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Record of meeting between the Minister for Health and Ageing and the peak bodies representing radiologists, RANZCR and ADIA.

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The Hon Tony Abbott MHR Minister for Health and Ageing

2 December 2003

Record of meeting

Record of meeting held from 4.30pm to 5.00pm on 2 December, 2003 between the Minister for Health and Ageing and the peak bodies representing radiologists, RANZCR and ADIA.


The Hon. Tony Abbott, MHR, Minister for Health and Ageing Dr Lawrence Lau - Incoming President, Royal Australian and New Zealand College of Radiologists (RANZCR) Dr Ron Miekle - President, Australian Diagnostic Imaging Association (ADIA) Dr Jeremy Druce, RANZCR Ms Sandra Keogh - Acting CEO, RANZCR Dr David Brand - ADIA Mr Allan Roche, Ministerial Adviser Mr Chris Sheedy, Department of Health and Ageing

Representatives from the RANZCR and ADIA made a presentation on the management of the previous Agreement and the benefits of the new Radiology Memorandum of Understanding (MoU). The key topic of discussion then focussed on Magnetic Resonance Imaging (MRI) and how to expand access to this technology to more Australians.

While Mr Abbott is determined to address MRI access issues in Australia, he noted that radiology is subject to a funding agreement with the profession and that the Government is not disposed to offer more funding than is already provided under that agreement.

The profession has agreed that funding for Medicare eligibility for four new MRI units can be managed within the agreed funding level.

Mr Abbott indicated that he would therefore act on the advice of an expert committee that had reported to Senator Patterson in 2002, and move to tender for new providers of MRI services in four regional locations which will be announced shortly.

However, he advised the representatives of his concern that this will not respond sufficiently to the significant need for MRI services in other areas, including in metropolitan areas and in public and private hospitals.

Mr Abbott also advised the profession of his view that MRI scans can be provided at a price considerably less than the current Medicare rebate - evidenced by the fact that many MRI units without Medicare eligibility charge patients less than $300. This compares to the Medicare rebate of $416, on top of which patients are often charged over $100.

The ADIA and RANZCR representatives challenged the viability of units charging such a low fee, indicating their view that for units that do not attract Medicare rebates any fee was better than no fee.

Mr Abbott believes that benefits from a lower real cost of provision should accrue to patients needing MRI scans and that the benefits of government funding should be more widely available. For this reason, he proposed to RANZCR and to ADIA that they should consider a significant reduction in the Medicare rebate for MRI scans, which would allow (within the total agreed funding levels for radiology) a significant increase (perhaps 20 in total) in the number of Medicare-eligible MRI units.

He also indicated that he would ask his officials, in consultation with an expert committee, to provide advice on priority sites for new MRI units, and to seek market information from potential providers on the price at which they would be willing to provide services.

RANZCR and ADIA representatives stated their position that:

● an expansion by four units (a 5.5% increase in the number of Medicare-eligible units) was sufficient to respond

to current needs and that they did not believe there was a crisis in availability of MRI services; ● a longer term process to match supply and demand should be developed, with a focus on clinical criteria rather

than geographic access and cautioned about moving too quickly to expand MRI; ● tendering, with a focus on price, had too great a potential to favour the public sector over the private sector in

any future allocation of MRI. This would lead to obsolescence in the private sector; ● profitability in the industry was falling and depended on current levels of cross subsidy from MRI;

● cost shifting from the States, and current funding arrangements for public hospital MRI machines, mean that

funding which should be available to the private sector is inappropriately accessed by the public sector; and that ● the profession has already agreed to fee cuts and made efficiency gains over the last five years to fund the

expansion of MRI. There is limited capacity to achieve further efficiencies to fund additional MRI within the funding available.

Mr Abbott noted the position put by the profession and, in particular, undertook to ensure that tendering processes allow for a level playing field for all potential providers. However, he asked the representatives to consider carefully the proposal that he had outlined to them, to discuss exact figures and processes further with Departmental officials, and to advise him of how they wished to proceed by 9 December 2003.

He also reinforced to the representatives that decisions on sites and providers for any new MRI units need to be made in way that ensures that all potential providers of MRI have equal access to information. For this reason he advised that he would post this record of discussion on his website.