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Thursday, 19 March 1987
Page: 1111

Mr PORTER(12.05) —It has been four years since the Hawke Labor Government came to office and four years since the Minister for Health (Dr Blewett) took over the reins of the Department of Health. Four years into his administration, we are still considering legislation which is so typical of this Government. The National Health Amendment Bill attempts to patch up the administration of the pharmaceutical benefits scheme by changing the law so chemists will be able to be paid without the Government breaking the law. This cut and paste Bill epitomises the Government's health policy as it desperately applies band-aids in an attempt to hold together a health system it has destroyed.

The facts speak for themselves. Under Labor, the public is disheartened and confused by the inability of our public hospital system to provide hospital beds. This is something that people took for granted in the past, whether or not they had insurance. Under Labor, doctors first in New South Wales and now in the Australian Capital Territory are so fed up with the Government's treatment of them under Medicare that they are leaving the system. Under Labor, nurses disputes continue to erupt as the morale of health providers falls to an all-time low. Of course, the Minister will claim that none of this is his responsibility. He says that it is just an enormous coincidence that is has all happened under his administration and since the introduction of the ill-fated and ill-conceived Government Medicare monopoly. But a detailed analysis of his stewardship shows us that it is not coincidental; it is a direct result of Labor's rotten policies, incompetent administration and a lack of leadership which has brought our health delivery system to its knees.

Public hospital queues have trebled in Medicare's first three years and they continue to grow. The cost of health care continues to spiral for both the Government and the consumer. Under Medicare, the Government has moved the nation as a whole on to a higher plane of medical servicing. This is being done by fostering bulk billing, whereby people are encouraged to believe that medical services are free. The provision of anything free leads to waste and over-use. When Medicare was first introduced the enrolled population was using an average of 5.8 doctors' services a year. Last year, the average was 7.5 services a year. In other words, there has been a 28 per cent increase in just two years. We now find that the Government's cost of providing medical services has increased by 42 per cent in the first three years of Medicare. The cost of health care for the consumer has risen by more than 26 per cent in the last 12 months alone and the levy was increased by 25 per cent despite this Government's promises not to do so.

Pensioners and low income earners have become more and more disadvantaged. They have been unable to receive health services in our public hospitals when they need them. National confidence in the safety and efficacy of drugs approved for use in Australia has been undermined as a result of Labor's rush to promote generic drugs without requiring appropriate safety checks because they are a cheaper alternative to patent brand name products. The remnants of the Minister's Madison Avenue approach to the drug offensive hang like the streamers of yesterday's party, along with the other initiatives of this Government such as the Priority One disaster.

Not only has the Minister's policy been a disgrace but also he has a woeful administrative record. Administration of the pharmaceutical benefits scheme under Pharmpay has been a total disaster. The system is so unworkable that last September the processing of doctors' prescriptions was 50 million scripts behind. So against the law the Minister made payments to pharmacists based on an estimate of the volume of business that the pharmacist would do in a month, with a promise to fix it up later.

In addition, the security of the Health Insurance Commission has been breached. At the height of Australia's first doctors' walk-out, potentially damaging confidential Medicare information was leaked to the Press. Even today the Minister cannot tell us where that leak came from; yet the Health Insurance Commission is the organisation to which he wants us to entrust more confidential personal information under the identity card proposal.

The Minister promised us that by giving the Health Insurance Commission a monopoly it would be cheaper to process Medicare claims; yet the unit price for the Health Insurance Commission to process these claims continues to rise, not fall. Despite the Government's push for bulk billing, despite the rapid growth in the total number of claims and despite the potential for economies of scale, the processing cost per claim processed has gone up, not down. This year the processing cost per Medicare claim has risen from 89c to 96c. That is what happens when one eliminates all competition. The Health Insurance Commission is, of course, a monopoly.

Last December the Minister instituted one of the highlights of his administration-a new safety net program for the pharmaceutical benefits scheme. A week before it came into effect pharmacists were still waiting for instructions about their new responsibilities under the scheme. Two weeks ago he tried to revise the system for doctors and dentists to refer patients to a specialist. Many of the medical practitioners never even saw the instructions until the program was supposedly in place for three days. In the Minister's administration of the Health Insurance Commission last year he breached various of his own laws no fewer than 17 times. There is nothing new in that really; he did virtually the same thing the year before.

