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Thursday, 16 September 1971
Page: 1430

Dr FORBES (Barker) (Minister for Immigration) - I. move:

That the Bill be now read a second time.

The purpose of this Bill is, firstly, to give effect to the Government's Budget proposals in relation to the contribution payable by the patient for pharmaceutical benefits and, secondly, to incorporate in the Schedules of the National Health Act variations made to certain items of those Schedules during 1971 by regulations. As announced in the Budget, it is proposed to raise the level of patient contribution in respect of general pharmaceutical benefits from 50c to $1. The fee has remained at 50c since 1960. However, the contribution payable by persons receiving assistance under the Subsidised Health Insurance Scheme - now to be known as the Subsidised Health Benefits Plan - will be maintained at 50c. Pensioners and their dependants covered by the pensioner medical service will continue to receive pharmaceutical benefits free of charge. It is proposed that these provisions will come into effect on 1st November 1971. The present system of providing pharmaceutical benefits to the general public, other than pensioners, is based on the principle of Government assistance to the individual in meeting the cost of medical treatment rather than the provision of 'free medicine' in the literal sense.

In September 1950 a scheme was introduced by the Government which provided certain life saving and disease preventing drugs free of cost to the whole community on a doctor's prescription. From July 1951 the Government introduced a further scheme which provided a comprehensive range of medicines for pensioners who were enrolled in the pensioner medical service. No charge was made for these drugs. Between the years 1951 and 1960 the list of life saving and disease preventing benefits was periodically expanded to include newly developed drugs. In March 1960 a major departure was made to the then existing schemes. The general and pensioner benefits schemes were amalgamated and the entire range of drugs in both schemes, with the exception of a small number of drugs restricted to eligible pensioners, was made available to the general public. The list of benefits was greatly expanded to provide a much wider range of treatment. At the same time all items on the list, except those restricted to eligible pensioners, were made available to the general public at a fee of 50c for each item supplied by a chemist. Pensioners, however, continued to receive the benefits free of charge. The drugs and medicinal preparations made available as pharmaceutical benefits are determined by the Minister for Health on the advice of the Pharmaceutical Benefits Advisory Committee established under section 101 of the National Health Act.

As honourable members are aware, pharmaceutical benefits are the most expensive component of the Government's overall health benefits plan. In 1970-71 the cost to the Commonwealth of prescription benefits to the general public amounted to $88.2m. Additional costs to the Commonwealth included payments to public hospitals and miscellaneous sources of $26.9m and payments in respect of benefits supplied to eligible pensioners and dependants under the pensioner medical service of $45.2m, a total of $ 160.3m. This figure compares with $1 37.7m in 1969-70.

In 1960-61 the corresponding costs were S34.3m, $6.8m and $ 14.7m respectively, a total of $55. 8m. Commonwealth expenditure on pharmaceutical prescription benefits for the general public has thus increased by 157.2 per cent over a period of 11 years. The patient contribution has increased from $ 10.3m to $24.4m for the same period, an increase of 136.9 per cent. However, the relationship of patient contribution to the total cost has fallen from 23.1 per cent in 1960-61 to 21.7 per cent in 1970-71. While the cost per prescription has risen from $2.18 in 1960-61 to $2.30 in 1970-71 and is estimated to rise to $2.65 in 1971-72, the number of prescriptions per head has increased from 2.13 in 1960-61 to 4.26 in 1970-71 and is expected to rise to 4.48 in 1971-72. The effect has been that the cost per person in respect of general benefit prescriptions has risen from $4.62 in 1960-61 to $9.80 in 1970-71.

Three main contributing factors are responsible for the increase in cost to the Commonwealth. These are the addition of new expensive drugs and the relaxation of restrictions on prescribing of certain drugs, particularly in relation to the antibiotics, analgesics, anti-hypertensive and antidepressant groups of drugs, together with some increase in prescribing by doctors unaccounted for by the above two factors. It is estimated that the proposed increase in the patient contribution from 50c to $1 will effect a reduction in the cost of the scheme to the Commonwealth, in respect of general prescription benefits, of $24. 6m in a full year and $ 15.8m in the current financial year. These estimates have been made on the basis of the situation that pertained in 1970-71. The expected savings, however, could be affected by variations to the list of benefits and changes in doctors' prescribing habits. At a time when the Government is concerned with the continuing sharp increase in the cost of the pharmaceutical benefits scheme, it believes that it is not unreasonable for the community at large to bear the cost of the increased patient contribution. There have of course been substantial increases in incomes since 1960 when the existing patient contribution was first set.

The proposed increase to $1 will mean that those items listed in the Schedules to the Pharmaceutical Benefits Regulations as pharmaceutical benefits which cost $1 or less will not be available as benefits to the general public. It is not proposed that these benefits be deleted from the schedule of benefits, as the Government recognises that such items should be retained and made available for the use of pensioners and persons receiving assistance under the Subsidised Health Benefits Plan. The present provisions of the National Health Act relating to the treatment of chronic diseases or conditions will also continue to apply. As I have already mentioned, beneficiaries under the Subsidised Health Benefits Plan will not have to meet the increase of 50c for national health prescriptions. This decision is in keeping with the Government's policy under the Health Benefits Plan to assist where possible those special groups in the community to meet the cost of medical care.

