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Community Affairs Legislation Committee
17/10/2012
Estimates
HEALTH AND AGEING PORTFOLIO
Australian Organ and Tissue Donation and Transplantation Authority

Australian Organ and Tissue Donation and Transplantation Authority

[15:53]

Senator DI NATALE: I have some questions that may need to be directed at the authority. To recap, the national reform agenda announced in 2008 included $150 million in funding. As I understand it the goal was to establish Australia as a world leader in organ donation. Australia is ranked 22nd still, at about 14.9 donors per million of population. I am wondering if the authority considers the national reform agenda, as it is currently tracking, to be a success?

Ms Halton : The answer is yes! I can tell you what she is going to say!

Ms Cass : I can give you a precis of our outcomes to the end of 2011 and the year to date, if that would assist you. I suppose the short answer is that in the two years of full implementation of this national reform agenda—since 2009—Australia has seen a 36 per cent increase in the number of deceased organ donors, last year achieving 337 donors. We have achieved 1,009 transplant recipients, at the end of last year, which is a 25 per cent increase over two years, and 1,041 organs actually transplanted, which is a 22 per cent increase over two years. Though that means that there has been a strong increase in the last two years, by no means do we consider that the work is complete. There is much more that needs to be done to ensure that Australia continues to achieve increases in its organ donation rates.

Can I also just correct one stat in your question. In 2011 we achieved a donor-per-million population rate of 15.1.

Senator DI NATALE: What is the target for this year?

Ms Cass : The target for this year is 16.3.

Senator DI NATALE: I note that during the nine months of the year it looks like there has been a lesser number of donors than for the corresponding period in 2011. So it looks to me that you are not going to achieve that target.

Ms Cass : At the end of September 2012, we have had 256 deceased donors, which is one per cent higher than the year to date last year.

Senator DI NATALE: That sounds like it is a couple of donors.

Ms Cass : It is virtually on the knocker for recipients and organs transplanted. For organs transplanted it is exactly the same.

Senator DI NATALE: If we achieved 15.1 last year, we look like we are bang on track to achieve the same number this year. The target is 16.3, so we are well short of the target set for this year.

Ms Cass : I think we are achieving consistent rates with last year—slightly higher than last year. We have achieved a 36 per cent increase in donor numbers in two years. The key lessons we have learnt from international best practice, which are the models that inform Australian practice, is that this is not an instant reform agenda. This is an agenda that is about changing the nature of clinical practice in intensive care and end-of-life care in our public hospital system. It takes five to 10 years to achieve solid, sustained growth.

Senator DI NATALE: I suppose we might differ on the international evidence, because in countries like Portugal and Croatia, where there have been similar reform programs, they have had a much more significant increase over a much shorter period of time. So we might differ on that point. But, just to be clear, it looks like we are not going to achieve the target that has been set for 2012.

Ms Cass : I will just go first to the statement in that question. We very carefully monitor the models, the practices and the outcomes that are being pursued internationally. We particularly look at Croatia, Spain and Portugal as key comparators. As you may know, the Spanish model is fundamentally the Australian model, plus key learnings derived from the United States around managing the family donation conversation. We particularly look at the outcomes achieved in those key international comparators over similar periods to the Australian reform agenda—so in the early years of implementation in Spain, Portugal and Croatia—and the rate of growth that Australia has achieved in the first two years, which is 1.9 average over those two years, is comparable if not better than many of those countries. Croatia's average rate of growth in its first two years was in the order of 0.8 DPMP. They have certainly achieved significant growth in the more than 10 years in which they have implemented their reform agenda, with incredibly strong growth in the last year or two. But the point to be drawn from that is that it is an extensive work program they have implemented, and that we are also implementing, which is about training staff, monitoring staff performance and reviewing performance and strategies to continually improve identification of, requests to and consent of donors.

Senator DI NATALE: Again, I take your point on the data, but I also recognise that there has been a significant increase over a short period of time shortly after the implementation of additional resources to this area, in some countries. I am looking at some of the evidence in the document before me. But I do not want to be distracted by that point.

Ms Halton : Can I just make one point. A large number of people think this is easy to do. They think—

Senator DI NATALE: I probably do not need a lecture on how difficult it is. I just want to ask specific questions.

Ms Halton : I understand that. But we get told this all the time by a bunch of people who think they can do this better and that this is not up to scratch. We have spent extensive amounts of time looking at the international evidence. We are very familiar with the critique, which clearly you have been briefed on, and we do not agree with it. As Ms Cass has said, this is hard. It requires persistence over a long period. We know for example that there are going to be months when things drop off. We had that happen at the beginning of this year. You have gone to the figures for this year. You are quite right to do that. But let's be clear, there were a couple of months early in the year where performance dropped. I can promise you the entire executive crawled all over poor old Ms Cass about why this was the case—CMO and everyone else involved. The bottom line is that the numbers are moving inexorably upwards and, yes, this will continue to require us to focus and to push to get the kind of outcomes we want, but that was always our understanding of what would be required.

Senator DI NATALE: The numbers previously have moved upwards to, from what I can tell, 1989 levels. So, it is not like we are making significant progress. And while in percentage terms—

Ms Halton : No, I am sorry, that is the briefing you got—and I know exactly who—and we have to contest that. That is not true. I am sorry, but Ms Cass is going to have to correct you on the record.

Senator DI NATALE: I am happy to be corrected.

CHAIR: We have limited time so maybe a briefing can be arranged.

Ms Cass : If I may briefly respond on that point. Over the last 21 years in which data has been collected on organ and tissue donation there has been one year, the first year, 1989, in which Australia achieved 14 donors per million population. For the entire period following that it has been in the order of nine, 10 and 11, and the average—

Senator DI NATALE: That is not inconsistent with what I said. That is exactly the statement I made. That is precisely—

CHAIR: Senator!

Senator DI NATALE: No, I take issue with being corrected on a point of fact when the fact that I made referred to a specific year, 1989. I said one year.

Ms Halton : But the—

Ms Cass : One year, yes.

Senator DI NATALE: We have collected data at 14 donors per million in 1989, and we have now slightly edged above that. I did not make any comment about what occurred in the intervening period.

Ms Halton : And, Senator, the intimation and the point that is made about that point by the people who argue this—

Senator DI NATALE: That was not my point, so if you have an issue with something that somebody else says, please direct it at them and not at me.

Ms Halton : Our point is that this number, and the point that they make, is that this is no achievement. Our point is that there was a one-off aberration—it is widely regarded as an aberration. It is not something that was able to be and was sustained. It did not reflect the normal functioning of the system. The fact is that we now have consistent numbers, consistent delivery and the trajectory is up.

Senator DI NATALE: The trajectory is not up. In fact it is flat. That is the reason I am asking these questions today. If the trajectory was up, on the basis of this year's figures, I probably would not even be interested in having this discussion. But it appears that we are not even going to meet the target set for this year. And the target, let us be frank about it, is about half of where we want it to be. So it is a very modest target and we are not going to meet it. The question I have is why are we not going to meet it?

Ms Halton : Because in the first couple of months of this year—and that is exactly the point I was making—if you actually look at the month by month and state by state performance, which we do, there are very particular reasons at the beginning of this calendar year—it might be better to have a separate briefing on this so we can take you through it—why the aggregate numbers for this year are what they are. They are explainable, and in fact a lot of work has been done on why this was the case, and we would be delighted—given that Senator Moore is going to kill me for keeping on talking, because of the time constraint!—to take you through those.

Senator DI NATALE: I am aware that I am under time pressure, so perhaps we will need to continue this conversation later.

CHAIR: I think it is such an important issue that we could go on for a very long time.

Senator DI NATALE: Sure. I actually have had a briefing. What I am actually asking is why are we not achieving the targets the authority has set for itself?

Ms Cass : The key point to make here is that we know from international practice that it takes time to embed clinical practice reform in our public hospital system. Croatia, as an example, had years of going up and down in terms of its donation outcomes over the 10 years, with a significant and dramatic growth in the last year. The message we get directly from the heads of those reform agendas is that you have to train people, you have to monitor their performance and audit it, and you have to correct performance. That is exactly what we are doing.

Ms Halton : And they need to train again.

Senator DI NATALE: I look forward to having a happier story to quiz you about next year.

Senator McLucas: We do offer a briefing if you would like to take that up.

Senator DI NATALE: I have already had a briefing, thank you.

Senator McLucas: From the authority.

Senator DI NATALE: Yes, from the authority.

CHAIR: Are there any other questions for outcome 13?

Senator FIERRAVANTI-WELLS: I do, but I will put them on notice.

CHAIR: I thank the officers of the authority. We will now have a short break and come back with primary care.

Proceedings suspended from 16 : 06 to 16:24

Senator FIERRAVANTI-WELLS: Mr Butt, you have heard the questions I have just been asking. Perhaps you could assist in relation to actual expenses for both 2010-11 and 2011-12, or perhaps give me the reference in the 2010-11 annual report.

Mr Butt : I will ask Mr Booth to respond to that.

Mr Booth : The information required is in the Department of Health and Ageing annual report for 2010-11, page 203. I can certainly read through the actual expenses for you. For program 5.2—primary care financing, quality and access—administered expenses were $325,198,000. Department expenses under the ordinary annual services appropriation bill were $24,559,000. Program 5.4—and this is just taking into account what was said earlier on today, that the programs have changed around slightly—is the primary care practice incentives programs. We have administered expenses there of $332,484,000, with department expenses under the annual appropriation bill of $1,634,000.

The figures for 2011-12 are contained in the Department of Health and Ageing annual report for 2011-12, page 173. That lists those two same ones, but they are slightly different numbers, because of the change. For program 5.2—primary care financing, quality and access—the actual administered expenses were $515,634,000, and departmental appropriation was $32,474,000. For program 5.3—primary care practice incentives—administered expenses were $315,683,000 and department expenses under the departmental appropriation were $1,613,000.

Senator FIERRAVANTI-WELLS: In relation to 2012-13 on page 149, is that still on track?

Mr Booth : That is correct. The figures in there should be on track.

Senator FIERRAVANTI-WELLS: And there have been no changes since those figures?

Mr Booth : As far as I know there have been no changes on that, but we will take it on notice and double-check for you.

Senator FIERRAVANTI-WELLS: And staff variation was 255 down to 215.

Mr Booth : That is correct. That is as a result of changes that have been happening within the division, so the numbers have tracked down.

Senator FIERRAVANTI-WELLS: Is that for a combination of reasons?

Mr Booth : A combination of reasons, yes. There have been changes within the division. There have been some changes with the introduction of flexible funds. We have had a number of grants programs that have been moving through. That is part of general departmental efficiencies. So yes, the figures are accurate.

Senator FIERRAVANTI-WELLS: Also, in relation to page 150, are the forward estimates still on track?

Mr Booth : Yes.

Senator FIERRAVANTI-WELLS: In relation to 5.1, I will get you to take the subprograms on notice as part of the other information I am going to be asking for.

Mr Booth : Program 5.1 is primary care education and training, which is across a number of areas within the department. So we would need to look at that.

Senator FIERRAVANTI-WELLS: Yes, that will make it easier—and I will do that for 5.1 and 5.2, as well as 5.3. So I will not ask any questions about those here. Ms Halton, I want to thank your department for providing the schedule for the GP superclinics. I have some questions in relation to the Redcliffe superclinic, and that will be about it. What is the projected value over the forward estimates of the after-hours practice incentive payment to be redirected to Medicare locals?

Mr Booth : Sorry, Senator—can I just clarify what you are looking for?

Senator FIERRAVANTI-WELLS: I just want to drill down on a couple of issues. On the after-hours practice incentive payment to be redirected to Medicare locals, what is the value for each year over the forward estimates of that particular initiative?

Mr Booth : As you know, the practice incentive payment aspect of after-hours is ceasing from 1 July 2013 and then is being redirected into the flexible fund for Medicare locals. We can get you on notice the forward estimates in the years ongoing.

Senator FIERRAVANTI-WELLS: Yes. Thank you. For each of the Medicare locals, how much core funding—non-service-delivery—is to be provided for each year over the forward estimates?

Mr Butt : Could you clarify that question please, Senator?

Senator FIERRAVANTI-WELLS: In relation to core funding for non-service-delivery, how much core funding is to be provided to each of the Medicare locals over the forward estimates?

Mr Butt : Sorry, Senator—where are you reading that from? Core funding for non-service-delivery is a statement from where? I do not recognise what you are referring to.

Senator FIERRAVANTI-WELLS: Perhaps I will put that one on notice and get a bit more clarity about it.

Mr Butt : Yes, because core funding for Medicare locals actually includes service delivery. It includes population health planning, practice support et cetera.

Senator FIERRAVANTI-WELLS: Okay, I will put that on notice and put a bit more detail into it. What about the current full-time-equivalent staff working in the GP superclinics branch for each of the years over the forward estimates? If you do not have that, please take it on notice.

Mr Booth : Yes, we will take that on notice.

Senator FIERRAVANTI-WELLS: And what is the total combined salary of all staff within the GP superclinics branch for each year over the forward estimates?

Mr Booth : We will take that one on notice.

Senator FIERRAVANTI-WELLS: Also, please provide the current number of full-time-equivalent staff working in the branch for each year over the forward estimates. And, for each year over the forward estimates, how much money has been allocated for the regionally tailored primary care initiatives through the Medicare locals fund? Perhaps you could provide that on notice as well. I will now turn to Redcliffe—and this has been an ongoing saga. Under what condition of the $3.2 million Redcliffe GP superclinic bailout will a third-party operator be appointed?

Mr Booth : Here is where we are up to with the Redcliffe GP superclinic. As you know, earlier this year the building was completed. As soon as the building was completed, an invitation to apply was put out in order to appoint a third-party operator for the GP superclinic at Redcliffe. That ITA process produced a successful tenderer, but unfortunately the negotiations with the funding recipient—the Redcliffe foundation—broke down. Fairly rapidly after that, a second invitation to apply was put out. We are still working through that process. The invitation to apply for the third-party tenderer has gone through its key processes. Recommendations have been made by the foundation. There is a requirement that Queensland Health actually looks at the tenderer. It is with Queensland Health at the moment, and we are encouraging them to move forward as quickly as possible.

Senator FIERRAVANTI-WELLS: Was it a condition of the agreement that the third-party operator be in place by a certain date?

Mr Booth : It was a condition of the agreement that the third party operator needed to be in as soon as possible but, of course, we have to ensure value for money and that the right operator—

Senator FIERRAVANTI-WELLS: So there was no date set?

Mr Booth : There was no date, as far as I know, set for that. But, clearly, we need an operator in there who will take forward the aims of the superclinic.

Senator FIERRAVANTI-WELLS: What are the consequences for the Redcliffe Hospital Foundation for not having a clinical operator in place? I thought there might have been a date, but you have said, 'as soon as possible.' So are there consequences? And, if there are no consequences, why was this not included in the agreement? Do you see what I am getting at?

Mr Booth : Yes. There was no specific date put in the agreement. We were working very closely with the foundation to ensure that the ITA process went as quickly and smoothly as possible. It was unfortunate that the first ITA process did not produce the outcome that we required. We continue to work closely with the Redcliffe foundation. They are, as you know, a charitable foundation within Queensland, and they have a small number of staff who are working full-time on this.

Mr Butt : We are also working more broadly with Queensland Health, as we have been since the commencement of this project, because of course it is on Redcliffe Hospital land and Redcliffe Hospital was involved and Queensland Health was involved in the selection of the Redcliffe Hospital Foundation, and they are both part of a larger metropolitan north hospital and health service. So we are working with them to try and get a resolution on the Redcliffe superclinic as soon as possible.

Senator FIERRAVANTI-WELLS: On 10 October 2011 then health minister Roxon put out a media release—I have a copy if you want, Mr Booth; I will refer to it, so I might just hand you a copy—and she stated at the time that the Redcliffe Hospital Foundation must step back from its operational role and immediately commence a process to engage a clinical operator. We are talking 12 months down the track and no clinical operator has been appointed. Surely this cannot be acceptable. It is 12 months. This thing has been dragging on. I cannot remember an estimates committee when we did not talk about the Redcliffe GP superclinic.

Mr Butt : Certainly we would have liked to have had it resolved by now. The Redcliffe Hospital Foundation did follow what was required in terms of appointing a planner, and a process was entered into to try and identify an operator. As Mr Booth has pointed out, at the first attempt the negotiations did not produce a result. The second attempt is being worked through now. And that is one of the reasons why, given that we want this resolved, we are also working more broadly with Queensland Health in the metropolitan north hospital and health service.

Senator FIERRAVANTI-WELLS: So are you aware that the foundation has been in negotiations with the preferred operator?

Mr Butt : That is what we are referring to in terms of the ITA process that they have gone through.

Senator FIERRAVANTI-WELLS: Okay; sorry. So do we know who this preferred operator is?

Mr Butt : We are aware of who the operator is, but—

Senator FIERRAVANTI-WELLS: But it is not in the—

Mr Butt : It is not on the public record because they are still going through the process and, as Mr Booth said, it has to be approved by Queensland Health.

Senator FIERRAVANTI-WELLS: As to this decision to retender, do we know why the negotiations with the preferred operator broke down? And is this why there was a decision—

Mr Booth : It was financial issues with the foundation.

Senator FIERRAVANTI-WELLS: And this was the reason why the decision was made to retender?

