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Community Affairs Legislation Committee
17/10/2012
Estimates
HEALTH AND AGEING PORTFOLIO
Professional Services Review

Professional Services Review

[21:04]

CHAIR: I welcome officers from PSR.

Senator FIERRAVANTI-WELLS: What were your actual expenses in the 2010-11 financial year? Do you have that or a reference to it in your annual report?

Dr Di Dio : Our expenditure in 2010-11 was $5.783 million. None of that was administered funding.

Senator FIERRAVANTI-WELLS: And in 2011-12?

Dr Di Dio : In 2011-12 total departmental expenditure was $5.787 million.

Senator FIERRAVANTI-WELLS: And in 2012-13? In the portfolio budget statements you have that not all of your revenue comes from the Commonwealth.

Dr Di Dio : That is correct. The 2012-13 departmental budgeted expenditure is within the portfolio budget statements—

Senator FIERRAVANTI-WELLS: Yes, on page 598. I have got that.

Dr Di Dio : Our appropriation is $5.759 million. Our year-to-date expenditure as at 30 September was $1.063 million, leaving a balance of $4,695,294 for the rest of the financial year.

Senator FIERRAVANTI-WELLS: And you will come within budget?

Dr Di Dio : Yes.

Senator FIERRAVANTI-WELLS: What about staff numbers?

Dr Di Dio : Staff numbers are to be approximately 24. Our full-time equivalent at the moment is 23.75.

CHAIR: If there are no further questions for outcome 3, I thank the officers.

Proceedings suspended from 21:08 to 21:22

CHAIR: So we will go back into questions around outcome 2.

Senator DI NATALE: I have a question around the savings from the implementation of the MOU between the government and Medicines Australia. Can you estimate the savings as a result of the implementation of the MOU? Secondly, can you indicate what the financial impact of expiring patents for drugs like Lipitor are?

Ms McNeill : Certainly, Senator. With respect to the 2010 further PBS reforms, which I think is the measure that you are talking to, as we have stated that previous estimates, we are on track to realise the $1.9 billion of savings as foreshadowed in that measure. And as we identified on page 103 of our annual report, the target for savings in 2011-12 was $191.2 million and actuals retrieved were $189.3 million.

Senator DI NATALE: Does that money go back to consolidated revenue? What actually happens to it?

Ms McNeill : That is already factored into the forward estimates so it is not money that we recoup. It is the fact that we adjust the settings for what is expected to be the expenditure based on the lower prices.

Senator DI NATALE: For the last financial year, how many drugs were approved by cabinet for listing, and what is the total cost over the forward estimates?

Ms McNeill : In 2011-12, there were 100 new medicines or extensions to listings on the Pharmaceutical Benefits Scheme, which added a net cost of $545.6 million over five years to the cost of the scheme.

Senator DI NATALE: What was the most expensive?

Ms McNeill : That would have been to Ticagrelor or Brilinta for some people who use the actual brand name. That was over $100 million.

Senator DI NATALE: Do you have a precise number?

Ms McNeill : It is over $100 million.

Senator DI NATALE: Over $100 million?

Ms McNeill : Yes.

Senator DI NATALE: That is a pretty big range. If it is $101 million or $102 million, that is fine. But I just want to know if we are talking—

Ms McNeill : It is just over $100 million.

Senator DI NATALE: Just over?

Ms McNeill : I do not have the exact figure with me, but I can take that on notice to clarify.

Senator DI NATALE: In terms of delays, have you got any data on what drove the longest delay that occurred between listing from the original PBAC approval to the actual listing date?

Ms McNeill : Are we talking in the financial year? Because we do have issues with the fact that we have drugs that are over $10 million, which are subject to one particular time table.

Senator DI NATALE: Yes.

Ms McNeill : Then we have drugs that are minor listings of under $10 million.

Senator DI NATALE: No. I am talking over $10 million—so the longest delay and perhaps the shortest delay as well.

Ms McNeill : Certainly.

Senator DI NATALE: And the cost of each of those.

Ms Halton : I am not sure that we can give you something that is defined by short delays. When is—?

Senator DI NATALE: The quickest.

Ms Halton : The quickest to list we can give you, as opposed to the longest.

Senator DI NATALE: Yes. Sorry, that was around about way of saying the quickest list.

