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Address to the Australian Pharmacy Professional Conference, Gold Coast.

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MINISTERIAL SPEECH Senator the Hon Joe Ludwig Minister for Human Services

Senator for Queensland

Friday 3 April 2009

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Address to the Australian Pharmacy Professional Conference

Gold Coast

Friday 3 April 2009


Thank you for inviting me here today. I would like to start by acknowledging the traditional owners of the area, and I pay respect to elders both past and present.

The Pharmacy Guild of Australia has made a significant commitment to IT and eHealth initiatives - and you are building on this progress through your discussions at this conference.

I appreciate this opportunity to talk with you and outline some key developments in this vital area from the perspective of my Human Services portfolio, in particular the agency you deal with every day - Medicare Australia.

My aim, and the Australian Government’s aim, is to provide better services for our customers through innovation and technology. It’s about increasing the use of electronic solutions in service delivery and in health services.

These will shape the way we do business together - and I’m confident about this future, especially if the example of pharmacy is followed elsewhere in the health sector.

You have embraced technology and electronic solutions and made them work well for your business - and most of all for your customers.

Our focus

Many of you are small business people - and the Rudd Government is acutely aware of the important role you play in our economy.

As pharmacists you also are an integral part of society - you’re a trusted source of advice to millions of Australians you deal with everyday.

These interactions are now taking place in a changed economy - the initiatives you are discussing today are taking place in a vastly different context than at your last annual conference.


This adds another challenge when trying to implement change, deliver better services and improve efficiency.

The Rudd Government is determined to do everything we can to help small businesses in the face of the global recession.

As part of the $42 billion Nation Building and Jobs Plan, we are providing an additional $2.7 billion temporary tax break to small and other businesses to encourage them to invest.

For the 2009-10 income year, the Government has also reduced the GDP adjustment from 9 per cent to 2 per cent, aligning it with the expected Consumer Price Index (CPI) growth of 2 per cent for 2009-10, as forecast in the Updated Economic and Fiscal Outlook.

The reduction will provide cash flow benefits to around 1.5 million taxpayers, cutting their PAYG instalments by around 6 per cent. This will ensure that their PAYG instalments more closely approximate their actual income tax liability for the year.

Those business owners who pay their GST quarterly will also benefit. The Commissioner of Taxation has advised that he will use the 2 per cent adjustment factor when he calculates GST instalments.

These measures; along with the Small Business and General Business Tax Break - shows the Government’s commitment to supporting small business and bolster confidence in the face of the global recession.

In a similar way, we realise that real progress on reforms to improve service and efficiencies can happen only both customer and provider benefit from the changes.

Online claiming for PBS

Online claiming for PBS is an excellent example of what can be achieved in electronic claiming - and of the strong working relationship between the Pharmacy Guild and Medicare Australia.

Take up of online claiming for PBS was achieved much faster than was expected. It is now an integral part of pharmacies’ business.

As at 25 March, there were 5,070 pharmacies claiming online. This represents over 97% of community pharmacies. Currently 98.2% of scripts are lodged online out of a total of approximately 190 million scripts per year.

There is no doubt that the Pharmacy Guild of Australia’s support for online claiming was a critical factor in its success. It speaks volumes about the willingness of community pharmacy to embrace IT-based solutions.

Pharmacy deserves credit for this and can look forward with optimism, both in terms of pharmacy’s role in government service delivery and patient care services.

Online claiming for MBS

Critical to PBS Online's success is its integration with dispensing software.


This means the claim process is streamlined with existing business processes, something I spoke about last week as being critical to fast take-up of new solutions.

I also spoke about the shortcomings of Medicare Easyclaim as a stand-alone solution that imposes re-keying of information that practice staff have already entered into their practice management software.

I can announce today that the Government will be offering subsidies for the design, development or roll out of solutions which will effectively integrate Medicare Easyclaim with practice management software.

This initiative comes in response to feedback from medical practices about the lack of integration - a key ingredient for success as demonstrated by PBS Online.

It is now time to start thinking about how we can build on the success of online PBS claiming.