Mr Booth : Yes. Unfortunately, the negotiations broke down and, as I say, as soon as we could we got them to retender.

Senator FIERRAVANTI-WELLS: You obviously must have been informed about the negotiations with the first operator. Was that first operator a suitable one?

Mr Booth : The first operator responded to the ITA and put in a proposal that was acceptable to the foundation in terms of the model that they were going to work, but the finances with the foundation just would not—

Mr Butt : I do not think it was ever a recommendation to us in relation to—

Mr Booth : No, there was no recommendation to the department.

Senator FIERRAVANTI-WELLS: No recommendation—and you did not provide any? Other than being aware, you did not provide any advice or anything like that?

Mr Butt : We certainly provided advice that we would like them to resolve the negotiations between the parties as quickly as possible.

Senator FIERRAVANTI-WELLS: Yes, but nothing in relation to the suitability of the first operator?

Mr Booth : No. That would have been as part of the ITA process.

Senator FIERRAVANTI-WELLS: Have they run a second tender process?

Mr Butt : Yes, and that is what we are referring to—that they have run the second tender process, they have made a recommendation and it has gone to Queensland Health.

Senator FIERRAVANTI-WELLS: All right. Sorry. The media release also stated:

Construction will take place over coming months, with the fit-out of the building occurring in early 2012.

Clearly, that has not happened. So do we know when the fit-out will be completed and when it will be opened? Any idea?

Mr Butt : The construction of the building was completed in January and it achieved lockup then. The issue of fit-out was very dependent on getting the third-party operator, because the operator will have a view on the nature of the fit-out and what will work for them in a business sense. So until the operator is appointed the fit-out will not be able to proceed.

Senator FIERRAVANTI-WELLS: Do you think we will get to the next estimates, Mr Butt, without the need to ask any more questions about the Redcliffe superclinic?

Mr Butt : We will see.

CHAIR: You are asking for an opinion, Senator.

Senator FIERRAVANTI-WELLS: Yes, I am, but can I record that there was a smile on Mr Butt's face in response to my question.

Ms Halton : No, Senator, it was probably a grimace, actually.

Mr Butt : Senator, you may obviously potentially ask questions on any GP superclinic at the next estimates.

Senator FIERRAVANTI-WELLS: Those are my questions, Senator Moore, and I think I have done very well!

CHAIR: You have. Do you have any specific questions for GPET?

Senator FIERRAVANTI-WELLS: No. We got the answers back on that. So I will put any other questions on notice.

CHAIR: Thank you very much to the officers from outcome 5. There will be significant questions on notice, as always.

[16:41]

CHAIR: We now move to outcome 11, Mental health.

Senator WRIGHT: My first questions are in relation to the Better Access program. In particular, I am focusing on some information initially about the six sessions that are available under exceptional circumstances, but I am going back five years in my questions, and obviously, in its most recent manifestation, the Better Access program for this year has been a matter of six and then four and then six. The last six sessions are within exceptional circumstances. Previously, it was six, six and six. So in both cases it is the later sessions that are available in exceptional circumstances that my questions are about.

First of all, could you please provide the total annual cost of the Better Access program for the past five years, and I understand that that would be available on a calendar-year basis because it is a calendar-year program. I am wondering if you have those figures readily available to you now.

Ms Nicholls : I can give you the total costs for the Better Access measure over the last five years, but I will be giving it to you by financial year rather than calendar year if that is okay.

Senator WRIGHT: That is fine.

Ms Nicholls : That includes the GP mental health treatment items, the allied mental health items, and the psychiatry items. I will give you a total: for 2007-08, it was $328.9 million; for 2008-09, it was $438.2 million; for 2009-10, it was $519 million; for 2010-11, it was $605.1 million; and for 2011-12, it was $593.9 million.

Senator WRIGHT: I am interested in having details about the total annual cost over the past five years of the additional six sessions accessed by clients in exceptional circumstances under the Better Access program. Do you have those figures readily available?

Ms Nicholls : We do not have those figures readily available, so I would have to take on notice how we would be able to calculate them.

Senator WRIGHT: Thank you for that, but you understand what I am asking for: it is the cost of any additional in that last amount of six sessions that are available under the program. Thank you.

Again, you may need to take this on notice: for the past five years, what percentage of the overall Better Access funding has actually gone towards paying for the additional six treatment sessions that could be accessed under exceptional circumstances? So, for each of those years, the percentage of the total that was actually paying for the sessions in the last six that were available under exceptional circumstances. I presume, again, you would not have those figures readily available?

Ms Nicholls : No. We would have to take that on notice.

Senator WRIGHT: If you could take that on notice; thank you. Do you have them for the last year?

Ms Nicholls : No.

Senator WRIGHT: Have they been ascertained at all?

Ms Nicholls : The data we normally get gives us the total sessional data per item, so we would have to specifically look at whether we could pull that out of the data, and that would take a while.

CHAIR: It would be useful, Ms Nicholls, if we could have that so we could interrogate it. That would be good.

Senator WRIGHT: I think many people would be interested in knowing that, because that is obviously quite a controversial aspect of the program. Do you have the figures for the total cost for this year, from 1 January to 30 September this year—the total cost, first of all, over that nine-month period, because that is the period up to 30 September since the change came in—and then the cost, particularly, for the six additional treatment sessions in exceptional circumstances for that period of time; do you have that available?

Ms Nicholls : No. I think I probably need to take those two on notice.

Senator WRIGHT: All right; thank you. I am also interested in the projected total cost for the Better Access program for this year from January to December. So it is not a financial year; it is a calendar year, but it accords with the period of time for which the change was in effect where there are 10 sessions and then six in exceptional circumstances. Presumably some projections were made about what the cost of that would be for the calendar year?

Ms Nicholls : Generally, DoHA only publishes the forward estimates for the total MBS expenditure, so I would have to investigate whether we are in a position to provide that or not.

Senator WRIGHT: When you say, 'in a position,' do you mean whether you are willing or whether you actually have those figures available today?

Ms Nicholls : I certainly do not have those figures available today, but we do not normally publish forward estimates for a subgroup of items or for specific programs.

Senator WRIGHT: Whether you do normally publish them or not, I am not clear on whether I would be entitled to ask for that information which would make sense to me given that the change to the Better Access program was for a set period of a calendar year from 1 January to 31 December.

Ms Nicholls : Perhaps I could take that on notice.

Ms Campion : We would need to talk to our colleagues who manage the MBS. We do not have policy carriage of the MBS, so we would just need to have a discussion with them about what the policies are around providing figures for subelements of the MBS. So we will take that on notice and give you an answer.

Senator WRIGHT: I am interested in knowing how many clients or individuals have access to the six exceptional circumstances treatment sessions that are available, over the past five years. So, in total, the number of people who have accessed those—have used those last six sessions that were available, either in part or in full.

Ms Campion : Yes.

Senator WRIGHT: And you do not have those figures today?

Ms Nicholls : No.

Senator WRIGHT: Considering the whole program, essentially, what percentage of treatment sessions are those that were accessed in the exceptional circumstances aspect of the program. So, as to those last six sessions, the percentage overall for the past five years.

Ms Nicholls : Yes.

Senator WRIGHT: Thank you, and I will put some more questions on notice about that. I will turn now to the mental health nurse incentive program, or MHNIP. In May the government announced changes to this program, which essentially resulted in a pause in funding to the program. As a result, organisations employing mental health nurses were directed to maintain existing service levels based on 2011-12 services for the new financial year.

However, the Australian College of Mental Health Nurses has received notification from organisations and nurses that, based on recent directives from government about new service-level allocations for this year, they will actually need to cut their service levels on average by 22 per cent. In some cases organisations say they have been allocated service levels for this financial year that amount to a 30 to 50 per cent reduction compared to the last financial year. In the face of that kind of information that I am receiving, does the department maintain that the program has not been cut and that service levels are being preserved?

Ms Campion : The original notification that went out to organisations in July this year by necessity had to rely on incomplete data for the full financial year because there is a lag between the provision of services and those services being claimed and when the data for the financial year is available. So we had to do some estimates at that time based on the data we had available which was from July to April. In some cases it turns out that our estimates and the advice we gave organisations about their caps may have underestimated their actual level of services in 2011-12 particularly for those organisations that had experienced growth in the latter part of that financial year. For that reason, when we provided organisations with notification of their caps, we did make provision for them to request a review of those caps, and a number of organisations have done so. We have had 157 request so far out of 470 organisations registered with the program.

Senator WRIGHT: How many?

Ms Campion : There are 470. We have just completed the assessment of those requests for review.

Senator WRIGHT: And they have all been fully completed now?

Ms Campion : We have just completed and advice has just gone out today.

Senator WRIGHT: Can you give me a sense then of what the effect has been of those reviews? Have service levels being reassessed and increased, or is there a general application of what has occurred or is it a case-by-case basis?

Ms Campion : It is definitely a case-by-case basis. We had to assess the reasons that the organisation has provided to us in terms of the basis of their request for review. Some organisations provided a number of different factors, so we had to assess each one of those as well. The outcome is that, of those 157 organisations that requested are reviewed, 133 have had an increase to the cap for this year. That does not necessarily mean that they received their full request for an increase, but at a minimum they would have received an increase to reflect their level of service provision in 2011-12 to allow them to maintain services to patients at the level that they were being provided in 2011-12.

Senator WRIGHT: Thank you for that. I have other questions but I will put them on notice. I will turn now to some questions about Lifeline. It has been reported that last year Lifeline was unable to answer 3,500 calls due to insufficient resources. That was 3,500 calls that went unanswered. Is that something the department is aware of?

Mr Mackay : I am aware of the media reporting in September which included claims about unanswered calls that had been made to Lifeline. There are some provisions in the current funding agreement that the department has with Lifeline that are seeking to boost their capacity to answer more calls.

Senator WRIGHT: Do you have any other form of information about that unmet need—let's call it that—apart from the media reports? Have you received any information in any other sort of official capacity that would alert you to that?

Mr Mackay : Yes, we receive progress reports against the funding agreement we have with Lifeline. I do not have the detailed figures from those reports with me, so if there is more detail that you would like I would have to take that on notice.

Senator WRIGHT: No, I am more interested in what you are aware of, really. From your first answer it would suggest that you only became aware of it because of the media reports.

Mr Mackay : No, Senator, I was referring to the specific number that you had mentioned. I made the assumption of where you were drawing that from. Yes, the reports that we have against the funding agreement do go to the detail of answer rates, calls that are abandoned, calls that are not answered and so on.

Senator WRIGHT: I was not referring to the media. I was referring to information that I am aware of. Given the large number of mental health organisations funded by the department that list Lifeline as the number to call for help, it is obviously an absolute primary source in terms of the work that we all too, has the department been working with Lifeline to address meeting the demand for their services? If so,—and you did indicate that that is part of the funding agreement and that there are negotiations there—what strategies and/or initiatives have been considered and how much will the total cost of implementation be over the forward estimates?

Mr Mackay : Over the three years to 2014-15, which is the period of the current funding agreement with Lifeline, the cost will be $25,306,000. That is GST exclusive.

Senator WRIGHT: Can I just clarify: is that the ongoing funding agreement or is that a particular cost associated with filling this gap?

Mr Mackay : That is the total figure.

Senator WRIGHT: That is the current figure under which they are operating, but what I have had raised with me is that that is not adequate to meet the demand that they are receiving. So, what strategies or initiatives is the department undertaking to address that unmet demand and, if there are those things, what are they projected to cost? What are they going to cost?

Mr Mackay : I would have to take the component cost part of the question on notice against the various initiatives. One that I particularly draw your attention to is the issue of overnight counsellors that Lifeline provides. Lifeline has traditionally operated a volunteer service and part of the issue in call answer rates, particularly overnight, as they reported to us, has been the inability to recruit and retain sufficient volunteers for overnight shifts to meet the demand in that time period. Part of that figure includes funding for Lifeline to pay overnight counsellors as opposed to relying on volunteers. I do have the figure since July 2012 that that move to paid overnight counsellors has increased their overnight call answer rate by 150 per cent.

Senator WRIGHT: Sorry, I did not catch that. It has increased their call?

Mr Mackay : Their overnight call answer rate by 150 per cent.

Senator WRIGHT: That ability to put on overnight trained counsellors, is the cost of that being met by Lifeline out of the original funding agreement, or is that an additional amount of money that has been made available to them to help meet this unmet need?

Mr Mackay : My recollection, which I would like to confirm for you on notice, is that it was an additional amount that they proposed to us in negotiating that funding agreement specifically for that purpose.

Senator WRIGHT: It may be, if it was within that funding agreement, is that then within that figure of $25,360,000?

Mr Mackay : Yes, that is right.

Senator WRIGHT: Is the department aware of whether Lifeline has nominated a funding amount that they need overall to ensure that people in crisis or at risk of suicide are assured that their crisis calls will be answered? In other words, to address that rather alarming number of people that are not having their calls answered, that 3500, which is the figure that I have been given. Have they nominated an additional amount that they would need?

Mr Mackay : I do not believe so. In the discussions we have had in negotiating the funding agreement, we have obviously been very focused on the need to increase the call rate, but I am not aware that a goal figure had ever been proposed to us that would equate to a 100 per cent answer rate.

Senator WRIGHT: So, you are not aware of that. Perhaps I can ask you to check that that is accurate and take that on notice and confirm whether that is the case or not.

Ms Halton : Senator, in the context of answering these questions, can we remind ourselves that Lifeline is a voluntary organisation and it has never been expected that government would control their operations or fund everything that they do. We make a contribution to their activity, but they have had a fairly strongly independent view of the role of what the control, how they do things and the fact that they actually fundraise for their activities. I am hearing a tenor of questioning, but I might be misinterpreting you, that sounds like we are responsible for these unanswered calls and we should be finding the money. The conversation we had with them was a bit more nuanced than that. It is a complex area, they are an independent organisation and we do work with them closely, but we cannot take over what they do. We can just work with them as a partner.

Senator WRIGHT: I understand that. But my understanding is that there is government funding and that there is significant unmet need. As I said, a large number of mental health organisations actually have the Lifeline number as the first absolute safety net, first port of call, when there is a crisis. Clearly, if they are not able to meet the need for whatever reason and if their own fund-raising activities are not able to meet the need, there is a responsibility as a community or as a society and it is not unreasonable to think that DoHA would have some role in that. My understanding is that there is a funding shortfall and the unmet need is concerning Lifeline greatly. While I appreciate that their maybe sensitivities, I am interested in the degree to which you are aware that there is this unmet need and how do we fix it.

Ms Halton : The answers vary. I think some of the work on service models is part of this. We all know that, as people become more savvy internet applications and different approaches, there are a number of things that you can look at in this kind of area. As has already been indicated by Mr Mackay, there are things you can do even in terms of their standard model, which is volunteers, to actually boost their capability.

Senator WRIGHT: Absolutely. I am sure they are a willing partner in those sorts of discussions. It is not just about money; it is about strategy and issues. I understand that, but there is money involved in these things as well.

Senator FIERRAVANTI-WELLS: Senator Wright has made that point, but I think what is also happening is that you have organisations, which are getting funding, that are actually brokering Lifeline on as part of their suite of services. So, they are getting the money and they are effectively trading-off and Lifeline that is actually delivering the service at the end. That is part of the other side of the coin, which I think is probably partly what Senator Wright is also talking about, which has been put to me as well.

Ms Campion : Can I make one point of clarification?. I do not think that we have made it particularly clear in our answering that the government did actually boost funding to Lifeline through that Taking Action to Tackle Suicide package. There was a $1.7 million increase in the value of their funding agreement for the 2012-13 to 2014-15 period and, as Mr Mackay has said, that has led to the ability to pay people to work overnight. So, there has been a recognition of the need to increase the funding to Lifeline through that package.

Senator FIERRAVANTI-WELLS: Senator Wright has asked the questions I would have, so I am going to focus on financial matters. In relation to 2010 could you provide me with a reference to the annual report for the actual expense both administered and departmental that would be helpful, otherwise I will trawl through and find it?

Ms Campion : Sorry, Senator, I do not have the 2010 figures.

Senator FIERRAVANTI-WELLS: Would you take that on notice or give me the reference?

Ms Campion : I have 2011-12 here.

Senator FIERRAVANTI-WELLS: That is fine. I have located 2011-12 in the annual report. For 2012-13 in relation to the budget on page 2006, are you on track and on budget?

Ms Campion : Are you talking about the PBS?

Senator FIERRAVANTI-WELLS: Yes, the PBS.

Ms Campion : In general terms at this point in the financial year we are on track in terms of the budget that we have been allocated.

Senator FIERRAVANTI-WELLS: Are there any changes to the program since the 2012-13 budget?

Ms Campion : No.

Senator FIERRAVANTI-WELLS: And staff numbers—any variations there?

Ms Campion : There has been no change to those at this stage.

Senator FIERRAVANTI-WELLS: Do the figures on page 209 of the forward estimates stay the same?

Ms Campion : At this stage there has been no change.

Senator FIERRAVANTI-WELLS: In relation to the various subprograms in mental health I will ask for that information on notice and I am sure you will give me as much detail as you can. I will ask some specific questions in relation to the subprograms and all the initiatives in mental health.

Ms Campion : Can I just clarify that we only have one formal program in mental health.