Ms Halton : We can do that one. That is easier.

Ms McNeill : Yes, Senator. Fingolimod, a treatment for multiple sclerosis, was listed within one month of what we call 'from pricing agreement', which is the time in which we agree to a price with the pharmaceutical company, and then when cabinet approval was received. And once they actually complete the information the drug is then actually listed. We tend to measure in slightly different spaces. The drug is recommended, let us say, at the July PBAC meeting. The pricing negotiations take place. When the pricing agreement is reached that is then taken to cabinet for consideration. We measure the time from when the pricing agreement is reached between the departments and the pharmaceutical company, and then when it goes to cabinet. The quickest listing in that particular instance was for Fingolimod.

Senator DI NATALE: What was the value of that?

Ms McNeill : About $66 million over four years.

Senator DI NATALE: $66 million? It only took a month. Good. And the longest delay?

Ms McNeill : I would have to take that one on notice for you, just for last financial year.

Senator DI NATALE: No problem. How often do PBS recommendations come to cabinet? How many times a year do PBS recommendations get sent on to cabinet?

Ms McNeill : Fairly regularly.

Senator DI NATALE: It is regular. That is fine. Good. Have you got any data on the average length of time for a medication once it has been recommended for listing, taking into account the time table you described? Would there be an average length of time from the date when a price has been agreed to listing?

Ms McNeill : For high-cost medicines?

Senator DI NATALE: Yes, for all the ones over $10 million.

Ms McNeill : It does vary. It is averaging about four and a half months.

Senator DI NATALE: It averages about four and a half months. That is good. Now, in relation to the listing of new drugs I have heard—and I just want to know whether this is in fact true—that, when the high cost therapies are considered, DoHA is required to provide the department of finance with offsets that are equivalent to the costs associated with the listing of the therapy. Is that in fact the case? Are those offsets required to be identified within the PBS or across other portfolios?

Ms McNeill : I am really sorry. Just give me one sec.

Ms Halton : Sorry, the officer is actually not very well. We may have to excuse her for a second.

Senator DI NATALE: Sure.

Ms Halton : You are the doctor in the house, you might have to follow. We can send you and the professor.

CHAIR: I do not think it is appropriate for Ms McNeill to even have to come back.

Ms Halton : No.

Senator DI NATALE: No. That is fine.

Ms Halton : I am sorry, Senator. Is there anyone else who can perhaps deal with the some of these questions? We will get the other officers to come to the table. I will send someone off after Ms McNeill and tell her she does not need to come back.

CHAIR: Yes. She does not need to return.

Ms Halton : We will battle on without her. And someone will make sure she is all right and, if she is not, the professor will go and deal with it.

CHAIR: Senator, if you would just repeat that question.

Senator DI NATALE: Is it true that when you are considering high-cost medication DoHA is required to provide the Department of Finance and Deregulation with offsets that are equivalent to the cost associated with the listing of the therapy?

Ms Halton : There are a range of budget rules in terms of what we are required to do for every submission that comes forward, be it PBS or others. The general rule is that all expenditure in the current climate is required to be offset, but there is a case-by-case approach on these things, as is always the case with every budget related submission.

Senator DI NATALE: And are those offsets usually identified within the PBS?

Ms Halton : No. I think I made a comment earlier today that the department is responsible for its share of spendings and savings, but the notion that you are going to get all of the savings for a particular spend in a particular program, it does not work like that.

Senator DI NATALE: How does that process relate to the Expenditure Review Committee? Is there any relationship?

Ms Halton : The Expenditure Review Committee has a responsibility for managing all of government spends and saves. So to the extent that these are spends and saves, yes, but ultimately there is a cabinet process.

Senator DI NATALE: Okay. I think I will leave it there. I can put a couple of more things on notice. Thank you.

Senator FIERRAVANTI-WELLS: In relation to outcome 2, I will put some financial questions on notice and I will confine my questions to other things. I have questions in relation to the community pharmacy and pharmaceutical awareness. Previously you provided evidence in answer to a question E11-191. Mr Bessell, I will give you a moment to find that. It is about premium-free brand.

Mr Bessell : It is E12.

Senator FIERRAVANTI-WELLS: What proportion and absolute number of PBS medicines dispensed attract the premium-free dispensing incentive?