We look to the Government for leadership in the administration and delivery of health services; and what do we get? We get the National Health Amendment Bill, just another attempted quick fix which ignores the basic problems. What I have highlighted this morning is the number of administrative blues which this Government has made, which is just a disaster. The health policy of this Government is a disaster and its administration is even worse.

This legislation tries to fix up some of the problems which have been shown up in the last year. Clause 3 of the Bill redefines the table of benefits so that, when samples are taken from a patient during a stay in hospital, pathology tests performed after the patient is discharged can be considered as in-patient professional services for the purposes of private hospital insurance benefits. In other words, such tests will be covered by the limited gap insurance arrangements applicable to such charges raised during a hospital stay. We support that change. But why did the Government not take this opportunity to address the problem it has created with all medical services with its aggressive bulk billing policies?

I said earlier that the cost of medical services increased by 42 per cent in the first three years of Medicare. Is it any wonder that this is so when we look at the blatant abuses of the spirit, if not the letter, of the law that we see going on around us as a result of bulk billing? Recently I was sent the following information on a new 24-hour clinic. In violation of the rules of the State's medical board, the doctors of this clinic have placed large and prominent advertisements in the neighbourhood newspapers. They have letterboxed leaflets and have even been responsible for soliciting business on the street. Their advertisement states:

24 hour clinic. Appointments are not necessary.

Of course one does not need an appointment; queues are for public hospitals. The advertisement continues:

Simply come to the surgery at any time!

Of course it is saying: `Come on Saturday afternoon, on Sunday or in the evening because Medicare will pay more then'-and the clinic is open 24 hours anyway. The advertisement further states:

No payment from patients!

That is particularly significant, because Medicare gives the clinic a provider number and a fresh supply of bulk bill forms. This provides it with an intravenous feed into the Federal Treasury. The clinic does not need the patients' money; it has the taxpayers' money. And the Government promotes that policy-`Go along to the doctor. You will not get the bill; it is directed straight to the Government'. Apparently this clinic has the backing of a non-medical businessman. One can only wonder what the financial arrangement between the doctors and their capital backing is. Is it a percentage of the action or a commission? Are the doctors on a salary or a commission?

How many times have we seen this situation repeated under Medicare? The Minister continues to state that bulk billing is the preferred billing method under Medicare and remains the policy of this Government. But it is both Medicare and bulk billing which have contributed to the massive increase in the number of medical services supplied in this country and to the abuse of the Medicare system. Bulk billing under Medicare has resulted in our moving to a new and higher plane of medical services. As I have said, the Medicare card is now costing us 42 per cent more than it did when Medicare first started three years ago. Are we a healthier nation for it? Of course not.

The Minister will claim that expenditures for medical services this year are right on target. He has said that before, so we looked at the figures. What does it mean? It means that the Department has finally set the percentage increase high enough to accommodate the blowout in the services. Of course they will be on target, if one sets the estimates high enough. I ask: How long will this Government, and how long can the nation, afford to sustain an annual increase of 12.5 per cent in the cost of services under Medicare?

The second and main issue addressed by the Bill is the revision of certain administrative procedures of the pharmaceutical benefits scheme. The national pharmaceutical benefits scheme was changed last year. Under the new safety net program the chronically ill, whose financial burden without the pharmaceutical benefits scheme would be a hardship, are now protected by a maximum contribution for their first 25 prescriptions, after which the supply of all drugs on the PBS is free of charge. When the legislation to change the pharmaceutical benefits scheme was introduced last year I said that the changes were consistent with coalition policy, but I promised that the coalition would carefully monitor its implementation.

Regrettably, the introduction of the new scheme was yet another disaster. Patients and pharmacists were given little or no notice of the changes to be made to the pharmaceutical benefits scheme. People had not been advised of the new arrangements and at vast expense to the taxpayer the Government had to air freight the documentation to pharmacists in some country areas in order that they might have the required forms on the changeover day. It was absolutely hopeless. It took months to organise the scheme, and this Government is airfreighting material to pharmacists at the death-knock. That is nothing short of yet another example of the gross administrative incompetence of this Government.