Senator FIERRAVANTI-WELLS: I know you do.

Ms Campion : Are you talking more about at a program level?

Senator FIERRAVANTI-WELLS: Absolutely. It is really hard to just follow. I have tried to do this in another way. I am going to do this with other areas of the department where there is only one program. I really would like to see that breakdown of the subprograms, the initiatives, and how much money is being spent in relation to those and over the forward estimates. I will put that as part of the question on notice.

I want to ask about the National Mental Health Reform Package. I was looking at 'Delivering the hospitals: mental health and health services'. Do you know that little chart?

Ms Campion : Yes.

Senator FIERRAVANTI-WELLS: I want to go through the column for 2011-12 and look at some of those figures and what has been spent on what has not been spent. Are you aware of some comments by Mr Shorten—and I might direct questions to Mr Shorten—about bureaucrats taking on average a year off work to recover from mental stress, which is four times longer than workers hurt in car crashes?

Ms Halton : That is an issue for the Public Service Commission.

Senator FIERRAVANTI-WELLS: Thank you. I will put those questions on notice to the Public Service Commission. In relation to that 2012 amount are there variations in relation to the figures in that column?

Ms Campion : Yes, there were some variations in some areas.

Senator FIERRAVANTI-WELLS: Could you tell me in general terms where the variations are?

Ms Campion : I think I mentioned last time that one area where we did not spend our allocation in 2011-12 was with the EPPIC payments to states. There was $8.1 million available last year in payments to the states. Because 2011-12 was a developmental year for EPPIC, only one jurisdiction sought funding and the outcome of the expression of interest was that more work was required to get it to the next stage. So that funding was not allocated. The other area where there was a delay in 2011-12 was with the establishment of the virtual clinic. That was largely because we first needed to get the design of the portal right to make sure that it would work. That resulted in some underexpenditure in 2011-12. The other major area was with our tele-web package of services. We needed to go back to the market for some of those. Again, there was some delay with that program too. There were some smaller elements, but those were the major ones, and they are reflected in the annual report as well.

Senator FIERRAVANTI-WELLS: What about the MYEFO moneys for action to tackle suicide, that $277 million, which has now been reorganised from the last federal election?

Ms Campion : The virtual clinic was one part of that. Are you interested in general progress, or more specifically about other expenditure in 2011-12?

Senator FIERRAVANTI-WELLS: I am interested to track where that $277 million has gone. I am having some difficulty following. I know that in the first year $9 million was set aside but only $7 million or thereabouts was spent. I would like to get some clarification there. Has it all been spent?

Ms Campion : Yes, that is correct. In 2010-11 there was $9.5 million, of which just over $7 million was allocated.

Senator FIERRAVANTI-WELLS: The point I am making is that there is a big difference between $9 million and $7 million and $277 million. That is where I am coming from. I would like an explanation as to whether that $277 million has found its way someone else. That is what I am trying to clarify.

Ms Campion : It definitely has not found its way to somewhere else. Some of it was redirected into the mental health reform package but it has all been allocated to mental health and suicide prevention activities.

Senator FIERRAVANTI-WELLS: Has it stayed in suicide prevention? All of it?

Ms Campion : Some of it, as I said, has been redirected to—

Senator FIERRAVANTI-WELLS: How much has stayed in suicide prevention?

Ms Campion : All of the $277 million is still in the suicide prevention package. Some of it is very specifically focused on suicide prevention. Other measures are focused more on downstream early prevention activity—things like building resilience in children. But it is all still part of the taking action to tackle suicide package.

Senator FIERRAVANTI-WELLS: On my reading, 2010 was over two years ago. So when is it anticipated that this money is going to be rolled out? It is rolling out at a very slow rate.

Ms Campion : It is rolling out according to the way it was phased, other than, as I said, a delay—

Senator FIERRAVANTI-WELLS: It was $277 million in 2010. The moneys were to start to be spent in, if I have understood correctly, 2011-12.

Ms Campion : Yes. It was $9.4 million in 2010-11, $60.462 million in 2011-12, $57.28 million in 2012-13, $57.768 million in 2013-14, $58.391 million in 2014-15—

Senator FIERRAVANTI-WELLS: What are you reading from?

Ms Campion : This is just an extract from the budget papers reflecting the allocations. And in 2015-16 it was $58.753 million. That gives a total over six years of $292.654 million.

Senator FIERRAVANTI-WELLS: In that case, has the $64 million for 2011-12 been spent?

Ms Campion : It has not all been spent yet, but we are implementing elements of the package in accordance with the funding that is available this year.

Senator FIERRAVANTI-WELLS: How much of it has actually been spent?

Ms Campion : I do not have a figure for the actual expenditure for the year to date here at the moment.

Senator FIERRAVANTI-WELLS: Could you take it on notice please. I want the actual figures on what has been spent and where it has been spent. If you could track all that for me in an answer to a question on notice I would be most grateful.

Mr Mackay : The total expenditure to date for 2011-12, as available at 30 September, is $47.55 million.

Senator FIERRAVANTI-WELLS: So, of the $64 million, you have spent only $47.55 million?

Mr Mackay : That is right. It was $60.4 million in 2011-12 and expenditure is $47.55 million.

Ms Campion : Would you like us to take you through the package and let you know where elements of it are up to? I think that might help explain what we are doing.

Senator FIERRAVANTI-WELLS: Yes.

Ms Campion : There were 15 elements originally announced, of which eight have been implemented fully or in part. Element 1(b) is community based psychology services. That was funding through Medicare Locals for ATAPS. We have now entered into funding agreements with Medicare locals for that funding. Element 2(a) is about boosting the capacity of crisis lines—and we have talked about the variation with Lifeline to increase their funding. Element 2(e) is about outreach teams going to schools. We have funded headspace to do a scoping study for that service and we have also entered into a funding agreement with headspace to provide that service. That has commenced this year.

Element 3(a) is funding to beyondblue to expand the National Workplace Program. We have entered into a funding agreement with beyondblue and they are implementing that program. Element 3(b) is funding to beyondblue to increase the capacity of the info line. This is with a focus on men. That funding agreement has been varied and they have started providing services. Element 3(c) was funding to beyondblue to do targeted campaigns for men. Again, we have varied their funding agreement for them to undertake that activity.

Element 4(a) is about the expansion of Kids Matter to primary. The expansion target of 600 schools participating in Kids Matter (Primary) by June 2012 was reached and, in fact, exceeded. That program is continuing to be expanded. Element 4(b) is about additional services to children through ATAPs. Again, as with the suicide money, we have entered into funding agreements with Medicare Locals for that.

Element 2(b) is mental health first aid training. We have undertaken consultations with providers to determine the core elements of that. We have done a select tender process and appointed three organisations to do the training, which will commence this month. Element 2(c) is infrastructure for suicide hot spots. We have done one funding round, which is not quite finished, for last year and we will undertake further funding rounds for the remainder of the funding. We are expecting to go back to the market for that soon. Element 2(d) is community prevention activity for high risk groups. We did a funding round last year for $1.5 million for the Aboriginal and Torres Strait Islander projects. Again, will be looking to go to the market for further projects there this financial year. We have provided $17 million to three organisations to target groups at particular risk of suicide. We have also funded the National LGBTI Health Alliance to do a program which is called Mind Out, which is related to addressing suicide in that target group.

Element 4(c) is online mental health counselling. This relates to the virtual clinic. As I mentioned before, there is a delay with that one because we wanted to get the design of the portal right and we also needed to consider the potential overlap with other tele-web measures that we fund elsewhere. We have actually gone to the market for the virtual clinic. We have signed a funding agreement with Access Macquarie to develop the clinic and we expect services to commence on 3 December.

There were also three elements where the funding has been redirected into the National Mental Health Reform Package, as I mentioned earlier. The Nationally Consistent Reporting function has been transferred to the commission to do the report card on mental health and suicide prevention; and there were two initiatives which have been redirected into the component of the reform package that is related to people with severe mental illness—the non-clinical services for the mentally ill and their carers, and the more community based psychiatry services.

CHAIR: Can we get a table that shows all that you have just said. I think it would be useful to have that to refer back to.

Ms Campion : Yes.

Senator FIERRAVANTI-WELLS: I have two short questions. Are you going to be making announcements in relation to the remaining headspace sites before the next federal election?

CHAIR: Senator, we will have to refer to the minister on that one. The department cannot answer that.

Ms Campion : The plan was to have the 90 headspace sites announced and operational by 2014-15. The government has announced 70 so far and there are 20 more to go.

Senator FIERRAVANTI-WELLS: A decision on the timing of the announcement of the remaining 20 sites has not been made?

Ms Campion : No specific timing has been announced but the plan is to have them operational by 2014-15.

Senator FIERRAVANTI-WELLS: To have them operational by 2014 when does a decision have to be made in relation to them and will they be in two tranches of 10 or one tranche of 20?

Ms Campion : There has not been a decision about the exact timing and nature of that.

Senator FIERRAVANTI-WELLS: I have one last question in relation to the road map. There has been a lot of criticism about the mental health road map. I appreciate that the consultation process on that has occurred, but when are we going to see this road map finalised?

Ms Campion : Earlier this year COAG asked that jurisdictions continue to work on the road map and bring it back to COAG for consideration later this calendar year, and that is still the intention.

Senator FIERRAVANTI-WELLS: What is the Commonwealth's view about that, Minister? That is a long time for this process to occur.

Senator McLucas: As you know, it is being driven by COAG and it has to be negotiated between states and territories. As you would also know, that can sometimes be a time consuming process. But, to get it right, we have to have agreement from the states and territories.

Senator FIERRAVANTI-WELLS: What has happened to the mental health plans? Are they still floating around?

Ms Campion : The fourth mental health plan?

Senator FIERRAVANTI-WELLS: Yes.

Ms Campion : Yes.

Senator FIERRAVANTI-WELLS: And what about the report on the third mental health plan? What has happened to that? I have not seen that one yet—or I might have missed it. Is there a report out on the third mental health plan?

Ms Huxtable : We will have to check on that, but my recollection is that that one was released.

Ms Campion : It should have been. It was a number of years now. We will need to check.

Ms Huxtable : It certainly takes a while, because there is a lag in data and getting everyone's input to it. Anyway, we can find out on notice.

Senator FIERRAVANTI-WELLS: Thank you. Chair, I will put the rest of my questions on notice.

CHAIR: Thank you very much to the officers from Mental Health. I know there will be a number of questions on notice.

[17:25]

CHAIR: We will now move to outcome 4, which is Aged Care and Population Ageing.

Senator SMITH: At page 152 of the annual report you talk about the number of residential aged care places per 1,000 people aged 70 years or over. The point is made that the target was not reached due to an underallocation of residential aged care places across a number of regions over the past ACARs. Attracting a sufficient number of high quality applications from potential aged care providers for residential aged care places is one of the challenges identified by the department. Can you provide me with a bit of an understanding about what is happening? We are underallocating aged-care places but we have got a discussion about the quality of the applications that are being received. Is there a problem with the quality of the applications that are being received by the department from aged-care providers?

Ms Huxtable : What that reflects is that there have been some instances with recent ACAR rounds where fewer residential places than you would expect from the planning ratios were allocated because there were insufficient applications in some particular areas. That is looking at residential aged care separately from package care. In some of those regions there have been more home care packages allocated, so that in part has dealt with some of the issues in the residential setting. But some of those issues around the interest in residential places were addressed in the aged care reform package which was announced in April this year. It went to some of the financing and funding settings which we anticipate will make it more attractive for providers to seek residential places. The quality of applications is something that my colleagues can speak about. Under the legislative framework for which places are allocated, a number of elements need to be met, some of which go to the nature of the applications that have been received. So there are a number of factors that have to be taken into account in determining whether an application is successful or not.

Ms Smith : The aged-care approvals round is a competitive process that occurs at the planning region. Firstly we have to receive a sufficient number of applications for the number of places that are available, and there is a competitive process that looks at each application on its merits against the criteria in the act. The criteria include the past record of the provider, their financial capacity and their capacity to meet the needs in the region. We can take on notice all the criteria we go through. While there have been particular problems in some parts of the country in recent ACARs, many of the pressure points that were driving those have been addressed in the aged-care reform package.

Senator SMITH: Are you able to identify which areas of the country are more problematic than others in terms of attracting quality applications?

Ms Smith : We have had a problem in recent ACARs, particularly in Western Australia, for several ACARs. Tasmania was a particular issue in the 2011 ACAR. We have also had some underallocation in New South Wales and Queensland.

Ms Huxtable : But we would not want to leave the impression that it is just about the quality of applications. There are a number of complex factors at play here as to whether or not there is a level of investment interest in the sector.

Senator SMITH: I accept that. Moving on—and this flows from the financial viability issue—some of the issues that are being talked about publicly from what I call rural and isolated or regional aged-care homes are particularly as a result of the changes to the funding arrangements. I understand that the ACFI review of 2011 argued that there was a case for aged-care homes in regional and remote areas to be provided with additional support as a result of the ACFI changes. I am just wondering where the department is up to in considering what that additional support might look like.

Ms Huxtable : A viability supplement has been made available for facilities, including in rural and regional areas. In the reform package in April that viability supplement was made a more standard element of the forward estimates and so flows through into the forward estimates period. That recognises some of those additional costs that facilities in rural and remote areas in particular face. It also covers some facilities that are meeting special needs, for example, around homelessness services, so special needs services as well.

Senator SMITH: So in Western Australia the argument is that, because it is a high-cost environment and as a consequence of the resources boom et cetera, the needs of those isolated and regional homes are more significant, and the financial viability is being brought into question much more quickly. I am just concerned about whether the department is putting its mind to a remedial plan or remedial actions that specifically relate to the unique circumstances of Western Australian regional homes.

Ms Smith : Obviously as part of the broader financing arrangements we look at both the macro needs as well as the needs of particular subsets of the population. If you look at the recent operating framework for the Aged Care Financing Authority, for example, the particular challenges that are faced in rural and regional areas of Australia were highlighted as something that the Aged Care Financing Authority had to pay particular regard to in considering whether the financing arrangements would stimulate the sort of investment that was required going forward.

In terms of the changes to the aged-care funding instrument that we introduced on 1 July, we have set up a monitoring process that looks at whether those changes are operating as intended. One of the particular things that we are looking at as part of that is whether there is any differential impact for particular groups. We look at those by state and also by service type and location.

So we are looking at the particular needs of remote and rural services, and certainly the data we are seeing so far—acknowledging that it is early days—is not showing any differential impact for those services. But my colleague may be able to elaborate on that.

Mr Tracey-Patte : The aged care funding instrument, or ACFI, monitoring group has had a look at the early claim data—that is, for July—following the changes. We looked at that by region, we looked at it by state and we looked at it by size of provider. The early indications are that there are no disproportionate impacts for particular categories of providers; it is operating, on the early data, very much the way we predicted it would.

Just to fill that out a little bit, the prediction we had was that residential care expenditure, particularly the care subsidy expenditure, would continue to grow. We saw in the month of July a 0.65 per cent growth above the average subsidies that were paid in June. So we are continuing to see growth in the average amount paid per person in an aged-care home. The intention of the changes was to bring that growth back to the long-term trend.

Senator SMITH: On the ACFI monitoring group, are you able to provide to me who actually sits on that? I notice that the reference is a generality—consumer groups et cetera. But perhaps you could provide, on notice, who actually participates in that. I understand from the minister's statement that it has met twice so far. Are the minutes of those meetings available to be shared with the committee?

Mr Tracey-Patte : The group has met twice. The meeting outcomes for the first meeting have been published on our website. The second meeting outcomes are expected to be published very shortly.

Senator SMITH: Going to your point earlier about there being no disproportionate adverse reaction for regional homes, the ACFI review itself does point to the fact that regional homes will be adversely affected, because they do not have the flexibility around the types of residents they might be able to attract. So when we talk about some remedial actions or consideration being given to addressing this particular issue, what sort of time frame are we talking about? You will know well that in Western Australia—I have my electorate office in Albany—there is continuing frustration from aged-care workers. I cannot speak for other states, but other senators—not just opposition senators, but government senators—have actually identified the fact that there are increasing concerns for regional aged-care providers. What sort of time frame are we looking at for possible remedial efforts for these sorts of homes?

Ms Smith : You are correct in identifying that the ACFI review did identify particular challenges for rural and remote services in terms of their resident mix et cetera as part of claiming under the ACFI. That is why, in last year's budget, the government expanded the viability supplement to take account of those very issues. That was extended for a 12-month period while the government was considering its response to the Productivity Commission. Then, in this year's budget, that was made an ongoing part of the funding arrangements. So there has actually already been action taken in response to that finding. As I said, though, in terms of the work of the Aged Care Financing Authority, the government has highlighted that as an important issue for them to consider moving forward as part of the financing arrangements. In all the work the financing authority will be doing, it will be looking at those particular issues—and advising government as appropriate.

Senator SMITH: I might just follow up on the viability supplement issue on notice. The other point I wanted to get an understanding of relates to page 154 of the annual report. The target for the number of annual reviews of the aged care funding instrument was set at 20,000 for the last financial year but the actual was only 16,000. So only 75 per cent of the target was met. There is an explanation in the annual report but can you step me through that in a little bit more detail.

Ms Smith : That would be for my colleague Mr Scott.

Mr Scott : You have successfully picked up on a typo in our annual report. As I understand it, there will be a corrigendum issued.

