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Community Affairs Legislation Committee
Department of Health

Department of Health


CHAIR: I welcome Senator Fiona Nash, the Minister for Rural Health, representing the Minister for Health, and officers of the Department of Health and the Australian Institute of Health and Welfare. Minister, would you like to make an opening statement?

Senator Nash: Good morning, Chair, and no, thank you.

CHAIR: Thank you. I will now go to questions. Senator Gallagher.

Senator GALLAGHER: I have some general questions in this area, and will kick off with the report in the West Australian newspaper yesterday. I am not entirely sure what it is around, or whether it is around the scope of work, but that is what my questions relate to. Is the report in the West Australian correct in terms of the work that it is saying that the health department is undertaking?

Mr Bowles : The report in the West Australian in essence is correct, in that the department is doing work around contestability of the payments around Medicare and aged care. Some of the characterisations in that article and subsequent articles around the outsourcing of Medicare writ large are not correct. I just want to make that clear up front. This is about looking at contestability around the payment system, which is an outdated system that is probably anywhere out to 30 years old and that does need to be revitalised in this modern age.

Senator GALLAGHER: Some reports—and I think it may have been in the West Australian—said that this work started in 2014; is that right?

Mr Bowles : That is correct. There was a request for information—I cannot remember exactly when, but I think it was late 2014—where we looked for the provision of medical and pharmaceutical benefits claims and payment services. So that is where it all started. That request for information went out about then. We have been assessing things. Subsequently a new RFQ went out in January this year, to start to look at how we might scope this type of work, stressing that obviously we are in an exploratory stage and no decisions have been made. In order to think in an innovative way about the future of payment systems in Health, we want to have a look at this sort of angle on it.

Senator GALLAGHER: Can you let me know what has happened between late 2014 and January 2016? That seems to be a long time.

Mr Bowles : When we went out in late 2014, it was about trying to understand from industry, that commercial sector, what was available. Once we had received that, by 2015, we did a whole range of internal thinking about how we might want to do that. With the machinery of government changes in the latter part of 2015, where aged care came back, we wanted to look at the aged-care payments issues in a similar type of context, because they are run in the same way through the Department of Human Services. Basically we just kept working through that. This was never a fast-track issue; it was something that we wanted to think quite deeply about. We have been thinking deeply about it and we went to the market again, as I said, in January this year to select someone to help us think about how we might progress this debate, again recognising that that has not been put to government for decision; therefore it is not a fait accompli.

Senator GALLAGHER: I can understand that it has not gone to the government for a decision, but presumably with a piece of work of this size there would be government approval for this work to be undertaken.

Mr Bowles : That is correct.

Senator GALLAGHER: Would that have gone through standard government processes—

Mr Bowles : Yes, it would have.

Senator GALLAGHER: Through the cabinet or the minister through to the cabinet?

Mr Bowles : Through the normal processes, through the minister.

Senator GALLAGHER: Did that occur back at the 2014 stage?

Mr Bowles : I cannot remember exact dates. I would have to take that on notice if you want exact dates around some of those things.

Senator GALLAGHER: That would be useful.

Mr Bowles : Initially it would have gone through the normal process. There was a decision to test the market, we tested the market, and clearly the decision to then go to a request for tender goes to the minister and decisions are made through that process.

Senator GALLAGHER: In essence, the 2015 period has been about talking with industry; it has been continuing the RFI?

Mr Bowles : It is more internal to us, trying to work out how we position this and how it actually looks. We have to work with the Department of Human Services, who currently run the payment system. I might add that the secretary of human services and I talk quite regularly about these sorts of issues. This is work that emanates from our department because we are the policy department, but we do nothing without working with the Department of Human Services on these issues. That is what we were doing through the main part of last year. Again, this is not something that we focused on every day of 2015; it was one of the projects that we had. As you would be aware, there are quite a few reform activities happening in the health space at the moment, so it is just one of those.

Senator GALLAGHER: The actual idea to go out for a request for information in late 2014: where did that idea originate from? There is some mention of it in the Commission of Audit. Was it following that?

Mr Bowles : It was before my time, I would have to say.

Senator GALLAGHER: Was there a direction from the government to pursue that recommendation?

Mr Bowles : Clearly, governments make the decisions around these sorts of issues. There was a decision made to go out in an RFI in that 2014 period—it was Minister Dutton at that point in time—and to see what the market would tell us. These things are not unique to what we are talking about. We have the HICAPS system in Australia that has been out there for a number of years—a very successful payment system. In the US and other places, they have payment systems. We are talking about the payment system. We are not talking about any of the policy parameters of Medicare; we are not talking about the health provision angles of Medicare. We are talking about the payments. As most people who have had a bit to do with the payment structures would know, including the doctors that use the system, cheques and silly things floating around the system are an inefficient way these days to deal with payments, with the new technologies.

We want to be thinking about those new technologies because we are in the tap-and-go thing at the moment. To be frank, the way that technology is moving, tap-and-go will probably disappear in a few years time and there will be something new and different again. We want to be able to keep pace with technology. People do everything by their phones, their iPads or their tablets these days. We are just trying to explore all those options to simplify the process for the consumer about how the system is dealt with in that payment context.

Senator GALLAGHER: In terms of the work that was done in 2015 internally, as you say, was work done on the capacity for government to do this work itself—the scoping of the work required? Also, are you costing what it would do for the government to have innovative technology available to itself to deliver this?

Mr Bowles : As I have said, I have regular sessions with the Secretary of Human Services, as do officials in my department with officials in her department. We have not costed to do this internally. The Department of Human Services are doing their own work around costings for the welfare payment system that is known as WPIT—I could not tell you what the acronym means, but it is about the payment system for welfare. The conversations we have had are that it is complex on that side. We need to update the technology around the payments for Medicare and aged care. The conclusions that we came to there were that we wanted to just test the market to see what availability there is out there. There are systems, even in the Australian market, like the HICAPS system—and I am not picking that out for any particular reason; it is just one that is quite identifiable in the Australian context. There are different ways to look at payments today. So that is the conclusion we have come to at this stage. We will use the current processes to further develop this and put that to government for government to make a decision. Those decisions will go to some of the very basic issues: do we outsource, do we insource, do we do it ourselves, do we do things? If I were to be really frank about technology, we are probably not going to be the most innovative in that particular space. We are very good at setting up infrastructures and architectures, but there are some really innovative ways of approaching some of these things today. We just want to be aware of those; we want to think about how we do that. We could get to the end of this process and say, 'Yes, that's a great idea, but we can do that.' We might come to the end of this process and find, 'That's a great idea; we have no chance of doing that.' We just want to have the opportunity to look at all those issues.

Senator GALLAGHER: So, in terms of being able to provide all of that information, surely having a look at your internal capacity and costing and going through the process of assessing that would be part of this work. But I think you said earlier that you have not—

Mr Bowles : We have not specifically done this in the context of the Medicare system, but Human Services have done a lot of work in the context of the welfare system, and that is a significant exercise in its own right, with similar challenges and similar costing issues. So, when you add those two together, I think we are talking about something of a massive scale that is probably not achievable in the time frames that I would be thinking of.

Senator GALLAGHER: Have you been specifically asked not to explore what it would mean for this work to be done by government—improving the payment system by government?

Mr Bowles : I have not had any explicit conversations with anybody that tell me to do one thing or another. We are exploring the options in a contestability framework, which is government policy, around our payment systems.

Senator GALLAGHER: Can you update me on exactly where the project is up to today?

Mr Bowles : As I have said, we have just gone out for a request for quotation in January this year. We have gone out to a group of consulting firms to be able to assist us with some of the work to develop up the proposal. So that is pretty much where we are.

Senator GALLAGHER: How have you chosen those firms?

Mr Bowles : We have used the Department of Finance standing panel for management advisory services. So we have looked at that panel arrangement and we have selected a number of firms. We are still to hear back, obviously—we have not got the answers to it.

Senator GALLAGHER: Are they the ones that are in the newspaper article?

Mr Bowles : I cannot remember. I did not focus on the newspaper too much, I am afraid.

Senator GALLAGHER: Really?

Mr Bowles : Yes—funny about that.

Senator GALLAGHER: I find that hard to believe, somehow. It was in one of them, but it had Deloitte—

Mr Bowles : It will be the normal big firms in Australia, and Deloitte will be one of those.

Senator GALLAGHER: Maybe in the interests of accuracy, could we have a list of those?

Mr Bowles : We will take that on notice and give you a list.

Senator GALLAGHER: Thank you. Also I would be interested in going back to the request for information on the industry organisations that you spoke to at that stage.

Mr Bowles : Yes. No worries; I will take that on notice.

Senator GALLAGHER: Is it correct that bids to design the business case are due in the next fortnight?

Mr Bowles : That is probably about right. Yes, that is right.

Senator GALLAGHER: So yes, they are. It seems to be pushing along at speed for something that kicked off—I am trying to get my dates right—if there was internal discussion in 2015, in January. So that has been a four- or five-week process.

Mr Bowles : Yes, normal tendering arrangements when we are asking for these types of services. We want to get someone on board to work with us. That is not saying that the next part of this process will be four or five weeks, because it will not. It will take some time to work up the next part of this process.

Senator GALLAGHER: Is that all on AusTender?

Mr Bowles : It normally would be. I have not specifically checked, but we put these things on AusTender.

Senator GALLAGHER: I find it a bit hard to navigate AusTender, I have to say.

Mr Bowles : Everything goes up on AusTender that is over a certain thing, so I presume it is on AusTender, yes.

Senator GALLAGHER: So the request for quote—

Mr Bowles : will be on AusTender.

Senator GALLAGHER: scope of work, would have been on AusTender. I do not know whether someone has it.

Mr Bowles : No, it may not be, because we got it off a panel arrangement. We got it off the Department of Finance panel. But I can give you those on notice—the firms that we went to. I think we went for eight firms through the Department of Finance panel.

Senator GALLAGHER: I am sorry; I am not fully across the Commonwealth's procurement processes, but does that allow a faster process? What is the benefit of going through the panel?

Mr Bowles : It does allow us to go direct to a group of firms, because these firms have been prequalified and all that sort of stuff. So we can go to those panels and request the services that we require through that. That is effectively where we are going.

Senator GALLAGHER: But then at some point that has to be a transparent—

Mr Bowles : Yes.

Senator GALLAGHER: publication of what—the agreement? Mr Cahill, do you have something? You are nodding.

Mr Cahill : We did send the request for quote to eight companies, as you mentioned. They are the companies identified in the media report.

Senator GALLAGHER: You did read the paper, then.

Mr Cahill : I did read the paper, thank you. The quotation period closes at 2pm this Friday. As the Secretary says, there is a standing panel that we have gone to. So it is a select group that we have gone to, which we have chosen to give us a good opportunity to engage with the sorts of services that we are interested in acquiring. Of course, whatever the outcome of that RFQ is would need to be gazetted in the normal way.

Senator GALLAGHER: At the moment can we have access to any information about what the scope of that request for quote is?

Mr Bowles : Not at this stage.

Senator GALLAGHER: And that is because of the panel arrangement?

Mr Bowles : There are a whole lot of commercial sensitivities and we do not want to put ourselves in a difficult situation with commercial arrangements, either. So we will gazette the outcome of this and we will be quite open about what is actually being looked at.

Senator GALLAGHER: At that point.

Mr Bowles : At that point.

Senator GALLAGHER: When is that envisaged?

Mr Cahill : We expect to probably make a decision on the advisory services by the end of February.

Senator GALLAGHER: Do you have a budget for it? What is the budget allocation? I do not need the specifics, necessarily.

Mr Cahill : I do have a budget for the task force, which obviously incorporates the initial costs of the consultancy services and the establishment of the task force for this financial year. That is funding that has been drawn from within the department, so no initial funding has been provided from any other source.

Senator GALLAGHER: The budget is?

Mr Cahill : It is $5 million.

Senator GALLAGHER: That is one year's allocation?

Mr Cahill : That is for the balance of the current financial year.

Senator GALLAGHER: So the task force was established late last year?

Mr Cahill : The task force was established when I started in the department on 11 January.

Senator GALLAGHER: That is not an insignificant amount for six months work, basically.

Mr Cahill : That is quite right. I have probably been—and the Secretary might say this—quite generous in my estimate, so it remains to be seen how much it would actually cost. We do not have enough information available to us to really be precise about this at this point.

Senator GALLAGHER: I understand that we are going to another senator, so just to finish for the time being—but I will come back to this—who are the members of the task force?

Mr Cahill : For the first week that was me, myself and I. I have managed to expand that to five people, all officers of the department. I am in the process of recruiting additional resources, which I hope to bring on fairly quickly, and they of course will be supplemented by the advisory services we have talked about.

Senator GALLAGHER: Once your task force is fully operational, how many staff are you expecting?

Mr Cahill : I am still negotiating that, but it will probably be in the order of 20 people.

Senator GALLAGHER: And they are all going to be officers of the Department of Health?

Mr Cahill : There will be a core group of people, departmental officers. As the task force proceeds with its work, they will be supplemented by subject matter experts who will come in and out of the task force—and not just from within the department, but from other departments, such as the Department of Human Services and the Department Veterans Affairs, as we develop the work further.

Senator GALLAGHER: Do you have a terms of reference for your task force?

Mr Cahill : No, we do not.

Senator GALLAGHER: So they have not been established?

Mr Cahill : No.

Senator GALLAGHER: Why is that?

Mr Cahill : We are in the process of doing that. I referred to the numbers in the task force to date, so there are a lot of things that we are doing immediately. That is certainly one of the tasks: to set some proper governance around the work we are doing, which includes a terms of reference for the steering committee that will govern that.

Senator GALLAGHER: I might come back to that.

CHAIR: Thank you. I will now go to Senator Smith.