This streamlining of processes will allow Medicare Australia to be more responsive, to address potential issues at a much earlier stage and will also prepare for the time when paper is no longer needed.

We have a shared interest in taking this work forward - as it impacts on the way pharmacies do business, as well as the future of Medicare Australia’s operations.

This work has already begun and much of it is based on feedback received during audits of pharmacies about the length of time taken for Medicare Australia to approach pharmacies with the scripts extracted from claims. Medicare Australia is looking to streamline this process.

Where pharmacy claims information may indicate non-compliance valued at under $5000, Medicare Australia will make contact with the pharmacy and seek an explanation on the basis of the electronic data alone.

In cases over $5,000, a sample of 10% of the documents will be reviewed before making contact with the pharmacy and seeking an explanation.

However, in any situation where the pharmacy requests a document review, the documents will be retrieved and reviewed.

ePrescribing and dispensing of medicines

ePrescribing and dispensing is a key building block in delivery of the electronic health environment.

They’re at the centre of current thinking, with electronic medication management identified as a priority in the National E-Health Strategy. 1

Medicare Australia is actively involved in these discussions - particularly as they relate to claiming and compliance.

ePrescribing offers many benefits to the community, doctors, pharmacies and to the government, including:

• reduction of red tape - with the possibility of removing the need for paper prescriptions to be sent to Medicare Australia;

1 The National E-Health Strategy page 12


• streamlined business processes for pharmacy - reducing the need for re-keying of prescription details;

• improved patient safety through better script legibility; and

• potential for improved data for policy making - data is more accurate, complete and timely.

These other benefits are possible, with appropriate privacy protections:

• improved consumer access to their own medication information;

• improved prescriber access to patient medication information (for example, what medication was supplied as opposed to what was prescribed - pharmacists can legitimately supply variations e.g. generic brands and dosage) which supports clinical decision making; and

• electronic storage of information provides an opportunity to streamline and strengthen PBS compliance activity, thereby maximising the likelihood that medications are supplied to the right people.

Medicare Australia has also provided support for some small scale trials of ePrescribing such as the Northern Territory point-to-point trial in an aged care setting and the community based electronic transfer of prescriptions trial.

These trials use Public Key Infrastructure technology to ensure the safe and secure transfer of electronic prescriptions.

I know that no-one is more aware of the benefits of ePrescribing and dispensing than the Pharmacy Guild of Australia through your involvement with eRx Script Exchange.

I look forward to continuing discussions with the Guild about the new system - as well as some of the other IT based initiatives you have been developing under the eGuild banner, including:

• Project Stop; and

• Find a Pharmacy.


I mentioned earlier that pharmacy was at the forefront of changes to service delivery and the increasing focus on eHealth solutions.

State and Territory Health Ministers have endorsed the National eHealth strategy.

State and Territory Ministers are saying that:

”E-Health will enable a safer, higher quality, more equitable and sustainable health system for all Australians by transforming the way information is used to plan, manage and deliver health care services.”

- National E-Health Strategy, 2008

The Human Services portfolio, through Medicare Australia, is actively involved in the development of several initiatives in this area - many of which have implications for pharmacy.


I will touch on a few of these - including the Unique Health Identifier (UHI) and the National Registration and Accreditation Scheme (NRAS). All of these initiatives are underpinned by IT.

Unique Health Identifier

One of the fundamental building blocks for e-health is the development of the Unique Healthcare Identifier (UHI) - a national health care identification service.

UHI service will be used to confidently and uniquely identify people and organisations involved in health care across Australia, including pharmacists and pharmacies.

Let me make it clear - no clinical information will be held on the record.

As a registered pharmacist you will be entitled to a HPI-I, with a future plan of this functionality being provided through a single National Registration and Accreditation Scheme.

This number will remain with you for your practicing lifetime.

The current Medicare Australia provider number and associated claiming processes, including Online claiming for PBS, will not be affected by the introduction of the UHI service.

One of the benefits will be provider-facing web browser access, made available through the Health Professionals Online Services channel, so pharmacies can search for customers’ UHI. This will be available through the Medicare Australia internet site.