Senator SMITH: The annual reports get read; you should be satisfied! So where are we up to? Just explain it for us. I do not know whether you should be embarrassed or pleased.

Ms Halton : I think we should be pleased!

Mr Coburn : The actual figure was 18,735.

Ms Halton : Do you want the percentage that is of the total, Senator?

Senator SMITH: Okay then.

Mr Coburn : That is 18,735.

Senator SMITH: For the sake of completeness can you expand on the explanation that is provided?

Mr Coburn : In the 2011-12 year we were doing some work around the arrangements for doing the ACFI program. That took some resources away from doing the work, in that we were training staff in how to do things in an appropriately robust fashion. We were also setting up arrangements whereby we would have a different risk model for how we choose those services which are going to be reviewed, and in particularly, in accordance with the normal regulatory practice, rather than having a one-size-fits-all review, having separate streams of activity within the review program whereby some services have a more light-touch review if we believe they are less likely to be incorrectly claiming as opposed to other services which have a more in-depth review. It took some resources to set up those arrangements and also to more fully implement, in particular, the more streamlined arrangements.

Also, as a consequence of the more intensive reviews we got a larger number of appeals or requests for reconsideration of outcomes. They are considerably more resource intensive to deal with than the standard reviews, as well.

Senator SMITH: I might leave it at that and defer to other senators. I am interested in the progress of the national strategy with regards to LGBTI issues in aging and aged care but I might just inquire for a briefing outside of the committee's time.

Senator McLucas: That would be fine, Senator.

CHAIR: Before I move to Senator Fierravanti-Wells and Senator Siewert, who will share the time, we have come to an agreement that we will continue with aged care until 6.30. Then the other program, which is program 10—I do apologise—will be required first thing after dinner. So you can all run away until 7.30. And there is an agreement that then, because of the number of senators asking questions, we will cover the other outcomes by the end of the evening. And everyone is still required. So the sub-agency people are still required. I apologise for that.

Senator SIEWERT: We were going to go to Ms Huxtable—

CHAIR: Ms Huxtable is waiting.

Senator SIEWERT: for the answers to the questions I asked this morning.

CHAIR: We have the HACC questions that you were asking. We can do that follow-up first.

Ms Smith : I think Ms Huxtable is waiting to refer the questions down this end of the table.

Ms Huxtable : Because there are some mental health elements to this Ms Campion will join us.

CHAIR: Before we go on, the Aged Care and Accreditation Agency are required. Do not look so happy! The last 10 minutes, I think, is for your agency.

Senator SIEWERT: Basically what we want to know is where we are up to in terms of the pay equity issues.

Ms Huxtable : The process?

Senator SIEWERT: The process, yes.

Ms Huxtable : Mr Tracey-Patte can speak to the aged care process, I am sure.

Mr Tracey-Patte : Certainly. We are working towards having the offers made to providers who are affected by the decision or employers who will receive the supplementation, by the end of this month. The process will be that for those organisations that we have a funding arrangement with we will provide a letter directly from the department to those services providers. We are trying to do that with as light a touch and in as effective a way as we can. We have identified in the aged care programs in particular, that it is the HACC program and the National Respite for Carers program that are in scope for that decision. So we will be working towards making those letters of offer by the end of November. Service providers will then have an opportunity to come back to us if they disagree with the amount that we are offering.

Senator SIEWERT: They will come back to you by the end of November?

Mr Tracey-Patte : No, we will be making letters of offer by the November.

Senator SIEWERT: I beg your pardon.

Ms Smith : There is a process that we have to go through in terms of for all those funded organisations in determining the categories of workers. We know the categories of workers that are affected but there is a process of identifying, for each of the funded organisations, whether they have employees in that category or not.

Senator SIEWERT: That is where I was going to this morning, in particular with WA and Victoria.

Ms Smith : No, that is a separate issue. For every HACC organisation that is directly funded by the Commonwealth—or the National Respite for Carers program—we fund activity across various service types, some of which are relevant to this SACS decision and some of which are not. Most aged care workers are covered by other awards.

Senator SIEWERT: That is going through a separate process.

Ms Smith : So there is a complexity, I suppose, for us to work through what is the most efficient way possible to communicate with those providers to ensure that we appropriately offer the funding that will ensure they can provide the supplementation.

Ms Huxtable : Senator, I gave you some figures this morning around the numbers of services. I think I said that they may be affected. It is important that it is understood that they are the ones that may be affected.

Senator SIEWERT: They are in scope.

Ms Huxtable : That is right. So some of them may not have the workforce that would attract SACS supplementation, so they would not be affected, but that is the maximum number that we are expecting to be working with across both mental health and aged care.

Senator SIEWERT: So then the issue of the different states' processes are factored in on top of that.

Ms Smith : So, in addition, in Victoria and WA, where the Home and Community Care program is still a joint program between ourselves and the relevant state, that process of making offers is subject to the Commonwealth-state negotiations that are going on, which are led by Treasury.

Senator SIEWERT: I am going to Treasury to ask them about that tomorrow.

Ms Smith : We will not be making offers to HACC providers in those states.

Senator SIEWERT: Okay, so you will not be sending out letters to Western Australian or Victorian providers?

Ms Smith : Not HACC providers, no. That would be a process where relevant treasuries will negotiate and then the relevant state or territory government will liaise with and make offers to the organisations that they fund directly.

Ms Halton : We do not have a direct relationship with those organisations. We have a direct relationship with HACC, where we have taken it over, but we do not in these circumstances.

Senator SIEWERT: What role do you have interacting with Treasury. Do you tell Treasury what scale of services you are providing in WA and Victoria?

Ms Smith : There has been a process across government where relevant departments have been working with Treasury and Finance on providing estimates. We fed information into a whole-of-government process and Treasury is leading the negotiations with states and territories.

Senator SIEWERT: I appreciate that is the quantum of the services that you are funding but I presume you have specifically given for Western Australia and Victoria on what services you are funding there.

Ms Smith : They certainly know the programs that are in scope in this portfolio for those two jurisdictions.

Senator SIEWERT: And presumably they know the value of those?

Mr Tracey-Patte : They would have the amount budgeted, absolutely.

Senator SIEWERT: In Western Australia, for example, the added complication there is Western Australia has not referred its IR powers. We had this discussion in various agencies last estimates. That is another complicating factor. Have you provided any advice on that?

Mr Tracey-Patte : We have not provided advice on that but we know that the lead agencies on this have been contemplating what the industrial relations situation in Western Australia is and what it means for the processes.

Ms Huxtable : That is a question for DEEWR, predominantly.

Senator SIEWERT: Did that cover all the questions I asked this morning?

Ms Huxtable : I think so. This morning was a long time ago.

CHAIR: Have you finished with the HACC questions?

Senator SIEWERT: HACC in pay equity, yes, but not for other HACC related issues.

CHAIR: For ease, as we are in the HACC area, we will go to HACC questions and then go back to other areas.

Senator SIEWERT: Where are we going with the implementation of the reforms? One of those is the community care element of the aged care package. I am still trying to find out how the community care packages and the changes to HACC are working. You are looking a bit perplexed.

Ms Smith : We have had this discussion before. At regular intervals we have updated you on where we are up to with the HACC transition. That was a process of intense work that we were doing with state and territory governments and service providers in the six participating states. From 1 July 2012 we have successfully transitioned the vast majority of service providers on to direct Commonwealth contracts. That is a process that is now being bedded down and the vast bulk of the work is now behind us.

Obviously Victoria and Western Australia are not transitioning at this point and that continues to be a joint state and territory program in those two jurisdictions. Business-as-usual arrangements apply in those two states though we are at the moment doing a review of the HACC review agreement. The HACC review agreement is the formal agreement between the Commonwealth and all of the states and territories originally. But it did say that there would be a review in the fifth year of the agreement. We are currently working on that in conjunction with Victoria and Western Australia. But that is a review of business processes; it will not get into roles and responsibilities. That is a process that is underway and nearly complete at the moment.

Senator SIEWERT: With Western Australia and Victoria?

Ms Huxtable : Yes. That is the existing HACC program. We have a Commonwealth HACC program in the six states and territories. We then have the joint HACC program in Victoria and Western Australia. Then, as part of aged care reform, the government announced that from 1 July 2015 it was intending to move to a new Commonwealth home support program. That will bring together the Commonwealth HACC program, the National Respite for Carers Program, the Day Therapy Centre Program and the Assistance with Care and Housing for the Aged Program. That will be a process that we will be working on over the next few years.

There is quite a lot of duplication between the services that are funded under previously Commonwealth-only programs and those that were funded under the old HACC program. Respite is a very good example. You get a lot of feedback from people about the fact that we are funding similar activity under different program structures with different eligibility requirements and different rules and not really meeting contemporary needs. That will be a real opportunity for us to look at streamlining that and making it more appropriate to the future.

Senator SIEWERT: By the sounds of it, work has not begun too much on that process.

Ms Huxtable : We are doing the early scoping work on that.

Ms Balmanno : We have started work particularly on the first cab off the rank, which will be the respite services. You may have noticed in the Living Longer Living Better documentation that changes to respite are flagged to occur from 1 July 2014 whereas the bulk of the other arrangements for the new home support program commence the following year.

We have started a conversation with the National Aged Care Alliance about possible membership of a reference group to work with us on that review. There is already work in the field occurring that was initiated during the development of the reforms around future directions for respite. Alzheimer's Australia is under contract and is due to report to us within the next month around issues with the current respite arrangements and the potential future of directions. That will inform the work of the working group over the next 12 months or so in shaping our future respite arrangements.

A similar process will be gone through for some of the other service types where there are potential issues of overlap and duplication with other parts of the reform package or indeed with existing programs.

Senator SIEWERT: Are you talking specifically about across-the-board in the reform program or in the community care area?

Ms Balmanno : In the community care area, but the establishment of an aged care gateway has implications for how certain service types are delivered under HACC, for example, which traditionally has not been connected in to the aged care assessment arrangements. It has had its own arrangements at the state level. Government also flagged in the reforms a number of service types that would be a particular focus of reviews in the development of the home support program. They were meals, transport, home modifications and home maintenance. Those ones have been flagged because they have been areas of attention in recent years from state and territory governments and were certainly areas where the patterns of service delivery, the nature of service delivery and consumer expectations are changing and evolving. We have had some initial conversations with a number of the largely state based peak bodies about those service types about how we can work with them to understand future trends and directions and about how the Commonwealth Home Support Program from 2015 can be a bit future proofed in those service types and where they are likely to go.

Senator SIEWERT: For the other states that have a direct relationship with the Commonwealth, have each of those providers now got a specific contract?

Ms Smith : All of them have a contract. There are three that we are just finalising the execution on. There have been a couple of particular challenges with a very small number of organisations.

Senator SIEWERT: Why is that?

Ms Smith : There are 1,012 of the 1,015 that have executed contracts and are receiving their second-quarter payment. Three agreements do not have an executed funding agreement in place but are expected to sign shortly.

Senator FIERRAVANTI-WELLS: Could I have a reference for the actual expense both departmental and administered for the 2010-11 financial year if there is one available, otherwise I will locate it.

Ms Smith : Was that the 2010-11 portfolio budget statement or the 2010-11 annual report?

Senator FIERRAVANTI-WELLS: Just a reference would be fine. Could you tell me what the 2010-11 actual administered and departmental expenses were?

Mr Tracey-Patte : That is on page 175 of the annual report.

Senator FIERRAVANTI-WELLS: I have the reference for 2011-12 at page 159 and for 2012-13 at page 123. Are you on track in this year's budget?

Ms Smith : Yes we are.

Senator FIERRAVANTI-WELLS: Have there been any changes to the program since the 2012-13 budget?

Ms Smith : No, not since the budget.

Senator FIERRAVANTI-WELLS: Have there been any variations in the number of staff? The number seems to have gone up from the estimated amount.

Ms Smith : Yes. The big difference between 2011-12 and 2012-13 in outcome 4 staffing is due to the fact that we are now directly managing the home and community care program. There were additional staffing resources that came with that transition. There was also additional staffing that came with the aged care reform package. Our outcome has had its share of the efficiency dividends and the like that have been occurring.

Senator FIERRAVANTI-WELLS: So you have had minus efficiency dividend but you have had extra staff to deal with the issues pertaining to HACC and other aspects of the reform?

Ms Smith : And new responsibilities came with the resourcing.

Senator FIERRAVANTI-WELLS: Is there any change in the forward estimates for outcome 4?

Ms Smith : Are you on staff, Senator?

Senator FIERRAVANTI-WELLS: No, I need a global number for the forward estimates. It is broken down program by program. It does not have an actual global amount for the department for outcome 4 as a whole.

Mr Tracey-Patte : We would have to add that. I do not have that figure with me. It is the sum of those. I will take it on notice.

Senator FIERRAVANTI-WELLS: I will ask questions in relation to each of the programs and then the sub programs thereunder. Perhaps that can all be provided then. Suffice to say, have the figures over the forward estimates changed?

Ms Smith : No, not since they were published in the budget.

Senator FIERRAVANTI-WELLS: Would it be easier to ask the agency now or leave the agency til the end?

Ms Halton : It is up to you.

Senator FIERRAVANTI-WELLS: While we are on financial matters, I will ask the agency if they can give us some figures as well. Mr Brandon, have you got some actual expenses for the 2010-11 financial year, or can you otherwise point me in the right direction?

Mr Brandon : As you would be aware, we are a company subject to corporations law and we are not part of the appropriations. Our funding comes through a grant from the Commonwealth through the Department of Health and Ageing, which represents around 62 per cent of our income. The other income comes from accreditation fees paid by providers. Our expenses for 2011 were $31.75 million. For 2011-12 they were $38.54 million. The projected budget for 2012-13 is $37.18 million. The Commonwealth contribution to that was variable by year. In 2010-11 it was $24 million; 2011-12, $18.2 million; and in the plan, the current year, it will be $25 million. The reason for those differences, of course, are that we run on a three-year accreditation cycle, so no two years are the same. The most significant difference is that in 2010-11 we did 467 site audits, which are big pieces of work. The following year we did 1,491, three times as many. So our workload is quite variable between the three years. I suppose the Commonwealth contribution goes to the difference between the expenses and our accreditation fees. Also, we negotiate a deed of funding with the secretary, and our current deed expires in 30 June next year.

Senator FIERRAVANTI-WELLS: And staff numbers?

Mr Brandon : At 30 June 2010 we had 232 full-time staff. At 30 June 2012 we had 225. Our current staffing is 232 full-time equivalents. But I should say to you that if you just take those figures they are potentially quite misleading because, given the mix and match of the workload and the variation of the workload, we have a pool of around 300 external assessors who we hire in on a needs basis, and they are not staff—they are casual staff. They come, they do a project of three or four days—a site audit—and then they go away.

Senator FIERRAVANTI-WELLS: As I go around, I hear constant issues in relation to inconsistency between those external contractors. I know we have discussed this before, but it still appears to be a perennial problem for you. Providers say to me, 'One contractor said to do it that way. We've done it that way. Somebody else will come along next time and give us a hard time because we haven't done it according to how contractor B wants it.' I get this all the time, so it must be an issue out there. It does not matter where I go, whether it is a small facility or a big facility—I get it all the time.

Mr Brandon : I agree. It is an issue.

Senator FIERRAVANTI-WELLS: So what are you doing about it?

Mr Brandon : What we are doing about it is that we have a very significant internal quality assurance program. We have run a program, as I think I said last time I was here, on on-site relationship management. When I talk to providers and start to get into the detail of it, what it actually gets down to is not at all that they disagree with the decisions or the recommendations of the assessors. In fact, we rarely see a disagreement with the outcome. The complaints we get tend to be about attitude or behaviour, and we do not get a lot of evidence that an assessor said this and the next one said that. Of course that is not a surprise, because most homes have a gap of 12 months between visits. The advice I give to providers when we talk about this is to ask them to look carefully at what they can tell me, so we can actually put our finger on what is the inconsistency.

I actually think, on the face of it and talking to colleagues who run similar organisations in other places, it is to do with attitude and approach. It is how they ask questions and how they go about it. Of course what we require of the aged care quality assessor is to be a different person. It is situational management; they have actually got to learn how to manage it. So I am not sure that it leads to an inconsistency in outcome, because, of the 92 per cent of homes that are 44 out of 44, no-one has ever rung up and said, 'Hey, listen, you've accredited us and you shouldn't have.' The inconsistency tends to be in approach, not in the decisions.

Senator FIERRAVANTI-WELLS: I know that that approach rolled out on the ground has not just organisational repercussions but also financial repercussions for providers in preparing for assessment. I just put that on the record because I spend a lot of time trekking out and about and I keep getting those comments made to me, so in fairness wanted to put them on the record.

Mr Brandon : We spend a lot of time asking people to tell us where this is happening so we can correct it, because we share your interest in getting it right.

Senator McLucas: Senator, can I just provide you with the information that I, when I sat on that side, asked basically the same set of questions. We are talking about human beings working in an equality assured system and there will always be glitches. Mr Brandon's comment about the final outcome was that we can be assured that it will be accurate, but because we are talking about human beings coming up against human beings in an assessment process there will always be views about how it went.

Senator FIERRAVANTI-WELLS: I will move to the ACFI changes and the announcements that were made. Can you tell me what the process was that led up to the ACFI changes? Was there consultation about the specific changes with the sector?

