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Taking Australia into the century of healing: the 1999-2000 health budget in synopsis [and] in detail.

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Media Release

The Hon Dr Michael Wooldridge

Minister for Health and Aged Care




11 May 1999

Budget 1999-2000



The 1999-2000 Federal Health Budget sets Australia on exciting, new strategic directions in health care and takes us into the century of healing.

The Budget contains major, innovative proposals that will produce long-term benefits and will dramatically improve health care, both now and for future generations of Australians.

Spending on new health initiatives exceeds $1 billion over the next four years.

Highlights of the Budget include:

  • A dramatic doubling of research spending with a funding increase of $614 million over the next six years. This will cre ate new opportunities for Australian researchers and offer an unprecedented future for Australians by enhancing our capacity to tackle major diseases such as cancer and diabetes.
  • A shift in focus to primary health care and enhanced quality in general prac tice. This shift includes a clear focus on prevention and on better co-ordination of care, particularly for older Australians and those with chronic illnesses. The revitalisation of general practice in primary health care is a landmark move. New Medicare i tems for enhanced primary care measures total more than $110 million and additional measures for general practice total more than $171 million.

This Budget also contains comprehensive, practical and far-sighted solutions to "intractable" problems and syst emic failures in health that previous governments have ignored or dismissed as "too hard". This Budget shows, yet again, that we understand how health works and that we have a plan to make it better.

  • Access to health care and quality in health care are im portant priorities. Initiatives in this Budget benefit those people in greatest need of more and better health care services, in particular Australians living in rural communities and remote areas and Indigenous Australians. Rural initiatives will receive around $171 million and spending on health care for Indigenous Australians will be almost $100 million. A range of measures will also be implemented to improve the quality of health care.
  • This Budget also contains a new 'lifetime' approach to private heal th insurance, known as 'Lifetime Health Cover'. This builds on the existing 'community rating' system by putting in place, a new, fairer and workable 'lifetime' approach. This system will attract younger members, reward long term membership, stop 'hit and run' membership (where people sign up temporarily for costly surgery and then leave the system), cut costs over time, and counter adverse selection. Strengthening the private health insurance sector in this way will take pressure off the public hospital sy stem and protect its long-term viability for all Australians.

The 1999-2000 Health Budget forges a new leading role for the Commonwealth in health in Australia, particularly through primary health care reforms and measures and the diversionary scheme put i n place to help those people addicted to illicit drugs.



Major boost to medical research takes Australia into the century of healing

The first decade of the new century looms as an opportunity to conquer many of the ch ronic challenges facing medicine, such as cures for cancer, heart disease, diabetes, asthma and other diseases.

The Federal Government has recognised this by taking the unprecedented steps of putting Australia at the forefront of health and medical research with a dramatic injection of $614 million over the next six years. By 2004, this will have doubled the existing research funding of the National Health and Medical Research Council (NHMRC). No previous Australian Government has ever given medical research such a high priority.

This historic doubling of the research budget will ensure that Australia conducts research that is priority driven. It will lead to discoveries that will alter the way health care is provided, particularly in establishing new research into public health, in addition to developing new treatments and new procedures.

This massive investment in health and medical research will ensure that Australian research is undertaken in a more systematic and cooperative way and that stronger links and communication between researchers and industries are forged to maximise commercia l opportunities and innovation.

To bolster the high calibre of existing Australian independent health and medical research institutes, the Government is allocating an additional $20 million over two years to a new capital grants initiative. Over the next two years this funding will help to establish new facilities or improve existing ones and so ensure the continued excellence of Australian research. This new funding fulfils an election commitment.

Critically, the doubling of money for research will create a long-term future within Australia for the brightest young Australian researchers and also ensures that Australia's premier national research council, the NHMRC, plays a leading role in reorganising and modernising research in Australia.

This significant boost in funding flows, in part, from the recommendations of the Wills Review, the most comprehensive report ever undertaken into medical research, which was recently formally presented to the Government.

Biotechnology: mapping out our future

As the Wi lls Review made clear, Australia is one of just a few countries in the world with the capacity to harness the benefits of the revolution in biotechnology. In the years ahead, this new field will undoubtedly create new treatments and disease prevention measures. This Government is determined to place Australia as a leader and significant player in this new and emerging field.

This commitment reflects the enormous advances made possible in biotechnology that will bear fruit over the coming generations. By funding the development of an integrated biotechnology strategy, this Budget ensures that Australia can create and maximise new opportunities in this emerging field. The strategy aims to maximise industry and community benefit, address public concerns about safety and ensure there is no threat to human health or the environment. This strategy also includes an enforceable regulation system, a public awareness and information program, and measures to better manage our intellectual property and successfully commercialise research.

Funding of around $7.6 million over two years will support the development of the national regulatory system through a Gene Technology Office to be established in the Health and Aged Care portfolio.

Better Health Care for Older Australians: New Initiatives in Primary Health Care

The Budget contains a number of initiatives - worth around $171 million - that will improve the delivery of primary health care services to all Australians. This funding marks a radical and innovative shift in the focus of health care to primary health care. These initiatives will ensure that health care is community based, increasingly focused on prevention, is better coordinated and is directed to finding new and better ways to manage chronic illness, arguably the greatest challenge facing health care right across the world.