Ms Platona : The answer is in one of the appendices of the annual report—the Pharmaceutical Benefits Pricing Authorityreport. The proportion is 78 per cent.

Senator FIERRAVANTI-WELLS: What page is that?

Ms Platona : It is page 523—'Prescriptions dispensed at the benchmark level' are 78 per cent.

Senator FIERRAVANTI-WELLS: The number?

Ms Halton : It is above the 78 per cent.

Senator FIERRAVANTI-WELLS: What is the most recent projection of expenditure on the incentive over the forward estimates?

Mr Bessell : That is a combined component within outcome 2.1. I would be happy to take that on notice and provide a detailed breakdown.

Senator FIERRAVANTI-WELLS: Thank you. Let's move on to the PBS. It would not be estimates without PBS questions late in the evening, Mr Learmonth.

Mr Learmonth : No, it wouldn't be.

Senator FIERRAVANTI-WELLS: I have some questions about the latest situation. You would have seen a comment by Medicines Australia—it looks like a media release.

Mr Learmonth : I am familiar with that.

Senator FIERRAVANTI-WELLS: Where are we at in relation to this whole issue of deferrals and some of the comments made there by Medicines Australia about uncertainty.

Mr Learmonth : As you are aware, there was a statement of principles in relation to the deferrals matter, which was put in place last year and was due to expire on 30 September this year. That statement of principles was agreed between the government and the three stakeholders in question—the Generic Medicines Industry Association, Medicines Australia and the Consumer Health Forum. It provided for a number of things, including discussions about sustainability of the stakeholders. It provided, essentially, for a moratorium on deferrals for the so-called minors—the less than $10 million a year listings—and for a number of other measures. Last month on, I think, 24 September, the minister wrote to those three stakeholders in anticipation of the statement expiring, essentially offering to roll over those provisions in relation to deferrals until the end of the memorandum of understanding the government has with Medicines Australia, which expires on 30 June 2014. The offer, if you like, provided for a continuation of the policy, as reflected in the statement of principles, in relation to deferrals and in relation to minor listings. It also provided for a further process of discussion with those stakeholders about sustainability of the PBS.

The three stakeholders accepted the terms of the minister's letter on, I think, 28 September. So the situation, if you like, in relation to deferrals remains as it was after the statement of principles was introduced last year.

Senator FIERRAVANTI-WELLS: Based on past experience, how many medicines costing over $10 million do you expect to be recommended by the PBAC over the forward estimates? Is that something that you are in a position to—

Mr Learmonth : We might be able to provide something. The trouble is that we do not absolutely know what the pipeline is. There is a meeting every four months of the PBAC. So we know a little in advance, but the pipeline is quite variable.

Senator FIERRAVANTI-WELLS: If I understand correctly, the issue of deferrals—the statistics that we may have had, say, going back four years when there was an open pipeline, if I can put it that way—is different to now?

Mr Learmonth : In what sense?

Senator FIERRAVANTI-WELLS: It would not be for the drugs costing over $10 million. I am just getting myself confused.

Mr Learmonth : There is no impact on volumes; there is an impact on process and things—

Senator FIERRAVANTI-WELLS: If you could give me some information in respect of that.

Mr Learmonth : Certainly.

Senator FIERRAVANTI-WELLS: Is there a procedure for when a deferral will be announced. Will it be as soon as possible after cabinet consideration? Is that the sort of framework?

Mr Learmonth : There is not an agreed process. Traditionally, cabinet announces its decisions—or government announces its decisions—

Senator FIERRAVANTI-WELLS: When it thinks it is appropriate?

Mr Learmonth : Yes, if it has made that decision in relation to a drug.

Senator FIERRAVANTI-WELLS: What actions are required, as far as the department is concerned, to ensure that after PBAC recommendations new listings are properly considered by cabinet?

Mr Learmonth : The department has a range of responsibilities after a PBAC recommendation, as Ms McNeill said before. The first responsibility is to agree a price and often a risk share with a company. That can be quick or protracted. It is part of a negotiation process that happens with the company after a successful PBAC recommendation. There is a process of costing with the department of finance, to understand what the total aggregate cost to government is and the preparation of decision material for government.