Medicare Australia was contracted in December 2007 by The National E-Health Transition Authority (NEHTA) to design, build and test the UHI service.

The Service will leverage existing Medicare Australia organisational infrastructure such as our Consumer Database, Provider Directory System, Public Key Infrastructure, online services capabilities and business infrastructure.

Full UHI services are expected to be operational by 2010.

National Registration and Accreditation Scheme (NRAS)

The Government is also delivering better outcomes for the health sector by working with all the jurisdictions to implement a National Registration and Accreditation Scheme. An intergovernmental agreement was signed by the Council of Australia Governments (COAG) in March 2008.

The agreement will create a single national registration and accreditation system for a wide range of health professions including pharmacists.

The benefits from the new arrangements include:

• reduced red tape as health professionals will need to register once instead of each time they wish to practise in another State;

• promotion of a more flexible, responsive and sustainable health workforce as these health professional groups will be able to move around the country more easily ; and

• improved safeguards for the public resulting from a single source of registration information.


The new scheme will also ensure a professional who has been banned from practising in one place is unable to practise elsewhere in Australia.

The National Scheme is expected to be fully implemented by 2010.

National Compliance

Despite the significant developments in ehealth, compliance still needs to be at the forefront of electronic solutions for service delivery.

Bear with me if I seem to stress the point, but it’s important a vital system that involves $30 billion dollars of taxpayers’ money is secure and functions for the greatest good.

We need to work together to ensure individuals and health providers are aware of their rights and responsibilities in the electronic health system.

Medicare Australia’s National Compliance Program works to maximise the number of people who voluntarily comply with their obligations and to minimise noncompliance.

The compliance approach includes an appropriate mix of education, support, deterrence and enforcement to encourage high levels of voluntary compliance.

I’m confident Medicare Australia will work with pharmacies through a proportionate education and audit program.


Medicare Australia will make it easier for health professionals and staff to understand PBS compliance obligations through the provision of high quality learning and support.

Over the years, Medicare Australia has supported a growing number of universities and other tertiary organisations with education for new pharmacists. Since 2007, it has supported approximately 100 sessions for 5500 pharmacy students and graduates.

Medicare Australia provided pharmacy assistants in training with educational presentations and workshops on the PBS.

In 2009, it is developing PBS eLearning for pharmacy and will be working with the Guild on education for pharmacists’ assistants.

Administrative Position Statements

Medicare Australia and I welcome feedback from the Pharmacy Guild, including suggestions on possible PBS topics requiring clarification to ensure that the process is relevant, efficient and effective.

It’s assisting health professionals to understand both compliance and program requirements through what Medicare refers to as Administrative Position Statements.

These are authorised and documented positions on Medicare Australia’s interpretation of the Medicare Benefits Schedule (MBS), PBS, and other programs administered by Medicare Australia.


The immediate focus is on Medicare, but some PBS priorities will be identified over time.

These Statements are being developed in response to feedback from health professionals. Medicare needs to provide a single and consistent position on matters requiring administrative interpretation to help with compliance.

So far, five draft Medicare APS have been released for public comment on the Medicare Australia website.

Where to next?

The Australian Government is committed to Medicare - a system that has marked its 25th anniversary this year.

It delivers Australians payments in the order of $30 billion.

Each year Medicare Australia processes around half a billion transactions, through 30 programs.

The Rudd Government is focussed on providing greater choice and convenience to the public and providers.

To achieve this, it wants to drive the further uptake of electronic claiming. The majority of these payments are made directly to providers - doctors, pharmacists, aged care services or allied health providers. Only 12% go directly to consumers.

This highlights the increasing role of providers - including pharmacists - in delivering programs.

In PBS and Aged Care almost all payments are made directly to the provider and Medicare bulk bill payments are assigned by the patient to the provider as well.

Pharmacy has been at the forefront of these changes through the Online claiming program for PBS.

Service delivery and health sectors will continue to evolve rapidly in the coming years. There is still much work to be done.

Pharmacy will continue to play a central role - and indeed a leading role.

Thank you.