As I have already indicated, another area of the pharmaceutical benefits scheme which has been a disaster has been the reimbursement to pharmacists for prescriptions filled under the pharmaceutical benefits scheme. Pharmacists were being paid under a scheme called Pharmpay. This involved every script which the pharmacist had filled being sent to the Department of Health where it was reread and put into the computer and then payment was made. In other words, scripts prepared by the patient's doctor are read and filled by the chemist and then submitted to the Department of Health's Pharmpay processing centre for payment. Before payment could be issued the doctor's script had to be reinterpreted by a Pharmpay clerk, coded and manually entered into a computer so that the amount of benefit could be determined and a cheque issued to the chemist. It rapidly became obvious that the system, even though it employed 800 data entry clerks, could not keep up with the rate at which drugs were being dispensed. The processing of scripts fell behind and payments to the pharmacists began to experience serious delays. At September last year there was six months worth of unprocessed scripts piling up in the Pharmpay processing centres around this country.

In order to continue making payments to the pharmacists, the Government began, in violation of its own law, to make payments on a monthly basis based on the anticipated average volume of the pharmacists' scripts. These average payments were issued with the understanding that at some time in the future the actual scripts would be processed and reconciling payments based on the benefit value of the scripts that were dispensed would be made. But just how long will it take the Government to make these reconciling payments, knowing that it must also maintain currency for payments for the ongoing program? Last week a pharmacist in Victoria was told by the Department of Health that it will be 1989 before all the old scripts are finally processed and a final accounting of payments made.

In the meantime, the pharmacists are bearing the financial brunt of the Government's maladministration of the pharmaceutical benefits scheme. It was last November when the Attorney-General's office brought to the attention of the Department of Health that it was in violation of the law in making average payments. The average payments method stopped at that time. In my own State of South Australia-also the State of the Minister for Health-I have received reports from pharmacists that their payments for prescriptions already dispensed under the PBS have fallen behind by as much as 60 days. The pharmacist, of course, has paid his rent, salaries to his assistants and staff, the bills of his pharmaceutical suppliers, and the interest to the bank on his Government-induced overdraft; and he will be expected in a couple of weeks time to pay provisional taxes to a government which continues to withhold payment to him for 50 per cent of his sales. It is a scandal and Pharmpay should be scrapped.

Clause 11 of the Bill amends the National Health Act to allow the Department of Health to make payments based on an estimate of the drugs dispensed by a pharmacist. While we support this amendment to overcome Labor's disastrous Pharmpay mess, we caution that it is not a solution to this Government's problem in administering the pharmaceutical benefits scheme, and that this measure should only be used in exceptional cases to protect the reasonable cash flow of the pharmacist. Meanwhile, the Government must make a serious commitment to rectify the situation caused by the illegal and excessive use of the average payment system over the last three years.

I understand that a proposal I put forward about 18 months ago to pay pharmacists on the basis of the computer data generated by the pharmacist in filling the scripts is now belatedly being adopted by the Government-and not before time. Of course, why should all the scripts be reread another time by a government clerk? It should be easy enough to audit the chemist's computer data record, and payment should be based on that computer data record.

Clause 5 of this Bill introduces an amendment to the administration of the pharmaceutical safety net program. When the pharmacist has issued a health benefit card to a person who qualifies for free drugs under the program the pharmacist is required to submit the supporting documentation to the Department of Health, instead of holding it for 12 months as was previously required. So the pharmacist is being given a month to submit the documentation instead of having to hold it for 12 months. Clause 6 of the Bill establishes a fee to compensate the pharmacist for the administrative efforts in issuing the health benefit card. We do not oppose those amendments.

Clause 4 of the Bill allows the Minister to make exceptions to the amount of the maximum quantity of a drug to be dispensed for the purchase to qualify as one of the 25 scripts to be purchased under the new pharmaceutical benefits scheme safety net program. The authority to make exceptions is to be reserved for dangerous or addictive drugs. The Government should monitor the program with respect to this provision. I am amazed, however, that the Minister has the effrontery to claim that his interest in the maximum quantity of drugs dispensed has to do with his concern over the safety of patients. This claim comes from the same Minister who allowed the introduction of cheaper generic drugs on to the Australian market when they failed to meet Australian standards of safety and efficacy. Thirty-three drugs, according to the Minister's count, have been placed on the market without meeting the high standard of safety and efficacy to which Australians have become accustomed.