The subsidised health benefits plan which has been in existence since January 1970 provides assistance, in meeting the cost of medical and hospital treatment, to persons receiving unemployment, sickness and special social service benefits, to migrants during their first 2 months in Australia and to low income families. The Bill provides that persons receiving assistance in each of these categories will be able to obtain medicines and drugs prescribed under the pharmaceutical benefits scheme for 50c a prescription. While the Government has taken this action to assist these special groups of people to obtain their pharmaceutical benefits for a charge of only 50c, it must be appreciated that the onus to establish initial eligibility must rest with the persons concerned. It is essential, therefore, that persons who believe they are entitled to subsidised health benefits should make application to the Department of Social Services or, in the case of migrants, to the Department of Health as soon as possible.

The Government has also considered the position of certain members of friendly societies who, under their lodge rules, are entitled to receive varying levels of rebates on the present 50c patient contribution for benefit items dispensed by frendly societies dispensaries. I should like to make it quite clear that the friendly societies dispensaries receive exactly the same payment from the Government as other retail chemists for pharmaceutical benefits dispensed. The rebate on the 50c patient contribution is met by the friendly societies and under the provisions of section 92a of the National Health Act this rebate is limited to members and their dependants who joined societies prior to 24th April 1964. Members who joined on or after that date are not entitled to any rebate on the patient contribution for pharmaceutical benefits.

Members of friendly societies were not required, by legislation, to pay the 50c patient contribution, introduced in March 1960, for benefits supplied at society dispensaries because those members had long been accustomed to meeting the cost of medicines by regular weekly or quarterly payments to their societies. However, by 1964 there were indications that other organisations were considering entering the field of rebate insurance against the 50c patient contribution. The Government was concerned that a situation might be reached where the deterrent effect of the patient contribution would be nullified. The National Health Act was therefore amended in 1964 to ensure that persons who became members of friendly societies on or after 24th April 1964, the date of operation of the new legislation provisions, paid the 50c patient contribution. Persons who were members of friendly societies up to 23rd April 1964 and certain of their dependents, retained their entitlement to rebates.

The Bill provides that friendly societies will not be permitted to rebate more than 50c for each pharmaceutical benefit item supplied. The effect of this is that persons who were members of societies prior to 24th April 1964 will not gain any additional advantage over persons who joined subsequent to that date. What this in effect means is that members of friendly societies who are entitled to the rebate may not necessarily have to pay the full $1 for prescriptions but an amount somewhere between 50c and $1. However, I would repeat the Government will deduct $1 from the price paid for each pharmaceutical benefit prescription dispensed by friendly societies for persons not eligible for concessional or free benefits. The societies will meet the amount of any rebate.

The second purpose of the Bill is to incorporate into the Schedules to the National Health Act variations made to those Schedules by the National Health (Variations of Benefits) Regulations in accordance with section 13A of that Act. This section provides that a table in a medical benefit schedule to the Act may be varied by regulation. However, the regulations cease to have effect unless they are ratified by an amendment of the Act within 15 sitting days of the House of Representatives following the expiration of 12 months after notification of the regulation in the Commonwealth Gazette. This particular section was inserted by amendment to the Act in 1970, as part of the reconstruction of the medical benefits segment of the new Health Benefits Plan. It was recognised at that time that adjustments to the schedules would be necessary as more comprehensive data become available regarding fees commonly charged by doctors for medical procedures infrequently carried out. It was also realised that it would be necessary from time to time to fix appropriate amounts for new medical procedures as they were introduced and to adjust Commonwealth and fund benefits for medical services when new common fees were determined. The National Health (Variation of Benefits) (No. 1) Regulations (Statutory Rules No. 43 of 1971) were notified in the Commonwealth Gazette on 1st April 1971 and came into force on that date. The National Health (Variation of Benefits) (No. 2) Regulations (Statutory Rules No. 75 of 1971) were notified in the Commonwealth Gazette on 24th June 1971 and came into force on 1st July 1971.

The variations made to the medical benefit schedules contained in the Variation of Benefits Regulations No. 1 and No. 2 are therefore covered by the present Bill. The regulations which became effective from 1st April 1971 involved amendments to 29 items of the Schedules. A number of services not previously listed was introduced into the Schedules and in addition the common fees and benefits ' for some items already listed were varied. The varia tions in the most common fees were made because at the time the original list of most common fees was drawn up information on some services had been incomplete. These amendments from April 1971 resulted from recommendations of the Medical Benefits Schedule Advisory Committee which is a body appointed by the Minister for Health to consider and recommend changes in the benefits schedules. The Committee consists of representatives of the Australian Medical Association, the registered medical benefits organisations and the Department of Health.

The changes to the medical benefit schedule made by the Regulations which became operative from 1st July 1971 were much more significant in their scope than the previous regulations, although not as many in number. The most significant feature of these regulations was the increase in Commonwealth and fund benefits in most States for the important general practitioner surgery consultations and home visits to meet the increases in the most common fees for those services as from 1st July 1971.

When the new common fee system was introduced on 1st July 1970 both the Government and the Australian Medical Association recognised the necessity for periodic reviews of medical fees to take account of economic circumstances. It was decided that there should be a review of the most common fees at 2-yearly intervals and that the first review would have effect from 1st July 1971. These regulations incorporate the changes made to the most common fees for surgery consultations and home visits as a result of a review of common fees. Consequential adjustments were also necessary to fees for 11 other medical services which, for fees and benefit purposes, are equated to general practitioner surgery consultations. I commend the Bill to the House.

Debate (on motion by Mr Hayden) adjourned.

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