federal funding's coming their way. I agree with the requirements for accountability, but surely that should be done up-front so that we know—

Ms Edwards : We share your view that we want to do it as quickly as possible. States are aware of what they need to provide us with in order to set up that infrastructure. As soon as we have the relevant material from the states, we'll act as quickly as we can to put it in place. Once the relevant documents are in place and set, and states demonstrate that they have met those milestones and provide the data they're required to provide, then funding will flow. We hope they do it very quickly.

Ms Beauchamp : We should also emphasise that the states and territories are actually responsible for providing funding and the provision of services, so this is really a Commonwealth contribution to support the states and territories.

Senator DI NATALE: That's right.

Ms Beauchamp : The NPA was only signed last October, in 2017, so, obviously, we are in the process of finalising those arrangements with all the states and territories, except for Queensland. So, it's a contribution towards the state or territory responsibility in this area.

CHAIR: Just a follow-up question in this regard: have any states and territories indicated that funding under the agreement is insufficient to meet the additional services they've agreed to deliver?

Ms Beauchamp : They haven't, and I think that the funding probably better reflects the actual cost of delivery of the services.

Ms Edwards : That's right.

Senator DI NATALE: I have one more question, and perhaps it relates to Professor Murphy's role as well. Do you have any involvement in providing advice on oral or dental health in the role you're currently in?

Prof. Murphy : No, none at all, unfortunately.

Senator DI NATALE: I know that in the UK and Canada there are chief dental officers. Has any consideration been given to such a role here within the federal department?

Ms Beauchamp : Not in my short time of being in the role.

Prof. Murphy : I think the point is, Senator, as was described before, that the states and territories are the service providers. The Commonwealth is merely providing additional funding to support the provision of services in the states and territories.

Senator DI NATALE: Do you see any role in providing advice on oral and dental health issues? It's still a big whack of money that's provided by the Commonwealth, particularly through the Child Dental Benefits Schedule.

Prof. Murphy : There is always the benefit of having advice on how Commonwealth money is spent, but I'm not sure that there is a need to have a senior policy officer on dental areas in the Commonwealth department when most of the services are very much provided by the states and territories.

Senator DI NATALE: Okay, thank you.

[16:11]

CHAIR: That's it! We release officers from program 4.6, insofar as they're not required later on. We will move to outcome 4.7. Senator Griff, I believe you have some questions?

Senator GRIFF: Firstly, I would like to return to questions I asked during the previous estimates, regarding transparency of IVF data. In October, Ms Shakespeare said that the department was in ongoing discussions with industry about publishing success rates on a clinic-by-clinic basis. Has there been any progress on this?

Mr Cormack : We'll have to take that one on notice. That work is being undertaken under outcome 4.1 and the officers have departed for the day.

Senator GRIFF: It was under 4.7 last time, so can I continue with these questions?

CHAIR: You can try, but they may have to take them on notice.

Mr Cormack : We just simply don't have the information here. We're not trying to be difficult; they've just gone for the day.

CHAIR: We did release 4.1.

Senator GRIFF: Okay, what I would like, on notice, is what conversations or meetings have taken place? There were also related questions on notice that I did not even get any response to, and so I will just quote those. If we could receive a response to those, that would be fantastic. I will ask them again. The number was SQ17-001311, for your own information. The first one was about the conversations that the department is having with industry:

With regards to publishing comparable IVF data, … Can the Department please detail what discussions and meetings have been had to date on this issue (when and with whom) and what discussions and meetings are planned for the rest of the FY.

a. Have any particular options been examined?

That is the first one that wasn't responded to. I also asked:

b. Has the made any assessment of the systems used in the UK and US - where the UK’s HFEA—

That is, the Human Fertilisation and Embryology Authority—

collects and publishes clinic performance data and the US’s CDC publishes data on ART clinic pregnancy rates - and considered whether it could be applied in Australia? If not, does it plan to do so?

One response I got back to a question on notice mentioned the ART MBS number items and the task force review, which does not seem really to be relevant. The response was: 'At this stage the publishing of clinic performance data is a matter for industry.' Can you clarify whether it is in fact the department's aim to make IVF success data publicly available on a clinic by clinic basis in the future?

Mr Cormack : There are no plans to do that.

Senator GRIFF: Here in Australia there are wide variations, which we have discussed previously, in success rates by clinic. This is a very critical issue for people, particularly young people, who have issues. Yet in Australia there is no intention to provide any of this information that is available in countries overseas.

Mr Cormack : I'm not saying it's not an important issue. I don't have the officers here today. My advice is that we have no plans to do that but we are still having ongoing discussions with industry around matters to do with assisted reproductive technology. I will confirm it on notice, but we have no plans to introduce a comparative outcome arrangement for clinics. Looking at it in the broader context of the health system, the comparison of outcomes by practitioner, however much, in a policy sense, that may be desirable, is not actually common practice in Australia. Indeed it's not common practice in many countries around the world to have publicly available comparative outcome performance indicators or information about individual practitioners.

Senator GRIFF: Minister, do you have a view?

Senator McKenzie: My apologies—could you repeat the question?

Senator GRIFF: IVF success rates are not published. You cannot determine or see the performance of IVF clinics in Australia, where there are wild variations. Yet in countries such as the UK and the US it's publicly available, so you can determine where you would go. The department has just said that there's no intention to look at or go down that path.

Mr Cormack : Under the MBS review arrangements, which we dealt with in 4.1, there is a report under development on assisted reproductive technology. That will be consulted on this year as part of a whole range of other MBS review reports. So there will certainly be an opportunity to deal with those issues and have discussion around those issues. But I repeat my earlier advice that there are no plans, certainly at this stage, to introduce a comparative performance arrangement for ART clinics.

CHAIR: Senator Griff is endeavouring to ask these questions in the correct spot, but it's not obvious to me that they should have been asked under 4.1. Do they fit under 4.7, where Senator Griff asked them last time? Where does this fit in the department?

Mr Cormack : It's being addressed under the MBS review process, and the MBS review process is under 4.1. If I had had the officers here to deal with that, I would have done so. I apologise that we don't have them here.

CHAIR: We released the officers; that's not your fault.

Mr Cormack : I'll endeavour to answer the question as best as I can. That is the current status. There is ongoing work in discussions with industry. But there are no plans afoot that I am aware of to set up a comparative performance publishing arrangement across ART clinics. I'm not saying that it's a good or a bad thing; I'm just saying that there are no plans.

Senator GRIFF: I look forward to receiving that information on what these ongoing discussions are, but I am somewhat gobsmacked that you are not looking to provide this information to the public, because it is a big issue for people. I just have a couple more questions, related to assistant reproductive technology, or ART. In answer to my question on notice regarding the audit of ART specialists, your department stated that there were a total of 18,625 services audited, and 1,199 were found to be noncompliant, which is quite a significant rate—6.4 per cent, in fact. How does this rate of noncompliance rank compared to inappropriate or fraudulent claiming in other specialties? Are doctors practising ART more likely to be making fraudulent claims, or is it around about the same ratio?