Senator SMITH: Congratulations, Mr Cahill. Some of us work very hard to get our names in TheWest Australian newspaper—

Mr Cahill : That does not include me.

Senator SMITH: For all the right reasons. Just by way of background, Mr Cahill, can you share with us what your experience is around these sorts of projects?

Mr Cahill : I have been a public servant for 40 or more years and I have policy and operational background across a wide range of areas in various departments and agencies. I have been the chief executive of an agency. I have undertaken significant procurement work in my previous experience and also corporate services and governance.

Senator SMITH: Thank you very much. I will start with you, Secretary, if I could. When I came into the committee, you were giving some evidence around time lines and you said that in 2014 work was being done. Which part of 2014—the first half or the second half?

Mr Bowles : The second half.

Mr Cahill : It was August 2014.

Mr Bowles : It was the second half, yes. There were a whole lot of conversations. I only started in October. I think things started around that August period and I really got engaged in it after I started. So it was late when we were dealing with the RFI outcomes.

Mr Cahill : I can clarify that, if you wish, Secretary. On 8 August, 2014 the then minister issued a media statement announcing the expression of interest going forward as part of decisions made in the 2014-15 budget.

Senator SMITH: Was any work being done prior to that point? Was any work being done prior to September 2013 in regard to a project like this?

Mr Cahill : We are talking 2014.

Mr Bowles : No; talking about the election. I could not say. I was not there, and neither was Mr Cahill. There were other people who were responsible for this. I would suggest that there would be conversations going for long periods of time around the payments system that is run by Human Services. It is probably a question best directed to them because they were the ones responsible for that at that particular point in time.

Senator SMITH: I would hope that there was a conversation happening in the previous government around improving the experience for consumers of Medicare payments—absolutely. You have talked about the current process being inefficient. Can you elaborate on why it is inefficient and how it is inefficient? I have read reports of 600 million transactions. Would you characterise it as paper-based or would you characterise it as a digitised process?

Mr Bowles : It is a mix of just about anything and everything that you want to think about.

Senator SMITH: Is it a mess?

Mr Bowles : Medicare has grown to deliver over a million services a day now. So significant transactions go through Medicare itself, and then we have aged care on top of that. So there is a significant amount of transactional work to make sure that doctors and others are paid through this particular system. I do not know the intricacies of the system, other than that it is very complex. If you look at the system diagrams of this, you would probably lay it out on the floor in the middle here; it is that sort of level of complexity. It is built on technology that is now probably 20 to 30 years old.

Senator SMITH: So it is inefficient because it is 20 to 30 years old. It is complex, which sounds like a technical word; I would probably call it a bit of a mess. Would you characterise it as paper based?

Mr Bowles : Parts of it are. It is still built on an IT system obviously, but there are paper issues, there are cheque issues, there are all sorts of things that still float through the system.

Senator SMITH: How would you describe the customer experience at the moment?

Mr Bowles : I can only describe my experiences when I go to the doctor. Again, it is complex for patients. It is not that obvious sometimes, particularly in the bulk-billing context, what the payment structures are, because a lot of people would not even actually know because it is between doctors and Human Services around the payment issues. The feedback we get of course is that it is a frustrating system for patients and doctors—and doctors in particular, I think.

Senator SMITH: I am probably more interested in the patient experience than the doctor experience. Mr Cahill, would you elaborate? How would you demonstrate that it is an inefficient process at the moment?

Mr Cahill : I am just scratching the surface. There is probably not much more that I can add to what the secretary has said. But I think that it is just not about the experience currently that those using the system have; it is about what happens into the future. So you are talking about systems, as has been indicated, that have evolved over probably 30 years. Those systems clearly are in need of development; so there is a need for investment in systems anyway. This process is really about making sure that, in going forward and making that investment, you do so in a way that is very consumer centric, that is user friendly, that is flexible, that is agile and that can cope with future policy development in a way that is responsive to the community's needs.

Senator SMITH: Do you have any information about the timeliness or lack of timeliness that customers might be experiencing at the moment, something that in your project would be improved upon or would be expected to be improved upon?

Mr Cahill : Again, it is early days for me to probably comment too much on that. Clearly, going forward, we want to make sure that that experience is much better than the experience that people have today.

Senator SMITH: I would hope so. It has been characterised as the privatisation of Medicare; is that accurate?

Mr Bowles : I might take that one. No. It is looking at the commercial possibilities around the payment system around Medicare. Talking about the privatisation of Medicare conjures up a whole lot of things around privatising the medical services in that, and that is not the case. This is about looking at options around the payment systems for Medicare and aged care.

Senator SMITH: That is right. Specifically, to quote the minister, the project is investigating ways to digitise its transaction technology for payments. It is a big stretch to be calling it the privatisation of Medicare when—to make sure that I am clear on this—it does not go to issues around eligibility or policy?

Mr Bowles : No.

Senator SMITH: This is an investigation of ways to digitise the transaction or the technology for payments.

Mr Bowles : That is correct. Just to make it very clear, government policy around Medicare and all of those rebate issues such as bulk-billing and all of the things that go to make up the entirety of our system is a matter for government. As senators would know, we have a whole range of review activity into the MBS around some of the item numbers. We are also looking at the whole issue around primary health care through our Primary Health Care Advisory Group—all the things that will come to government over time that go to Medicare more broadly. This issue is specifically around the payment mechanism once all of those policy decisions are made in the normal course of events by governments of the day.

Senator SMITH: Mr Cahill, are you familiar Centrelink's Express Plus application?

Mr Cahill : No.

Senator SMITH: It has been reported in the press. Your name was not in that article. You may not have gone to it; I understand that. It is an application that currently exists in Centrelink. It does 68 million transactions. Rather than being accused of having a sneaky plan, you could be accused of taking too long if Centrelink is doing these sorts of things already.

Mr Bowles : I cannot comment on that.

Senator SMITH: Finally, I want to go to a comment that John Deeble has made. Are you familiar with John Deeble? Do you know who he is?

Mr Bowles : Yes.

Senator SMITH: Who is John Deeble?

Mr Bowles : He did a lot of work in the early days of Medicare—Medibank and worked in that in whatever it was—the sixties or seventies.

Senator SMITH: John Deeble is reported as saying today—and the article regards him as co-authoring proposals in 1968 that were used to form the Hawke government's Medicare and before that the Whitlam government's Medibank—that he had no problem with the efforts to make payments more consumer friendly and faster. This is a quote from Dr Deeble: 'It won't necessarily alter Medicare because it's the structure of Medicare, what money you get for what service, that matters, not who does the running of it.' Would you agree with that comment, Mr Bowles?

Mr Bowles : That is effectively what I have been saying, I think, about the basic tenets of—

Senator SMITH: It is a very powerful endorsement from the author of modern Medicare.

Mr Bowles : I am so glad.

Senator SMITH: But it does have a long history.

Mr Bowles : Yes. The basic tenets of Medicare are a decision—

Senator DI NATALE: Can I just ask: Senator Smith, do you support—

Senator SMITH: No. I am on the public record as supporting co-payments.

Senator DI NATALE: Dr Deeble does not.

CHAIR: Order! Senator Di Natale, as fun as it can be, Senator Smith has the call and Senator Smith is asking questions. You will have your turn to ask questions.

Senator DI NATALE: Yes. I am just being cheeky.

Senator SMITH: That is right. I think the federal Labor health minister proposed co-payments, but that will be on the record. Mr Cahill, do you support the comments of John Deeble?

Mr Cahill : I support the secretary's comments about the comments of Dr Deeble.

Senator SMITH: Very, very wise. You will go a long way, Mr Cahill. You have gone a long way, Thank you very much, Chair.

CHAIR: Thank you, Senator Smith. I will come briefly to Senator Cameron. I know that there are some senators who want to ask questions of AIHW and, given that we have an hour in this area—I think Senator Simms was one, but he is out of the room now—I will come to Senator Cameron for a few minutes. Richard, do you have questions for AIHW or for other areas?

Senator DI NATALE: I have some questions about the Medicare proposal. I missed some of that; so I am assuming that most of them have been asked. But I have just one question on that.

CHAIR: Senator Di Natale and then I will come to Senator Cameron.

Senator DI NATALE: You were saying that your personal experience and the experience of some patients is that it can be a little confusing in terms of payments and a bit frustrating. How would you say the reimbursement of payments through private health insurance is in terms of the experience of patients and perhaps your own experience? Have you ever had to deal with that and how would you describe it?

Mr Bowles : I am probably a lucky person; I have not had a lot of health-related issues; so I have not had to do a lot of that personal stuff myself.

Senator DI NATALE: So then your earlier comments probably are not that relevant either; is that right?

Mr Bowles : I am sorry?

Senator DI NATALE: So your earlier comments then probably also apply to that as well?

Mr Bowles : I do not agree with that. I still go to the doctor and I still hand over my card and I still pay through the normal process that most of us do. What I am saying is that I have not had to go to hospital and have surgical activity done on me so that I would need to go through my private insurance to deal with those sorts of issues. But there are different technologies these days that are available around payments—that is the point that I am making—and we want to make sure that we can have a look at those.

Senator DI NATALE: I suppose the point that I am making is: would you agree that there is also frustration about payments within the private health sector?

Mr Bowles : I think there are frustrations; they are not necessarily to do with the process. I think we need to separate issues around how some of the policy issues happen in this space versus some of the payment issues. What we are talking about here is not trying to unpick policy positions around Medicare, private insurance and all that sort of stuff.

Senator DI NATALE: I suppose that all I am saying is that there is an assumption here that the only way to fix what might be some problems within the sector or within the back-end operations, if we want to call them that, is to tender those services to a for-profit provider and what I am highlighting is that some of those same issues still exist within some of the for-profit sections of the health sector. So why is there this assumption that simply transferring it to a for-profit provider will fix it and why isn't there an acknowledgement that we can do something about it without having to tender those services out?

Mr Bowles : First of all, there are no assumptions on anything at this particular point in time. There are no decisions to do this in any particular way. We are in the process of engaging consultants to help us to have a look at the broader issues of this. I do not think anyone could argue that the back-end payment structures of Medicare and the aged care systems need to be dealt with; we need to do that. We want to have a look at what might be the best way to do that and, as I said—probably before you came in—we could get all the way to the end and say, 'We can do that the same or differently and be just as good.' We could get to the end of this and say, 'What a great idea, but we've got no chance of doing that,' and we might look at a different model of doing that. So I think we have got a long way to go yet before a decision is going to be made around: is it truly that? The thing for me is that I want to be able to explore options without having to say that we have made a decision that we are outsourcing Medicare. I think that is just outrageous. What we are doing is exploring options around how to make better use of public money in the delivery of fundamental services to the Australian community. That is what our job is and that is what we are trying to do.

Senator DI NATALE: It is reassuring to hear that a decision has not been made and that there is not just a kneejerk assumption that simply privatising it and putting it in the hands of a for-profit provider means that you will get a more efficient service. If that is the starting point, I would like to be able to challenge that assumption. You are saying that is not the starting point.

Mr Bowles : Again, we are just starting on trying to really explore that. We went to a request for information in 2014; we got a whole lot of ideas back and we now want to explore some of those ideas. At the end of the day, these are decisions for government, but we need to give them information. We need to explore options before we actually give them options.

Senator DI NATALE: We are talking about sensitive health information. Do you have concerns about those privacy issues?

Mr Bowles : Clearly I have concerns about the sensitivity of information.

Senator DI NATALE: About how they would be dealt with?

Mr Bowles : But we would be making sure that those issues were being dealt with. We do that every day. We have access and have had access to this data forever, since Medicare has been around.

Senator DI NATALE: But you have control of it now?

Mr Bowles : And we will always have control of that. Just because something is done by some other group does not mean that you hand over the keys to the kingdom on everything. I think we have got to be really careful about the idea that just doing this will actually give everyone's health information to everyone around the world. With the little bit of the media that I did read about outsourcing overseas—the immediate assumption is Asia and the immediate assumption is India or something—that is just madness at this particular point in time. Nobody is suggesting that.

Senator CAMERON: Are you accusing me of being mad because I said this morning that, if you follow the banks—

Senator DI NATALE: Some people might.

CHAIR: I not saying that, but I am glad you did.

Senator CAMERON: The Philippines and India are where lots of these transactions go. Are you saying that that is not the case?

Mr Bowles : I am not talking about what other people have done. We have started a process and we are nowhere near that. As the department of health, we are very, very sensitive to the data that we hold; we are today, we will be tomorrow and we will be next week and the week after.

Senator GALLAGHER: Mr Bowles, just following on from that, your frustration is noted. I think what would help and what would be useful for the public debate is for Health to tell us exactly what the scope of work is. What are your principles, what are you ruling out? In the absence of that information, people will speculate and people will look at how these systems have worked in other countries and in other organisations and speculation will occur. So the more information that could be provided about exactly what Health are looking at—what is out, what is in—the better. If it is not going overseas, then tell us that now.

Mr Bowles : All of the things that I have been talking about tomorrow have been in the public domain since 2014 and it has always been around the payments system and the need for us to have a look broadly at the current payment system, which has been around for a long period of time and which is in need of fixing. There has been no secret of that; it has come up multiple times over a long period of time. I do not want to get into this rule in, rule out. What I have said is that we want to look at options around payments, but we are very sensitive to the need for privacy around patient data; we always are and we always will be. All of those things will be built into anything that we do into the future. We are not talking about handing over Medicare to anybody; we are talking about exploring options around how we can modernise payments that allows us to bring those payments into this current technology era.

CHAIR: Senator Cameron.

Senator CAMERON: I came in halfway through one of your answers to a question and you were talking about paper issues and cheque issues and complexity and about laying things out on the floor and having a frustrating system. Can we maybe get back to some focus on this? First of all, what is the system that we are talking about? What system are we looking at changing?