Ms Smith : There has actually been extensive consultation on the changes to the Aged Care Funding Instrument that date back to around November of last year. An ACFI Monitoring Group was set up to work with the department to understand what was going on in terms of the higher than anticipated levels of growth and to look at what some of the options might be to deal with that. That was a process that was quite intensive leading up to the decisions that were announced in the budget context. There was then a further—

Senator FIERRAVANTI-WELLS: Can I just ask: was that a confidential process?

Ms Smith : That was a process on which we did ask members to respect the confidentiality of the material they were being provided, though they were able to consult within their organisation. Following the government's announcements in the budget context we had further, quite detailed, engagement with industry and with provider and consumer organisations and we re-established the ACFI Monitoring Group, which—as we said before in relation to Senator Smith's questions—has now met twice and will meet again next week. We also had a number of quite detailed conversations before the monitoring group was actually developed. Those were conversations in which we asked the people who came to the meetings to actively engage with their organisations.

Ms Huxtable : In addition to that, we also have had some intensive engagement with individual provider organisations or provider groups. So I would characterise it as being a three-phase process. There was the consultation that occurred leading up to the April announcement. There was then a series of consultations in which there was a great deal of intense engagement with industry about how that—

Senator FIERRAVANTI-WELLS: Did that include the banking organisations?

Ms Huxtable : That is correct, yes. That was about how that would be implemented. And, since the operational decisions occurred, we have had two meetings of the ACFI monitoring group, which is looking at whether or not the changes are resulting in what we expected to occur. I think the minister has made very clear that the objective is to monitor very closely whether we are seeing the return-to-trend growth that is anticipated through the ACFI changes. We are very active in that process now—noting that we are in the very early days of data being available.

Senator FIERRAVANTI-WELLS: Perhaps I can just take you to an interview Minister Butler gave on 7.30 on 16 August. I have several copies of the transcript if that would be helpful. It was the interview about alleged overclaiming by aged-care providers. It covered a number of people; there were some nurses. This was the one about the aggressive behaviour of consultants. On the fourth page, Minister Butler says:

I'm worried about the very aggressive behaviour of consultants encouraging providers to maximise their income. There are obviously providers in the sector who deal with the instrument as they should, but there appears to be a number who are claiming in a way that they shouldn't.

How many were actually claiming in a way that they should not?

Mr Scott : At the end of the financial year 2011-12, we had downgrade rates of around 18 per cent through the ACFI validation program.

Senator FIERRAVANTI-WELLS: Can I just ask you a very precise question? The minister made a very serious assertion, because he then goes on, three paragraphs later, to say:

I've asked for detailed advice about what the full range of options are that we have and where there was a case of fraud obviously it would be incumbent upon us to refer that to the authorities.

I want an answer to some specific questions. First, who are these people? How many people were there who, according to the minister, were engaging in aggressive behaviour? That is the first thing. Secondly, how many providers are we talking about, about whom the minister made that allegation? And, thirdly, regarding the cases of fraud, has detailed advice been provided to the minister? Has there been an investigation? And can you point me to cases where there has been fraud?

Mr Coburn : In 2011-12, around two-thirds of providers who had a review visit had at least one claim downgraded. So, in a sense, that many providers were in some way or another not using the instrument correctly. It is also worth noting, though, that when we are talking about incorrect use of the instrument, around one in five claims are incorrect but, of those, around one in 10 are actually underclaiming. Incorrect use of the instruments ranges from a very small proportion of claims—around two or three per cent of total claims represent underclaiming, and that is a matter of concern to us—to misunderstanding of the instrument to the more serious cases that the minister was referring to.

Some of the kinds of things that concern us are, for example, the use of consultants, use of medication timing, use of physiotherapists and things like that. We are at the moment, for example, looking at a small number of providers who we believe are at possibly the more serious end of misclaiming, but that is in relation to investigations that are in process at the moment.

Senator FIERRAVANTI-WELLS: The minister made some very serious accusations on that evening. I would like to know what he is referring to. Is he correct in those assertions? Or, if he is not, what is the correct position? Is the minister not being accurate on the record? That is what I would like to know from you. I asked a series of specific questions and, with all due respect, you have not provided me with a proper answer.

Ms Huxtable : I think Mr Coburn has answered the question.

Senator FIERRAVANTI-WELLS: No, he has not answered my question.

Ms Huxtable : He has made the point that there are a number of cases where downgrades occur. He has made the point that we are aware of instances where there appears to be systematic overclaiming and that they are being investigated. It would be inappropriate for us to talk in more detail about those when there is an investigation.

Senator FIERRAVANTI-WELLS: So nobody has actually been charged with fraud?

Mr Scott : That is correct.

Mr Coburn : I believe the minister said that if there were cases of fraud it would be appropriate to take that forward. We have not had any cases of fraud that we have identified definitively at the moment.

Senator FIERRAVANTI-WELLS: He refers to detailed advice. Has that advice been provided to the minister?

Mr Scott : Yes, we have provided a number of pieces of advice are around the ACFI claiming patterns as well as contributing to the advice around the ACFI reforms that were done in the Living Longer Living Better program.

Senator FIERRAVANTI-WELLS: Was there any advice in relation to specific cases of fraud?

Mr Scott : No. I am looking at transcript that you referred us to and the minister in the section that you were pointing to has noted:

… and where there was a case of fraud obviously it would be incumbent upon us to refer that to the authorities.

We have not identified to this point any specific cases of fraud, but were we to, of course, we would make those referrals.

Mr Coburn : I think it is also worth clarifying that fraud has a particular meaning. In terms of the Criminal Code it actually refers to obtaining a benefit by deception. Our concerns about serious incorrect claiming go much beyond fraud. We do not just stop investigating things because we think there is not a criminal case to be made. We have other arrangements as well.

Senator FIERRAVANTI-WELLS: Mr Coburn, the reason I asked this is that there is a correlation between the two statements that the minister has made. It is very clear. He says, 'I'm worried about the very aggressive behaviour,' and then he goes on to talk about fraud. So, there is a difference. You would have to agree there is a vast difference between aggressive behaviour of people who are legitimately claiming within the funding instrument and actual fraud, but the minister seems to be linking these two things together. That is where my concern is.

Senator McLucas: Senator, perhaps I can be of assistance. The minister is referring to the previous speaker's reference to the use of the word 'fraud' and he says:

… and where there was a case of fraud obviously it would be incumbent upon us to refer that to the authorities.

So he is saying, if there were a case of fraud.

Senator FIERRAVANTI-WELLS: Senator McLucas, I am just simply reiterating and putting concerns that have been raised with me that the minister has, if I can put it this way, wholesalely alleged that there is fraud. So people are understandably concerned about the inference that this may draw.

Senator McLucas: That is not true.

Senator FIERRAVANTI-WELLS: I just basically want to know if there is anyone who has been actually charged with fraud, and the answer my question is no.

CHAIR: Senator, that was the answer given.

Senator FIERRAVANTI-WELLS: Thank you. The day after there is another transcript which is 'Minister calls for inquiry into alleged rorts' and I have two copies that I can hand up as well. It says:

Current and former commonwealth nursing officers say some of their managers told them to look the other way when they found false funding claims submitted by aged care providers.

My question here is; the minister again makes comments about the funding claims and says:

… I'll be asking for an explanation from the department …

Can I ask: did he ask for that explanation and when was that explanation provided to him?

Mr Scott : I will have to check the precise date but my recollection was that the explanation was provided within a couple of days of these interviews and of the 7.30 program.

Senator FIERRAVANTI-WELLS: All right, and can you tell me what that explanation is?

Mr Scott : When we came aware of what the 7.30 program was going to allege, I made inquiries with the senior program managers of the ACFI review program. You may be aware that the ACFI review program is operated out through each of our state and territory offices. I spoke with the state managers of each state and territory office that run our ACFI validation program and asked them (1) to confirm for me that they had not been approached by staff with serious concerns about over-claiming that has not been investigated and addressed and (2) that they could confirm for me that they had not given a direction along the lines of 'look the other way'.

They were able to confirm for me that those directions had not been given and they had not been approached about concerns with over-claiming that was not being addressed by the department. In turn I also asked them to confirm with their senior program managers in the state offices that they had not been made aware of any formal concerns about the conduct of our program or that directions had been issued to look the other way, and they were able to confirm for me that no such direction had been given by them. We also have another formal investigation currently on foot that is being handled by our audit and fraud area and that is still underway.

Senator FIERRAVANTI-WELLS: When do expect that that will report?

Mr Scott : I have not been made aware of the expected end date but I am happy to make inquiries and come back.

Senator FIERRAVANTI-WELLS: I asked this question to Senator McLucas: in view of these allegations that are out there, is the intention to make these reports available?

Ms Halton : Which reports, Senator? That is not a question for Senator McLucas; that is a question for me. Senator, I would like to be really clear about this. I take these kinds of claims extremely seriously because it goes to the integrity of the department and it goes to the integrity of departmental offices.

Senator FIERRAVANTI-WELLS: That is very reason why I ask because, if there is nothing there, then in fairness to the people against whom these allegations have been made, it would be appropriate for that report to be released.

Ms Halton : We do not release investigation reports as a matter of standard practice. However what I can tell you are a couple of things. Firstly, we have continued to receive a series of FOI requests from the journalist. We actually have a very good idea who actually has made these claims. I can tell you I know which state office it is and I can tell you also that the relevant people, we believe, were actually packaged out by the department as part of reducing function. I can also tell you that in terms of this process it was that the department, consistent with our obligation to manage public expenditure in a very careful and thorough way, who actually have looked at these issues of claiming patterns.

We can have a debate about what led into statements made by the minister but we do know there are a series of things that we are responsible for by ensuring they are operating properly and correctly, and that includes claiming against the ACFI, and that brings with it responsibilities. I actually sought assurance from the officers in the department that they gave a very, very clear message to officers down the line that they are expected to do their job consistent with practice. I have had assurances back in relation to people's understanding of their obligations. As I say, I have a very good idea of where this has come from and I can promise you that the message to staff inside the department is that they are to discharge their obligations consistent with the legislation and consistent with our responsibility to ensure proper use of Commonwealth monies.

Senator FIERRAVANTI-WELLS: Mr Nick Heywood-Smith from Wellness & Lifestyles, who was the subject of the 7.30 report, or one of the people who make comments in relation to this matter, has he commenced any legal proceedings against the Commonwealth of Australia?

Mr Scott : Not that we have been informed of. There is publicly available information that suggests he may have commenced legal action against the ABC, but I am not aware that we have had any contact from Mr Heywood-Smith.

Senator FIERRAVANTI-WELLS: Can I ask some questions in relation to the Aged Care Financing Authority? Is that legislation likely to come on soon? Where are we at with that?

Ms Smith : The Aged Care Financing Authority is actually a non-statutory committee. In terms of the legislation to implement all the financing changes in the Living Longer Living Better—

Senator FIERRAVANTI-WELLS: I was under the impression that there would be some legislation coming through pertaining to finance matters. Is that not the case?

Ms Smith : There will be a great deal of legislation to implement the financing changes that are in the Living Longer Living Better package; you are absolutely correct. But that relates to changes to the Aged Care Act to implement all the means testing and other financing changes. The Aged Care Financing Authority itself is a non-statutory committee and does not require legislation.

Senator FIERRAVANTI-WELLS: When is that other legislation likely to come on?

Ms Smith : We are working actively on that at the moment in terms of the drafting instructions. The timing of introduction is a matter for government, but the government is very keen to ensure that it is progressed quickly to give industry the certainty that it is looking for.

Senator FIERRAVANTI-WELLS: In relation to the workforce compact, it does not seem to be going very well. Do you anticipate that it will be finalised shortly or not at all?

Ms Smith : The Strategic Workforce Advisory Group, which has representatives from all the relevant players, has been working through the detail of a compact and, as you would imagine, there have been robust discussions within that forum. Commission Gooley, who is the Commission of Fair and Work Australia who was appointed to lead that process, will be finalising her report to Minister Butler and Minister Shorten very shortly.

Senator FIERRAVANTI-WELLS: In relation to that announcement, were there any discussions with the relevant unions before the announcement was made about the workforce compact?

Ms Smith : There was engagement through the National Aged Care Alliance with all the relevant players, the providers, the unions, the consumer reps. There was discussion on the package and feeding into the package.

Ms Huxtable : Leading into the package there was actually work done on workforces as a critical issue that was managed under that and a whole range of people were involved in that work. I do not know whether you could say it was about the compact, per se, but the workforce is a significant issue.

Senator FIERRAVANTI-WELLS: In that case then, when did you first discuss the workforce compact with the unions?

Ms Smith : The workforce compact was discussed with the unions following the announcement.

Senator FIERRAVANTI-WELLS: Only after the announcement? Can I get this clear, Ms Smith, your answer to the question is that, from a departmental perspective, discussions with unions in relation to the workforce compact only occurred after 20 April? Can I get that clear?

Ms Halton : I think that the officer is trying to make a distinction here that in terms of the generality of reform, which included the broad notion of workforce, there was a series of discussions with all of the stakeholders. In terms of the specifics of the workforce compact, that specific particular initiative was only discussed with the unions and others, and everyone else, after it had been announced.

Senator FIERRAVANTI-WELLS: My question is: was the workforce compact discussed by the government with unions before 20 April?

Ms Halton : We can speak in respect of what we have done and beyond that we cannot comment. The officers are saying to use specific separate conversations.

Senator FIERRAVANTI-WELLS: That is what I wanted, I just wanted to clarify that. Senator McLucas?

Senator McLucas: I can seek some advice from Minister Butler.

Senator FIERRAVANTI-WELLS: Would you, please. Thank you. Does the department have statistics in relation to the aged-care workforce? How many are in unions and how many are not in unions? Is that the sort of statistics that you would have?

CHAIR: Senator, that is not an issue that this department holds in terms of union membership.

Mr Tracey-Patte : We have no data about union membership.

Senator FIERRAVANTI-WELLS: As far as the workforce compact is concerned? I ask that because providers are going to be required to enter into enterprise bargaining agreement, so I would have thought those might be things that you might be aware of.

Mr Tracey-Patte : Senator, we have information about the number of employees that are covered by enterprise agreements, but we do not have information about union membership.

Senator FIERRAVANTI-WELLS: All right, so you do have statistics about the total number of workers in the aged-care sector? Is that yes? And you do have figures in relation to how many of those workers are covered by an enterprise bargaining agreement?

Mr Tracey-Patte : That is correct.

Senator FIERRAVANTI-WELLS: Can you provide those to me, please?

Mr Tracey-Patte : Certainly. In the residential care sector approximately 75 per cent of all employees are covered by an enterprise agreement, and in the community care section sector it is approximately 60 per cent.

Senator FIERRAVANTI-WELLS: Can you provide me with actual numbers, please?

Mr Tracey-Patte : Certainly.

Senator FIERRAVANTI-WELLS: Have you got them there?

Mr Tracey-Patte : I will quickly check and if I cannot give them to you quickly I will take it on notice.

Senator FIERRAVANTI-WELLS: There are three figures: total workers in aged care—

Mr Tracey-Patte : Total workers in aged care, there are 352,000.

CHAIR: Are they carers in aged care or all workers employed in aged care?

Mr Tracey-Patte : They are employees in aged care. The figures I have here are estimations.

Senator FIERRAVANTI-WELLS: That is fine.

Mr Tracey-Patte : That was the estimated 75 per cent and 60 per cent I referred to. To give you more specific numbers of employees, I will take that on notice.

Senator FIERRAVANTI-WELLS: Thank you very much. I will put the rest of my questions on notice.

CHAIR: Thank you to the officers from aged care and population ageing. We will now take a dinner break and we will come back with outcome 10, health system capacity and quality.

Proceedings suspended from 18:36 to 19:35

CHAIR: We will go to questions for outcome 10, Health system capacity and quality.

Senator HUMPHRIES: I wanted to ask—I assume I am asking the parliamentary secretary since she is at the table—if she is aware of the announcement today by the ACT health minister and, I gather, by her colleague, Senator Lundy, that the federal government will provide $5.8 million towards the establishment of a dedicated service for children in the Canberra Hospital emergency department paediatric stream.

Senator McLucas: Just what I saw on the news when I watched it this evening.

CHAIR: Which program does that fit into under program 10, Health system capacity and quality?

Senator HUMPHRIES: This is for the Canberra Hospital.

CHAIR: Certainly the parliamentary secretary and the officers will try to answer, but for my own sake I would like to know where it fits.

Senator HUMPHRIES: If the parliamentary secretary does not know much about the announcement or she can tell us where the money is coming in the health budget, I assume if it is in the news that it is a decision of the federal government.

Senator McLucas: Absolutely correct.

Senator HUMPHRIES: You cannot tell us where the money is coming from?

Senator McLucas: We will find that out for you. I am sure it will be really well received by Canberra residents.

Senator HUMPHRIES: I think it might be, except there is one element which gives me some concern. The policy is expressed to be a decision to provide for this new dedicated service for children on the basis that it is provided to a re-elected ACT Labor government. In speaking to the ABC today, Senator Lundy was asked whether that meant that the promise was contingent on the election on Saturday of a Labor government, and she apparently said that it was a partnership that comes from commitments from ACT Labor about what they will contribute to the project. She had not seen anything from local Liberals about their health plan and she is not in a position to be able to follow this through with any government other than a newly formed Labor government. Is it the case that this commitment is made to the ACT on the proviso that it elects a Labor government at the election on Saturday?