Mr Cormack : I'll ask Mr Cottrell to deal with that one.

Mr Cotterell : We haven't done a comparison across all specialties of rates of noncompliance. My feeling is that it would change over time. At the time that we did these audits on ART treatment cycles, it would have been for a reason—which is that there was some concern about how those treatment cycles were being performed. Usually, when we look at a profession, or part of a profession, we look at it because there's reason for concern about the claiming practices. So, I can't give you any update since our previous answer, because we haven't undertaken any further audits since we answered that question.

Senator GRIFF: Given that 6.4 per cent is not a low number, why have you not conducted further audits?

Mr Cotterell : First of all, we can't audit everyone all the time.

Senator GRIFF: Sure.

Mr Cormack : Secondly, we monitor the data across the MBS to look at what's growing fast and where there are unexpected patterns, and we target our activities to those. So, we haven't been looking at ART from an audit sense since that time, because we haven't seen unexpected patterns.

Senator GRIFF: My understanding is that most of the incorrect claiming related to items being billed both individually as well as globally. Is my understanding correct?

Mr Cotterell : That's right.

Senator GRIFF: Did this stem from confusion amongst doctors between ART packages of care and fees for individual services?

Mr Cotterell : I'd have to take on notice whether we have any detail about the reasons the doctors gave for that. In answer to your previous question, this is a common occurrence across the MBS where there is a packaged item and individual items. Often, we will find providers claim both of those things.

Senator GRIFF: I'll refer to a previous question on notice, where I asked whether there had been any evaluation of flash glucose monitoring products. I was told the department was currently evaluating these products for subsidy under the NDIS, and that the evaluation was 'expected to be finalised soon'. Has the evaluation been finalised?

Ms Shakespeare : The evaluation report has now been finalised. I think that occurred in December last year. We have now been asked to undertake further discussions with the company involved.

Senator GRIFF: Was the product found to be suitable for subsidisation, or not?

Ms Shakespeare : It was found to not be cost-effective at the price proposed by the sponsor. That's why we're in further discussions.

Senator GRIFF: In the 2017 budget, the government allocated $54 million over five years for continuous glucose monitoring for people under 21 with type 1 diabetes. How much funding on this initiative has been expended to date, and how many people would have received any form of this funding?

Ms Shakespeare : So, 7,900 people have now been approved as eligible under the program. The project funding in 2016-17 was $3 million; in 2017-18 we are expecting $11.7 million to be expended. But this is a demand-driven program, and we're still part-way through the year, so I can't give you an exact figure as of today.

Senator GRIFF: It was estimated, I think, originally that 15,000 people would be eligible for the program. But you're saying 7,900?

Ms Shakespeare : No; the original estimates were that 4,000 people would be eligible under the program.

Senator GRIFF: Has the department modelled what it would cost to extend the program from age 21 to 25?

Ms Shakespeare : No; we have not modelled that extension.

Senator GRIFF: Would you consider it? Young adults are more likely to be independent and employed and able to afford to purchase the devices themselves.

Ms Shakespeare : The government's policy, which we have implemented, is that the products are subsidised for children and young people aged up to 21. It would require a government decision to change that to include other groups. The program was established with assistance from a committee of experts—endocrinologists and diabetes educators—who advised us that the people who have the most challenges in managing their blood glucose levels are children and younger people. We didn't get any advice that people aged up to 25 were particularly high-needs users.

[16:26]

CHAIR: I believe that's it for outcome 4. We'll release all officers who aren't required later in the program. You go with our thanks. We move to outcome 2, health access and support services, starting with program 2.3, health workforce.

Senator WATT: Minister, I want to return to that issue we discussed first up this morning about the proposal for a Murray-Darling medical school. Prior to her departure from the parliament, the then senator Fiona Nash was at one point the Assistant Minister for Health and had responsibility for rural health, and I think it's fair to say that she also was a bit of a champion of this proposal.

Senator McKenzie: As I said earlier, many, many federal conferences ago, it became, at a grassroots level, a National Party policy. A lot of National Party senators and members support what our state branches have brought forward.

Senator WATT: For instance, if you'd like to have a look, I've got a copy of an interview transcript with then Assistant Minister Nash from September 2014. She was interviewed on ABC Riverina—it sounds like an electorate—in which she said she has a lot of time for this proposal. She mentioned that Michael McCormack from down in the Riverina has pushing this—obviously he's now the Deputy Prime Minister—and talked about the benefits, particularly to Wagga Wagga in Mr McCormack's electorate. So, it does seem she, among others, has been a bit of a champion of this. You haven't been able to confirm, since we spoke this morning, whether there's a reference to this proposal in the coalition agreement?

Senator McKenzie: No.

Senator WATT: Have you bothered to look?

Senator McKenzie: I said I wouldn't be confirming it.

Senator WATT: You still won't confirm it?

Senator McKenzie: I was quite adamant about that. It's not a public document.

Senator WATT: Why not? What about just releasing the bit to do with the health portfolio, so we stay within the terms of the estimates committee?

Senator McKenzie: I've been clear. I've answered it—this will be maybe the sixth time. But ask again and we can go for a seventh.

Senator WATT: I just thought if I narrowed it down to the commitments regarding health in the secret coalition agreement that you might be prepared to talk about them. That'd be a no?

Senator McKenzie: I've answered your question.

Senator WATT: So, Senator Nash, as she then was, was one of the champions. It just so happened that this morning, after I asked those questions, the Farm Online website published an article, 'Fiona Nash takes regional reins at Charles Stuart University'. Have you seen that article? You've been in here, so you may not have.

Senator McKenzie: I think I saw something on Twitter.

Senator WATT: Apparently, today it has been announced that former minister Fiona Nash will be, in her words:

… taking up a position with Charles Sturt University as their strategic adviser, regional development.

She said:

… all of her previous roles on the front bench for the Nationals in the Coalition would contribute in some way to her new position at—

Charles Sturt University. Do you know whether in that capacity former Minister Nash is going to be continuing to push for this Murray-Darling university? That may or not be in the coalition—

Senator McKenzie: I don't know. I haven't seen her conditions of employment. I think it's a bit ridiculous that you would expect me to.

Senator WATT: Have you had any discussions with Fiona Nash about her new role at Charles Sturt University?

Senator McKenzie: I knew she was looking at the role. She's really looking forward to what she'll be able to achieve.

Senator WATT: Has she had any discussions with you specifically about the proposal to support a new Murray-Darling medical school?

Senator McKenzie: No.

Senator WATT: You've never spoken to her about that?

Senator McKenzie: Not in her current role.

Senator WATT: Not since she's been appointed?

Senator McKenzie: No.