Senator FIERRAVANTI-WELLS: Under current arrangements how long is this taking?

Mr Learmonth : There are a variety of things there. For example, sometimes a risk share is not required and we can strike an agreed price very quickly. Sometimes a risk share is required and that can be either very quick or quite prolonged. It is essentially a commercial negotiation about risk and assumption of risk on each side. That can be quite complex at times. It is a matter between the department and the company. So it can be a little variable. Beyond that, it is usually a fairly standard process in terms of costings and providing government with the normal material that it requires to make a decision.

Senator FIERRAVANTI-WELLS: Have any directions been given or have any ministers given directions in relation to the process currently in place?

Mr Learmonth : In what respect?

Senator FIERRAVANTI-WELLS: Under the arrangements that have been in place over the last month and over the last year and under the moratorium that is continuing, has the minister given any directions to the process that has been in operation?

Mr Learmonth : The usual processes of government decision making apply. In all that, government is conscious of its undertakings in relation to both the statement and the MOU.

Senator FIERRAVANTI-WELLS: Nothing new has been given—no new directions or any direction has been given since—

Ms Halton : Nothing material has changed.

Senator FIERRAVANTI-WELLS: Nothing material. Okay. Are the time frames still basically the same sorts of time frames as in the past?

Mr Learmonth : No, they are faster.

Senator FIERRAVANTI-WELLS: Faster?

Mr Learmonth : But not as a result of the statement of principles—as a result of the MOU with Medicines Australia, the commitment to best efforts for six months. So we have got accelerated listing times.

Senator FIERRAVANTI-WELLS: In 2011, the savings from price disclosure were $112.5 million, which was twice what was expected—$62 million—according to the annual report. At page 103 of the annual report, under 'Estimated savings to the government from the price disclosure program per annum', it gives the target as $62 million and the actual as $112.5 million. Do you expect the savings from accelerated price disclosure will be higher than expected in total over the forward estimates?

Ms Platona : Senator, on page 103 there are two aspects of price disclosure that are captured in there. The $112.5 million actual, versus the estimated $62 million, refers to the 2007 program—the old price disclosure program that commenced in 2007. The figures below are the ones that we refer to as the 2010 program, the accelerated and expanded price disclosure—

Mr Learmonth : A further PBS reform.

Ms Platona : A further PBS reform.

Ms Halton : Yes, mark 1 and mark 2.

Senator FIERRAVANTI-WELLS: Mark 1 and mark 2, okay.

Ms Platona : And the figures for those ones are $189.3 million actual versus $191.2 million estimated.

Senator FIERRAVANTI-WELLS: That is just for that year. What about over the forward estimates?

Mr Learmonth : I think, as Ms McNeill said earlier, we expect the projected saving of $1.9 billion to be met.

Senator FIERRAVANTI-WELLS: Okay. Stakeholders such as the Consumer Health Forum have said that the government requires further savings from certain areas of the PBS. Does this refer to additional changes to price disclosure or any other mechanism?

Ms Halton : Sorry, I do not know that we would—

Senator FIERRAVANTI-WELLS: Can I just give you a copy of that. It is a release that was put out by the Consumer Health Forum and it is dated 28 September.

Ms Halton : Okay. Which bit are you referring to, Senator?

Senator FIERRAVANTI-WELLS: It says:

CHF … has agreed with the Federal Government and industry stakeholders to find savings from other PBS areas …

Ms Halton : So which paragraph is it?

Senator FIERRAVANTI-WELLS: It is halfway down. My question is: does this refer to additional changes to price disclosure or another mechanism to find savings?

Ms Halton : Well, I find it interesting that the CHF is apparently going to determine policy in this area, Senator. CHF understands the need for blah, blah, blah, and 'has agreed to immediately commence further discussion to find savings'. I will be looking forward to their advice on where I can find those savings!

Senator FIERRAVANTI-WELLS: I think you have answered my question!

Ms Halton : I look forward to being illuminated!

Senator FIERRAVANTI-WELLS: Can you provide me with an update on the progress of a new framework on biosimilars? That is page 100 of the annual report.