Senator McLucas: Senator, I think we are probably venturing into areas that neither of us have a lot of information about; we are just taking this from what we have heard on radio or seen on television.

Senator HUMPHRIES: Sorry, actually I have more than that here in front of me. I have, for example, the announcement on the ACT Labor Party's website.

Senator McLucas: I was going to finish. As you would be aware, a lot of funding commitments are based on a situation where a government—the federal government in this case—will partner with, in this case, the ACT government. That will require funding from both sources. If you have quoted Senator Lundy correctly, she says that she has not seen any commitment from the opposition in the ACT; then that is as it is. If there is no commitment from the opposition in the ACT then it is reasonable to think that the contribution from the ACT government, should the Liberal Party be elected, would not be there. That is the state of play as we are today.

Senator HUMPHRIES: But, Parliamentary Secretary, with respect: the ACT Liberal party did not know anything about this until the announcement was made today. Has the federal minister for health approached the ACT opposition to invite it to contribute towards sharing the cost of this program?

Senator McLucas: It is not usually the way business is done, Senator. You know that as a former ACT chief minister.

Senator HUMPHRIES: Surely the way that it is usually done, or rather—I will put it more strongly than that—the way that it is always done, is that the federal government announces a commitment to a state's or territory's health system or a particular hospital which is not contingent on the election of a particular government. Instead, the money is available whichever government is sitting on the treasury benches, as long as it might be prepared to come to the party and meet a Commonwealth commitment. Isn't that the way that it is usually done?

Senator McLucas: I have seen things happen in various ways in my time in this place and in others, but I understand that it is entirely consistent with the Commonwealth's health reform agenda. It will reduce times in the emergency department, and it is a priority that the ACT Labor government has identified.

Senator HUMPHRIES: But surely that money should be available to whichever government the people of the ACT choose on Saturday to elect; it should not be contingent on the election of a certain government.

Senator McLucas: If the alternative government does not have identified funds available—

Senator HUMPHRIES: But maybe it does.

Senator McLucas: Maybe it does—and that is why started the sentence with 'if'.

Senator HUMPHRIES: But it does not know anything about this. It has not been asked to contribute funds, because it has not been approached by the federal government to make this offer. That is why, usually, such commitments are made to a state or territory or to a health system or to a hospital, not to a particular government.

Senator McLucas: As I said, we are having a conversation about an area on which I, certainly, have limited information on what the commitment is. Seemingly, you have more; but it once again comes from media outlets. I would prefer to take those questions on notice and be able to provide further information. But what we have just talked about I have seen happen on many occasions in the context of an election campaign—and that, also, from your government.

Senator HUMPHRIES: I have never seen such an announcement.

CHAIR: I think we have gone as far as we can go in this process. The parliamentary secretary cannot speak for what happened today, and I would like her to take it back for the minister for health. I was happy to let it continue so that you could make the point, but it is not part of this schedule that we are covering at the moment. This is a question that has come in from outside. I am happy for it to have been put on notice, but we cannot continue any further.

Senator HUMPHRIES: I do have a couple more questions.

CHAIR: In this section?

Senator HUMPHRIES: If we do not know where the money is coming from—

CHAIR: Senator, you know better than I, from doing this position, that the way the Senate estimates process works is that we work program by program. I was unaware of your special need. I gave you the call on the basis that you would be asking questions in outcome 10. The question about funding for a hospital in the ACT does not fit into that outcome. In fact, Ms Halton, I think that it would have fitted in—

Ms Halton : Outcome 13.

Senator HUMPHRIES: Okay. Can I play some questions on notice then?

CHAIR: Of course you can.

Senator HUMPHRIES: You have just said, Parliamentary Secretary, that you are aware of other situations like this arising. In my more than 23 years in politics I have never seen a situation where a federal government has promised money based on a particular party being elected in a state or territory poll. Would you please supply me examples of where a precedent of this kind has occurred? I might also ask the department to similarly advise me of whether there have been—in the last 20 years, shall we say—any occasions where there have been any occasions where a—

Senator McLucas: I think that that question would be impossible to answer.

Senator HUMPHRIES: Can I finish my question? It is perfectly possible to answer. Has the department—

Senator McLucas: That we would have records for 20 years that would make go back to political commitments made outside of the department about what someone might have said during an election and what commitment was made by the partner in government—

Senator HUMPHRIES: No, I am not—

Senator FIERRAVANTI-WELLS: You would have incoming government briefs, Parliamentary Secretary. You would have incoming briefs of governments going back over those periods of time. You keep those sorts of things in blue books and red books.

Senator HUMPHRIES: I am not asking for commitments made that the department never got its hands on; I am asking for actual programs that were delivered based on a promise. I know that the department always has the original promise to work on when it has to deliver a program that has been promised. That is where it goes back to—it is a starting point on what has been delivered. Have there been any cases in the last 20 years where the department has delivered a promise which was made contingent on the election of a particular government in an election? Take it on notice, please. I know now that the answer will be that there are no such examples from either of you. It does not happen.

Senator McLucas: I will be able to furnish you, I am sure, with some examples.

Senator HUMPHRIES: I look forward to being contradicted.

Senator SMITH: On the point of where this issue is best addressed, outcome 13 does not deal with health infrastructure but outcome 10 does. Outcome 10.6 deals with health infrastructure and outcome 10 also deals with the Health and Hospitals Fund. I am seeking some clarification about where the issue that Senator Humphries has raised is most appropriately dealt with. I think it is more likely to be program 10 than it is to be program 13.

Senator McLucas: In these circumstances I do seek the advice of the secretary.

Ms Halton : I think the short answer is either but more likely 13.

Senator SMITH: But 13 mentions nothing about health infrastructure.

Ms Halton : It does mention public hospitals and in all these cases it is variable as to which one it will be classified under.

Senator SMITH: So this is as suitable an opportunity as 13.

Ms Halton : I think that is fair comment.

Senator HUMPHRIES: If that is the case, I would like to ask—

CHAIR: In terms of process, my understanding of the questions you are asking is about something that was promised today.

Senator HUMPHRIES: Indeed it was, but it has been promised with federal taxpayers' money administered by the federal Department of Health and Ageing. So I think it is fair to ask the question. Can I rephrase that last question I asked and address it to Ms Halton. Are you aware of any program of spending committed to a state or territory government, or for that matter a foreign government anywhere that the Commonwealth has put dollars in the past, where the commitment was based on one made for a jurisdiction or a hospital or a service or anything of that kind dependent on a particular election outcome before that election occurred?

Ms Halton : As I have not seen anything in relation to today's announcement in terms of what has been said, I am not prepared to comment. I have not seen the news and I have not heard what has been referred to. I did not see the details of the announcement and I think it would be unfair to expect me to comment in that circumstance, as it would indeed be fair to expect the officers to comment.

Senator SMITH: It sounds like it might be a purely political election commitment as opposed to a funding commitment that has been based on sound evidence about a health need in the Australian Capital Territory.

Senator McLucas: I am advised that that is not the case, that this is a priority that has been identified by the ACT government and that has been a discussion between the ACT government and the Australian government—

Senator HUMPHRIES: Which the ACT opposition has not been invited to attend.

Senator McLucas: Well, they are not the government.

Senator HUMPHRIES: They should be invited to attend if you are going to make a promise to a jurisdiction.

Senator McLucas: The ACT government has made an assessment of the need that is required for this specific children's service and there has been agreement from our government that it should be funded.

Senator FIERRAVANTI-WELLS: All right. Which program is this money coming from?

Senator McLucas: As I indicated to Senator Humphries, my knowledge of this commitment is very limited. I watched the seven o'clock news tonight and that is as much as I know. But I have undertaken to take Senator Humphries' questions on notice.

Senator HUMPHRIES: Will the answer be provided before Saturday's election?

Senator McLucas: We will do the best we can, Senator. I am sorry I cannot give you an undertaking that that will be answered by Saturday. I understand your question, though, and we will do the best we can.

Senator FIERRAVANTI-WELLS: Have you provided any advice to the minister in relation to this announcement, Ms Halton?

Ms Halton : I will have to refer to Ms Flanagan at this point.

Ms Flanagan : Not to my knowledge.

Senator FIERRAVANTI-WELLS: Were you aware that this announcement was made today?

Ms Flanagan : I saw it on the news tonight too.

Senator FIERRAVANTI-WELLS: So if we are to understand correctly, there has been an announcement made—do we know how much it is?

Senator HUMPHRIES: $5.8 million.

Senator FIERRAVANTI-WELLS: $5.8 million and the Department of Health and Ageing has no knowledge of it.

Ms Halton : Senator, I think it is—

Senator FIERRAVANTI-WELLS: You have just been given a bit of paper, Ms Halton.

Ms Halton : No, in fact it is the announcement, Senator.

Senator FIERRAVANTI-WELLS: So now you know what the announcement is?

Ms Halton : I have not read it yet.

Senator FIERRAVANTI-WELLS: Well, perhaps we will give you a moment to read it.

Senator HUMPHRIES: Can I correct what I have just said. It is a $5.8 million announcement, $879,000 coming from ACT Labor, not the ACT government, and up to $5 million from the federal government. To quote the policy, 'The federal Labor government has agreed to provide a re-elected ACT Labor government with up to $5 million in capital funding to construct a dedicated paediatric waiting and triage area.'

Ms Halton : Senator, now that I see this I think it is fair to say that the minister has indicated at some point through her office to the government that she sees services for children in the ACT as a priority. I do not think it has been more than that, but I will have to take that on notice.

Senator HUMPHRIES: We all see it as a priority, of course. Every party does, I am sure.

Senator SMITH: Across every state and territory, I should imagine.

Senator HUMPHRIES: Taxpayers at all places are entitled to the benefit of such contributions. Thank you very much, Chair, for your time.

CHAIR: Any further questions in outcome 10?

Senator FIERRAVANTI-WELLS: Yes. I might start with my questions in relation to the portfolio itself, in relation to actual expenses for 2010-11. If I have a reference to those expenses from an annual report or—

Ms Flanagan : This is one of those other complicated outcomes with many owners. We can take it on notice.

Senator FIERRAVANTI-WELLS: Perhaps the owners can tell me how much they have contributed to the expenses. Yes, I take the point.

Ms Halton : If you look at the list—e-health implementation, National E-Health Transition Authority, Chronic Disease Treatment, a different part of the department. You get the idea. International policy engagement: Would you like me to tell you exactly how much people love internationally our tobacco policies because that comes under this. Research capacity and quality or health infrastructure—there is a lot in this outcome.

Senator FIERRAVANTI-WELLS: I am happy for it to be taken on notice. In relation to 2011-12, I note that it is in the annual report at page 244. So that is fine for that one. In relation to 2012-13, overall the budget for this outcome—will you provide the information in relation to break down by the subprograms?

Ms Halton : Yes, we will have to do it that way. That is the easiest thing to do.

Senator FIERRAVANTI-WELLS: What about in relation to staffing levels? You will take those on notice as well?

Ms Halton : Yes. I would make the point that in a number of these areas, these are programs that have been fluctuating and for a number of them staffing levels are coming off.

Senator FIERRAVANTI-WELLS: Yes. I notice from this—

Ms Halton : Exactly.

Senator FIERRAVANTI-WELLS: In relation to outcome 10, I will put questions on notice about the financial components—no, they are broken down. In relation 10.1, at page 188 what about those figures over the forward estimates?

Ms Halton : Are we doing 10.1 or 10.2?

[19:54]

Senator FIERRAVANTI-WELLS: Why don't we do 10.1 first—Chronic Disease Treatment. Could you take on notice for me the relevant funds in this section and the subprograms in this section as well. In relation to 2010, what were the actual program expenses? Could you provide that to me? You probably do not have those details on you in relation to 10.1.

Mr Smyth : I have subelements on 10.1. Mine relate more to the McGrath breast cancer nurses, which is a program under 10.1. The large flexible fund, which is the health system capacity development fund, sits under 10.3. But we are on track to fully expend funding for the McGrath breast cancer nurses, which is a measure that terminates at the end of this financial year.

Senator FIERRAVANTI-WELLS: That is right. We went through this last time.

Mr Smyth : We went through that last estimates—that is correct.

Senator FIERRAVANTI-WELLS: In relation to 2011-12, I will get those details out of the annual report. In relation to 2012-13 budget expenses, page 188, is 10.1 tracking on target?

Mr Smyth : Again, a lot of this relates to the Health and Hospitals Fund, under 10.1 expenses. That is another area of the portfolio. But certainly the subelements that I have are tracking to full expenditure.

Senator FIERRAVANTI-WELLS: The variance between 271 and 145 obviously relates to when various projects, particularly in relation to the hospital fund, come to fruition—

Ms Halton : This is the point we were discussing earlier. You may remember that particularly the Health and Hospitals Fund was a very large injection, together with a couple of other things. It basically does that.

[19:58]

Senator FIERRAVANTI-WELLS: Let's do 10.2—e-Health Implementation. I will start with the PCEHR, the electronic health records. Could you tell me how many people have signed up to date since 1 July?

Mr Morris : As of midnight last night, 13,340 people had signed up.

Senator FIERRAVANTI-WELLS: Does the department stand by the figure in the 2012-13 budget papers of 500,000 as the number of consumers who will register for a PCEHR? That was at page 192 of the portfolio budget statement.

Ms Huxtable : The 500,000 figure referred to the expectation that we had on the basis of international evidence and the like around the rate of consumer take-up that has been seen in other countries. A number of scenarios sit around that. The 500,000 relates to the first full year of operation. As I think we discussed at the last estimates, the PCEHR is being rolled out in a staged way. The first stage of the rollout was consumer registration, which took effect from 1 July. Then there was the staging of a provider portal, which took effect from mid-August—I think 19 August was the date. And we are gradually having software providers coming on board. A number of software providers have incorporated the PCEHR into what is called a companion tool, and there are other software providers that are well advanced in enabling connectivity. So we will see a gradual upgrading of software into GP practices. That will happen over a period of time. The first tranche of that will start from around the end of this month. The 500,000 figure was used for operational planning purposes to get a sense of where we would be heading in the first full year of operation. It needs to be read in that context.

Senator FIERRAVANTI-WELLS: Does that mean that 1.5 million, then 2.2 million and then 2.6 million in the forward years is really achievable given where we are at the moment?

Ms Huxtable : There are a number of processes that will be and have already been put in place that accompany the staging of the rollout. You would be aware that there has been clarification provided for GPs in respect of use of MBS items for their participation in the electronic health record. There have also been announcements made around the Practice Incentives Program and the expectations of practices in terms of their engagement with electronic health. These will all be drivers for adoption. As you would know, this is an opt-in system for both consumers and providers, but the expectation that we have, based on international evidence and our own experience, is that providers will be an important part of driving consumer take-up. We are very focused on the value of the participation in the PCEHR. Overall numbers is one metric but equally important is the metric around the types of people who are participating in the electronic health record. The focus of the development work has been very much around those cohorts who will benefit the most—people with chronic disease, mothers and newborns, Indigenous people, older Australians et cetera. That has been the focus and we are driving toward that.

Senator FIERRAVANTI-WELLS: So the telephone number that you call for assistance—

Ms Huxtable : To register?

Senator FIERRAVANTI-WELLS: Yes.

Ms Huxtable : Yes, it is actually in the Department of Human Services. So there are three registration channels, one of which is a phone channel, but there is also the Medicare shopfront and the online channel.

Ms Halton : And I have to say: I am delighted that we have got 13,000. We are not even at the point of having the GP software available and yet, despite that, literally, day on day—we get the numbers everyday of how many people have registered—I open it and think, 'Goodness me'. People really want this. It is amazing. Most of those registrations are coming online.

Senator FIERRAVANTI-WELLS: Ms Halton, let me share with you my experience on 4 July.

Ms Halton : You have tried, yes.

Senator FIERRAVANTI-WELLS: Let me tell you about my experience on 4 July. So I ring up and I spell my surname—three times. There was a problem with the hyphen—lots of problems with hyphens. So, after 20 minutes the person at the other end of the phone says, 'Can you go to a Medicare office?' I said, 'Great, terrific—I'll go off to a Medicare office to register for something online.' Ms Halton, not good enough.

Ms Huxtable : Senator, the online registration capability came into effect from 6 July, so the online channel has been opened from 6 July—

Senator FIERRAVANTI-WELLS: Does it take hyphens?

Ms Huxtable : It does.

Senator FIERRAVANTI-WELLS: And commas?

Ms Huxtable : Yes, all of the above. And 90 per cent of registrations are coming through the online channel.

Ms Halton : Senator, I think it is important to understand here: this is a huge piece of software—softwares, lots of it. This is a huge change. This capability was stood up in the time that was actually requested of us to stand it up. Yes, there are all sorts of things that we are learning as part of this process. In fact, as we move to roll out the GP software—and my colleagues down this end of the table can talk to you about the early software we now have available to the profession. But the main bits of GP software will become available later this year. The last bit is available early next year. Essentially we are in the early phases of this. So you actually constitute an attempted early adopter. This is my point about the 13,000—we have not gone out and promoted registration to anybody.