Senator WATT: You don't think there's any potential conflict in a former minister who was championing a university which may or may not be required under the secret coalition agreement now going and working for that university?

Senator McKenzie: No, as long as she adheres to the code around becoming a lobbyist per se. I have no indication from the very brief Twitter evidence I've had that she'll be doing that, at all. I have every confidence that Fiona will adhere to those rules.

Senator WATT: I certainly hope so. This is one of the reasons why we ask questions about this coalition agreement. While there's secrecy about it people are suspicious about what it might provide for.

Senator McKenzie: I've been really clear that the National Party has been a strong advocate to address the maldistribution of rural workforce in the health area. The Murray-Darling Basin regional proposal between La Trobe and Charles Sturt many, many years ago is something we supported.

Senator WATT: Are you aware that since I asked questions about this this morning, the Australian Medical Students' Association has issued a press release again reiterating opposition to a new medical school in the Murray-Darling Basin region? Have you seen that press release?

Senator McKenzie: I've just been handed it.

Senator WATT: Among other things, they say:

The Murray-Darling Medical School proposal has been gathering dust on Ministers’ desks for more than five years because it lacks merit and won’t fix the workforce issues it claims to address.

New medical schools are expensive, take years to produce doctors, and add to the numbers of medical school graduates when there are already more graduating medical students than available internships …

Even these latest comments don't give you pause for thought about whether this is a good idea or not?

Senator McKenzie: I think, as we traversed earlier, the provision for addressing the maldistribution of rural health workforce requires a range of strategies across government. I, as the Minister for Rural Health, don't back away from seeking a range of measures to ensure that that maldistribution is addressed.

Senator SINGH: How do you respond to the press release?

Senator McKenzie: If I could have some time to read it and think about it I am happy to respond. Can I have sometime over dinner?

Senator SINGH: That's fine.

Senator McKenzie: I've seriously just been handed it.

Senator SINGH: Senator Watt just read out some of the findings to you. I thought you might have a response to that.

Senator McKenzie: I would like to check the veracity of the claims of the media release and be able to give you a detailed answer.

Senator WATT: That would be good. That is it on that and that's it for health workforce from us.

CHAIR: I've got a couple of little things. I'm not entirely sure they're health workforce, but I'll ask them here and you can tell me to ask them elsewhere if it's incorrect. Can I get an update on the work of the National Rural Health Commissioner and what he is doing in this space?

Prof. Murphy : It's very much health workforce. Mr Hallinan can comment, but he has hit the ground running. He's very active and energetic. His primary focus is on developing the rural generalist pathway. These are these very skilled general practitioners who do procedural work. He has an agreement with the two colleges, the College of General Practitioners and—

Senator McKenzie: A historic agreement.

Prof. Murphy : A historic agreement, which has even got a name. He has got them working strongly together. He is currently developing a lot of proposals, which he will bring to government later on, for expansion of the rural generalists and a lot of ideas to promote that model. I don't know whether Mr Hallinan or the minister can say more?

Senator McKenzie: We've run a rural task force, if you like, a forum, bringing together peak bodies from across medicine—allied health, nurses, Indigenous and doctors. We had them around the table three weeks ago and introduced them to the Rural Health Commissioner. He was very engaged and they were very appreciative to have somebody who is wholly and solely focused on assisting them to do their very vital work in the regions.

CHAIR: Can I ask about my home state of Western Australia and the current state of the health workforce in Western Australia. Do you have any granular data at that level? Are there any particular problem areas?

Prof. Murphy : Mr Hallinan can answer specifically—

Mr Hallinan : I'll have a look.

Prof. Murphy : if he can find it, but we know that Western Australia is different.

Senator McKenzie: Yes—very!

Senator SIEWERT: If I had a buck for every time I'd heard that, election campaigns would be no problem!

Prof. Murphy : The ebb and flow of practitioners in and out of Western Australia is different from the rest of the country. They've had some difficulties, particularly in attracting their junior medical workforce in the state public hospitals. They haven't produced enough medical graduates, historically, to be self-sufficient. That's being addressed now with Curtin coming online, increasingly, to produce more medical graduates. They've had some issues in specialty training. They've had fairly good support from the Commonwealth specialist training fund to promote specialist training positions. They've actually got a senior doctor just devoted to health workforce in their health department, and he has produced a lot of information, which he will share with our National Medical Training Advisory Network in the near future, and is very keen to have those special but nice differences recognised, I think.

CHAIR: Good save, Professor Murphy!

Prof. Murphy : Mr Hallinan can add—

Mr Hallinan : I don't think there is much to add on that, but we are working very closely with our colleagues in Western Australia to support their workforce policy and planning.

CHAIR: Obviously, coming from Western Australia—I think Senator Siewert would agree with me—we often hear about these issues of health workforce shortages in the bush. We also hear that—and this is going back to Senator Watt's earlier questioning—people who either originate in the bush or who are trained in the bush will tend to stay in the bush. Do we have any data as to whether that could hold true for people who are trained regionally, say, in the eastern states, who then might stick in a regional area in WA or Queensland or South Australia? Is the regional part of their training transferable? Are they more likely to stay regional across Australia, or do we need another way of attracting people into the bush in WA—for example, getting people out of the bush in WA and training them up?

Prof. Murphy : I don't think we've got any data on that. The sense about regional and rural training is (A) there is an attraction to the type of medicine, so that may be transferable—someone who enjoys the generalist practice of regional training. But the other advantage of postgraduate training in the regions, out of the metropolitan areas, is actually people forming links and connections, and so that is one of the major drivers of regionally based training, which we're trying to support and getting the colleges to push. We know that if people do all their postgraduate training in the cities, they form their relationships and take root in the city, and it's very hard to get them out, whereas, if they've done their training in the regions, they tend to form connections there. So, to some extent, it might be transferable. But we believe pretty strongly that Western Australia, like the rest of the country, needs its own regional based training, where possible, and we will attempt to push that.

CHAIR: Great. Thank you very much.

Senator GRIFF: Professor Murphy, as you're aware, the Royal Australian College of Physicians had that part 1 entry exam that was a disaster because of IT issues, and people are having to be forced to resit it. In the past, as you'd also be aware, there have been suicides relating to this exam. We have the brightest people who are placed in a training environment that's incredibly competitive, and they lose all perspective as a result of it, and some have taken their own lives. According to the Telegraph article, 20 have taken their own lives. I understand that training standards are a matter for the relevant colleges, but the federal government has invested significant resources in training students at uni and then supporting training positions in hospitals. Is the department looking at ways in which the training environment can become more of a safe environment? Is that something that you're investigating or considering?