Ms Platona : The biosimilars discussion has now been ongoing between us and industry, represented by the generic medicines sector, Medicines Australia, consumers and our colleagues from the TGA, for a number of years, probably from the end of 2009-10. It is an extremely complex area. It is evolving. It is evolving overseas. It goes to the regulatory basis on which these follow-on biologics are being approved for marketing purposes and then their naming, which have implications for the way the National Health Act, statutory price reductions and then price disclosure are being applied. For example, a molecule called epoetin alpha that is now a reference product on the PBS is a product that is already available. Follow-on biologics is another version of epoetin. If that epoetin is called epoetin lambda as opposed to epoetin alpha, with different brands, that naming by the regulatory agencies has impact on the operations of statutory price reductions and price disclosures. It is a very complex area and there is no agreement across the industry as to what their position is. We have been waiting for a joint position from the industry for us to work with and progress, but that has not been forthcoming yet.

Senator FIERRAVANTI-WELLS: Thank you. One final question: can you provide an update on the time frame for the minister to consider and make a decision on the listing of new anticoagulation therapies now that it has been over a year since the review was commenced?

Mr Learmonth : Senator, the review, as you suggest, has taken a while. It has been an extremely complex piece of work. The reference group met last on, I think, 13 September. The report is being finalised for the minister.

Senator FIERRAVANTI-WELLS: Thank you.

[21:51]

CHAIR: We will now move to outcome 12—health workforce capacity. Senator Wright, Senator McKenzie and Senator Fierravanti-Wells all have questions. We have 40 minutes to do 12, 9 and 6.

Senator FIERRAVANTI-WELLS: In relation to outcome 12, I will put on notice my financial questions, which will make things a bit easier. I will also put on notice my financial questions in relation to program 12.1. I have questions in relation to Health Workforce Australia, and I will also put my financial questions in relation to 12.2 on notice. But I do want to ask Health Workforce Australia some financial questions.

CHAIR: Senator Wright, where are your questions?

Senator WRIGHT: I have questions in relation to the rural mental health workforce generally and some for Health Workforce Australia too, if I have time.

CHAIR: Senator McKenzie?

Senator McKENZIE: Mine are around Rural and Regional Health Australia and classification of workforce distribution.

CHAIR: On that basis we will start with Senator Wright with questions on mental health workforce, and we will do all the questions for you and Senator McKenzie before we get to the questions on Health Workforce Australia.

Senator WRIGHT: These are general questions in relation to the rural mental health workforce and strategies to deal with the challenges of that. In previous answers to questions on notice, the department has recognised that the percentage of mental health professionals living in major cities is 85.8 per cent of psychiatrists, 78.7 per cent of psychologists, 75 per cent of social workers and 65 per cent of mental health nurses. But when we compare these figures with the percentage of the general population living in regional rural and remote areas, which is 32 per cent, I ask: does the department recognise that there is a significant disparity between the percentage of the general population living in nonmetropolitan Australia and the percentage of mental health professionals working in those areas?

Ms Shakespeare : The figures that we have provided are based on surveys over a number of years. I think for the psychologists that was from 2006. There may be lags in some of the data, and we are not sure if those are the same percentages currently. But, based on that data, there are discrepancies between the proportion of health professionals in those categories and the general population living in rural areas.

There are a number of strategies, though, to provide services to people in rural areas. For instance, you mentioned psychiatrists. The majority of those are based in metropolitan areas; however, the government has introduced Medicare rebated items for telehealth services provided by medical specialists, including psychiatrists, which is another way of providing services to people in rural areas.

The categories that you have mentioned also do not include general practitioners, who also provide mental health services to people in rural areas. We have a number of strategies to increase the general practice workforce in rural areas. We have strategies which increase the nursing workforce in rural areas. We are also funding a number of programs to train allied health professionals, including psychologists, in rural areas, with the expectation that people who are trained in rural areas will be more likely to remain in those areas and work. So we certainly hope to see improvements in the number of allied health workers, general practitioners and nurses as a result of those programs over time.

Senator WRIGHT: Thank you for that, Ms Shakespeare. You have pre-empted my follow-up question. I am wondering if you could take on notice and give a bit more detail about those particular programs that you have outlined—the strategies to increase the nursing workforce in rural areas, and particularly in relation to mental health trained nurses, and also the allied health professionals and psychologists and the training of people from rural or in rural areas. I think that was what you were referring to there, as some of the current strategies that are being employed.