Senator FIERRAVANTI-WELLS: Ms Halton, you qualified it by saying, 'as far as the department is concerned'. Doesn't it smack of an implementation that was rushed without properly—

Ms Halton : No.

Senator FIERRAVANTI-WELLS: Why didn't you do it properly? You wouldn't have had so many problems.

Ms Halton : No. Senator, I actually have to strongly disagree with you.

Senator FIERRAVANTI-WELLS: It has been done properly?

Ms Halton : It has been done properly.

Senator FIERRAVANTI-WELLS: How many people do you think may have tried and had a problem and may be put off—

Ms Halton : The thing we know—and it is definitely the case and we are working on this—is that there are some difficulties for people with online registration. There are some barriers in terms of what is referred to in the trade as 'useability'. My colleagues can all talk to you about that issue. My point is exactly this. Early adopters are giving us a lot of feedback about the registration process—some of the barriers, some of the issues, some of the challenges. When the GP software becomes available this is when we actually expect to see, and when we indeed expect to drive, registration. What we are doing is working through some of those issues in this early phase. And, yes, it is freely acknowledged that there are some challenges in people actually registering, and we tried to deal with some of these issues early on, with information provided on the website about what you might need to verify your identity. If you ask people along this table, they can all give you a variety of experiences about registration. Rosemary registered in about three minutes flat because she had—

Ms Huxtable : An aus.gov.au account.

Ms Halton : an aus.gov.au account. I did not. Everyone has got different experiences. The truth is that this is a long-term change. It was delivered, as we promised registration would be available, from1 July, and the electronic registration from the 6th. That is exactly what we promised.

Senator FIERRAVANTI-WELLS: Can I ask NEHTA: do you think this target is achievable?

Mr Fleming : Yes, it is achievable and yes, it was achieved—absolutely. As Ms Halton said, registration was available on those dates.

In terms of the software vendors that Ms Halton mentioned, we are working with four groups of software vendors at the moment. In terms of GP desktop vendors, there are nine of them; two of them are in the category of the companion tools, and the others are the traditional desktop providers. The companion tools have been built out and are operational in beta sites at the moment, and they will roll out before the end of the month to other sites. So that is a normal process.

In terms of the GP desktop vendors, who represent 98 per cent of the market, they have all built the HI system into there. They have an objective: by the 31st of this month to have the functionality of the PCEHR finalised, and they will do that. Then they have another objective for February.

In conjunction with that group, we are working with the aged-care vendors. Once again, the major vendors in that market are approximately 90 per cent of the market, and they have a series of objectives that they are working to. We will make announcements very soon about the community pharmacy vendors who are also signed up and working. The fourth group of vendors are ones that are not part of our vendor panel but are working with us for various reasons and, once again, progressing quite strongly down that path. So, yes, it is absolutely achievable.

Senator FIERRAVANTI-WELLS: How many shared health summaries have been created and uploaded to the PCEHR?

Ms Huxtable : I do not know that I know the exact number. With the companion software, there has been a shared health summary uploaded—that is correct, isn't it, someone? But it is in the very early stages, so, as Mr Fleming said, the companion tools are in use. I think there are two practices that have used those companion tools. It must have been at least a month or six weeks ago.

Mr Madden : Mid-September.

Ms Huxtable : The really important next step is when those software vendors are rolling out their desktop software, which will be starting later this month.

Senator FIERRAVANTI-WELLS: How many have been created? Do you need to take that on notice? I would have thought that that would be information Mr Fleming or somebody would have.

Ms Halton : Mr Fleming is not the operator so he will not have that information. We can get that information for you, but I just need to remind you that what we have here is actually ahead of what we were anticipating. It was not our expectation that there would be any summaries available until the GP software actually became available. The fact that we have had two software providers come out early because they are trying to get into the market is actually a bonus. We were not expecting summaries to be provided until the GP software started to roll out.

Ms Huxtable : I can tell you that 791,764 Medicare documents have been uploaded to Personally Controlled Electronic Health Records, however, as at the end of September 2012.

Senator FIERRAVANTI-WELLS: Medicare documents?

Ms Huxtable : Yes: information about MBS claims, PBS claims, organ donation registry records and immunisation records.

Senator FIERRAVANTI-WELLS: But the summaries number would be less than that?

Ms Huxtable : Yes, definitely, because, as Ms Halton and I both tried to say, we are not really at the stage—

Senator FIERRAVANTI-WELLS: I was just asking for the summaries.

Ms Huxtable : where we are getting the roll-out of software to enable the summaries to be uploaded.

Senator FIERRAVANTI-WELLS: Can you take on notice the summaries?

Ms Huxtable : Yes. Certainly the national infrastructure has the capacity to upload shared health summaries, event summaries and discharge summaries. So that functionality has been delivered.

Senator FIERRAVANTI-WELLS: Mr Fleming, now that the PCEHR has gone live, what is your focus over the next 24 months going to be?

Mr Fleming : NEHTA, as you know, is funded through two sources: the Council of Australian Governments—and within that context there was significant work to do around infrastructure-type services, the HI service, discharge referral et cetera—and, through PCEHR, the Commonwealth. We are still completing some of the COAG activities, and indeed our focus is now very much on supporting implementation. So we are working very closely with all vendors. One of the things we have built out within NEHTA is: every time we write a specification, we write sample code, build it ourselves and then make that available to vendors and help them implement. So our focus is very much now on helping the implementation of this throughout the country, whether that be with vendors or others. On the clinical side we have a group of people who are working with clinicians and those services on process re-engineering and so on, so it is very much around implementation. We are also finalising certain aspects. We are working on medication management will flow through in the near future, for example.

Senator FIERRAVANTI-WELLS: What is the status of the National Authentication Service for Health?

Mr Fleming : As you are probably aware, we did terminate the contract with IBM. We have been working with DOHA and DHS. We have implemented a NASH solution with DHS, which is in operation and rolling out. That is progressing.

Senator FIERRAVANTI-WELLS: When will this be complete?

Mr Fleming : NASH is doing what we need now. For PCEHRS there is a second component which will support secure messaging. DHS is working with some final phases there, and they will make some announcements in the very near future. Certainly everything we need NASH to do it is capable of and it is doing.

Senator FIERRAVANTI-WELLS: Could I just give you a copy of this article. It is 'Experts brand e-health audit trail as "gobbledygook"'. Did you see that article?

Mr Fleming : I am aware of it from a little while ago.

Ms Halton : This is the infamous David More, the well-known blogger. 'E-health consultant and medico Dr David Moore', otherwise known as the well-known blogger.

Senator FIERRAVANTI-WELLS: You have not actually heard what my question was going to be.

Ms Halton : No. I have not seen before.

Senator FIERRAVANTI-WELLS: It is about the audit trail. Are you questioning Dr More just because he is a serial blogger?

Ms Halton : I was just reading the second paragraph, so I know can what this is about.

Senator FIERRAVANTI-WELLS: Are you saying his comments should be dismissed?

Ms Halton : I have not even got to the next part of the comment.

Senator FIERRAVANTI-WELLS: I will let you read it. That would be good.

Ms Halton : We might let the chief information and knowledge officer start talking while I read.

Mr Madden : I did see that blog some time ago. I cannot remember the exact date. Ms Halton mentioned earlier there were a range of issues around usability. We had delivered an audit log. We had expected that there would be low numbers of registrations, and the intention was to reformat and provide that information in what I will call a more user-friendly style, which has been done since. Back at that point what we had set out to do was to make sure that we were capturing all of the auditable records and the changes and the creation of things in the PCEHRS. All of the audit logs and all of those activities that have been undertaken have been recorded. How we format that and put it on a screen to make it usable has been updated to make more user-friendly.

Senator FIERRAVANTI-WELLS: If you are dismissive of Dr More's comments—he styles himself as an e-health consultant and medico, and I think he makes some pretty valid points there—over the page there are some other comments. One is by Carol Bennett. She makes the comment on page 2 of that article:

… the ability of consumers to track who had accessed their e-Health record was a "critical component" …

"For the audit to work it has to be user friendly and it currently isn't," she said.

What is your response? She also makes some other comments:

… have to make it a high priority to make the audit user friendly so it can generate confidence that consumers have the ability to have control over who accesses their record ...

What is your response to Ms Bennett?

Mr Madden : The response to Ms Bennett is that the usability and the ability for users to navigate the audit records is a priority, and we will continue to work on those usability aspects. I guess the critical aspect is that we have kept a record of every creation of record, access of record, change to record. So all of those elements of information are there. How we present them into the future to make them more useful and usable to the user will continue to be a focus for us.

Senator FIERRAVANTI-WELLS: What about the comments by the Australian Privacy Foundation in that article that the audit trail data was 'absolutely meaningless'? The quote continues: 'How the heck is a consumer expected to interpret machine addresses, that's all they've got to track their record.' And you have comments there. What is your response to those comments?

Mr Madden : Again, the feedback we got when the blog was first published was a very important set of feedback that has actually turned our focus to how we present that information in a more user-friendly style. Again, the information we have collected and will maintain is the audit trails and logs of all of the activities in the PCHR, and we are turning that into a user-friendly log that is more usable and easier for people to read.

Senator FIERRAVANTI-WELLS: Have you done that or do you have a time frame to do that?

Mr Madden : The first part of turning that into a user-friendly audit log has already occurred.

Senator FIERRAVANTI-WELLS: In relation to the glitches, I mentioned hyphens and commas. Have apostrophes been sorted out.

Ms Halton : There is no issue there.

Senator FIERRAVANTI-WELLS: No more issues?

Mr Madden : No. We only ever had issues with the apostrophes. We did not have issues with the hyphens.

Senator FIERRAVANTI-WELLS: Well, Mr Madden, I had a problem with hyphens.

Mr Madden : Okay.

Senator FIERRAVANTI-WELLS: I have a long name with a hyphen. I was told 'Can't do hyphens.' If you tell me there is no problem—

Ms Halton : I can guarantee you that you can do hyphens.

Senator FIERRAVANTI-WELLS: I might go back and try.

Ms Halton : When you try—and this is important—because of the aus.gov.au front end, there are a series of questions you are asked that enable Medicare Australia database to confirm that you are you. We put this information on the website, but as I said there are still some useability issues about it, which is why we are not out promoting this very hard at the moment as we try to sort through those. When you try, have with you the information about the last time you went to the doctor—so, the last time you claimed a Medicare benefit. If you have that kind of information—where it was, when it was and how much it was—that will help you verify your identity to the Medicare database. It basically says that, if you know that, that is really who you are. That is a little hint.

Senator FIERRAVANTI-WELLS: I will try again. I now have questions in 10.4 and 10.5 and that will complete my questions.

CHAIR: As there are no further questions in 10.2 or NEHTA, thank you for your evidence. Are there questions on 10.3?

Senator FIERRAVANTI-WELLS: I will put those on notice.

[10:22]

CHAIR: We will now move to 10.4.

Senator FIERRAVANTI-WELLS: For 10.4 I will put financials on notice, and I have just one question in relation page 196 of the portfolio budget statement. It concerns international policy engagement on page 196 of the portfolio budget statement. The expenditure for 2011-12 was projected to be $9.9 million, increasing to $14.9 million for each year over the remainder of the forward estimates. Can you give me an explanation for the 50 per cent increase in expenditure between 2011-12 and 2012-13?

Mr Cotterell : At the beginning of the 2011-12 financial year the budget for that year was $14.9 million. This program is used to pay our dues to international organisations, including the World Health Organization. We paid those early in the financial year. Because our exchange rate is strong, we had money left over that was taken as a saving by the government at additional estimates. So there was a $4.9 million saving taken, but the allocations across the forward estimates remained at the original level.

Senator FIERRAVANTI-WELLS: And that accounts for the variations?

Ms Halton : That is right.

[20:25]

CHAIR: We will move to 10.5.

Ms Halton : While the officers are coming to the table, I have had a message from Professor Picone, the chief executive of the Australian Commission on Safety and Quality in Health Care, who firstly apologises for her inability to attend today. She has asked that I provide additional information and further clarification to Senator Di Natale's question from today.

In addition to providing the secretariat function of the Antimicrobial Resistance Standing Committee, the commission is leading national work to address health care associated infection and reduce antimicrobial resistance in Australia. The commission's budget in 2012-13 for health care associated infection is $2.8 million, which includes providing implementation support for health services of Standard 3 of the National Safety and Quality Health Service Standards; undertaking a national epidemiological and clinic survey of Clostridium difficile; development of definitions and dataset specifications for catheter associated infections, urinary infections and surgical site infections; development of a national strategic plan for the prevention of antimicrobial resistance; and delivering a national hand-hygiene initiative in every Australian hospital.

The most significant change in relation to antimicrobial stewardship is the commission's work on the implementation of standard 3, as referred to above. These standards were mandated by health minsters to be implemented in all public and private hospitals in Australia. This standard ensures the appropriate prescribing of antimicrobials and requires that all health care services 1) have an antimicrobial stewardship program in place, 2) that the clinical workforce prescribing antimicrobials has access to current endorsed therapeutic guidelines on antibiotic use, 3) that monitoring of antimicrobial usage and resistance is undertaken, and 4) that action is taken to improve the effectiveness of antimicrobial stewardship.

Senator FIERRAVANTI-WELLS: I have some questions about the National Prescribing Service and how much funding is to be provided to it over the forward estimates.

Ms McNeill : The National Prescribing Service has a four-year funding agreement that involves $199.498 million. I should just clarify that that is a four-year agreement that started in 2011-12 and covers the period 2011-12 to 2014-15.

Senator FIERRAVANTI-WELLS: Is this entirely funded through the Quality Use of Diagnostics, Therapeutics and Pathology Fund?

Ms McNeill : Yes, it is.

Senator FIERRAVANTI-WELLS: Does the NPS have to apply for funding on a competitive basis through the fund?

Ms McNeill : It will when the time period comes up.

Senator FIERRAVANTI-WELLS: At the end of the agreement?

Ms McNeill : Yes.

Senator FIERRAVANTI-WELLS: After the agreement expires, when will the reapplication for the agreement occur?

Ms McNeill : We tend to look at these things 18 months in advance. Obviously there is lead time with respect to actually going out to determine what services we need in that particular area.

Senator FIERRAVANTI-WELLS: What other services or organisations are funded through this fund?

Ms McNeill : We also fund the National Return and Disposal of Unwanted Medicines program. That is one of the innovative programs we have operating through community pharmacies, where patients who no longer require their medicines at home—they have perhaps moved on to a different medicine or no longer need that treatment—can return it to the pharmacy and have it safely disposed of on their behalf.

Senator FIERRAVANTI-WELLS: This is the whole fund under 10.5

Ms McNeill : Not the whole fund. There are other aspects of the fund that are part of another area of the department.

Senator SMITH: I have a question in regard to the Health and Hospital Fund and the report of the Australian National Audit Office, in June. Secretary, you will remember that at the last estimates we discussed briefly the Health and Hospital Fund program. You alluded to the report of the Australian National Audit Office, which I think was being undertaken at the time. In the opening remarks of outcome 10.5 and in the annual report one of the challenges identified by the department is managing the large and diverse portfolio of capital works projects funded by the Health and Hospitals Fund. The Auditor-General's report of, I think, June this year drew attention to the fact that the department might take a very narrow view of some of its responsibilities. Point 23 states:

There are some administrative aspects, however, where there is scope for the department to better assist key decision makers, particularly the Health Minister, in discharging their responsibilities—

specifically in regard to this program. Then, at 25, is says:

DoHA advised the ANAO that throughout all rounds it has been the Government’s decision as to which of the eligible projects are to be funded, and that it has not been required that the Board or the department rank projects for the Government. While there is no such requirement, this approach reflects a relatively narrow view of responsibilities in grants administration.

My question goes to the challenge that is identified at page 215 of your annual report, the commentary from the Australian National Audit Office and, specifically, what the department might be doing to address some of the concerns the Audit Office has raised?

Ms Halton : There are two issues, one of which is the actual recommendations of the Audit Office. I think there is a distinction between a series of comments made in an audit report versus the recommendations. If you go to the recommendations—and I do not have the audit report in front of me, so I am flying a fraction blind here—the recommendations, which, as I understand it, go to maximising transparency in decision making, the department is to include all significant aspects of selection processes and funding guidelines and advise the minister on priorities for funding proposals assessed as eligible; enable decision makers to form a considered view; and improve transparency and accountability in the reporting of outcomes.

There are a couple of things about this, and there are some parts of where the Audit Office went that I do not agree with. Essentially, there is a difference, in my view, between advice required and requests by ministers in relation to broad priorities as against the actual specifics of individual projects. Under the legislation, the HHF board was asked to say whether or not projects meet the requirements. We have been through that ad nauseam in this committee, in terms of those processes. That is what happened.

If I take the cancer example, there were a number of priorities that the government were interested in. For example, regional cancer centres. The Audit Office seems to think that we should get into a level of detail in advising of ministers. That, in my view, given the construct of that legislation and the remit that was given by the ministers in relation to the broad priorities, I did not agree with. I did not have any objection to the specifics of the recommendations, but there was what I would describe as gratuitous commentary by the ANAO. I have had this conversation with the Auditor-General; my views are not a surprise. I do not have a problem with the broad recommendations, but I think some of the commentary was, frankly, gratuitous. They can have their opinion and, as far as I am concerned, have obligations under the legislation, in terms of the guidance given by ministers, or in this particular case a minister, as to what was required. That is how we administer this.