Prof. Murphy : I think it's important not to attribute suicides to an exam. I think the challenge in young doctors is actually getting help for mental health conditions. I think that's a really big problem—getting people to seek help. Stress can certainly precipitate mental health issues, but generally people who take their own lives have a mental health problem which needs addressing. One of the challenges that we're facing—and COAG health ministers have addressed this—is the reluctance of young doctors to seek help when they need it, and part of that has been attributed by the AMA and others to the current requirement for mandatory reporting through AHPRA. Ministers are looking at that as something that they may relax so that people feel more confident to seek help.

The physicians exam was a disaster for the college, which is my college. It was a PR disaster. It was a terrible thing. The company involved is refunding the exam fee to the students. They're doing everything they can to compensate for it. It would be a terribly stressful situation for them, and I think it's very unfortunate. But I think most of these young doctors are robust. We are working with the colleges. There is big work with the College of Surgeons on the training environment, reducing bullying. Every training hospital in the country now has programs to address stress, mentoring programs and bullying. Again, the training environment is mainly in the state public hospitals, but we have a big relationship with the colleges, so we work with them to do that. So I think there's a lot of work being done. That episode with the College of Physicians, as they would be the first to admit, was a terrible outcome for them, and they're obviously covering ground pretty quickly to try and make it have the least possible impact on those trainees.

Senator GRIFF: As you mentioned, you're working with AHPRA to move it from a punitive model to a supportive model?

Prof . Murphy : I think actually there was a bit of a misapprehension. I think the mandatory reporting requirement wasn't in fact a barrier, but it was a perceived barrier to some young doctors seeking help. So I think the ministers' views collectively—they haven't reached the final position yet—are that it may be best to say that there isn't a requirement for mandatory reporting for someone who comes and seeks help for a mental health issue. The ministers haven't reached their position yet, but I think that's the likely outcome of that.

Senator GRIFF: Good to hear. Thank you.

CHAIR: Senator Singh, you had a final question in this area?

Senator SINGH: Senator McKenzie, I just wanted to pick up on questioning by Senator Watt before regarding Ms Nash's new role at Charles Sturt University.

Senator McKenzie: It was halfway through the article.

Senator SINGH: Can you confirm that her new position is not a breach of the ministerial code of conduct?

Senator McKenzie: Absolutely. You're not allowed to get a job after you quit parliament?

Senator SINGH: I am asking you specifically.

Senator McKenzie: Absolutely.

Senator SINGH: There is a post-ministerial employment section, which I'm sure you'd be aware of.

Senator McKenzie: Yes.

Senator SINGH: I'm asking you whether her new employment in any way, shape or form is a breach of—

Senator McKenzie: I haven't seen the contract, which I don't expect you would know, but, when I read the public article on what she's been employed to do, I don't see that there is a breach of the code at all.

Senator WATT: Do you know what the code says about postministerial employment?

Senator McKenzie: There's a time frame around conducting lobbying opportunities. When I read the public comments that former Senator Nash makes about her new role, I see she's talking about getting out into the regions and talking with communities. There's nothing about lobbying politicians, which would obviously be a breach of the code.

Senator SINGH: But there's a further requirement within that postministerial employment part of the code in point 2.25, which I'm sure you're aware of as a minister.

Senator McKenzie: 0.2—

Senator SINGH: I need to tell you where to find the—

Senator McKenzie: No, I'm trying to remember which clause you said. I'm writing it down. 0.255?

Senator SINGH: No. It's under the heading 'Post-ministerial employment'. It's 2.25 and 2.26. And my question to you was whether or not you believe that there is a conflict of interest in Ms Nash taking up this position at Charles Sturt University post her employment as minister.

Senator McKenzie: I haven't seen her employment contract, so I would have to take that on notice.

Senator SINGH: So you're now taking it on notice. A minute ago you said there was no conflict. I just want to be clear.

Senator McKenzie: You've asked two different questions.

Senator SINGH: No, I haven't.

Senator McKenzie: The first question was: has she breached the code. The second one you just asked was: does she have a conflict of interest. They're two different questions.

Senator KENEALLY: So has she breached the code?

Senator McKenzie: No.

Senator KENEALLY: How do you know if you haven't seen her employment contract?

Senator McKenzie: Because I look at what she's publicly said, and my understanding of the code is you can't take lobbying activities in areas of previous ministerial oversight.

Senator WATT: That's one aspect of it, but there's also something about not using—

Senator SINGH: She's also has this requirement:

Ministers are also required to undertake that, on leaving office, they will not take personal advantage of information to which they have had access as a Minister, where that information is not generally available to the public.

Senator McKenzie: I'm confident that former Senator Nash won't do that.

Senator WATT: What makes you confident?

Senator SINGH: That's a bit pie in the sky, Minister.

Senator McKenzie: Well, it's also a bit—I don't think how you can sort of—

Senator SINGH: So you don't think she breached the code

Senator McKenzie: It's about former Senator Nash making sure she conducts herself in her new role in a way that she doesn't breach the code. I'm confident she knows about the code and I'm confident in what I know about her as a person that she won't knowingly breach the code.

CHAIR: I'm not sure this is actually an area we can traverse in this committee. Whether a person external to this committee has breached a code or not is not something the minister or this committee can deal with.

Senator WATT: I think we made our point.

Senator McKenzie: I just got advice that her tenure as Minister for Rural Health finished on 19 July 2016—if that helps you.

Senator WATT: Okay.

CHAIR: Can we move on?

Senator WATT: Yes. That's it for 2.3 for us.

[16:48]

CHAIR: Okay, so we release 2.3 insofar as they are not required later on. We will move on to 2.4, preventative health and chronic disease support. Senator Watt, you have the call.

Senator WATT: We have three different topics in here.

CHAIR: We will throw the call around a little bit because a lot of senators want to ask questions in this space.

Senator WATT: Sure. Can we start with my hobby horse: of the National Cervical Screening Program. Where are my friends who I talk to every estimates? Hello! Sometimes it's new faces; sometimes it's old faces. I think last time around Mr Madden might have been one of the people who gave evidence on this, but I gather he's on leave at the moment. I want to check how we're going with meeting some of the milestones with this contract with Telstra Health. At the last estimates, in October, we were told that the renewed National Cervical Screening Program—and that's the HPV test instead of the Pap smear—would go live on 1 December 2017. Did that happen?

Ms Konti : Yes, it did.

Senator WATT: I think the original go-live date was to be 1 May, wasn't it?

Ms Konti : Yes.

Senator WATT: So there was about a seven month delay in the end. We were told the first components of the National Cancer Screening Register, mainly the capacity to receive pathology reports, would also go live on 1 December 2017. Did that happen?

Ms Konti : Yes.

Senator WATT: On that date?

Ms Konti : Yes.

Senator WATT: We were also told that the complete National Cancer Screening Register system would be operational by mid-January. Did that happen on time?

Ms Konti : No.

Senator WATT: Is it now operational?

Ms Konti : Not yet. This is probably the right point in time to have the discussion. The new Cervical Screening Program has gone live since 1 December. Everything that is required to support women to have the new test is in place. I think, at the last estimates, we were talking about joint register operations between the National Cancer Screening Register and the states and territories. That is still in place and is continuing.