Ms Shakespeare : Yes, there is the University Departments of Rural Health program. We also have scholarships and locum support schemes for rural nurses and rural allied health workers to provide support and expand the workforce. I can certainly provide more detail about those programs on notice to you.

Senator WRIGHT: Thank you for that. I would also be interested—and I might ask you to take this on notice because I do not imagine that you will have this readily available—in the total cost currently and for the forward estimates of rolling out those particularly related mental health workforce strategies that you have identified and any others that you might want to identify as well.

In light of the strategies that are being employed and the consideration of this discrepancy issue, what will be the major mental health workforce capacity issues and challenges faced by regional, rural and remote Australia over the next three to five years?

Ms Shakespeare : Are you asking me to take that on notice?

Senator WRIGHT: I am asking you if you can identify what they might be. Is the department able to say at this point what those capacity issues and challenges will be over the next three to five years?

Ms Shakespeare : We can certainly provide information about what we expect workforce challenges to be over the next three to five years. HWA may also be able to provide some more information—potentially not just specifically about the mental health workforce but workforce challenges more generally. They have completed some modelling 'Health Workforce 2025', which looks at parts of the health workforce out to 2025 and the challenges.

Senator WRIGHT: I have some questions for them too, but I am really interested in drilling down specifically to mental health. That is my particular interest, and I have been doing some consultation and some of the issues that are coming up time and time again in my consultations concern the workforce. If you could provide that information, I would be grateful for that—as in projections and consideration that the department is giving over the next three to five years about where those challenges will be.

Ms Shakespeare : I will take that on notice and possibly talk to my mental health colleagues.

Senator WRIGHT: Thank you. And the projected costs, I suppose, of what the strategies might be for dealing with those challenges. I am interested, in particular, in what strategies the department has developed or implemented to address particular barriers that I have come across in my consultations. There are three that I have identified. One is the unavailability of mental health services in regions. Another is a lack of internet services to access e-mental-health services. An example there is the fact that obviously, in a country with the distance issues that Australia, e-health holds a lot of promise but it does rely on the ability of people to access computers and the technology and also have the literacy to be able to operate them. For instance, are there any strategies to ensure that there is technology available in Indigenous communities? The last of the barriers would be privacy—the issue of privacy and taboo in small towns and the issues that that creates in terms of conflicts of interest, stigma and so on. Has the department addressed any of those barriers?

Ms Flanagan : It might be best if we take this on notice. This outcome has mainly to do with workforce. We have the workforce experts here but, as Ms Shakespeare has said, we would need to consult with our colleagues that deal with the mental health policy and that think about the whole range of delivering mental health services into Australia. So we will get back to you on notice on that.

Senator WRIGHT: Thank you. Perhaps I have not asked the questions in the right area, so thank you for that. I have a couple of others, and I hope you are able to answer these. Has the department provided or considered providing mental health training in regional, rural and remote communities for non-mental-health workers in order to expand capacity, such as police, firefighters, maybe staff in local government, teachers and community leaders? If so, what programs or strategies are there, in what communities and regions have they been implemented, and what is the cost of that?

Ms Shakespeare : We have a program called Rural Health Continuing Education which is funded at $3.2 million in 2012-13. It has three streams. One of those is funding for the Rural Health Education Foundation, which operates the Rural Health Channel. Now it has a digital channel that is available throughout Australia via satellite. They provide programs in the nature of continuing professional education, but it is not limited to health professions; many other people in rural communities are able to access that resource. So that is one mechanism we have to deliver information about health issues that are of particular interest in rural communities.

Senator WRIGHT: Are you aware of whether any other consideration has been given to mental health training for non-mental-health workers to expand the literacy and the capacity of people to respond to challenges where there are not professionals?

Ms Shakespeare : I probably would not like to say no. I am not aware of any programs, but again I would like to talk to my mental health colleagues and take that on notice.

Senator WRIGHT: Thank you for that. I have some more that I will put on notice. I just have one other issue that I would like to ask you about. I have been consistently told about the negative mental health impacts of fly-in fly-out work. Is that an issue that the department is aware of, and are there any specific strategies that are being developed or are in place to address those issues? Again, is this the right place to ask about those?