Mr Bowles : Payments.

Senator CAMERON: The DHS delivery of payments system. What is the name of that system?

Mr Bowles : It is the Medicare payments system, from my perspective. I do not get into the intricacies of what DHS do and do not do.

Senator CAMERON: Mr Cahill, you are the one that I read as in charge of dealing with this; surely you know the name of the system.

Mr Cahill : I mentioned perhaps before you came into the room that I have been engaged for a very short time.

Senator CAMERON: You do not know it either.

Mr Cahill : I do not know the name of the system.

Senator CAMERON: So you are in charge of it and you do not even know the name of the system that you are going to privatise.

Mr Bowles : Can I answer this question and reiterate this? We are looking at—

Senator CAMERON: It is incredible.

Mr Bowles : I am sorry, Senator; did you want to say something?

Senator CAMERON: No, I am listening to you.

Mr Bowles : I thought you were talking. We are looking at the Medicare payments system. If you want to ask specific questions about what the Department of Human Services do, I think they are on tomorrow.

Senator CAMERON: I know that they are on tomorrow. You do not deliver; you determine policy. DHS deliver. But Mr Cahill is looking at alternate delivery systems—aren't you, Mr Cahill?

Mr Bowles : Mr Cahill started a couple of weeks ago. We are in the process of defining the total scope of work here. We have gone to the market to engage consultants. When we actually get to that point in time, we can give more information.

Senator CAMERON: You have an army of public servants behind you. Is there any one of those public servants who can tell the secretary or the service task force leader the name of the system that we are about to privatise? Can anyone?

Mr Bowles : I am answering questions here.

Senator CAMERON: So you cannot answer my question; you do not know.

Mr Bowles : I am not going into the issues that relate—

Senator CAMERON: I cannot believe that you do not even know the name of the system.

CHAIR: Senator Cameron!

Mr Bowles : I cannot answer any more on that one.

Senator CAMERON: Okay; so you do not. So this system that you do not know the name of: is this the system that has the problem with the paper issues, the cheque issues and the complexity? Is that the one?

Mr Bowles : Again, we are at the very early stages of exploring the Medicare and aged-care payment systems. We have made no decisions on any part thereof at this particular—

Senator CAMERON: So what is Mr Cahill doing?

Mr Bowles : Mr Cahill has been engaged to start this process for me and we will work with the Department of Human Services on their system's issues.

Senator CAMERON: Mr Cahill, how long have you been employed for?

Mr Cahill : Since 11 January.

Senator CAMERON: So your job is to look at the alternatives to the current payments system; is that correct?

Mr Cahill : My job is to head up the task force that is charged with doing that task, yes.

Senator CAMERON: And you do not know the name of the system that you are tasked to privatise or look for alternatives to?

Mr Cahill : The secretary has described in the broad way the payment systems that we are talking about.

Senator CAMERON: But do you not know the name of the system?

Mr Cahill : The particular labels that are attached to the components of that system I do not personally know—

Senator CAMERON: The particular labels?

Mr Cahill : But the description of what they are has been outlined by the secretary.

Senator CAMERON: Have you had discussions with the Secretary of the Department of Human Services or with any officers from Human Services on this issue?

Mr Bowles : I have.

Senator CAMERON: I am asking Mr Cahill. Mr Cahill, have you had any?

Mr Cahill : I have certainly had discussions with officers of the Department of Human Services, yes.

Senator CAMERON: How many meetings have you had with them?

Mr Cahill : Probably half a dozen at this point since 11 January.

Senator CAMERON: Are there minutes of these meetings?

Mr Cahill : No. We are establishing a formal governance mechanism around the work, so a steering committee is in the process of being established.

Senator CAMERON: Are there file notes of the meetings, if there are no minutes?

Mr Cahill : There will be a terms of reference for that. The membership will include officers from the Department of Human Services and the Department of Veterans' Affairs and there will be minutes and records made of those meetings.

Senator CAMERON: Okay. Are there file notes of the discussions you have had with DHS at this stage?

Mr Cahill : No.

Senator CAMERON: No file notes?

Mr Cahill : I do not have any, no.

Senator CAMERON: Why not?

Mr Cahill : They have been largely informal discussions about the work coming up.

Senator CAMERON: Do you keep a diary?

Mr Cahill : As I have said, they have been largely informal meetings, informal discussions.

Senator CAMERON: Do you keep a diary, I am asking?

Mr Cahill : Not of those meetings, no.

Senator CAMERON: You do not keep a diary? You have no notes of these meetings?

Mr Bowles : I am a bit disturbed about this line of questioning in relation to what internal meetings happen between departments in relation to these activities.

Senator CAMERON: Mr Martin, you can be as disturbed as you like. This is Senate estimates and we are entitled to ask questions. You can get as agitated and as disturbed as you like. I am interested in ensuring that we have got a Medicare system that can go into the future and is not privatised. So if that disturbs you, bad luck.

Mr Bowles : I am not disturbed at all about that.

CHAIR: Order! Senator Cameron.

Senator CAMERON: Thank you, Chair.

CHAIR: No, I was not giving you the call; I was using your name before going on to suggest that we show all witnesses a little more respect. You called Mr Bowles the wrong name. We will try and stick to the right name and also—

Senator CAMERON: What did I call him?

CHAIR: You called him Mr Martin. We will stick to the correct title. But also I must ask you to show due respect to our witnesses and allow them to answer the questions. I would ask you to do that.

Senator CAMERON: I think you have got to earn respect in life. If you set about to do a task and you do not even know the name of the system that you are about to change, I do not think that deserves much respect in terms of this process.

CHAIR: I am suggesting that you will show due respect for the witnesses at the table.

Senator CAMERON: Do not lecture me, Chair.

CHAIR: I am not lecturing you; I am telling you how proceedings will go forward.

Senator CAMERON: Mr Cahill, do you have a business plan that you are looking for on this that you are going to move ahead with?

Mr Cahill : There will be a business plan, yes.

Senator CAMERON: There will be. When you were engaged, what were you engaged to do?

Mr Cahill : To head up a task force to look at the digital payment services systems.

Senator CAMERON: Is this a short-term fixed term contract?

Mr Cahill : No. I am an ongoing officer of the Public Service.

Senator CAMERON: This is a short-term task, is it?

Mr Cahill : It remains to be seen how long it takes. It may be a long time; it may be a short time.

Mr Bowles : Those questions are probably best directed at me. I am the accountable officer here. Mr Cahill was engaged to do this particular task as a task force. In the normal process of appointments, he is an ongoing employee of the Public Service and has been, as he mentioned, for some 40 years. This task: we do not have a definitive time frame. In my head at the time when we were thinking was that it is possibly a two-year type activity until we actually understand what is going. But we still need to work this through. We are in the very, very early stages where we still have not actually got the outcome of going to market around a consultant to assist us in some of these activities. We will continue to develop all of the necessary governance structures around this that will give accountability and that will deliver an effective payment structure for Medicare and aged-care payments into the future.

Senator CAMERON: But there is an effective system in place now, isn't there?

Mr Bowles : I challenge the notion of whether it is as effective as it could be. What we are doing is exploring—

Senator SMITH: He said it was not effective and inefficient.

Mr Bowles : I said 'inefficient'. I said that it was inefficient. But we are looking at what is the best way of actually looking at these payment systems into the future. No decisions have been made around the wholesale outsourcing, where it goes, who it will go to—any of those sorts of issues at this stage. We are in the early stages of this conversation.

CHAIR: Senator Cameron, before you proceed, I will just advise you that I will in a moment be going to Senator Simms who has been waiting and also to Senator Madigan for some short questioning. So I will get you to wrap up at this time before I go to them. We are due to finish this area at 10 o'clock. I would like to stick to the times as much as possible.

Senator CAMERON: That will not happen.

CHAIR: Senator Cameron, I am well aware of the standing orders that I cannot stop senators from asking questions beyond the allocated time. I would make the point that this committee has agreed in previous estimates and going forward that we would endeavour to work to stick towards times. I would just make that point. If you choose to invoke the standing order later to extend the time, it will either eat into your colleagues' time or necessitate spillovers. I would just make that point. I am very aware of the standing orders, but I will get you to wrap up with one more question now and then I will be going to Senator Simms.

Senator CAMERON: Mr Bowles, are you aware of the Public Service Commission capability review of DHS?

Mr Bowles : Not specifically. The capability review?

Senator CAMERON: You know what a capability review is, don't you?

Mr Bowles : I know of capability, yes.

Senator CAMERON: They are an important part of accountability—

Mr Bowles : Yes.

Senator CAMERON: An important part of quality delivery of service. Are you aware that the last capability review of the DHS indicated that it was working very effectively in terms of complex delivery services? Are you aware of that?

Mr Bowles : I do not know the specifics of Human Services outcomes to their capability review, but I will say that I agree with you: Human Services do a very good job at what they do, despite some of the criticisms that are levelled at them around some of these issues from time to time. I am a great supporter of the Department of Human Services and what work they actually do.

Senator CAMERON: Okay; we do not need to know that.

Mr Bowles : That does not mean—

Senator CAMERON: I have got limited time and I am trying to deal with some of the questions.

CHAIR: This is not an overly long answer. He is entitled to answer.

Mr Bowles : That does not mean that we do not look at options to make our payment systems the best they can be over time. As I have said on a number of occasions, when we get to the end of this, that may be the very answer that we come to; it may not be. That is why we are having this process now.

CHAIR: Senator Simms.

Senator CAMERON: I have not even finished my question. I will put one and one on notice.

CHAIR: Sure.

Senator CAMERON: Are you aware of what is in some areas seen as a $1.5 billion investment in the WPIT system?

Mr Bowles : I am broadly aware of that.

Senator CAMERON: Mr Cahill, are you aware of it?

Mr Cahill : Yes, I am.

Senator CAMERON: Are the discussions with DHS as to whether—

CHAIR: Senator Cameron, is there one question that you want to put on notice?

Senator CAMERON: Yes, this is it. Have you, as part of your discussions with DHS, looked at whether this massive technological development in DHS could include the Medicare payment system?

Mr Bowles : I will answer that. We have been talking to DHS through this entire process and looking at all sorts of options around payments and the answer is yes, we have always looked at whether there are options to add to the WPIT. We are also looking at the broader issues of payment systems at the moment; that is what we are doing now. As I have said, we are not ruling anything in or out—whether we continue along the same pathway, whether we redevelop in Human Services, whether we go to an external market or whether we do anything else. That is the work we still have to do before we get to a point where we can say, 'That is the right outcome for us.'

Senator CAMERON: When you come back, Mr Cahill, after the break, would you be in a position to advise me what the system is that you are looking at changing, the name of the system, the problems with the system and the options that you are looking at? Even let me know the name of the system that you are looking at.

Mr Bowles : That is the work we are about to do. We are not going to come back and give the outcome of work we have not done at this stage. We want to look at what are the best options going forward for payments for Medicare and aged-care payments.

CHAIR: Senator Simms.

Senator SIMMS: My question relates to the LGBTI health alliance. I am happy for the department or you to answer it, Minister. The National LGBTI Health Alliance was formed on 2 February by the Department of Health. It was not successful in its application for ongoing peak health and advisory body program funding, and funding for the organisation ceased in December 2015; that is what I am advised. Does the department consider it acceptable for an organisation to be informed of a final decision on their funding two months after the funding had ceased? Is that usual practice within your department?

Mr Bowles : I do not know the specifics. I can take that on notice and get the specifics of that for you.

Senator SIMMS: Yes, could you take that on notice?

Mr Bowles : That is fine.

Senator SIMMS: In terms of a few more questions about this alliance, the National LGBTI Health Alliance is the only national organisation providing policy advice to the government on LGBTI health issues. The organisation has worked with the government across a range of issues, including ensuring equitable outcomes for transgender men who are accessing testosterone, improved data collection standards on sex or gender diverse people and advising on the implementation of government services. The loss of funding will result in gaps with regard to policy advice in this area. Does the department have a plan to deal with such critical policy advice now that they have ceased funding to this organisation?

Mr Bowles : I might have to take the overarching nature of these questions on notice. Just to put things in some sort of context, when we make policy decisions that relate to specific groups, we clearly do go to some of those groups. There is not only the association; there is a whole range of other activities that we will have a look at in determining what policies there might be around an LGBTI type issue. I do not know the specifics of this, so I will take that on notice.

Senator SIMMS: I appreciate that.

Mr Bowles : But we do have an active LGBTI network internally within the department itself and we do talk about a range of those issues in those sorts of contexts. That is not really answering your question, so I will take the guts of that on notice.

Senator SIMMS: I appreciate that. Tell me a little bit about this network. How does that work?

Mr Bowles : We have a range of networks internally to help us understand our organisation and understand our staff. We have an Aboriginal and Torres Strait Islander network, a disability network and an LGBTI network. Staff members come together to discuss the issues as they relate not only to policy but to how we deal with things in the department and the like. That is a very active group in the department.

Senator SIMMS: Are they policy experts in that field or are they people of that community?

Mr Bowles : It is people of that community within the department who come together. I meet with them every now and again. I think I have one coming up this week or next week.

Senator SIMMS: But what mechanisms do you have in place to consult and engage with people outside your workplace, outside the department?

Mr Bowles : Again I can take that on notice and give you a broader answer. But when we actually look at the policy implications for different groups—and there are multiple groups that get affected by some of these things—we will widely consult with different areas around specific policy related issues.

Senator SIMMS: Who would you consult with if you do not have a funded peak body? That is what I am trying to get at.

Mr Bowles : I do not know off the top of my head. I will take that on notice and we can give you some broader areas. We do not have peak bodies in every single community group either.

Senator SIMMS: There are some particular health issues that impact on this community.

Mr Bowles : There are. Absolutely, I accept that.