Senator WATT: So the joint register between the Commonwealth and the states aspect has not yet commenced?

Ms Konti : No, that was in place from 1 December, and is still in place today.

Senator WATT: So when you say that the complete system is not yet operational, what is not operational?

Ms Konti : The element of operations that needs to finish being tested and needs to be implemented are around: the pathology test results and the matching of those to the clients in the register; the migration of the state and territory registers to the national register; the application of the pathology test results and the calculation of the woman's screening pathway outcome as a result of that. That is the work that's still in front of us.

Senator WATT: What is the current expected deadline for that?

Ms Konti : At the moment, we're targeting a June 2018 implementation time frame for that.

Senator WATT: Well, I reckon that we'll be talking about that at budget estimates. We'll see how we're going. I think you've already addressed this, but Mr Madden told us last time that all historical data from state and territory registers will be migrated to the national register by the first week of March 2017. Did you say that that's already happened?

Ms Konti : It hasn't happened yet.

Senator WATT: When are you expecting that to happen?

Ms Konti : We're now targeting a May to June time frame for that migration.

Senator WATT: How much do these ongoing delays impair women's ability to be notified of their screening requirements?

Ms Konti : They don't. Like I've said, the joint operations between the National Cancer Screening Register functions, which have been implemented now, and the joint state and territory register operations, together, provide the full service, and will continue to until the register is able to afford it.

Senator WATT: Once you get through these remaining things in May or June, how will it be a better system than what you've got right now?

Ms Konti : It will have a complete national database. Women who have moved from state to state will have a full screening history made available to the pathology laboratories that do the test. That's one of the elements that is completely split. It has always been split for the previous cervical screening program. Once there's a national register histories will be complete for those women who move interstate.

Senator WATT: Does that mean that there's no full screening record provided to women who move between states and territories at the moment?

Ms Konti : They get screening histories from the state and territory that the pathology laboratory requests the screening history from, and any new screening result that has come through since 1 December.

Senator WATT: If a woman has been living in New South Wales and moves to Queensland, she can get the details she needs from testing she's had done in Queensland, but not seamlessly from New South Wales?

Ms Konti : The pathology laboratories doing the tests tend to be the ones that request the screening history. If a pathology laboratory is aware of the woman's previous addresses, they can request the histories from both state and territory registers, but, typically, they'll request it from their own state and territory register and get that history.

Senator WATT: Moving to the National Bowel Cancer Screening Program, that was due to go live even earlier, on 20 March 2017, but that's been pushed back even later. Last year, Mr Bowles, the then secretary, told us that we were looking at the first part of next calendar year, being 2018. But I gather, Ms Konti, you gave some evidence to a different parliamentary committee recently along the lines that the National Bowel Cancer Screening Register planning will recommence at a point in time when we have fully delivered the registered services for cervical screening. Does that mean that there's no work even being undertaken on the Bowel Cancer Screening Register at the moment?

Ms Konti : That's correct.

Senator WATT: It's been put aside, waiting for the cervical screening program to get up and running?

Ms Konti : Yes.

Dr Studdert : I will add to that, though. It's important to note there is a current Bowel Cancer Screening Register that is run by the Department of Human Services and that remains fully operational. So there's no impact on the rollout and the continuing expansion of that program going forward.

Senator WATT: I remember we've talked about this in the past. If that's the case, why are we bothering having a new one if it's not going to be new and improved?

Ms Konti : It will be new and improved. The current bowel screening register requires general practitioners, when they are referring someone with a positive FOBT to the next phase of the diagnostics, such as a colonoscopy, to fill in a paper form to report to the register. When the transitioned Bowel Cancer Screening Register is in place there will be integration between that register and the GP software systems, as well as a healthcare provider portal, to allow general practitioners to report as a by-product of their clinical practice rather than as an extra burden.

Senator WATT: If it's been put aside for the moment, what is the new expected go-live date for the National Bowel Cancer Screening Program?

Ms Konti : As I think I mentioned to the Joint Committee of Public Accounts and Audit, there is not currently a scheduled date for that. Once the cervical screening program is fully supported by the complete National Cancer Screening Register, rather than the joint operations that we have in place with the states and territories at the moment, a new bowel cancer transition date from the Department of Human Services will be determined.

Senator WATT: Would you expect it to be this calendar year?

Ms Konti : I would expect it more likely in the next calendar year.

Senator WATT: So more likely 2019.

Senator McKenzie: I want to clarify something for Senator Singh. As I said earlier:

Post-ministerial employment

2.25. Ministers are required to undertake that, for an eighteen month period after ceasing to be a Minister, they will not lobby, advocate or have business meetings with members of the government, parliament, public service or defence force on any matters on which they have had official dealings as Minister …

As I stated, former Minister Nash ceased to have any ministerial oversight of rural health in July 2016—so that's 20 months ago.

Senator SIEWERT: I want to go to the drug-testing trial. I note Senator Di Natale was asking questions around that this morning, and I won't repeat his questions. But I want to go to some more of the details of the new legislation and ask you what the differences are, if there are any, in the new proposal from the previous one the government withdrew from the welfare reform bill?

Ms Beauchamp : Those sorts of questions should be directed to the Department of Social Services, particularly the legislation and policy responsibility. We're involved in ensuring that there are appropriate treatment services in place to support that trial.

Senator SIEWERT: I will, of course, be asking DSS tomorrow. I should have said: what is your understanding? This is obviously relevant to your portfolio, because one of the changes that I understand that is being made is reviewing—we haven't seen the legislation; I'm only going on what has been reported—and ongoing monitoring for any deleterious impacts. That's why I'm specifically asking this here, because I would've thought that would involve your department. And I want to know if you are aware of that and what your level of involvement has been so far in that particular legislation. What is your understanding of the most recent changes and the level of involvement that that will necessitate your department having?

Dr Studdert : We haven't had visibility of the current legislation and any changes, but I think it would be fair to say that we expect to continue to be involved in an interdepartmental committee on the planning for and implementation of that trial. Where there are technical questions that are relevant to the Department of Health, we would, obviously, provide that advice and support to our colleagues in DSS as appropriate and as requested.

Senator SIEWERT: Just so I'm clear, you said that you haven't had any visibility of any changes.

Dr Studdert : I will confirm that with my colleagues. No, we have not.

Senator SIEWERT: None across the Department of Health?

Dr Studdert : Not at this stage, no.

Senator SIEWERT: On the new legislation that is about to or has just been introduced?

Dr Studdert : No, we have not.

Senator SIEWERT: I find that extremely surprising. Have you been asked to give any advice—different to: what is the advice?—on possible ongoing monitoring for any deleterious impacts on participants?