Ms Halton : The mental health issue is probably a question more for the mental health people, but Ms Shakespeare can tell you a little bit about the whole-of-government aspects. There is a discussion in the whole of government about fly-in fly-out. I do not know if this will be the pre-eminent feature, but undoubtedly it will be on their list.

Ms Shakespeare : There is an interdepartmental committee looking at issues around both fly-in fly-out and drive-in drive-out workforces across Australia and a range of impacts that that has. It involves people from the Department of Health and Ageing and the Department of Regional Australia, Local Government, Arts and Sport—DRALGAS—Education, and other departments that have an interest.

Senator WRIGHT: Can you take on notice specifically which departments are involved in that interdepartmental committee. I was not aware of that, and it is very interesting to me that that is there.

Ms Shakespeare : It is discussing issues. There are no specific outcomes I can report to you from it, but certainly there are discussions going on within government, crossing over portfolios.

Senator WRIGHT: Thank you very much for that. That is it for me on those.

CHAIR: Senator McKenzie, you have a general question, and then we go to Health Workforce Australia.

Senator McKENZIE: As you know, this committee did a report into rural and regional health workforce issues this year. With the annual report hot off the press, I wonder if we could address two quick KPIs. First is the number of doctors relocating to rural and remote locations, on page 262. The target was 70 and our actual was 22, so less than a third of the target. I think this is around Rural Relocation Incentive Grants. Do the department have any reasons why you think that might not have been met?

Ms Shakespeare : The General Practice Rural Incentives Program has a few streams. There is registrar support, to get trainees in general practice training in rural areas. There are incentives paid to doctors who are already in rural areas, to encourage them to stay there. Then there is the third stream, which you have identified from the annual report, which is the relocation grants. These are demand driven, so, when doctors decide they want to move from a metropolitan area or a regional area to a more remote location, that is when they are eligible for the relocation grants. The uptake of doctors moving to more remote locations has not been as great as expected. However, other parts of that program—

Senator McKENZIE: What sort of promotion did the department do? It is a demand system across the board. If we have got this incentive out there, was there a range of strategies from the department's perspective on increasing demand to move out to experience the wonders of regional living in Australia?

Ms Shakespeare : Yes. Again, our approach is multifaceted and we have a number of programs which are supporting getting more people to experience what it is like to practise in rural Australia.

Senator McKENZIE: If you could you on notice provide some detail around the promotion of this program and the strategies that you had to reach the target of 70, I would appreciate it.

Ms Shakespeare : Okay.

Senator McKENZIE: Second is the number of allied health locum placements, where there was a target of 100 and we actually only got 58. Uptake of the program has been slower than expected. Do you have any reasons why that may be?

Ms Shakespeare : Yes. We have discussed that program with the administrator, Aspen Medical, and we have made changes to the program guidelines. Initially, when the program started, the locum placements were to support nurses and allied health professionals taking leave to undertake continuing professional development activities. The program guidelines were broadened so that it would support locum placements for leave for other reasons—recreation leave, maternity leave, that sort of thing. So uptake is now increasing, but it has not reached targets. Aspen Medical are promoting the program and engaging with, in particular, state governments, who employ the majority of people that we think would be accessing the program, to get them to increase their usage.

Senator McKENZIE: How much money has been allocated to the relocation incentive grants specifically, within the overall General Practice Rural Incentives Program?

Ms Shakespeare : I will have to take that on notice. The total allocation for that program is $116.4 million, but I cannot break that down into the three separate components. I can take on notice to see if we can do that.

Senator McKENZIE: Thank you, I would appreciate that. Finally, on investment in rural education, and bearing in mind the evidence we just heard that those from rural areas are much more likely to return on completion of their degrees, what percentage of students studying at rural clinical schools are from regional areas?

Ms Shakespeare : We have preliminary data for 2012 from the universities that participate in the rural clinical training program. Based on that preliminary data, the proportion of students from a rural background is 28.7 per cent. That is the combined medical programs run by 15 universities that we are funding under that program.

Senator FIERRAVANTI-WELLS: I have some questions on the health workforce and then I will put my financial questions on notice. Firstly, in relation to internships, there was an article called 'States in standoff with Canberra over medical internships funding'. I can give you a copy now of that article.

Ms Halton : I think we might know that one. It is fairly recent.

