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Thursday, 22 May 1980
Page: 3163

Dr Klugman asked the Minister for Health, upon notice, on 20 March 1980:

(1)   Does the common fee for medical services as updated by Mr Justice Ludeke continue to include a loading to compensate medical practitioners for free of charge treatment of public hospital patients prior to 1 975.

(2)   Have medical practitioners, since the 1975 Commonwealth/State hospital agreements, been entitled to (a) sessional fees or (b) modified fees-for-service for all work performed on standard ward public hospital patients.

(3)   What was the estimated cost, for the last year for which figures are available, of providing medical services by visiting private medical practitioners for standard ward hospital patients for (a) each State, (b) the Australian Capital Territory and (c) the Northern Territory.

Mr MacKellar - The answer to the honourable member's question is as follows:

(   1 ) The common fee for medical services did not include a specific loading to compensate medical practitioners for free of charge treatment of public hospital patients prior to 1975. The concept of 'the most common fees currently being charged in each State for all the medical services and procedures provided by medical practitioners' was proposed by the Committee of Enquiry into Health Insurance (the Nimmo Committee)- see paragraph 4.51 of the Report (March 1969). The most common fees advised by the Australian Medical Association (AMA) to the Government in January 1970 were determined in accordance with a complex set of rules from data on fees commonly charged, but mainly they represented the major modal fee. The new medical benefits introduced from 1 July 1970 were based on these most common fees, which became known as Medical Benefits Schedule fees.

The Nimmo Committee considered the matter of some doctors providing services without charge or at concessional rates. 4.68. The total volume of services provided without charge or at concessional rates is substantial and is one of the factors responsible for the continued wide gap between doctors' charges to insured patients and benefit entitlements. The medical profession is pursuing the 'Robin Hood' principle which applied before governments became involved. Its application is much less justified now and we consider that future policy should be directed to its gradual elimination by the payment to the profession of fair and reasonable remuneration for these services. 4.69. We emphasise that it is in relation to 'future policy' that we express this view. Honorary services in public hospitals are given under arrangements existing between the State hospital authorities and the medical profession. Any alteration to these arrangements could only be made by agreement between the hospital authorities and the doctors. In any case it would clearly be wrong for payment to commence immediately for all these services as doctors have taken them into account in setting their current fees. But in relation to the question of fee adjustments, it seems to the Committee that the whole honorary and concessional fee structure should be examined as part of each review. For example, if the authorities were to agree that doctors should have the right to charge fees to insured patients in public wards of public hospitals, this right might be equal to or of greater value to the profession than a general 5 per cent increase in fees. Likewise, a 10 per cent increase in pensioner medical service consulting fees might be of similar value to a 2 per cent increase in general practitioner consulting fees to insured patients. The honorary and concessional elements in these services are at present distorting the fee structure and future policy should, as we have said, be directed towards their gradual elimination. 4.70. Before measures to this end could be considered it would be necessary to collect and assess a great deal of factual material not at present readily available. It would also be necessary for the Commonwealth and the State Governments to enter into detailed negotiations with the medical profession regarding all the implications of any new policies.

We consider that the National Health Insurance Commission should undertake the assembly of the necessary factual material. When the relevant information is available the Commonwealth and State Governments should be able to determine the extent to which they are prepared to eliminate, at any particular time, the honorary and concessional elements in medical services provided. To the extent that this can be done the need for upward adjustments in the established common fees for services to the public will be reduced.'

With the reduction of honorary and concessional services following the introduction of Medibank in 1975, the Government submitted to the Second Private Enquiry on Medical Fees for Medical Benefit Purposes 1975 that whatever percentage increase in Schedule fees was determined by the Enquiry, it should be reduced by five percentage points in view of the increase in income following the payment for services previously rendered free or at concessional rates. At page 12 of the Determination of that Enquiry, it was stated that- the financial benefits under discussion will affect doctors quite differently, depending on the nature of their practice so that the imposition of 'an across the board ' reduction to the percentage increase would, to a certain extent, redistribute income within the profession. Such an adjustment would be clearly inequitable. '

It could well be that some medical practitioners will not benefit financially from any of the effects of Medibank, and it would be unjust for these people to be penalised in such a way. Accordingly, I have made no allowance for this matter in my Determination. '

In 1976, following discussions with the Government, the AMA proposed that the increase it was making to its list of medical services and fees of 7.5 per cent overall, from 1 January 1977, should be applied to Medical Benefits Schedule fees, even though an increase of 14 per cent was indicated by the AMA's Medical Fees Index to cover increases in wages and other practice costs, and to maintain net income in real terms. The Government implemented the increase in Schedule fees from 1 January 1977.

(2)   Yes.

(3)   Payments made to Visiting Medical Officers for services to 'hospital' patients in recognised hospitals during 1978-79 are listed below. These payments include sessional and contract (modified fee for service) arrangements.


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