I think we need to put the gratuitous comments in one place, the recommendations in another, and then this particular comment in the annual report, which goes to managing the large and diverse portfolio. I come to that point. This department had a period some considerable years ago where we had large capital projects that we ran as a matter of routine. Basically, in the mid- to late-nineties, the amount of capital expenditure we were monitoring declined very significantly, principally because of some decisions taken under the last government, principally in aged care. That meant that the corporate expertise, in relation to managing large capital projects—I will not say evaporated—was considerably diminished. When we got a significant subvention in relation to capital—that is, HHF—and because the beginning of this process was very rapid and very intense, we had to scramble to catch up. I think it is also on the record that we got no resourcing to do this. That has since been rectified, for which I am very grateful. So we had to scramble to create that capability whilst, basically, beginning the early stages of the implementation of this program.

Again, I think we have dealt with this in the past: the circumstances where we have created in the department a centre of excellence in relation to capital projects. We have recruited some staff whose particular experience and expertise is in managing large projects. In fact, the person who leads this area has come out of a long history in the construction industry and has worked on large projects, so he can sniff his way around a set of building plans and a building site in a way that the very capable policy officers in the department have no hope of doing. We built that capability and we are now running, in a consolidated way, our approach to these big capital projects such that we can be quite confident that we have good oversight and a good grip, if I could put it that way, on what is going on with these projects. That is reflecting that we went from zero to a significant investment in large capital. These go to very large projects, and we have had to scramble to keep up with that.

I am quite comfortable that we have that under control. I am very comfortable with the capability we have built, including things like building a portal so that these projects and the proponents of the projects can give us reporting on their progress via the portal. Interestingly, the portal is sufficiently well-regarded that people outside the department can use and can have the technology. So, we try to ensure that we keep an eye on expenditure, that it is delivering what we want it to and that we have people in the place who know what they are talking about when it comes to knowing one end of a building site from the other. That is really what that means.

Senator SMITH: Just so that I am clear in the way that I have read the report, the department did not feel that it was obliged to provide any more information to the minister. Am I correct in saying that it is because the construct of the legislation did not require it?

Ms Halton : Yes, exactly. Essentially, for the ministers in a number of cases—this has spanned ministers, as you would understand—there is a process early on of asking, 'What are our priorities for this round?' I have already mentioned regional cancer centres. In terms of assisting the running of the priority around regional cancer centres, there is a lot of policy work done inside the department about the construct of services, where populations are and where people go. That advice is given to the HHF board, which then informs their review of the project proposals and the things that they say to government are qualified to be funded.

Senator SMITH: So where the audit office report says that the minister did not receive further advice such as merit lists or scores for individual projects against the evaluation criteria to support her assessment, that is not because the department was negligent in its responsibility. Your view is that the legislation was not constructed in a way that made it a requirement.

Ms Halton : Absolutely. In fact, the legislation is very clear. We have had this conversation a number of times. The legislation asks for the board to ask, 'Does it meet the criteria or does it not?' That is exactly what has happened. The process of going through whether it meets the criteria, I can tell you, because I have sat through days and days of meetings as a board member, was absolutely rigorous.

Senator SMITH: The criticism in the commentary was not about the interface between the department and the advisory board.

Ms Halton : No, I understand that. I have a very clear view about what it is we are required to do as part of this. Do I get into giving gratuitous advice? Mostly I find that is not welcome.

Senator SMITH: Excellent. Thanks very much.

CHAIR: We have completed outcome 10. Thank you to all the officers.

[20:42]

CHAIR: Now we are moving to outcome 3, which is access to medical services.

Senator FIERRAVANTI-WELLS: In terms of the 2010-11 financial year, what were the actual expenses? If you have them or a reference to them, that would be good.

Dr Bartlett : I have them. I can go through them by outcomes.

Senator FIERRAVANTI-WELLS: If you could read those onto the record, thank you. Will you give me an overall figure first?

Dr Bartlett : I can give you a variety of overall figures. Program 3.1 is Medicare services. Expenses for Appropriation Bill No. 1 were $1,997,000, for the Dental Health Bill Benefits Act 2008 were $68,523,000, for MBS were $16,392,466,000 and for the department were $34,609,000. Program 3.2 is targeted assistance—medical. Expenses for Appropriation Bill No. 1 were $6,643,000 and for the department were $557,000. 3.3: diagnostic imaging, bill 1 $5,550,000, departmental $2,390,000. 3.4: pathology, bill 1 $4.7 million administered, $2,806,000 departmental. 3.5: radiation oncology services, administered $80,669,000, departmental $2,698,000. 3.6, which has since been folded into 3.2, administered $6,808,000, departmental $1,226,000.

Senator FIERRAVANTI-WELLS: Thank you very much. I will get the 2011-12 figures from the annual report. I will pick those up. In relation to 2012-13, pages 100-101—I beg your pardon, there is not an overall forward estimates for each of the outcomes as a whole. They are subprograms.

Dr Bartlett : They are subprograms. But in the PBS on page 101 there are total expenses for outcome 3.

Senator FIERRAVANTI-WELLS: There are total expenses for 22 and 23, but not over the forward estimates.

Dr Bartlett : No.

Senator FIERRAVANTI-WELLS: And thereby the program. Are each of those forward estimates figures the same? Have there been changes to those forward estimate figures?

Dr Bartlett : There have been no changes to those figures.

Senator FIERRAVANTI-WELLS: And in relation to staff on page 101, 252 to 235 through efficiency and other redundancies et cetera, is there nothing abnormal?

Dr Bartlett : That has been the allocated staffing.

Senator SMITH: My questions go to the diagnostic imaging reform package. Specifically, there is some expectation in the community—and a number of my colleagues wanted me to ask this—around the decision that is expected with regard to the outcome of the tender for the Medicare eligibility arrangements. It was 12 MRI units over a four-year period, and I think there was some expectation that we would have a decision about two of those by August.

Dr Bartlett : The decision was due to be made and announced by the end of the year. There was an advertised process and an assessment that has been completed. There are a series of recommendations with the minister.

Senator SMITH: That is interesting, because the parliamentary secretary has written to me saying that a decision would be made prior to 1 November. That follows my understanding that a decision was going to be due in August. What is the current situation?

Dr Bartlett : The current situation is that the recommendations from the process are with the minister.

Senator SMITH: So your comment that a decision might be taken by the end of the year was just a loose comment?

Dr Bartlett : The original commitment was always that there would be two licences allocated in the 2012 calendar year, two in 2013, four in 2014 and four in 2015. By definition that means it is before 31 December.

Senator SMITH: Just so I am clear, all the advice has been transmitted from the department to the minister.

Dr Bartlett : An MRI area of need process was advertised, it has gone through an evaluation as per the evaluation guidelines that were agreed, and the results of that are with the minister.

Senator SMITH: Do you have any idea about when a decision might be made?

Dr Bartlett : No.

Senator SMITH: Perhaps you could take on notice to inquire as to whether Mr Peter Watson, who is a member of the legislative assembly in the state parliament of Western Australia—the member for Albany—made any representations on behalf of Great Southern Radiology.

Dr Bartlett : We will take that on notice.

CHAIR: Okay, that is 3.3 done. Senator Fierravanti-Wells, you have questions under 3.4—pathology services.

Senator FIERRAVANTI-WELLS: I also have some questions on the Medical Services Advisory Committee. Does that come within your bailiwick, Dr Bartlett?

Dr Bartlett : Yes.

Senator FIERRAVANTI-WELLS: Okay, then I will ask my pathology questions, and then I will ask those ones. In relation to the pathology funding agreement, what were the final MBS outlays and growth rates for 2011-12?

Ms Cahill : I have with me the final expenditure. I do not have a growth rate figure with me. We could take that on notice.

Senator FIERRAVANTI-WELLS: Thank you.

Ms Cahill : The expenditure for 2011-12 was $2,227,236,660.

Senator FIERRAVANTI-WELLS: Was that above or below the rate caps for 2011-12?

Ms Cahill : It was above the maximum expenditure target for 2011-12.

Senator FIERRAVANTI-WELLS: Okay, so you will get me the growth rates on notice, and perhaps you could also tell me whether the growth target was above or below the rate caps as well.

Ms Cahill : Yes, I will take that on notice.

Senator FIERRAVANTI-WELLS: Have the parties to the agreement reached a consensus? And are any changes proposed to adjust outlay levels?

Mr Learmonth : There is a process provided for under the pathology funding agreement between the parties to manage that end-of-year figure. That process is underway.

Senator FIERRAVANTI-WELLS: Do you have a time line for that?

Mr Learmonth : It depends how the process runs. There are a number of time lines that are provided for within the agreements, depending on how that process goes.

Senator FIERRAVANTI-WELLS: I also have a question that I had forgotten about in 3.1, which I will put to you, and if nobody can answer it then it can be taken on notice.

CHAIR: I think Dr Bartlett will be able to ferry it on.

Senator FIERRAVANTI-WELLS: Yes, Dr Bartlett: under 3.1—Medicare services—given the capping of the additional items under the extended Medicare safety net in this year's budget paper No. 2, at 176, what are the current projections of expenditure on the safety net for each year across the forward estimates? And how does this compare historically?

Dr Bartlett : We will have to take that question on notice.

CHAIR: Senator Smith wishes to turn very briefly to diagnostic services. There was a missed question.

Senator SMITH: Just so that I am perfectly clear, in the tender process, was there a requirement that these services needed to be up and running by November of this year?

Dr Bartlett : There was no requirement that services had to be up and running by November this year. A range of applications were received, some of them from people with existing MRI machines in place and others from people who proposed to put one in place subject to a satisfactory outcome.

Senator SMITH: So there was no requirement in the tender about people being able to have a service available and operating by November?

Dr Bartlett : Again, no.

Senator SMITH: Just to be clear regarding the delay in the decision—and I know it is not your decision anymore; all I know is that people have been expecting a decision in August, but I take what you have said—is there any budget consideration to the delay in a decision being taken?

Dr Bartlett : No.

Senator SMITH: My final question is: do you have any advice, or is there any suggestion, that the government may not be committed to the establishment of the 12 MRI licences to areas of need throughout the country during the next four years?

Dr Bartlett : It is probably appropriate that I ask Ms Cahill to step you through the process. I think there is a bit of a misunderstanding here. There is clearly a commitment from the government to the process. The government has in the course of this year announced 30 regional MRI machines which have received full licences. It has announced 161 metropolitan machines that have received partial eligibility, all of which will get that eligibility from 1 November this year. To argue that our time in terms of these two licences evidenced a lack of commitment is—

Senator SMITH: No. We argue in the parliament; we ask questions in the estimates process.

Dr Bartlett : I will rephrase my answer. There is clear evidence of the government's commitment to extending the availability of MRI services. This process has gone through a reasonable assessment and I will ask Ms Cahill to step you through what has happened.

Senator SMITH: I am only interested in the discussion and the process as they relate to where there might be a misconception on the part of some people, including myself, that a decision around these two might have been made in August. A letter has been received by me from the parliamentary secretary saying that the decision will now be made prior to 1 November and then Dr Bartlett you said to me that a decision would be made before the end of the year. I am keen to get some clarity on this because in regional communities access to MRIs where people can use a Medicare facility is very important—I do not need to share that with you. Ms Cahill, can you explain to me the timing of the decision or the announcement of the decision?

Ms Cahill : Yes. Certainly in the period from when the department was originally planning this process and when the ITA was originally advertised on 26 May until now our expectation about the complexity of the assessment certainly changed. We received a very large number of applications, a total of 185, of which 181 went on to be fully assessed against the criteria. That was a larger volume than we had been anticipating. As a consequence, the assessment process did take longer than we had estimated when originally providing guidance about when we thought a decision might be possible.

Senator SMITH: Ms Cahill, that is totally reasonable. I thank you very much for your contribution.

CHAIR: We have finished diagnostics and now back to you Senator Fierravanti-Wells.

Senator FIERRAVANTI-WELLS: This question is on the Medical Services Advisory Committee, which comes under 3.1. The issue of removal of item numbers for joint injections was considered by the Medical Services Advisory Committee on previous occasions and there was to be a review. What was the final outcome on that, Dr Bartlett?

Dr Bartlett : An application on joint injections was received from the Australian Rheumatology Association. MSAC reviewed that application and felt that it was unable to recommend to the government that it was appropriate to fund joint injections for rheumatologists as a separate item on the MBS.

Senator FIERRAVANTI-WELLS: Can you tell me the rationale for refusing the use of this item number, which is 55054, for ultrasound and anaesthesia, argued to be essential for patients' safety while MSAC is considering the application?

Dr Bartlett : Senator, 55054 is an item that is used for the provision of interventional radiology services using ultrasound. A number of anaesthetists have started using it. The anaesthetist schedule is based on the relative value guide that assesses complexity and time in the provision of services. The use of ultrasound has a range of implications in that it may make the provision of the service less complex and quicker. So in the use of 55054, while there is no question that they are potentially benefit from anaesthetists using ultrasound, there is a significant question about what the appropriate payment for that service was and whether it was appropriate that they use this item or another item. MSAC has been asked to do that in the interim, given that the item is not an anaesthetist's item . We have changed the schedule. They have received previous advice that they should not use it. They ignored that advice service schedule was explicitly changed to say they should not use it. That will take effect from one November.

Senator FIERRAVANTI-WELLS: Can you tell me what the process is for ensuring people of adequate expertise in respective specialties are available to review and provide advice on respective funding proposals through MSAC? Is it a fixed committee?

Dr Bartlett : It is a fixed committee with a series of subcommittees and a medical expert standing panel, which has a significant number of people on it who are there to provide expert advice.

Senator FIERRAVANTI-WELLS: So they are the ones who provide the—

Dr Bartlett : They will provide clinical advice. We will also seek clinical advice from the various applicants. There are a range of ways in which we can get it. What we have tried to do in the new MSAC processes is have a much more standardised approach using standing committees rather than having a range of assessment panels that are set up for each application. This proved to be quite a slow and unwieldy way of dealing with matters.

Senator FIERRAVANTI-WELLS: Have you had any difficulties in any of those specialties in sourcing individuals with relevant expertise?

Dr Bartlett : As I understand it, at this stage, no. I believe—

Senator FIERRAVANTI-WELLS: No delays to any reviews caused by problems in sourcing people with appropriate expertise?

Mr Porter : There are obviously always timing issues in terms of getting access to medical specialists, but there is no awareness that I have about any delays in that respect.

Senator FIERRAVANTI-WELLS: Can you tell me what the process is for disputing the finding or expertise of an MSAC committee?

Dr Bartlett : There is no formal process of review if somebody disputes an MSAC outcome. There is always the option of them reapplying with new evidence. We have had a recent case where MSAC has recommended that hyperbaric oxygen therapy not be funded. The applicants from that came to me to raise a series of issues that they had with what had happened. I asked MSAC to have a second look and confirm what they had done. That was done. I said to the applicants that, if they believed there were errors of fact in the outcome, they could raise them with me and I would get them independently checked. They did not raise errors of fact. They raised further arguments about assessment of evidence. We got those looked at by NHMRC, who confirmed the approach that MSAC had taken. It is not a formal review process but it is certainly intent on ensuring that things are checked thoroughly.

Senator FIERRAVANTI-WELLS: What about in relation to processes for initiating an MSAC review for funding of a procedure or technology?

Dr Bartlett : There are a range of ways in which that can happen. Some will happen as a result of the specialty indicating an interest in having things reviewed. We have a paediatric surgery review that is effectively based on an approach from that particular area.

Senator FIERRAVANTI-WELLS: From your internal subcommittee?

Dr Bartlett : No. It is where we were approached by the paediatric surgeon association and asked to have a look at issues they have in terms of the way in which the schedule is working for them. It may be that we look at things and feel that there are some areas where there are some concerns about whether the items and actual practice align well, and there will be a review done there, or we may feel that there are particular specialties where there would be benefit in checking that the MBS actually reflects what they are doing.

Senator FIERRAVANTI-WELLS: Can you tell me what proportion of requests for funding are formally reviewed by MSAC and also where a recommendation, positive or negative, is formally provided to the minister?

Dr Bartlett : Sorry, Senator, I missed the beginning of that question.

Senator FIERRAVANTI-WELLS: The proportion of requests for funding that are formally reviewed by MSAC and where a recommendation is made, whether that be positive or negative, and then formally sent to the minister. Does that happen?

Dr Bartlett : There is an application process for MSAC. People can go through an application. If they put in an application, it will be checked for its eligibility for assessment, which generally means whether it aligns broadly with current things funded under the MBS. On that basis, it will then proceed through the MSAC process, be assessed and a recommendation made to government, one way or the other.

Mr Learmonth : Are you after their acceptance or rejection rate?

Senator FIERRAVANTI-WELLS: Yes, basically; just if you had some stats. I guess the point is the process up to the minister. How many actually do go up to the minister?

Mr Learmonth : How many recommended versus not recommended?

Senator FIERRAVANTI-WELLS: Yes.

Mr Learmonth : We can provide that.

Senator FIERRAVANTI-WELLS: Yes, if you could just get some stats in relation to that. Give me some basic time frames for this process and how it compares historically—but just some general information in relation to that. I now have questions on PSR.