Mr Laffan : The department continues to participate in interdepartmental committees with the Department of Social Services and the Department of Human Services in relation to this matter. Issues such as ongoing evaluation of any trial in this regard have been discussed in that committee.

Senator SIEWERT: How often and how recently?

Mr Laffan : I would need to take that on notice. There was a meeting in the last couple of weeks in relation to that committee.

Senator SIEWERT: This issue of real-time monitoring was discussed?

Mr Laffan : I don't have any specific details about what the monitoring program might or might not be in relation to this measure. Again, the Department of Social Services might be able to give you some more details in relation to it. I just know that the department has been engaged in a conversation about what the overall evaluation framework for a potential drug testing trial might look like.

Senator SIEWERT: To be clear, this was after the measure was dropped from the welfare reform legislation. There were ongoing meetings of—which departmental committee? There were ongoing meetings talking about drug testing trials.

Mr Laffan : There are ongoing meetings, which talk about a variety of topics within that welfare reform measure space, so not just specifically in relation to the drug trial. But we have had some conversations as part of that committee recently in relation to the evaluation.

Senator SIEWERT: That was specifically about—I can only ask about what I have seen to date.

Mr Laffan : Certainly. I'm not aware of the specifics of that conversation. I'd have to take that on notice. I know just that the overall evaluation framework in relation to the trial was something that was discussed.

Senator SIEWERT: If you could take on notice the more specific details about the nature of those discussions, that would be appreciated.

Mr Laffan : Sure.

Senator DI NATALE: I want to talk about the Commission on Narcotic Drugs in Vienna. Can the government advise who will be leading the delegation in Vienna at the upcoming CND meeting?

Dr Studdert : I will be.

Senator DI NATALE: Congratulations. Who else is going to be part of the official delegation?

Dr Studdert : It will be a delegation of colleagues from across government. My colleague David Laffan, to my right, will be joining us and a colleague from the office of drug control. We're expecting colleagues from Border Force, Australian Federal Police to join us in Vienna, probably from the European offices where they work. We'll have technical advice from Professor Steve Allsop.

Senator DI NATALE: Will he be going?

Dr Studdert : He will be going as well. He's been a regular member of our delegation for quite some years and is very well regarded by the community there. And Kay Hull will be joining us too as the chair of ANACAD.

Senator DI NATALE: Is any of the information provided around the matters raised during the visit from the delegation publicly available? What are the reporting requirements?

Dr Studdert : We certainly report to our colleagues across government. We have a standing committee. It's called something like the standing interdepartmental committee on narcotic drug issues. I can clarify that. It meets several times a year and we certainly report back to that. I think, in pending discussions with government, we are quite happy to provide advice on the issues that are raised with the Australian delegation and those that are covered. We have a meeting there. One of the side events is the meeting of the supplier providers in the listed opiate industry. That's an important meeting for the Australian government with the industry that we have here. We had an advance meeting for that last week and invited suppliers and manufacturers in the Australian industry to meet with us, to update us on issues in the industry in advance of the meeting next month. So I don't think there's any high degree of secrecy or sensitively around the issues discussed. It's a very open meeting to the NGO sector. We certainly make a point on the ground to make contact with Australian NGOs that choose to attend and involve them in side events and activities that are happening in the context of the meeting.

Senator DI NATALE: Are controversial issues like the exjudicial killings in the Philippines the sorts of things that would be raised by the delegation?

Dr Studdert : That is a matter that DFAT tends to take a lead on. In my previous involvement with this forum, we have been supported by DFAT colleagues from the post, and they take a very strong line in terms of the Australian government's position around the death penalty in drug related crimes. But it wouldn't be something that we as a Department of Health officials would raise. And if it was raised with us, we would refer to our DFAT colleagues to comment on those issues.

Senator DI NATALE: I might reserve some questions for DFAT. I have questions about the Ice Taskforce funding. Can you tell me how much of the Ice Taskforce funding has been spent by PHNs now?

Mr Laffan : In relation to the money allocated to the PHNs, there's $249 million in treatment services, and the department has$177 million of that in contract and that is from when the Ice Taskforce started through to the end of the 2018-19 financial year.

Senator DI NATALE: How much has been spent? I know you've allocated some of that funding, but I know there was quite a delay in—

Dr Studdert : To be clear, we allocate it to the PHNs and then they enter contracts with service providers. We've got up-to-date data on the number of contracts that are in place. And we could certainly take on notice to give you as up-to-date information as we have on the disbursement to service providers.

Senator DI NATALE: You don't have that at the moment?

Mr Laffan : As at 2 February, we understand that there have been 321 services rolled out so far. The value in contract at the moment—I'm not sure if that includes completed contracts or not—is $101 million with the 31 PHNs.

Senator DI NATALE: So that's $101 million of the $240 million.

Mr Laffan : Yes, in total, and of the $177 million which is currently in contract. You'll appreciate that the commissioning processes for PHNs are ongoing and that they're constantly and on an annual basis conducting needs assessments within their various areas and commissioning new services. We still have a short period of time left in this financial year, as well as the 2018-19 financial year.

Senator DI NATALE: One of the concerns I have is that I know a lot of money has been spent on community consultation. There have been community meetings. Some of the PHNs are contracting counsellors. But there's been very little allocated to treatment beds, as far as I'm aware. I'm not sure if you have that granular level of detail, but it would be interesting to know what proportion of that $101 million that is currently being contracted is in treatment, additional treatment beds?

Dr Studdert : Just to be clear, you said a lot of money was being spent on consultations. The money is very specifically for treatment services. But they take a range of forms. Not all of them are residential. Some are community based day services, counselling services through community health centres—it's a range of services.

Senator DI NATALE: But they're also—

Dr Studdert : I would hasten to say, they're not consultations as such. They're services to—

Senator DI NATALE: Are you saying there's no money spent on community meetings?

Dr Studdert : There would be some, but I don't think that's the primary intent of this funding.

Senator DI NATALE: I recognise that.

Dr Studdert : It's a treatment fund and it's intended to service clients that are seeking treatment.

Senator DI NATALE: Do you have a breakdown of that? Where that funding is going? If you don't have it, would you be able to provide it on notice? And specifically, how much money is going to additional treatment beds?

Mr Laffan : We can certainly break the money down by treatment service type, although the money going into PHNs is just one part of the story as well.

Senator DI NATALE: It's the biggest part, though.

Mr Laffan : When the funding was provided through the Ice Action Strategy, and some additional money that transferred over to the PHNs—of course they're going through and having a look through those needs assessments of service mixes in their individual areas. The department has retained quite a number of residential rehabilitation services that are funded directly on a national basis. Those contracts are with the department, not with other PHNs.

Senator DI NATALE: Of the $240 million, how much of that is a direct contract between the department and those service providers?

Mr Laffan : That $241 million under the Ice Action Strategy will all go to the PHNs to be provided to service providers.

Senator DI NATALE: How much is the additional that goes directly in service provision?