Senator SIMMS: If you would take it on notice, that is fine.

Mr Bowles : Yes, I will do so.

Senator SMITH: The other point is that it is not as if there are other groups doing similar work to the LGBTI health alliance.

Mr Bowles : No, I accept that, Senator. As I said, I will take it on notice. I just do not know the specifics of that one off the top of my head.

Senator SIMMS: Thank you.

CHAIR: Senator Madigan.

Senator MADIGAN: Mr Bowles, I refer the department to AHPRA's website as it pertains to physicians and the treatment of Lyme disease. There are a number of doctors who treat Lyme-like patients who have had conditions placed on their registration such as 'only prescribe medication in accordance with the Australian Therapeutic Guidelines'. No Australian doctor can treat Lyme disease or Lyme-like illness in Australia and operate within the Australian Therapeutic Guidelines, even for a patient with overseas acquired borreliosis. Therefore every Australian doctor prescribing the internationally recommended antibiotic treatment for Lyme disease is in contravention of the said guidelines.

This situation, Mr Bowles, is unsustainable. Thousands of very sick people are sick after a tick bite but they improve when prescribed antibiotics. Given that the health minister accepted the recommendations of the Independent Review of the National Registration and Accreditation Scheme for health professions that AHPRA's responsiveness to consumers should be improved, could the department please advise what will be done to address this issue?

Mr Bowles : I might ask Professor Baggoley or Dr Lum to give you some more detail about some of the broader issues because it is a very long and complex question. Professor Baggoley, we might start with you.

Prof. Baggoley : Thank you for your questions. I am aware you had a long conversation with Martin Fletcher, the chief executive of AHPRA, on Monday and covered a whole range of areas there. You have asked a lot of questions and I might need to be reminded of one. But you raised the point that borreliosis could not be treated under our therapeutic guidelines. Dr Lum, our principal medical adviser within the Office of Health Protection, can provide advice on that one.

Dr Lum : Thank you, Senator Madigan, for the question. In terms of borreliosis—that is an infection caused by bacteria of the genus Borrelia—certainly in Australia we are able to treat that infection. If you are referring specifically to classical Lyme disease, we certainly do see patients with classical Lyme disease who have acquired it overseas. We are definitely able to treat that.

When it comes to the patients who are presenting with chronic debilitating systems, those particular patients, if they do have a confirmed infection caused by a Borrelia burgdorferi sensu lato, can definitely be treated. For those patients where the diagnosis is either difficult or in dispute, trying to work out what is causing their illness is the nub of what the department is trying to do in its work with these particular patients.

Senator MADIGAN: At the previous Senate estimates, Dr Lum, I raised my concerns that doctors are being targeted and are having restrictions placed on their ability to practise. You and Professor Baggoley assured me that this was not the case. Just recently we had a doctor in Melbourne, leading up to Christmas, who had conditions placed on his ability to practise and treat people that are suffering from chronic disease symptoms. Could you inform me where these people are supposed to go when it seems that seven doctors across the country to whom these people go to seek treatment have been either knocked out or had conditions placed on them that severely restrict them in helping these people? Why is it a crime that these doctors are trying to help these people and give them relief?

Prof. Baggoley : As Mr Fletcher advised you on Monday, neither AHPRA nor the Medical Board are targeting doctors who are treating Lyme disease. I know you have had that discussion. When complaints are raised by members of the profession or the public with the Medical Board, the Medical Board is obliged to investigate according to its legislation, and to take action as is required under its processes.

Where these investigations have been raised, they have come through from, as I say, complaints that have been made. They are not being made de novo by the medical board. Doctors who they might hear about that are treating Lyme disease are not being targeted. I think, Senator, you are aware of that.

It is important, though, to come back, to the issue of the patients who are suffering from these chronic debilitating illnesses. There is no doubt there is quite a division and certainly a weight of opinion on the side of the infectious disease specialists and pathologists in this country who say there is not likely to be a unitary cause for their condition. So each patient will have to be considered on their own.

We have contacted our colleagues within the Department of Health and Human Services in Victoria, alerting them to this problem. Certainly there are some infectious disease specialists who are having patients referred to them. I am not sure how many and what their treatment is required to be. We think this is something that the public health system needs to engage with because we are really concerned about these patients and their problems, as are you, Senator; I respect that.

Senator MADIGAN: Professor Baggoley, I appreciate your answer. I note that you pointed out to me that I had a meeting with AHPRA, but the said gentleman at AHPRA told me that these doctors that have had conditions placed on their ability to practise can refer their patients on to other doctors. But they have been to countless doctors. I have visited hundreds of people, I might add, Professor Baggoley, in New South Wales, Victoria and Queensland, who say they cannot get treatment. The doctors who treat them, and treat them successfully, are being knocked out. So who on earth are these doctors supposed to refer them to when these people have been to countless specialists and GPs and received no treatment?

Prof. Baggoley : I think this gets to the nub of the problem, Senator. When these patients refer to our leading infectious diseases specialists in this country, with whom we trust the management of all infectious diseases in any other setting, these specialists are still requiring and needing more evidence than we have now that what they are being asked to treat is in fact Lyme disease.

We are working, and we have worked over the last three years, to try to bring these together. We cannot get in the middle of that doctor-patient relationship. It is not our role. But it is our role to point out to the medical community more broadly that we have patients who have real problems, who need care, and we need them to work together to come to a solution for these patients with major problems.

If a leading specialist in infectious diseases has a patient in front of them, looks at all the evidence they have and does not believe they have Lyme disease, a Lyme-like illness or something that requires intravenous antibiotics for a very long time, we cannot say, 'But you must treat that.' We trust them, and we trust them in all other cases.

It does come back to the fact that there are many patients—and I receive petitions online; I receive letters from this doctor's patients in Victoria. You read of patients who have been quite unwell and who have been given treatment, which is complex treatment—antibiotics intravenously, often over a long period of time, plus other treatment—and who do feel better and who do come good. And then they are really concerned that, by not having access to that doctor and his treatment regime, they are going to deteriorate—and some believe they already have—and that is a problem. But it is going to be solved by bringing people together. As to the issue of the specific practices of some of these doctors, which may or may not relate to the treatment of Lyme disease, how they treat it or other factors, this is not the place to go into that.

Senator MADIGAN: Thank you, Professor Baggoley. That still does not answer the question for these people who are suffering. If you have not personally visited people, like I have, in their homes and spoken to their families, none of what we were told at the previous Senate estimates or what you have told me now will deliver any comfort or any solutions for these people. The rhetoric and the reality at the coalface don't marry up.

Prof. Baggoley : In regard to the way forward for these patients, I am aware that you have described some of these patients being treated by other doctors as being treated 'worse than mongrel dogs with mange'. That isn't going to help, either. We need to have a multidisciplinary approach to these people, get our best brains together—

Senator MADIGAN: When is it going to happen, Professor Baggoley? In the meantime these people are suffering. Their families are going to hell in a handcart—

Prof. Baggoley : I understand that.

Senator MADIGAN: and all they're getting is lip service.

Prof. Baggoley : What would you have happen, Senator? I realise you ask me the questions, but I know that was a question that was asked of you a few days ago.

Senator MADIGAN: Professor Baggoley, I am not a GP. I am not a specialist. You are a professor. Dr Lum is an expert in his field. But these people are suffering. I cannot ignore that. I am asking you what is practically being done to address these people's illness. Rather than just telling them to go away and roll up in the corner and die, what is the department proposing to do to get some positive outcomes for these people?

Prof. Baggoley : The department, again, does not manage the clinical conditions or the clinical treatment of individual patients. We work with, and we have been in contact with, the Department of Health and Human Services in Victoria, pointing out precisely the problem that you have pointed out. We have been in contact with at least one specialist who also is looking for similar help. No-one wants to abandon these people. No-one is saying they should be put in a corner to die. But we come back to a fundamental issue—not just in this country but around the world—of the treatment of people with chronic symptoms as a result, in many cases, of a tick bite. There are some doctors who believe that this is a Lyme-like disease and long-term antibiotics are a problem. And we do have this doctor in Victoria who has restrictions on his practice. This does present a problem. We are hoping that, through working with Victoria and the specialist community there, those people working together will come up with an answer.

Senator MADIGAN: Thank you Professor Baggoley. Thank you, Chair.

CHAIR: Thank you. Senator Lindgren.

Senator LINDGREN: Professor Baggoley, I have just read some of the documents around Lyme disease as well. When a patient sees a doctor, would they do a process of elimination based on blood test results? Or does it present as possibly an autoimmune disease, and then they start going through the different tests before they even get to a Lyme disease prognosis?

Prof. Baggoley : I might ask Dr Lum to comment on this, given that he is a practising pathologist as well, but when a patient presents with any condition there is a diagnostic process to go through. There is clinical history, there is an examination, there are tests to be undertaken. Then there is a process of elimination as you go through. It might be a process of treatment and diagnosis, seeing what happens and then coming back to this. Many of these patients have symptoms that are quite dissimilar to other patients. It is not as if it is in the chronic form of what we are calling a 'chronic debilitating illness'. Many patients don't fit a nice pattern. The acute illness of tick-borne Lyme disease, which is seen overseas and when people come from overseas back to here, is pretty straightforward. It is a clinical diagnosis—a short course treatment of antibiotics and people get better, usually. Dr Lum, you may want to add to that.

Dr Lum : Thank you, Professor Baggoley. In terms of the presentation of patients—and we will start with classical Lyme disease—you are right; where the disease is endemic, you have pathognomonic signs, like an Erythema-Migrans rash. Because it is an endemic infection in those particular places—which means that it is found commonly and it spreads commonly—then a diagnosis just on sight is usually able to be made. That can be reported for surveillance purposes and treatment can occur.

For the patients we are seeing in Australia, where there is no evidence of it being classical Lyme disease, they are presenting with a constellation of debilitating, usually chronic, symptoms; so for example, chronic fatigue, headaches, sore joints, sore muscles. Some of them are experiencing muscle spasms. Others are reporting what they describe as 'cognitive fogging' or difficulty with being able to think, with being able to do simple mathematics, et cetera. For those particular patients it is difficult. There is a long history in terms of investigation for patients with chronic fatigue. More and more is being learned about chronic fatigue syndrome as a distinct syndrome.

The other important feature with autoimmune disease is that many of these patients also present with symptoms that are similar to other chronic diseases. So, for example, many patients will have symptoms consistent with motor neurone disease, multiple sclerosis, Parkinson's disease. Some patients who are much older and who fit into the definitions for dementia—Alzheimer's dementia, particularly—will also have symptoms that may overlap. The difficulty is that for many of these patients who have very straightforward diagnoses—usually made by a consultant neurologist for that particular group of disorders—their treatment may be not as straightforward or as easy as they would like. We see this with all human beings. Not every treatment that we expect to work will always work; so patients will often look to potentially other causes. We live in a day and age where one of the really good things about medicine is that people are more informed, more aware, and they can look up their diagnosis and ask questions about it.

The reality is, though, that there are some patients who have been given a firm diagnosis of one of these other chronic diseases and who will then also consider that they might have another illness. While we do not believe that it is classical Lyme disease, and while the diagnosis of chronic Lyme disease is disputed and not agreed upon by the conventional mainstream medical profession, many patients believe that that is what they may have. So they will seek treatment for that ailment when, in fact, they probably do have the original diagnosis. The difficulty is that many patients will also be managed with long-term multiple antimicrobials. The problem is, some of those antimicrobials have effects on the human body that are not limited to being anti-infective. So they will actually make you feel better. So we do understand that there are patients who receive antimicrobials, start to feel better and through deductive reasoning believe that they have an infection, when in fact that may not be the case.

Senator LINDGREN: So if you did a blood test and their anti-inflammatory factors were up, your first line of defence would not be then a high dose of antibiotics over a period of time?

Dr Lum : Anti-inflammatory markers—for example, an erythrocyte sedimentation rate or a C-reactive protein—would simply imply that there is some sort of inflammatory process going on. It could be due to infection. It could be due to other causes. So, to make a conclusion that it is an infection because anti-inflammatory markers are raised is not a complete way of making a diagnosis and not really a very good way of managing a patient.

Senator LINDGREN: Okay. Thank you.

CHAIR: Senator Di Natale.

Senator DI NATALE: Just a couple of more general questions. Do you have an update on the latest figures for total health expenditure?

Mr Bowles : I might get someone.

Senator DI NATALE: On another topic, while we are waiting, have you have done any work, including any modelling, around increasing the Medicare levy?

Mr Bowles : No.

Senator DI NATALE: Nothing like that?

Mr Bowles : I had to think then what you were talking about—the actual Medicare levy?

Senator DI NATALE: Yes.

Mr Bowles : No.

Senator DI NATALE: You know that thing that we all pay?

Mr Bowles : You got me with that one—but no, we haven't.

Senator DI NATALE: That was a little fishing exercise, but you never know—sometimes you catch something. I have a few questions around obesity but, given the time, I am happy to put those on notice. I am interested in the latest figures on health expenditure.

Mr Bowles : Are you talking about—

Senator DI NATALE: Total health expenditure.

Mr Bowles : Because we have the aged care components.

Senator POLLEY: There is not enough for aged care; I just put that on the record.

Mr Bowles : No worries, Senator. It is a total of around $85.1 billion, including aged care and sport: so $68.7  billion on health, $16.1 billion on aged care—

Senator DI NATALE: What year are the figures for? What year are we talking about?

Mr Bowles : It is 2015-16, our current year as at MYEFO: so 68.7 on health; 16.1 on aged care and 0.3 on sport. That makes a total of 85.1.

Senator DI NATALE: How does that track compared to the previous year?

Mr Bowles : It is an increase of 4.7 per cent. I do not have the specific figure, but it is an increase of 4.7 per cent.

