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Thursday, 12 September 1985
Page: 505


Senator MacGIBBON —My question is directed to the Minister representing the Minister for Health. Given the continuing concern of successive governments, and this Government in particular, to control fraud and overservicing, what is the Government going to do about the alleged grand larceny now taking place in the health service?


Senator GRIMES —As Senator MacGibbon said, this Government and previous governments have been concerned about fraud and overservicing in our health system. We have been inhibited in the past, as have other governments, by the lack of a capacity to determine the level of such fraud and to detect where it is going on. This is now being overcome as one of the side effects of the introduction of a universal health insurance scheme, which for the first time gives us the statistical information to enable us to home in on fraudulent behaviour. Only a very small number of doctors are involved, but those who do it do so in a big way, if the report of the Joint Committee of Public Accounts presented yesterday is to be relied upon.

As I heard Senator Peter Baume saying in a speech yesterday, if we have a situation in which an insurance system is provided-public in the case of Medicare or private in the case of other health insurance schemes-whereby the fee paid to the doctor is paid partly by another organisation, there is always the potential for fraud. There always has been, particularly in the pathology area, where larceny, as Senator MacGibbon has said, seems to have been going on on a grand scale. The difference between Medicare and a purely private system, as was demonstrated by the Nimmo report many years ago, and the concerns of even the Gorton Government in this area, is that under Medicare we have a statistical and data base on which we can investigate. It is this that upsets doctors such as Dr Bruce Shepherd and Dr Michael Aroney in New South Wales. It is this information base that they are attacking and want to get rid of because they know it is the means whereby governments can detect fraud of this type.

The fraud and overservicing detection division of the Department of Health, as the Minister for Health, Dr Blewett, and the Public Accounts Committee have said, has not been as effective in the past as it should have been. It will be more effective in the future. Dr Blewett has announced changes made in the fraud and over- servicing detection division of this Department and the Health Insurance Commission. I will obtain details of those changes for Senator MacGibbon and honourable senators generally.

The Government is concerned about what Senator MacGibbon calls grand larceny. We will continue to attack that grand larceny, as he has put it. We will ensure that the concerns of the Public Accounts Committee and the concerns of the whole Parliament as demonstrated by that Committee will be followed up so that individuals and groups of the type spoken about in the report of that Committee will be brought to justice.


Senator MacGIBBON —I have a supplementary question. It concerns a point of amplification of what the Minister said. I understood him to say that the present situation was a continuation of a series of practices that had been in existence for years. Surely one of the interpretations of the Public Accounts Committee report is that a new class of fraud is coming in.


Senator GRIMES —I am sure that is so. That new class of fraud has come in as the result of the development of what my colleagues in the medical profession like to call the entrepreneurial doctors, some of whom seem to have been getting a bit of a run in the Press today. Certainly, this practice is occurring on a new scale but it has always been there to a certain extent, and it always will be a temptation for those in the diagnostic services such as pathology and some of the others who can see a means of making a quick quid. There will always be the temptation there for them to do so.

I must point out, though, as did Senator Peter Baume yesterday, that the vast majority of doctors and, indeed, the vast majority of pathologists, will not take part in such activities. Many of the people who are doing the ripping off in the pathology area-the entrepreneurial doctors-are not themselves pathologists. There is a suggestion that some of them are entrepreneurial general practitioners who set up pathology companies. We have had descriptions of fee splitting, et cetera. So, certainly, on the scale that has been demonstrated by the Public Accounts Committee, it is new, but, unfortunately, it is not a new practice. I believe that what we have now is the capacity that we have not had in the past to do something about it. We have the desire to do something about it in the medical profession, by people on this side of the Parliament and, I believe, by most people on the other side of the Parliament, with a few exceptions like Mr Porter and Mr Carlton who have always defended vigorously the attempts of people like Dr Shepherd and Dr Aroney to destroy the Medicare system, to destroy the very basis on which we can detect such illegal activities.