The chain of events leading up to this situation began over two years ago when statistical inconsistencies in data needed to justify market approval of certain generic drugs was detected. That discovery led to a senior officer of the Department of Health going to South Africa to inspect the Gestalt Pty Ltd laboratory, which was the laboratory responsible for the testing of the drugs in question. The officer said in his report of that on-site inspection:

There have been a number of issues raised by evaluators of these submissions which have never been adequately resolved and it was for this reason that I arranged to visit Gestalt Pty Ltd laboratories.

Given the stated reason for the on-site visit and given the resulting negative report on this officer's evaluation of the Gestalt testing laboratories, how is it possible that the Department of Health could have subsequently approved 13 drugs for market approval when the submissions for the market approval of those drugs were based on questionable data from that same laboratory, Gestalt laboratories in South Africa? In addition, we now know that at least one drug was approved for marketing prior to the issue of bioequivalency of that drug being resolved. In other words, the basic test of safety was not even done, and the drug was approved as being safe for Australian consumption. I ask the Minister: How many other generic drugs have received similar approvals without the test being done? When will he tell the Australian public? It is a scandal.

The Minister took action on this matter only four months ago-after the report on the Gestalt laboratories was leaked to the Press. The Minister did not take action when the matter was with the Department. He had the matter with the Department for 18 months and did nothing. But when it was leaked to the press he thought: `Oh, gee, it is getting a bit hot now; I had better do something'. This leads to the inescapable conclusion that there has been a massive cover-up in the approval of generic drugs under this Government.

After being pursued on the issue by me and by professional organisations the Minister has now said that he will have an independent evaluation of the Department's generic drug approval process. But what has happened? Well, we have not heard anything. We have the terms of reference of the investigation, and it is now clear that it will be a secret investigation. Only a full and open inquiry by specialists competent in drug assessment will satisfy the Australian community that generic drugs which have been approved are safe to be used and that the approval process to be adopted in the future will have as its prime goal the safety of the Australian people rather than the cost consideration.

We know that the Minister is under pressure; we know that the Medicare program is totally out of control; we know that the cost of that program has gone way beyond any estimates the Government ever put forward in the initial planning stages of Medicare; and we know that he is under enormous pressure from the Australian public to curtail the rapidly increasing cost of health. But I tell the Minister that the way to contain the cost of Medicare is not to allow unsafe drugs to go to the Australian community. The Minister should not sacrifice the normal high safety requirements that this country has come to expect to cut his costs. The way to cut costs is to go to the root of the problem-Medicare.

It is time that the Minister stopped giving us this quick fix type of legislation that we have before the House today. It is time he began to address the real problems he has in his health programs. He must initiate Federal action to address the problem of public hospital queues and underutilised private hospital beds. He must eliminate bulk billing for all except pensioners and health care card holders, in order to slow the increase in medical utilisation. Confidence in Australia's drug approval process has been severely damaged. He must restore this confidence with an open, independent investigation of the generic drug approval process, followed immediately by a clear statement of revised procedures for generic drug approval. He must address the problem of unprocessed pharmaceutical scripts. He must end Medicare's monopoly on medical insurance and allow people to leave the Medicare program and provide for their own health insurance.

Only when the Government takes the steps I have outlined will we regain in this country the health service which we deserve. We had an excellent health service in this country before Medicare was introduced. We now have a situation in which people cannot get into hospitals, the providers of health care are demoralised, and we have unsafe approval of drugs for use by the Australian community. Fundamental changes must be made. We can no longer delay.

We know that the Minister has a philosophical commitment to Medicare, but surely even he can now see that it is not working. The Australian people are not getting the health services that they deserve. How on earth can he justify having 100,000 people waiting for a public hospital bed? How on earth can he justify the fact that so many of those people waiting for a hospital bed are the poor and the pensioners of our community? They are the ones who cannot afford to buy a private hospital bed for their care. Of course, the well-off in this community-the members of the Australian Labor Party, who have good incomes-can have surgery when they need it. They can pay for a hospital bed in a private hospital. It is the pensioners and the underprivileged of our community who have been most seriously disadvantaged by the introduction of Medicare. Previously, they had access to a hospital bed; now they do not. There are 100,000 people in the queue for a hospital bed. I thought that the Labor Party was the Party that was supposed to look after those people in our community. It has looked after none of them. In fact, we are all now worse off. The cost has gone up and the standard of care has dropped. The people providing the care are disillusioned, and the Australian community deserves better. Fundamental changes must be made, and they must be made now.