Senator DI NATALE: What are the components that increased?

Mr Bowles : They were 4.6 in health, and 5.9 in aged care, and a decrease of 15 in sport.

Senator DI NATALE: Do we know what that increase is attributed to in health? What are the biggest components?

Mr Bowles : Hospital payments went up by about 6 per cent roughly, off the top of my head.

Senator DI NATALE: This is despite the fact that there were changes—

Mr Bowles : There are no changes in place at all at this point, until the 2017-18 year.

Senator DI NATALE: Yes, you are right, sorry.

Mr Bowles : Someone might have the exact figure, but it is around the 6 per cent for hospitals. Medicare is still growing; I think it is around the 4 per cent still. So overall it comes up to that 4.6 per cent.

Senator GALLAGHER: Is that broken down into what is contributing to those increases, like the Commonwealth expenditure—

Mr Bowles : These are our figures.

Senator GALLAGHER: They are—not total?

Mr Bowles : No, not total. So if I look at the total figure, roughly around $155 billion is spent on health care. It is probably up a bit at the moment. But a rough percentage is: Commonwealth, 41 per cent; states 27 per cent, and the private sector in the broad is about 32 per cent—just to give you a broad perspective.

Senator DI NATALE: So that $150 billion I had was 2013-14.

Mr Bowles : Yes, that is probably about right.

Senator DI NATALE: That is the most up-to-date?

Mr Bowles : I don't have any further one. We do?

Mr Cormack : No, that is the AIHW.

Senator DI NATALE: The most recent figures?

Mr Cormack : The $154.6 billion is the AIHW health expenditure Australia report 2013-14. That is the most up-to-date on that basis.

Senator DI NATALE: Good; thanks.

CHAIR: I am conscious that we are about a half hour over time. Senator Gallagher, did you have some more in this outcome?

Senator GALLAGHER: Yes, I do. I have some questions around the flexible funds. At last October's estimates it wasn't entirely clear where all the changes and reductions in expenditure were going to flow through. I have gone back and had a look at the questions on notice and your evidence, Mr Bowles. Can you update the committee now?

Mr Bowles : I could probably do that on notice, Senator, to give you an updated answer to specifics. I think I gave you a table on notice—

Senator GALLAGHER: There was a table, yes.

Mr Bowles : around the flexible funds. I can give you that on notice, if you like. When we deal with all the ins and the outs, I think the total has roughly gone from about 12.3 down to about 11.8 in total numbers. But I will give you that on notice.

Senator GALLAGHER: That is good. You will take that on notice. I still have some questions that hopefully you can answer here. Do the 16 flexible funds remain?

Mr Bowles : I do not want to sound evasive. What we said last time was that we were in the middle of reviewing all of the funds. We are looking at a new outcome structure for the future, which I cannot obviously talk about because that is in the context of the upcoming budget rounds. What we are looking at is: is there a way we can look at health expenditure to make it more obvious in an outcome structure perspective? As we sit today, all of the funds still exist. There is no intention to get rid of the outcomes within those areas, other than to realign them over time. We will look at that. That is probably a good question for the May estimates, because we will have it in the context of the budget then.

Senator GALLAGHER: There are changes afoot?

Mr Bowles : Only into the structure, not what it is.

Senator GALLAGHER: Where you have, say, chronic disease, health protection, workforce, rather than having specific streams for those grants, what you will be looking for is outcomes as set presumably by the department about what you want to see in workforce?

Mr Bowles : Yes, exactly.

Senator GALLAGHER: So you would want to see a reduction, say, in the prevalence of diabetes?

Mr Bowles : Yes. It will be something along those lines, trying to get a better alignment. If you have a look at our outcome strategy, we have 11 outcomes. It is reasonably complex to know even where to go to ask a question sometimes. We are trying to simplify that to make it a bit easier. But in the context of the flexible funds and the broader health expenditure, what we want to do is streamline the outcomes and then look at what are the program activities that are funded and how do we actually deal with it in that sort of context.

Senator GALLAGHER: Have the cuts that were announced and were subject to discussion in October's estimates and probably the May one, I imagine, been allocated? That is the $500 million in cuts to the flexible funds.

Mr Bowles : That is correct.

Senator GALLAGHER: On top of the original indexation freeze, that is about $697million. Have they been allocated across those funds and, if so, how?

Mr Bowles : That is the table I am talking about. I can give you that table.

Senator GALLAGHER: You do not have that information now? Considering this has been the subject of—

Mr Bowles : I do not know if I have got it in that form is the issue, right down to the individual component, but there was the $197 million and then there was the $596 million figure that were the flexible funds.

Senator GALLAGHER: That is $596 million out of the $962.8 million cut?

Mr Bowles : That is right. That is that 11.8 over the forward estimates figure that I gave you. But there will be some ons and offs as well in that sort of context as we streamline some of the different programs through there.

Senator GALLAGHER: Ons and offs?

Mr Bowles : Yes.

Senator GALLAGHER: That is a term I know well. So you cannot give me a table today that just in a global sense has the savings that have been allocated across the 16 different funds?

Mr Bowles : I will see if I can get that for you before the day is out.

Senator GALLAGHER: That would be really great. It may become clear from this table that you are able to provide me—but were those cuts distributed consistently? What was the process to apply the cuts? Were there funds that were less of a priority than others?

Mr Bowles : For starters, two of them were immediately discounted. Indigenous and medical indemnity were excluded initially. So only 14 of the 16 were affected. Then we really did take a look at each of the programs and the funds and looked at what they were doing. Therefore, it was not a uniform 'let's just cut down the line'. We wanted to understand what was appropriate and what was not. We have gone down that activity. That is why it is a little complex because at the end of the day we have these funds but behind that there are thousands of activities that go into this. That is why it is a little complex sometimes.

Senator GALLAGHER: Have the organisations that have relied on this funding—I think again this came up in last estimates—been advised now of what that looks like?

Mr Bowles : I think everything is out there now, isn't it?

Ms Cosson : Where we had contracts with organisations, they have remained while we have gone through this process. Where we are going out to market or whether we are looking at extensions, then we are connecting with those relevant organisations.

Senator GALLAGHER: Do they have funding secured until 30 June and then these cuts come in?

Mr Bowles : I think in that context it will depend.

Senator GALLAGHER: Some have multi arrangements?

Mr Bowles : Yes. Some will have multiyears. They will go out for another two, three, or four years in some cases probably. Some will actually finish because they are terminating programs, for want of a better term. And some will be renewed. That is a process that goes on every single year.

Senator GALLAGHER: Have those that will have funding terminating or running out, expiring, whatever you want to call it, at 30 June, been advised of that?

Ms Cosson : They will be aware of that within their contract arrangements. They will see when their contract is expiring. They will be aware and we will be in discussions with them at the next—

Senator GALLAGHER: Saying there is no money for this?

Ms Cosson : That is right.

Senator GALLAGHER: Are you able to give me any idea of how many organisations will be affected by that and where they come from, what they are doing?

Ms Cosson : I am certainly aware of the number of contracts that are ceasing on 30 June. I do not have a list of the organisations that will be affected.

Senator GALLAGHER: Whatever you can provide me with will be really useful. I understand there has been a decision not to fund the Women's Health Network and Arthritis Australia. Can you confirm that?

Ms Cosson : I will need to take that on notice.

Senator GALLAGHER: Could you maybe come back on that? I am sure there is somebody related to that in the room.

Mr Bowles : If we have the information on that, it might come up in one of the outcomes later with the relevant policy person and we can raise it then.

Senator GALLAGHER: I will try to remind myself when that happens.

Mr Bowles : We will even try to remind you.

Senator GALLAGHER: That is very helpful.

Mr Bowles : We will try to get it into the outcome.

Senator GALLAGHER: That is very helpful. Following on from this, there seems to be a health peaks fund that has been announced or is being established. I am trying to understand where that fits into the flexible funds. It seems to be a new fund. Is it?

Mr Bowles : No. I think it has always been around.

Ms Cosson : We did consolidate a few activities into a peak body fund. We ran a process where we did send out an approach to market to gain interest in this new peak body fund arrangement. Yes, that has been announced.

Senator GALLAGHER: You said you have consolidated into a health peak arrangement; so it is a new fund?

Ms Cosson : I would need to get some advice from one of my colleagues. My understanding is we had a look at what was out there actually delivering those services to consolidate how that service would be delivered in the future.

Senator GALLAGHER: So across the flexible funds you have looked at where those funds were being used to fund peak organisations and you have pulled them out?

Ms Cosson : That is my understanding but someone might be able to correct me if I am wrong.

Mr Bowles : That is correct; yes.

Mr Cormack : Yes, we have completed a funding round for the Health Peak and Advisory Bodies programme funding, which is a reconfiguration of a different range of funds. We have completed an approach to the market. We have executed funding agreements with a number of those organisations. We are still negotiating final agreements with another 10. Obviously there were a number of applicants for that fund who did not succeed in getting funding under that round.

Senator GALLAGHER: This funding has come from the other flexible funds?

Mr Cormack : That is right.

Senator GALLAGHER: Across all 16 of them?

Mr Cormack : I will need to take on notice the precise sourcing of the former 16 and how it translates into this. That is the source of funds. We have completed a round within the new fund, which is the Health Peak and Advisory Bodies programme fund.

Senator GALLAGHER: What was the budget for the health peaks, the global?

Mr Cormack : I need to take that on notice. I can give you some idea of some of the funding outcomes for individuals.

Senator GALLAGHER: I think everyone got the same amount of money, didn't they?

Mr Cormack : No. There was some reasonable variation amongst the applicants.

Senator GALLAGHER: Was there?

Mr Cormack : If you like I can run through those that we have got executed funding agreements with.

Senator GALLAGHER: Yes.

Mr Cormack : I will get the figure on the total amount of funds while I am going through that. Just going through the names that we have got funding agreements with, Allergy and Anaphylaxis Australia got $704,000 over four years; Asthma Australia, $767,000; the Australian Federation of AIDS organisations, $1.283 million; Consumers Health Forum of Australia, $1.283 million; Continence Foundation of Australia, $1.283 million; the Haemophilia Foundation, $657,000; Lifeline Australia, $612,000; Macular Disease Foundation Australia, $1.283 million; Mental Health Australia, $1.8 million; the Metabolic Dietary Disorders Association, $604,000; the National Association of People Living with HIV/AIDS, $1.283 million; and the Public Health Association of Australia, $1.283 million. The total committed is $23.7 million from 2015-16 through to 2018-19.

Senator GALLAGHER: The $1.283 million regularly pops up.

Mr Cormack : Yes. There was certainly a methodology applied. As I indicated to you, not all funds have received the same.

Senator GALLAGHER: You have 10 more to come, did you say?

Mr Cormack : Yes.

Senator GALLAGHER: Why haven't they been finalised?

Mr Cormack : We go through a process with each of the organisations where, obviously, we notify them they have been successful. We then go through the process of negotiating a final amount with them. So it is really just a contract finalisation process. Obviously some may have the need to provide additional information, get their board sorted out, just the normal sort of contractual things.

Senator GALLAGHER: Most of those were finalised in December, were they; is that right?

Mr Cormack : The round was completed last year and they were certainly notified towards the end of last year. We are just now hoping to get all of the contracts sorted out by March.

Senator GALLAGHER: Going back to Mr Bowles's point around the work you are doing to become more outcomes focused, is that why you pulled the health peaks out? Perhaps this is a better question: the health peaks funding round, or whatever it was—I think you had a different name for it.

Mr Cormack : I will ask the secretary to deal with that.

Mr Bowles : I think it is trying to get better clarity around where the funding is going rather than mixing that in the middle of all the delivery funding, if you like. We want to understand what are the different components of funding that we deliver out there. As you probably appreciate, there are a lot of people out there that talk on behalf of different parts of the community that have nothing to do with part of the community sometimes. So what we want to be able to do is focus on who are the peaks that we fund to do broad consultation and broad activities for their particular area. That is really why we are doing it, just trying to clarify that.

Senator GALLAGHER: So that $23.7 million has come from a range of the other 16 funds, which you will confirm for me at some point today?

Mr Bowles : Yes.

CHAIR: Senator Gallagher, sorry to interrupt but we are pushing up against morning tea. I want to get an indication whether you are close to finishing in this area or not.

Senator GALLAGHER: I am close to finishing in this area but I do have other questions in a general sense.

CHAIR: In the portfolio?

Senator GALLAGHER: In the whole of portfolio, yes. If I can get through those then we can sweep through the other questions.

CHAIR: If you have got a little way to go with whole of portfolio then I suggest we will break unless there are just one or two quick ones.

Senator GALLAGHER: I will finish up on these, the funds.

CHAIR: Sure.

Senator GALLAGHER: If I could also get today how many of those peaks were unsuccessful?

Mr Bowles : That could be difficult as well because when you go to the market all sorts of new things get created as well. We just do not want to necessarily do that. We can take on notice who the peaks are that may have been funded in the past that did not get funding. We could do it that way.

Senator GALLAGHER: Yes, that would be good.

Mr Bowles : We can take that on notice. As you would appreciate, I think we got over 100 applications.

Mr Cormack : There were certainly a lot.

Mr Bowles : There were a lot more applications, but from groups that we had not really heard of before.

Mr Cormack : Just to add further confusion to this: some of these individual organisations are also receiving funding from other funding pools, a number of which have a number of years to run.

Senator GALLAGHER: But they might have lost their peak funding status through this?

Mr Cormack : That is right, yes.

Senator GALLAGHER: If I could get that, that would be good. Also, just in a general sense—I am sure you have got it in a format that is available—a list of organisations expiring on 30 June?

Mr Bowles : We can take that on notice. Again, this is the complexity of these funds. Some will expire and get new funding, some will expire because it has come to a natural conclusion and some will expire because the priorities change. It is a bit complex trying to come up with the specific answer to that. We will take it on notice.