Senator FIERRAVANTI-WELLS: I just don't want you to say I did not come prepared.

Ms Halton : No, well done, Senator, thank you.

Senator FIERRAVANTI-WELLS: Ms Shakespeare, when did the department first identify that there would be a shortfall in medical internships?

Ms Shakespeare : I would have to check the exact date, it has been several months, so I do not know off the top of my head exactly when we were first advised that there may be a shortfall in internal positions for medical graduates in 2013.

Senator FIERRAVANTI-WELLS: It has been in recent months?

Ms Shakespeare : Yes. I think the allocation process for medical interns would have started around April this year, but we did not necessarily know at that point.

Senator FIERRAVANTI-WELLS: No, but please take it on notice. What is the current shortfall and projected shortfall for each year over the forward estimates?

Ms Flanagan : This is a complex area in terms of the uptake of placements. It depends on how many people decide that they want to take up an intern place, whether they want to take it up immediately after they graduate et cetera. There is an organisation based in New South Wales which collects data. First of all, you need to know how many students might be graduating and then you need to know from the states and territories how many positions might be available and try to match those up, noting that some students we have found apply for eight different spots, for example. As they go through the allocation process and they accept a spot, it might mean that more spots are freed up. We have had regular reports from both the states and territories collected through this organisation and the figures vary quite widely, depending on where you are in a round of acceptances and trying to match up students to places et cetera. Each state reports—

Senator FIERRAVANTI-WELLS: That shortfall could be a range from X to Y.

Ms Flanagan : It is very, very difficult because each jurisdiction reports separately and, as I say, there might be a student who has applied to three or four jurisdictions.

Senator FIERRAVANTI-WELLS: Do they have separate reporting criteria, a bit like beds? I have not asked you about that.

Ms Flanagan : I know, I did miss the bed question!

Senator FIERRAVANTI-WELLS: I noticed in a recent article in New South Wales that Minister Skinner was asked in her estimates about beds, so there seemed to be a case of deja vu about the whole thing.

Ms Flanagan : I am sorry, we were getting back to—

Senator FIERRAVANTI-WELLS: The criteria in each state.

Ms Flanagan : They select differently. Some of them do it on a merit basis. Some of them might look at employing their own students first. Some like the Northern Territory who do not have a medical school have a different process again, selecting from graduates right across Australia.

Senator FIERRAVANTI-WELLS: Minister Plibersek has made some comments there in that article, so I assume that within your knowledge there are some figures, because she has obviously proposed to redirect $10 million for 100 internships.

Ms Flanagan : Yes. It will probably not be until December that we have a very firm view.

Senator FIERRAVANTI-WELLS: Perhaps you could take that on notice. Also, assuming this happens, what costs does this cover for each internship and what would be the impact on the number of training places available under the prevocational general practice training program of a redirection of $10 million? You might need to take that one on notice.

Ms Flanagan : We will take that on notice.

Senator FIERRAVANTI-WELLS: What is the government's response to this shortfall?

Ms Halton : I think we need to be a little careful. The truth of the matter is internships are organised by the states. We are and the minister is attempting to play a role in making sure that a number of the short-term challenges are met, but the states actually organise this whole process, they manage it, they have traditionally financed it et cetera. We can provide you with a commentary on the process. I think the minister has put on the table an extremely generous offer in respect of what is anticipated to be a shortfall. She is waiting for a response from a number of her colleagues.

Senator FIERRAVANTI-WELLS: Are there other fixed costs in relation to having an internship program at a hospital? Do I take it from the answer that is clearly within the purview of the respective governments? There is no contribution by the Commonwealth?

Ms Halton : We can point to a couple of places. There was historically a relationship when Greenslopes was operated by Veterans' Affairs. So I can point you to a couple of places where the Commonwealth does have a finger in it, but in the broader operation of the system it has been driven by the states historically.

Senator FIERRAVANTI-WELLS: So other than in Commonwealth related establishments such as that hospital—

Ms Halton : Formerly.

Senator FIERRAVANTI-WELLS: formerly—the federal government does not contribute to these costs. I will put the rest of these questions on notice. I have some questions in relation to the Dental Relocation and Infrastructure Support Scheme which I will put on notice, and on the rural medical generalists and rural dual training positions projects.