Mr Laffan : I have a figure here—I don't have a direct breakdown—where the department over a four-year period provides an extra $134 million in state-wide residential national leadership and sector capacity contracts. That's directly from the department with service providers.

Senator DI NATALE: So $134 million over the forward estimates. The $240 million is over what period?

Mr Laffan : Over the same period—from 2016-17 onwards for the four years.

Dr Studdert : To explain a bit further, before the National Ice Action Strategy was adopted and the additional $240 million for treatment services was added to the Commonwealth's funding mix, there was already some funding that the department was administering for treatment services. That is the $130 million that David referred to. Because a lot of those services are either national or across boundaries and jurisdictions, we've continued to administer that, although we are talking to PHNs about a subsequent transition where there is that option and it fits into the current geographic boundaries of the PHNs. The important thing has been to maintain those services and the funding to them while those discussions and consultations occur.

Senator DI NATALE: That has been ongoing and historical.

Dr Studdert : Yes. For some time.

Senator DI NATALE: So now we're talking about additional. That $240 million—

Dr Studdert : It's additional.

Senator DI NATALE: So you're increasing that $134 million—that's been consistent.

Mr Laffan : To give you a more fulsome picture, the total amount of money allocated for treatment services over the four-year period is $547 million. Within that, there is the $240 million which was allocated under the Ice Action Strategy for PHNs. There is $170 million that was previously paid by the department in direct contracts with individual service providers. Where they sat neatly within PHN boundaries those contracts are now no longer held by the department—they are held by the PHNs. Then there is the $134 million for which the department still retains responsibility for the contractual arrangements.

Senator DI NATALE: That $177 million—why is that separate?

Dr Studdert : That's the historical.

Senator DI NATALE: So that's been merged across.

Mr Laffan : The $177 million, if we're talking about that, is the amount that's in contract of the National Ice Action Strategy money. It's a subset of the $241 million. The $177 million is the three-year amount which is in contract, not the four-year allocation.

Senator DI NATALE: And you're saying that some of the services, where they fit in with the PHNs—

Mr Laffan : There is $170 million that the department previously filtered into individual services within the country. When they fit neatly within the boundaries of the PHNs, the department has provided that money to the PHNs—

Senator DI NATALE: And the PHNs will administer those contracts.

Mr Laffan : to go into the mix with their needs assessments commissioning processes.

Senator DI NATALE: With that $134 million, will the same process occur there?

Mr Laffan : That will be a decision for government.

Senator DI NATALE: I would like to get some sort of detail about the additional treatment beds. I'm interested in knowing how many additional beds we are getting as a result of the commissioning process of the PHNs and new contracts administered. What proportion of those are going to go to additional treatment beds?

Mr Laffan : We will be able to give you on notice some information in relation to amounts of money for residential rehab services. We can't give you a direct figure of how many beds that money buys.

Senator DI NATALE: So you have no data on what that treatment service looks like, whether we are talking mild or severe in-patient?

Mr Laffan : Price per bed depends on many factors: the model of care used within those different services; location; other factors as well.

Dr Studdert : We can take on notice to get you a more detailed breakdown of the treatment types and to give the information that we have via the PHNs.

Senator DI NATALE: I have some question on opiates, which I can put on notice. Just so I know I'm asking the right questions, does the department keep any information about opiate overdose deaths, in particular prescription versus heroin deaths? Is that something you are going to be able to provide me on notice?

Mr Laffan : The research centres such as NDARC will have that information. NDARC does an analysis of information from the Bureau of Statistics' causes of death data and the National Coronial Information System. They bring that together.

Senator DI NATALE: Do you have any concerns about—obviously there is the opiate crisis in the US, and concerns about increasing overdose numbers here in Australia. Do you, for example, keep track of whether products like fentanyl are increasing in their availability; deaths as a result of that; and obviously the bigger question about what plans you have in place to prevent an opiate crisis like we have seen in the US?

Dr Studdert : That is certainly a matter of consideration and discussion, particularly with our research centres and their ability to analyse those data and to look at trends. We are certainly very cognisant of the situation in the US. That is something we will be keeping a very close eye on, as we continue to do with all different drug types and under the drug strategy. That is something we have a monitoring watch on.

CHAIR: We'll go to Senator Patrick and then we'll come back.

Senator PATRICK: Following on from questions relating to PHN funding and ice, you provided a breakdown of the PHN funding allocations, by state and territory, on notice last year. The Department of Health grant program guidelines say funding for PHNs takes into account 'a number of factors, including population, rurality and socioeconomic factors'. Can you please, briefly, provide some more details as to exactly what those rurality and socioeconomic factors are?

Mr Laffan : The funding model for the breakup of the National Ice Action Strategy money, as provided to PHNs, has the socioeconomic disadvantaged rurality, which has different factors and different ratings in it from very remote through to urban areas, and is also weighted for—

Senator PATRICK: Is that publicly available?

Mr Laffan : I read it into the Hansard at last estimates but I don't have it with me today.

Senator PATRICK: I'll have a look at that online. I presume some of the statistics you use in there come from the census data. Would that be correct?

Dr Studdert : That would be correct.

Senator PATRICK: South Australia is struggling with the surge in use of the drug ice, recent wastewater analysis showing ice use in Adelaide was up to about 80 doses per thousand people every day. Just last week there were figures released in an article saying one baby per week is born showing symptoms of withdrawal. When you allocate the funding, do you or will you take into account factors such as wastewater analysis?

Mr Laffan : Wastewater analysis is just one source of data available to the department in understanding the nature and geographical distribution, in relation to drug use, in the country. In relation to the wastewater report itself, while it picks out a number of sites, both in cities and in various rural locations, it doesn't necessarily provide the depth or breadth of information that would make it suitable to use within a funding model.

Senator PATRICK: It's empirical data and, in some sense, is useful. If you were checking against your other factors, developed as a reasonable share of the money, would you not go back and at least run—

Dr Studdert : Certainly. We use it amongst a range of data points to validate the models that we're using. It's particularly useful in monitoring trends, particularly different drug types. That's also how law enforcement use those data, to give them an indication of what's being used in the respective communities. So, yes, it is absolutely a data source and data point that's used and cross-referenced.

Senator PATRICK: It sounds like it's not being used. I'm just wondering if you could, maybe on notice, come back and work it—

Dr Studdert : The funding is for treatment services of all drug types. Of course, there is tailoring within those treatment services for particular different drug types, and often there's dual usage of different drugs as well in treatment services with clients. As my colleague said, it's probably not as useful, in terms of allocating funding for particular treatment services, but it's certainly helpful in informing those services about the trends in particular communities.

Senator PATRICK: You talked about the money being allocated for generic and drug and alcohol programs. How do you identify, specifically, what money is being spent treating ice addictions? Do you do that?