Senator GALLAGHER: As helpful as you could be. I did go back through the last questions. It referred me to other pages in the budget paper and I went there and the answer was not there.

Mr Bowles : The answers are probably there. They are very, very complex issues, unfortunately.

Senator GALLAGHER: Not in the format that it was asked for. As helpful as you can be. Then in terms of the next changes to the flexible funds, in terms of becoming more outcomes focused, we will see that in the budget?

Mr Bowles : In May, yes.

Senator MOORE: All of the peak funds that you announced at the end of last year are all four years?

Mr Cormack : Three years.

Senator MOORE: They are all three years. They all have secure funding for three years?

Mr Cormack : That is right.

Senator MOORE: Thank you.

Mr Cormack : If I can just correct my answer. It is three years and the balance of this financial year. So it is actually 3½ years. My apologies for that.

Senator GALLAGHER: You said it was over four financial years.

Mr Cormack : It is over four financial years.

Senator MOORE: So it is three full financial years and the rest of the year.

Mr Cormack : That is right.

Proceedings suspended from 10 : 47 to 11 : 05

CHAIR: We will recommence. Senator Gallagher.

Senator GALLAGHER: Finally on the flexible funds, was the $23.7 million that was the global budget for the health peaks' funding a reduction from the funding that was provided to health peaks from the various funds? Is that information available?

Ms Cosson : I can confirm that the funding that went towards the peaks was taken from three other flexible funds. Existing in those funds there were secretariat type functions, and we had applied the save to those before we actually consolidated the funds. So a save in that figure has already been applied.

Senator GALLAGHER: Are you able to tell me what the global budget for health peaks wasI am not necessarily after individual peakswhich takes it to what it is now, at $23.7 million?

Mr Cormack : If I could clarify, the $23.7 million is what is committed. There are still some uncommitted funds.

Senator GALLAGHER: Okay. So the global budget

Mr Cormack : $31.24 million.

Senator GALLAGHER: Thank you.

Mr Cormack : So there is still some to be committed. The $23.7 million is the

Senator GALLAGHER: Allocated; the ones that you have signed and sealed.

Mr Cormack : That is correct; yes.

Senator GALLAGHER: With that $31 millionthat changes my questionwhat was it prior to that? I am trying to understand what savings have been made to health peak funding.

Ms Cosson : I might have to take that on notice because we have taken the funding from a range of different flexible funds to consolidate. I do not know whether we had clear line of sight of the total amount that was provided to peaks before we did this work. That was why it was important to do this body of work. I will have a look to see if we can.

Senator GALLAGHER: Thank you. I have a few questions around the MYEFO document and the savings outlined there that build upon the savings in the budget. There is a line item that shows a save of $146 million over four years through the redesigning of 24 health programs to operate more efficiently. I have not been able to find any more information on what those 24 programs are and how they are affected.

Mr Bowles : We are still working through the implications of the $146 million over the forward estimates, because it only came out in MYEFO.

Senator GALLAGHER: December, yes.

Mr Bowles : We are going through that process at the moment. It goes to the broad programs across the departmentthings like immunisation, community pharmacy. It is the things within the broad programs of the department that do not fit flexible funds. We do things like medical indemnity, broadly hearing services, e-health, health information, research capacity and quality, health infrastructure, blood and organ, and things like that. While there are activities happening out there in some of the portfolio agencies, there are activities that happen within the department around some of those as well. That is what it applies to. We are currently working through that for the forward estimates. We will probably be in a better position at the next estimates to give you a clearer picture. What I will try and do for that is to have a table, similar to that for the flexible funds that we gave you in answer to a question on notice, that gives you a bit of an understanding of how that breakup will happen.

Senator GALLAGHER: That would be useful. Looking at how these things are done, I would expect that you would know what those 24 health programs are. You would have had to provide something, presumably, to Treasury and you would have said, 'These are the 24'

Mr Bowles : Well

Senator GALLAGHER: It is very specific in the MYEFO, that is all. It does not say, 'We're finding a save of 146 over four across.' It says 'by redesigning 24 health programs'. Treasury would not know that, so you must have come to them and said, 'We can redesign'

Mr Bowles : I can give you the programs. What I can't give you is what the $146 million means to those programs at that stage.

Senator GALLAGHER: Okay, what you are attributing to each program?

Mr Bowles : Yes.

Senator GALLAGHER: You have not decided that?

Mr Bowles : No. That is the work we are doing now.

Senator GALLAGHER: In order to volunteer the 24 programs or to come forward with the 24 programs, I am sure everyone was asked to find savings. You have come forward with 24 individual programs. You must have had an idea of what was reasonable within those 24 programs, to actually come up with a $146 million global target.

Mr Bowles : We understand across the 24 programs that that equates roughly to about a five per cent issue across the programs. It is like what we did with the flexible funds. We then have a look at each of those 24. So we will not uniformly apply a percentage cut across any single program. If we do that we might disadvantage some of them. Then we have a good look at what happens.

'Volunteering' is an interesting word. I would have to redefine it in the dictionary to come up with that. That is the process that came up with the $146 million. It comes literally from looking at the entirety of the program. We then go away and work out how to best allocate that across the 24. I can give you on notice, or I can give you later on, a list of those 24 and what they would be. At the next estimates we could try and give you a table that shows how that $146 million is applied over the

Senator GALLAGHER: Later, or on noticenext estimates, because you reckon those decisions will not be taken

Mr Bowles : That is right.

Senator GALLAGHER: I might have further questions on that once I see the programs. It is hard in isolation to

Mr Bowles : In essence, the 24 programs go right across the current 10 health and sport related programs; not the 11th, which is aged care. So it goes across all of those 10 items that we deal with in our current 10 outcomes structure.

Senator GALLAGHER: If you could provide me with that list, I might then have further questions which would come from that.

Mr Bowles : All right.

Senator GALLAGHER: I might wait to see the list and then I will come back to that issue. There is one more area that I want to touch on in whole of portfolio. It flows on from MYEFOthe pathology and diagnostic imaging cuts that were announced. I want to understand this a bit more and the history of the issue. Did the department consult with the pathology and diagnostic sector prior to those cuts being announced?

Mr Bowles : Not specifically on those cuts; no.

Senator GALLAGHER: But you consulted with them less specifically on

Mr Bowles : We consult broadly on a range of things. But in budget related matters, as has been the case forever, we do not go into the specifics of those sorts of things. We provide information and advice to the minister. The minister, and then the government, obviously, make the decisions about what happens there.

Senator GALLAGHER: Did you do a piece of work or was some work done on pursuing savings in this area that informs that advice that would then go to budget cabinet?

Mr Bowles : Yes. We provide advice to our minister, who obviously then deals with that in the context of government decisions. The whole nature of budget repair is in the government's dialogue, if you like. We have to contribute to that, like anyone else, and we look at what are the things that we spend money on that probably give the least benefit in the overall context. We have to make some of those decisions. This issue here is not about changing Medicare rebates, which is in some of the media that you see on that. This is about the bulk-billing incentives around diagnostic imaging and pathology.

Senator GALLAGHER: So you would have done some work internally

Mr Bowles : Internally.

Senator GALLAGHER: So internally, not via consultants

Mr Bowles : No, internally.

Senator GALLAGHER: around the incentives. And that would have shown up a flag to you that there is an issue with the incentives

Mr Bowles : We have to constantly look at where we spend money and where we believe it is giving the biggest impact.

Senator GALLAGHER: I get that.

Mr Bowles : If you look at pathology, where bulk-billing rates literally moved not much over a period of time, even though money was there for bulk-billing incentives, we have to give analysis to government, and governments make decisions, as to whether that is the most appropriate way to spend money? Or if there is a budget imperative, is this a way to add to budget repair?

Senator GALLAGHER: So with the save that was put up, what was your understanding of the impact that that saving would have on bulk-billing rates?

Mr Bowles : I can get someone to maybe give a little bit more detail but, overarching, we do not believe that there will be a significant impact.

Senator GALLAGHER: I think I have heard you or others say that.

Mr Bowles : Yes.

Senator GALLAGHER: What informs your belief?

Mr Bowles : If we have a look at other issues that have been floating through the health system, like the rebate freezes and things like that, the view was that that would have a significant impact on bulk-billing rates. In fact, it hasn't. There has been no discernible change in bulk-billing rates. I suppose it is more about looking at the data over time: do we actually see things? Sometimes what you see is a dip and then recovery. That is generally what you see in these things. If you look at bulk-billing rates over recent history, they still slowly climb. They are not actually decreasing, despite some of the doom and gloom predictions on some of these sorts of things.

Senator GALLAGHER: So is that work that the department did though, to predict

Mr Bowles : We constantly look at these thingsI might be able to get Mr Stuart to talk in more detailbut recognising that this will be advice to government, as opposed to something that is broadly available. We have been understanding the policy implications for a long period of time and watching what happens in different policy tweaks, if you like, around different things on bulk-billing. That is why I mentioned the predictions around the freeze that it would drop. Well, it hasn't; it has maintained. If you look at things like pathology, even with the injection of incentive money, bulk-billing rates have stayed relatively the same over time. Mr Stuart, do you want to add anything to that?

Mr Stuart : I guess our understanding is that bulk-billing rates tend to be driven in a significant degree by work force supply and by competition. Pathology and diagnostics are both highly competitive sectors with good supply in the marketplace. In particular, in pathology the bulk-billing rates, if you don't include the in-hospital services, have been in the high 90 per cents for a considerable period of time. There was no discernible effect at the time the bulk-billing incentive was implemented. We, therefore, don't see the likelihood of any significant movement in the bulk-billing rate from the removal of what is actually a relatively minor payment in the grand scheme of things for pathology.

Senator GALLAGHER: What I am trying to understand is the level, the depth of understanding, of the work that was done to understand all of the implications of this save as it went to government. I hear what you are saying. I hear what the providers are saying. I understand some of that background. They are saying it will have an effect; that some operators will potentially close. I think they have gone as far as saying that. It will certainly increase out-of-pocket expenses for patients. There has to be somewhere in between. I guess the department is saying there is going to be no impactyou just remove the $650 million and the world will stay the same.

Mr Bowles : Given that this was announced at MYEFO, we have done the work to provide advice to government. Government makes decisions and then private providers of this will make their own commercial decisions around what they do. So I do not think we can really come up with a definitive answer to say that we're right, they're right, we're wrong, they're wrong, or whatever. The issue is, if you look at other sectors where these things have been done, there has been no discernible difference in what has happened to bulk-billing rates. Our assessment and the work that we have done and the advice that we have given the minister, and therefore the government, is that we don't see a really significant change to bulk-billing rates in this space. As Mr Stuart said, with things like pathology, it is about the bulk-billing incentive, not the rebate amount. That is a completely different set of issues. Unfortunately, the two have got conflated now, and that is not what has actually happened here.

Senator GALLAGHER: In terms of the impact of these changes, are you expecting there to be a difference in regional areas compared to metropolitan areas? I think you touched on work force and competition before.

Mr Stuart : We are not expecting major differences between metro and rural. We have no basis for expecting such a marked difference. In rural areas, the mainstay of diagnostic processes is often the public hospital, as opposed to private provision for referral. They are traditionally highly likely to be provided free of charge to the patient.

Mr Bowles : If you look at out-of-hospital pathology, running at 98 per cent, it means it is pretty good across all sectors of the community; otherwise you would see significant variations in that. Even if you include in-hospital activity, it is still around 87-odd per cent.

Senator GALLAGHER: In terms of pathology, the diagnostic imaging industry has voiced their concerns post this announcement. Has the department met with them to understand the issues they have concerns about?

Mr Stuart : Yes, we have, and we are doing so. I have had a couple of discussions already and a couple more in the diary.

Mr Bowles : As have I; I have some in the diary as well.

Senator GALLAGHER: So you are actively engaging on the issues they are raising around potential closures, out-of-pocket expenses for patientsthose issues?

Mr Stuart : Yes, we are in discussion with them.

Senator GALLAGHER: Does it link in any way to the MBS review? Are they linking?

Mr Stuart : The organisations are raising that issue but we think that that is misunderstood or mistaken.

Mr Bowles : There are two separate issues here. One is around bulk-billing incentives. We will look at the broader issues of MBS items. That is up and down. That is not always a downward trajectory. I think both pathology and diagnostic imaging groups and clinicians more broadly are actively engaged in the MBS review process. Professor Robinson is actively talking with all of those groups all of the time. They are separate tracks. It is like a lot of these thingssome things might be underdone from a rebate perspective, but there are things that are probably overdone from a rebate perspective. That is a separate process.

Senator GALLAGHER: I understand. It has come up in another inquiryabout the adequacy of the rebates to begin with

Mr Bowles : That is right, and that is getting dealt with now.

Senator GALLAGHER: and the viability of the providers going forward.

Mr Bowles : The adequacy of rebates is in relation to certain thingsnot in all things diagnostic and all things pathology. Some are overdone as well. So there is all that sort of stuff that goes in. These two industries are very heavily reliant on technology and, as technologies change things become faster, and therefore sometimes cheaper, but sometimes more expensive.

Senator GALLAGHER: Potentially cheaper, yes.

Mr Bowles : Potentially. All of that plays out. We have seen that in a range of fields that are highly dependent on technology at the moment. The more quickly you can do some of these things, the cheaper it becomes or the more throughput you get, which means the more revenue, and things like that.

Senator GALLAGHER: Understood. In terms of the meetings that you have had with the industry, what feedback are they providing you with?

Mr Stuart : The feedback I am getting is probably consistent with what they are saying in the public arena. We are pointing out why we have significant reason to doubt that the things they are saying will come to pass. One of the very difficult issues that always confronts government departments in these circumstances is divining the line between what people say in terms of the private interest versus the public interest.

Senator MOORE: A very dangerous track to go downthat argument.

Mr Stuart : I think that is one of the things we always need to do. The interesting construction of the MBS is that essentially we use the MBS to underpin affordability for the consumer through a flow of funding to providers who are in the end at liberty to set their own fees. Too high and there are inflationary impacts, too low and there are other impacts. We don't have direct insight into the businesses and business models of these organisations. The issue, as the Secretary outlined, is that the minister is in a process of constantly looking for where beneficial new investment can be made, but also where there is lower value investment with less bang for the buck that needs to be brought forward.

Senator GALLAGHER: Changes to the incentives have to be tabled; is that right?

Mr Bowles : That is correct.

Senator GALLAGHER: Have they been tabled?

Mr Bowles : No.

Senator GALLAGHER: When will they be tabled?

Mr Stuart : We are in a discussion with the minister's office about the options for putting forward the required regulations. We are just working through that at the moment. This is both for pathology and for diagnostic imaging. This is an issue that needs to come forward through disallowable instruments. So we are in discussion about the options for that at the moment.

Senator GALLAGHER: The options for timing?

Mr Stuart : Yes.

Senator GALLAGHER: Or the options about how you proceed with a disallowable instrument?

Mr Bowles : That is not our call; that is the minister's call.

Senator GALLAGHER: No, I wouldn't have thought so. Around timing.

Mr Bowles : Timing.

Senator GALLAGHER: The changes are due to take effect from 1 July; is that right?

Mr Bowles : Yes; that is right.

Senator GALLAGHER: It would need to sit before the parliament for a certain amount of time?

Mr Bowles : That is right.

Senator GALLAGHER: One would imagine it has to be relatively soon.

Mr Bowles : Again, that is a decision for the minister.

Senator GALLAGHER: A decision for the ministerokay. Presumably it is going to have some impacts. Even though the changes have been foreshadowed, there will be some changes that providers have to adopt by that time as well; is that right? They won't have seen the detail.

Mr Bowles : They would have seen the detail in the context that it is removing the bulk-billing incentive. So they will understand what that means. I am sure they will be doing their own economic and business modelling.

Senator GALLAGHER: I am trying to work out the amount of time the providers will have to adopt the changes that proceed through the parliament, presuming that they do.

Mr Bowles : This is a payment direct to a provider. It doesn't go via a patient or anything like that. It is for bulk-billing. It is an incentive structure, not to do with a payment structure per se.

Mr Stuart : There have not been any issues of that nature raised with me. My understanding is that this is a payment that is being made that would simply cease being made. There is not a claim involved specifically or the need for software changes on behalf of the industry.

Senator GALLAGHER: So you would not be aware of any costs that would be required to administer the changes by the industry providers other than the loss of the money?

Mr Stuart : Not to implement the change in itself, no.

Senator GALLAGHER: To administer the changes, yes.

Mr Stuart : That is right.

Senator GALLAGHER: I think I have seen the claim that the potential is for pathologists not to bulk-bill for a pap test. What do you say to that? Would that result in women having to pay the full cost up front?

Mr Bowles : That will be a decision individual companies, I suppose, will make. Let us be clear. The tests are done and then the pathologists do their work. What we are talking about here is taking away the incentive for bulk-billing. We are not changing the rebate for pap tests in this specific case. If there is a broader issue around whether the rebate is appropriate for that, that is an issue in the medical benefits review process that we will look at in the context of the work that we will do in that particular space. This is one of the ones that have been characterised as the rebate having been changed. It has not. It is the bulk-billing incentive to do that.

Senator GALLAGHER: To bulk-bill?

Mr Bowles : To bulk-bill. If a provider decides to not bulk-bill, yes, of course there is a cost to an individual patient. But then what is the driver for some of those business decisions is something that is beyond our control, but I do not know specifically what the incentive is. We are talking about it being in the $1 to $3-type mark. We are not talking about dramatic shifts in the actual rebate itself.

The broader question might be in that context: is the rebate appropriate? That is not up for us at the moment. That is something that the NBS review will have a look at at some stage.

Senator GALLAGHER: What is the Medicare rebate for a pap test now? Do you know?

Ms Jolly : Currently the Medicare rebate for a sitology item for pap smear is the NBS fee, which is $19.45. There is also a patient episode initiation amount which goes to the collection of the specimen, and that is $8.20.

Senator GALLAGHER: Has the department tried to understand if pathologists did not bulk-bill what the out-of-pocket cost would be for a patient?

Mr Bowles : I think it will depend on the business model of the pathologist potentially if the rebates are around that $19 and $8. Let us not forget that tests can still be done by the doctor under Medicare, under the normal process. This is only the testing of the activity, if you like. It depends on the business model, I think. I stand to be corrected, but it will be dependent on the business model of the pathology group around how they deal with the particular testing in these particular cases. If there is a view that the $19 and the $8 and all that stuff is not appropriate, as I said, that will come up later. The issue at stake here is the amount that is currently paid as an incentive directly to pathologists to bulk-bill in that component of a pap smear test.

Senator GALLAGHER: I think I got all that.

Mr Bowles : It is complex because you have got your doctor bit which happens through Medicare still, you have the pathology bit which is subject to bulk-billing in the majority of the cases now, definitely in the majority of cases. If you are looking at in and out of hospital, you are talking 87½ per cent. If you are talking about out of hospital, you are talking about 98 per cent of the time. If in fact there were decisions by pathologists to change that, we could not determine what price they might put on that because that would depend on their business model through poor return and a range of other decisions that they would have to make if they wanted to do that. But again, we are talking about the incentive. Again, I do not know the specific incentive payment for these things which goes directly to a pathologist, but it is in that $1 to $3 range.

Senator GALLAGHER: It might be useful for the committee to understand what the incentive is.

Mr Bowles : We will see if we can find out.

Senator GALLAGHER: I guess ultimately at the end of the day what we do not want is a situation where women, through this change, through this savings, are discouraged from undertaking this test because of the importance of it.

Mr Bowles : Absolutely.

Senator GALLAGHER: You already have issues with the human papillomavirus immunisation program that is changing people's belief about the importance of this test. That is the issue for us. If this means that women are going to have greater out-of-pocket expenses and are actually discouraged from proceeding with it, then that is not the outcome that I would imagine the health department wants.

Mr Bowles : No. That is exactly right. That is exactly why we have the NBS reviews looking at the broader issues. That is why we are only looking here specifically at the bulk-billing incentives, because the rates have not changed in this particular context in any discernible way over a long period of time, even with the significant amounts of money that go into incentives across this sector.

The government also introduced different testing arrangements into the NBS. I think that was last year. The human papillomavirus test went from

Ms Jolly : The immunisation arrangements.

Mr Bowles : Yes, the new testing arrangements. Sorry. The new testing arrangements do not come in until 2017. But that also takes it out from two years to five years. Over time all these things are changing.

Senator GALLAGHER: Women all over the country will be happy with that, don't worry.

Mr Bowles : I am sure.

Senator GALLAGHER: I think there has been a suggestion from the Australian Diagnostic Imaging Association that the rules be changed to allow patients to pay only the gap up front. Have you been talking, through the meetings and through the options, about going to the minister to consider that?

Mr Stuart : I have had a discussion with ADIA about that particular issue. The consumers tend to not favour that, perhaps ironically. On the one hand if you were to implement such

Senator GALLAGHER: The consumers, did you say?

Mr Stuart : Yes.

Senator GALLAGHER: So through the Consumers Health Forum?

Mr Stuart : Yes.

Senator GALLAGHER: Or through the peaks?

Mr Stuart : Yes; perhaps ironically. On the one hand there is an opportunity for people to pay only the gap and walk away with no more to pay. That would seem to be potentially beneficial. On the other hand, there is a feeling that allowing such a process to occur removes the incentive towards bulk-billing, which is a simpler financial transaction for the company. And it would potentially be inflationary in terms of the amount being charged to patients. Just to give you an example, if I go to my GP in Canberra I pay about $75, of which about half is the rebate and about half is an out-of-pocket cost. If we allow direct billing with a co-payment I might be charged $45 by the doctor with the same rebate. I feel as though I am better off but in fact I am an extra $10 out of pocket.

So the consumer arguments become quite interesting around this issue between the convenience of leaving the surgery with no more to pay versus the potential inflationary impact of such a measure. That discussion has gone round and round for a number of years without really finding a clear resolution.

Senator GALLAGHER: I am finally going back to the disallowable instrument. You would need to have it in parliament. How many days can it sit in the parliament?

Mr Stuart : Fifteen days.

Senator GALLAGHER: Fifteen sitting days; that is three, four sitting weeks.

Mr Bowles : Potentially, yes.

Senator GALLAGHER: My guess is that you are running out of time for that, aren't you? I just cannot see how, necessarily, you can make that timetable unless, I guess, you bring it on for debate.

Mr Bowles : Again, that is a matter for government. We will provide advice around those sorts of things but ultimately government and the minister are responsible in that particular domain.

Senator GALLAGHER: But from your point of view the work is done, the disallowable instrument is ready to go?

Mr Bowles : We are talking through all of the options now with the minister's office and we are ready to put that in.

Senator GALLAGHER: But what are the options?

Mr Bowles : It is a regulation, isn't it, and it has to go in as a regulation which is disallowable. Therefore it has to sit there. And it is about the schedule of items around this bulk-billing.

Senator GALLAGHER: What is in and what is out is being discussed?

Mr Bowles : No. It is the bulk-billing incentive that is out. But you have to make the schedule of all of those items. That is the issue. We then send that into parliament and there is 15 days for disallowance from that moment on.

Senator GALLAGHER: All right.

CHAIR: Have we exhausted questions for whole of government?

Senator GALLAGHER: If there is no-one else, I had a couple on that final matter of the Medicare task force.

CHAIR: Senator Gallagher.

Senator GALLAGHER: Mr Bowles, I think you said that when you were looking at the duration of the task force you thought it would be in the order, in a general sense, of around a two-year activity.

Mr Bowles : That is correct.

Senator GALLAGHER: I note that all of the media reportsand I know you do not always believe what you read in the mediaare indicating that this is proceeding for the budget this year. I am just wondering how you reconcile that with the two-year timetable.

Mr Bowles : I am not aware of what is in the media. But some things will go to budget this year probably and some things will go to budget next year.

Senator GALLAGHER: From the task force?

Mr Bowles : From the task force. The task force is doing things in tranches. They have provided their report to the minister. She will consider that. We will take some things forward to budget but they are onto this. I think they have already started their second tranche, haven't they, or are just about to?

Mr Stuart : Yes.

Mr Bowles : Just about to.

Senator GALLAGHER: The second tranche?

Mr Stuart : Appointing clinical committees now.

Senator GALLAGHER: Sorry?

Mr Bowles : They are appointing their clinical committees now for the second tranche of activities. There will be a third tranche at a future point. But we are looking at this going into next year as well.

Senator GALLAGHER: I have not heard about the tranches, that is all. What are the tranches of work? What we were told earlier was that there is not a terms of reference, the scope of work is to be determined but staff are coming on board. Are we talking about different task forces?

Mr Bowles : Yes.

Senator GALLAGHER: Sorry, I had finished on those things.

Mr Bowles : Let me recalibrate. I thought you were talking about the MBS task force.

Senator GALLAGHER: No.

Mr Bowles : Sorry.

Senator GALLAGHER: I had moved. I had finished that and I had moved on without advising you, it appears.

Mr Bowles : Can you ask that question again? Sorry.

Senator GALLAGHER: The media report talks about this proceeding to the budget this year. I am wondering how that aligns with your view about a two-year activity.

Mr Bowles : I am not going to go along with anything the media says about what may be in or out of the budget, to start with. But we will look at the activities that we need to undertake in the task force. We think it is probably around that two-year time frame. We will make further determinations once we have got the consultants on board and built the governance and business plans around that. I think the media referenced that they put money in the budget for some trials or something like that. I cannot remember exactly what it says.

Senator GALLAGHER: There is a proof of

Mr Bowles : Proof of concept or something or other?

Senator GALLAGHER: Yes. It confirms that there is a proof of concept to be trialled for next year.

Mr Bowles : I am not going to go into confirming or denying what might or might not be in any budget at any point of time. What I am saying to you is that we have internally funded the task force to do this activity around the payments system. Despite what you read in the media about the outsourcing of Medicare and that I am telling porkies about all sorts of things, we are looking quite specifically at the contestability around the payment systems for Medicare and aged care only. It is not anything to do with the broader issues of Medicare. And as is normal process, you would not talk about what is in next year's budget or in the May budget, basically.

Senator GALLAGHER: I am just trying to get an understanding really of how progressed the work is. From the evidence this morning it would appear that, from the task force's point of view, it is early days.

Mr Bowles : Very early days.

Senator GALLAGHER: And that proceeding for a budget timetable would seem like a very large task for a staff of 20.

Mr Bowles : Yes. I think you could take it from me that, while I will not confirm what is in or out of a budget, we will not be starting this in May this year to outsource anything. We have to do the work. We have not done the work and no decision has been made by government as to which way we might go in this particular space. While there might be something in the budget that relates to proof of concepts, I do not know; we have not really got that far. Even if we do want to do proof of concepts, we may look at that in a completely different way. We have not made those decisions. We have not even got there. We are in the very early days, and you will not see a new provider starting after the budget this year.

Senator GALLAGHER: Is there a proof of concept?

Mr Bowles : Again, we are in the early days. We will look to a whole range of things. In the normal course of events, you would probably look at a proof of concept. We do not know yet. We want to actually do some more work on that. That is why we have gone to the market.

Senator GALLAGHER: So you will not deny or confirm the existence of a proof of concept; is that where we have got to?