Dr Studdert : It's, actually, quite difficult. As I said, often clients present using different multiple drugs, and it's a broader addiction problem than an individual, single-drug problem. I'm sure there are research data that give us more insights into that, but the National Ice Action Strategy money was for treatment services, broadly.

Senator PATRICK: I understand you're not using it inappropriately; I'm just wondering if there's anyway we could look at understanding—

Dr Studdert : I think with time and the collection of data we will be able to look at that, and we actually have a very strong research sector and good data collection from the services. In terms of monitoring ice use, we also have the National Drug Strategy Household Survey, which is done every three years. That gives us probably the best data on trends in particular different drugs and their use. Because it's quite a large survey, it's quite powerful in understanding population-wide trends.

Senator PATRICK: All right. You said this will get better over time, so if you could just have a look at how you might look to extracting information about specific treatments and maybe give some advice back on notice as to how you might approach that and in what time frames.

Dr Studdert : Yes, certainly happy to do that.

Senator PATRICK: My former colleague Senator Kakoschke-Moore had a discussion about funding of local drug action teams. Round 2 applications have been announced, and there have been six LDATs announced in South Australia so far. Has round 3 been announced?

Mr Laffan : Round 3 has both opened and closed. It closed a short time ago. There were applications from across all states and territories for that round.

Senator PATRICK: So do we know who's successful yet, or has that not been announced?

Mr Laffan : No. Part of the process from here is for the expert panel to get together to make an assessment of those applications, and there will be an announcement in due course.

Senator PATRICK: So we're still at six in South Australia from the previous rounds?

Mr Laffan : Correct.

Senator PATRICK: Thank you. I have a very quick question that relates to a constituent of mine, a Mr Xenophon. He lives in Hartley—

Senator KENEALLY: I'm sorry, can you identify him? I'm not familiar with him.

Senator WATT: He makes bad videos.

Senator PATRICK: Yes, he does that. I think Senator Griff might tell you something about that. That's his masterpiece. Mr Xenophon had an application in relating to ISDS costs. He went through a very painful FOI process and managed to get a ruling from the—so the nature of the request was that he was requesting the total legal costs invoiced to the Commonwealth of Australia in relation to the ISDS arbitration between the Commonwealth and Philip Morris Asia Ltd. I seem to recall that was before your time, Secretary. There was a conversation about whether or not this would end up in the AAT, with the then secretary suggesting that that would be up to Mr Xenophon. But it turns out now it's up to you. I know we're still within the 28 days. Are you likely to release that information to Mr Xenophon?

Ms Beauchamp : I'm well aware of the case, and it's still in train. We're going through a number of processes, so it's not likely to be released in the short term.

Senator PATRICK: Well it has to progress before 28 days are up, otherwise your appeal right actually expires.

Dr Studdert : We're mindful of that date. As has been indicated through this process, it involves multiple parts of government and we are in the process of consulting about that and considering the response to the Information Commissioner.

Senator PATRICK: So we'll get a response one way or another by the date. Let's hope it's not an application sent to us for an AAT hearing. For the Hansard, I can see some blank faces. I won't press it any further. Thank you very much.

Senator KENEALLY: I note that Senator Watt said he had some friends in Health to talk about some of his important issues. I hope to develop some friends in Health to talk about an issue close to my heart, and that is stillbirth. Do we have someone here from the department who can answer questions around stillbirth?

Prof. Murphy : We could try, Senator. It's not an area of my expertise, but we could certainly take things on notice and follow things up if necessary.

Senator KENEALLY: Thank you, Professor Murphy, I appreciate that. I'm mindful of the time, so, out of courtesy to my fellow senators, I may be quite happy to put some of these questions on notice. Does the Department of Health or any other associated state or federal funding source provide funding, directly or indirectly, for stillbirth research?

Prof. Murphy : I suspect that the NHMRC would have provided such funding over the years. I'm pretty sure. We'd have to contact them to find out how much and over what time, but it would be a topic that would have had applications for NHMRC funding and is likely to have had some funding over the years.

Senator KENEALLY: Thank you very much. I have a number of subquestions on that that I'm happy to put on notice. Does the Department of Health or any other associated state or federal funding source provide funding, directly or indirectly, for prevention measures, including information or other campaigns?

Ms Flynn : We don't provide money for prevention measures generally, but in the specific case of listeriosis, which can cause miscarriage or stillbirth in pregnant women—it's a foodborne illness—there is information provided on the FSANZ website about foods to avoid when you are pregnant and also the states and territories provide information around that same topic. In terms of generally, I don't think we provide any funding for prevention measures.

Senator KENEALLY: Thank you. Again I have some subquestions, but I'm happy to put those on notice for the department. Does the Department of Health record the number of stillbirths in Australia each year?

Dr Hartland : The AIHW publishes data on stillbirths regularly. Since we had notice that you were interested in this topic two publications have been brought to our attention. One is on perinatal deaths from 1993 to 2012, and that was published in October 2016. They also do a regular report on Australian mothers and babies, which looks at the rate of stillbirths.

Senator KENEALLY: So the most recent data available then through the AIHW is 2012?

Dr Hartland : I have some data for 2015 from the Australian mothers and babies publication. The 2012 data looks to me—and I haven't been able to review the publication in detail, I'm sorry—like a regular kind of time series data that they would do.

Senator KENEALLY: Again I have a number of subquestions that I'm happy to put on notice for the department. You mentioned those two areas. I understand that the ABS also collects data on stillbirths. How does the Department of Health use the data that is available from these various sources?

Dr Hartland : Health is a very data-driven department, as you'll find out when you make more friends in it. We monitor trends across a range of diagnosis and disease categories. If we see changes in trends or incidents then we address it. But, having said that, I don't have anything specific that I can offer at this stage without going back and looking at it in a bit more detail.

Senator KENEALLY: I will put some questions on notice. This will be my last question on this. If we can go back to those two sources of data you have just cited, from 2012 and I think you said 2015, is there a headline figure—for example, the number of stillbirths per year—that each data source points to?

Dr Hartland : In 2015 perinatal deaths, which are both stillbirths and very-close-to-birth deaths, were—

Senator KENEALLY: Sorry, if I can be clear for the record. The definition you are using of perinatal includes both stillbirths and babies who were born alive but died—

Dr Hartland : Within 28 days. Yes, that's right. That's an unfortunate rate of nine per 1,000 births, and that's around 2,800. Of those, 2,160 were stillbirths, so that is around seven per 1,000, and 689 or 690 were neonatal, so that's around two per 1,000.

Senator KENEALLY: And what about 2015?

Dr Hartland : That is the 2015 data.

Senator KENEALLY: And the 2012 data, then?

Dr Hartland : I don't have that with me. I'm sorry.

Senator KENEALLY: Okay. Thank you very much. I appreciate it.

CHAIR: I believe that is it for 2.4. I believe we can release the officers for 2.4 insofar as you're not required later on.