Mr Bowles : That is pretty much it. Again, if we want to be truly innovative in our thinking about the future, given all of the technology changes that are going on out there, we should not be in this situation of ruling in or ruling out, because that will just stifle our ability to do that. What we are about is trying to come up with what is the best way, from a convenience and cost perspective, for the Australian community more broadly around our payment systems. That is really what we are on about.

Senator GALLAGHER: Can you identify how many staff are in scope of this work?

Mr Bowles : No, not at this point. It is far too early and, again, that will be a conversation over a longer period of time, both with me and the secretary of Human Services.

Senator GALLAGHER: In terms of the decision point to proceed with this workI think you confirmed earlier that it is a decision of the executive to proceed with the workyou referenced, I think, inefficiencies and frustration with the current system. Has there been an evaluation done of the current system to identify the failings or the shortcomings or the projected, I guess, future proofing of the current system?

Mr Bowles : I think I referenced the inefficiencies and the complexity and age of the system and the need for us to actually look at what the future might hold. If you want to talk anything about the specifics of the current system, that is probably a question best asked of the secretary of Human Services because she knows intimately the details of this system. If we go again to what is the specific name of this, there is not really a specific name. We are talking about Medicare payments and aged-care payments. The number of Human Services systems that come together to do all of these things is astronomical. I referenced a systems diagram that would probably fit in this bit in the middle here; it is literally multiple systems talking to each other, multiple facets of Human Services activities that go into what I describe as Medicare and aged-care payment systems. It is that sort of thing that we are looking at. It is a 30-year-old system that has built up piecemeal, I suppose, over time, depending on different things, and it is becoming very difficult to make policy tweaks nowadays because of the age of the system and the architecture it is on because it is old and cumbersome. We have all of these new things that are happening in payments today that we need to contemplate in how we take this forward.

Senator GALLAGHER: Again, from experience, I would say that if a department came to a minister you would have to identify what the problem was. To identify what the problem was you would have to have gone through a piece of work that says, 'This is the problem we are trying to solve by embarking on this agenda.'

Mr Bowles : Yes.

Senator GALLAGHER: If that is the case, what did that say and is that information available?

Mr Bowles : That is a question best asked of Human Services because they are the ones who are actually responsible for the current system. I am not trying to be evasive, but it is not under my control, if you like.

Senator GALLAGHER: So the Department of Human Services was actually the one that would brief the executive on the work that needed to be done. Then it has been Health; this is your component of the work.

Mr Bowles : Effectively that is how it works. We are working together. I personally have had a number of meetings and conversations with the secretary of Human Services. We are aligned on our view about what actually needs to happen here: that it is an old system and it does need revamping. What is the best way to revamp this going forward? Is it the piece of work that we are now doing? While I have the policy coverage in Health, I will be working very closely with Human Services on this and, as I think Mr Cahill mentioned earlier, once we get into the nitty-gritty of understanding some of these things, we will have people from Human Services and Veterans' Affairs who are also engaged in payments.

Senator GALLAGHER: But is this a problem that Health identified and have briefed their minister about the problem, or has it been captured in work that has been done in Human Services for which Health now have a role?

Mr Bowles : It is probably a mix of all things, but ultimately it is Human Services who have an issue. Ultimately they will have to replace their payment systems at some stage. Therefore, they talk to us and we both brief our ministers about different parts of this issue. But what we are now doing is coming together to say, 'This is what we want to look at or a way we want to look at this to get an outcome into the longer term.'

Senator GALLAGHER: But it was not Health's idea to pursue it?

Mr Bowles : Again, I would not say it was our idea or their idea. I think it is our collective idea that we need to look at this in this way. As I have said, the secretary of Human Services and I are pretty aligned on our view on this.

Senator GALLAGHER: In terms of, again, patient feedback, people who use the Medicare payments system, I think you alluded earlier to frustration from all feedback. What is the source of that? Is there a survey that you do, or is that a Human Services issue as well?

Mr Bowles : It mainly will be that Human Services have more detail, but it is not only

Senator GALLAGHER: What about the doctors?

Mr Bowles : Yes. I was going to say that it is not patients who are the main users; it is actually the doctors. Again, Human Services is probably a good one to ask on that because they are the ones with the staff and they are the ones with the interactions.

Senator GALLAGHER: Through the customer satisfaction

Mr Bowles : That is right.

Senator GALLAGHER: You do not do any customer satisfaction?

Mr Bowles : Not specifically on that, no.

Senator GALLAGHER: So you would not have any document

Mr Bowles : No.

Senator GALLAGHER: or survey that says anything?

Mr Bowles : None that I am aware of.

Senator GALLAGHER: What about the AMA? Have they been included in the loop on this through the task force's work, considering that they would be key stakeholders?

Mr Bowles : Ultimately they will, but we have to actually start the work before we bring them into it.

Senator GALLAGHER: So they have not been briefed on it?

Mr Bowles : Not on the specifics, as far as I am aware.

Senator GALLAGHER: Thank you.

CHAIR: Senator Brown, do you have questions in this area?

Senator CAROL BROWN: Yes; I hope they are in this area.

CHAIR: Go for it, Senator Brown.

Senator CAROL BROWN: Thank you. I just wanted to follow up on a question from Senator Gallagher about the regulations that have to be introduced into the Senate. I am not quite clear on what the rules are surrounding the placing of disallowance instruments in the Senate. Is it possible that we could come to 1 July and the regulations have not been introduced and the system proceeds, or do we actually have to have the regulations in the Senate?

Mr Stuart : My understandingI stand to be correctedis that they must be in the Senate before 1 July.

Senator CAROL BROWN: But that does not necessarily have to be the whole 15 sitting days before.

Mr Stuart : That is technically correct.

Senator CAROL BROWN: So they could be in the last sitting days, which would be somewhere in May.

Mr Bowles : I think you probably should ask the Senate for the specifics of that because we are not experts in that space; but I think you are right where you are.

Senator CAROL BROWN: You could actually put them in on the last sitting day and we would go over into August and they would still be sitting there and the new regime would be operating.

Mr Bowles : Maybe that is technically correct, but I think that is a huge assumption that anyone would even try to do that.

Senator CAROL BROWN: I am asking about the guidelines; I am not asking whether that is what you are going to do, because you have indicated that that is not an issue for you.

Mr Bowles : No, we are not trying to do that.

Senator CAROL BROWN: But that is correct.

Mr Bowles : Again, I do not want to confirm that because I am not an expert in how the Senate operates.

Senator CAROL BROWN: There have been a lot of health regulations put in the Senate. I am sure Mr Stuart would know. The answer

Mr Bowles : I do not think he is an expert either, to be honest.

Mr Stuart : No, we are not an expert, but we do advise on issues and dates and, yes, my understanding is that that is technically correct.

Senator GALLAGHER: I am sure that a House of Representatives minister would not be an expert on Senate procedure, Chair, but that is not a reflection on ministers. I am sure that the minister would know the answer to that.

Senator Nash: Not on that particular process. Senator Brown, you know as well as I do that some of these processes are very complicated.

Senator CAROL BROWN: Anyway, we have got the answer. The answer is yes.

Mr Bowles : The only caveat I would put on that is that you should confirm that with the Clerk of the Senate because they are the true experts as opposed to us. We can give you our view on what we think that is, which we have. But if you want to be absolutely sure, confirm that with the Clerk of the Senate.

Senator CAROL BROWN: I have some questions about government responses

CHAIR: Government responses? Yes, this would be the place.

Senator CAROL BROWN: to a community affairs committee report. Can I ask those here?

CHAIR: I think that would probably be appropriate.

Senator CAROL BROWN: They are pretty quick.

Senator SIEWERT: In that case, I have some too.

CHAIR: Just before you proceed, Senator Brown, I would point out to senators that we are a fair way over the allocated timein fact, about an hour or morebut proceed.

Senator CAROL BROWN: I want to know where we are at with the government responses into the out-of-pocket costs in Australia in relation to the speech pathology community affairs report.

Mr Bowles : I do not know specifically. I might have to take that on notice, unless someone is jumping up immediately to answer that.

Senator CAROL BROWN: It is a question that has been asked reasonably regularly in this estimates committee.

Mr Bowles : Are you saying that we answered it in the last estimates?

Senator CAROL BROWN: The minister at the table did say 'shortly' about a year ago. I do not want to really put her on the spot again, but I would like to know in terms of speech pathology.

Senator Nash: My understanding is that it is still under consideration, but I will take that on notice for you.

Senator CAROL BROWN: Has the department put a response together? Let us talk about speech pathology.

Dr Southern : Yes, the department has pulled together a draft whole-of-government response to the report.

Senator CAROL BROWN: To the speech pathology report?

Dr Southern : Yes. This is the Senate inquiry into the prevalence of different types of speech and language communication disorders and speech pathology servicesjust to make sure that I am at the right one?

Senator CAROL BROWN: You are absolutely correct.

Dr Southern : Thank you.

Senator CAROL BROWN: That was 2014. When was that draft response put together?

Dr Southern : I do not have the specific date here. We would have started working on it as soon as the report was tabled. My understanding is that a number of recommendations of the report actually address issues which are most appropriately dealt with at the state and territory level, so there has been correspondence and consultation with our state and territory colleagues. Indeed, the minister has written to the relevant state and territory health ministers and other government portfolio ministers who have responsibilities in this area as well. So it is one that covers different levels of government but also different government departments. We have sought those responses and I think a couple of those are still outstanding from the states and territories.

Senator CAROL BROWN: So you are saying that the draft responses are not finalised?

Dr Southern : That is correct, yes.

Senator CAROL BROWN: In answer to a question on notice back in June, there was an indication that they are currently being considered by government.

Dr Southern : That is correct. We have been engaging with the minister's offices about the response briefing on the need to consult with state and territory colleagues and developing that correspondence. Now we are awaiting responses from some of the jurisdictions so that we can finalise it.

Senator CAROL BROWN: In terms of the speech pathology report, how many drafts have you put together?

Dr Southern : I would have to take that on notice. The process would be iterative as we are getting responses and developing the particular responses to the recommendations. But that would be an iterative process as we are receiving the feedback from the parties that we have been consulting with.

Senator CAROL BROWN: When did you start the process in regard to getting feedback?

Dr Southern : Within government, I believe it would have started very shortly after we had received the report, when it was tabled. As I say, that process has been iterative since then.

Senator CAROL BROWN: Have the draft responses been to the minister?

Dr Southern : In the context of preparing the correspondence for the minister to send to other portfolio ministers at the Commonwealth level and state and territory health ministers, the proposed draft responses to date, I believe, were provided as part of that briefing. I would have to double-check that.

Senator CAROL BROWN: Those proposed responses have gone through a number of redrafts; is that what you are saying?

Dr Southern : Yes. That would be the normal process within government in preparing a response to a Senate committee report.

Senator CAROL BROWN: Are those redrafts based on your consultations with other states and territories or with the minister's office?

Dr Southern : We have had some responses from some of the states and territories and we have had officials' level consultation with portfolio colleagues where the recommendations go to their responsibilities. Talking about it in terms of the number of drafts you go through, I would describe it more as a kind of iterative process as you develop up the proposed response. At a point in time, there will be a draft, but that will change as we get feedback.

Senator CAROL BROWN: I am more interested in whether the redrafts have been on direction from the minister's office. Since we had some belief that the speech pathology response would occur shortly, and it has now been nearly 12 months since that response that we received, could you please provide us, on notice, with a list of who you have been consulting with in terms of the government's response?

Dr Southern : Certainly.

Senator CAROL BROWN: There are the same questions regarding Out-of-pocket costs as well.

Dr Southern : I am not familiar with that particular report.

Senator CAROL BROWN: Out-of-pocket costs in Australian healthcare, presented on 22 August 2014.

Mr Bowles : We can take that on notice as well.

Senator MOORE: We know that a number of recommendations needed a whole-of-government response, because that was the way it worked. You said you had received responses from some of the jurisdictions. Is it possible to know from whom you have not received a response? Who has not answered?

Dr Southern : I would have to take that on notice. I do not have those details here.

Senator MOORE: But we can get that information. In the response that you have already agreed to give, you can give us that detail?

Dr Southern : Yes.

Senator SIEWERT: Firstly, do you give them a deadline or a time line in which to respond? Secondly, in the past I seem to recall that you have published responses that do not have all the state responses included. Are you setting a deadline by which you are just going to publish and then you can virtually name and shame those jurisdictions that have not responded? There is a hell of a lot of work that goes into those committee reports, both from ourselves and, most importantly, from the community, the witnesses and people who care very much about this issue. They are literally hanging out for the government's response.

Dr Southern : I do not have the correspondence in front of me. It certainly would have indicated a time frame within which we were looking for responses. The normal practice would be that if, come that deadline, we had not received all the responses, the department would be engaging with our counterparts to try and speed up a response, where we are still looking for it, and that is underway at the moment.

Senator SIEWERT: Surely, the deadline that you gave them would not have been virtually 18 months, which is where we are at now?

Dr Southern : No, I suspect not. As I say, I do not have the correspondence in front of me.

Senator CAROL BROWN: Can we add to the list that we are inquiring about? You can come back with information on all three of them. The other one that we are interested in is the Care and management of younger and older Australians living with dementia and behavioural and psychiatric symptoms of dementia, tabled on 26  March 2014.

Mr Bowles : We will take it on notice.

Senator CAROL BROWN: I would like answers to the questions that we have been asking about, tooacross all three.

Mr Bowles : Yes.

Senator CAROL BROWN: I have a question about Medicare service centres closing; is that in this area?

Mr Bowles : Human Services.

Senator CAROL BROWN: Okay. So the decision about closing Medicare offices is entirely up to Human Services?

Mr Bowles : Human Services. Thankfully, I do not have to deal with that one.

CHAIR: That is all the questions we have on whole of portfolio.