There is a special focus in this Budget on General Practice with a comprehensive range of initiatives worth around $171 million to revitalise General Practice in its role in the primary health care system.

  • The largest measure is a $110 million initiative where the Medicare Benefits Schedule (MBS) will be expanded to include new items that will allow for a more integrated approach to health care, particularly for older Australians, includi ng voluntary annual health checks for people 75 years of age and over.
  • As well, for the first time Medicare will provide funding for GPs in the work they undertake with other care providers in planning care for people with chronic and complex needs, parti cularly older Australians. This will build a much-needed comprehensive team approach to the provision of primary health care. This new measure comes into effect from November 1999.

This new style of team work in primary health care and cooperative care pla nning will be complemented by a new incentive under the Practice Incentives Program for GPs to ensure that patients aged 65 and over with chronic and complex needs have care plans if they need them.

In this technological age, exchanging information plays a key role in health care planning. Funding of $10.1 million will be committed to support research and development in this important area.

Coordinated Care Trials are an important way of exploring mu ch better, coordinated care for people with chronic illnesses. The existing trials are already proving successful in reducing rates of hospitalisation and increasing use of preventative health services such as diabetes education, enabling people with diabetes to manage their own illness better.

  • Coordinated Care Trials will be boosted under this Budget with an injection of a further $33.2 million to develop additional trials and to build on those already running.

Primary health care will also be substantia lly boosted with several innovative measures, including the establishment of Carelink , which will allow people easy access to information about health services in their local area. This fulfils an undertaking made by the Government after the election.

By establishing single contact points for community care across Australia, this $41.2 million initiative will greatly simplify access to quality health services while reducing the confusion and disconnection that currently exists which detrimentally affects the health care many people in the community, especially older people, receive.

Better Health Care for Australians in Rural and Remote Areas

While these improvements in primary health care will improve the quality of health care all Australians receive and especially help those Australians who depend the most on the health care system, some Australians are in great need of better health care and access to services, most notably Australians living in rural and remote areas and Indigenous Australians.

This Budget contains extensive measures to increase the reach of health care services and to improve the quality of health care provided to these Australians.

This Budget contains around $171 million over the next four years to significantly improve access to services in rural and remote areas of Australia and to strengthen the rural health workforce.

The Budget will provide funding of $43.1 million over four years to be channelled into retention payments for GPs. The retention payments will be based on a GP's length of service, the remoteness of the area they are practising in and the level of service they provide.

Funding of around $18.6 million will be provided to establish a regional medical school at James Cook University and a clinical school at Wagga Wag ga. The balance of funding for this election commitment will be met from within existing appropriations. These initiatives are in addition to the seven University Departments of Rural Health that the Government has already funded.

Funding has also been allocated to assist the training, counselling and support of rural health professionals and new funding of $4 million over four years will be allocated to provide medical students from rural areas with scholarships to meet their accommodation and other support costs while studying.

The Government is also honouring an election promise by providing $40.8 million to establish 30 Regional Health Service Centres for rural communities across Australia.

The Government will work with State and Territory Governments and local communities to develop these Regional Health Service Centres to provide a range of health, aged care and community services tailored to the needs of local communities. These centres will have an emphasis on primary health care and provide a range of services which could include rural health promotion, GP services, services focused on illness and injury prevention, acute and palliative care, women's health, community nursing, aged care and mental health.

In an innovative move, this Budget is particularly addressing the distinctive needs of women in rural and remote areas. Fulfilling its election commitment, the Federal Government has allocated $8.2 million for a "fly-in-fly-out" female GP service and $4.1 million over four years for support services for women with breast cancer. This Government recognises the need for greater choice in health care for all Australians. These services will provide a greater level of choice and support for women in these areas and ensure improved access to quality health care.

Claiming Medicare entitlements can sometimes be difficult for people living in rural and remote areas. The introduction of Medicare Easyclaim facilities outlined in past budgets has helped to overcome some of these barriers. In this Budget, we are honourin g our recent election commitment by providing an additional 600 Medicare Easyclaim facilities in rural and remote areas with funding of around $19.2 million.

The Government will also honour its election commitment by providing $559,000 from within existing portfolio resources to extend the Bush Crisis Line, a counselling and crisis support service for health practitioners and their families living in remote and isolated communities.

This Budget also recognises the needs of older people in rural and remote areas. Funding has been increased by $25.6 million for the upgrade of aged care facilities that require assistance for certification and accreditation by January 2001. Many of these facilities are in rural areas.

Other new measures for older Australians in rural and remote areas include around $5.3 million over four years to improve the aged care planning process by providing communities with greater flexibility and autonomy in the delivery of services and $2 million for an additional 100 aged care places for the new Regional Health Service Centres.

Meeting the health needs of Indigenous Australians

No Australians are in greater need of better and more extensive health care services than Indigenous Australians. Indigenous Australians use the Medicare Bene fits Scheme at only one quarter of the rate of other Australians, yet their health needs are approximately three times higher.

To redress this imbalance, and building on the numerous measures put in place during the last three budgets, the Federal Government has designed a package of initiatives worth almost $100 million that will make a real difference to the health of Aboriginal and Torres Strait Islander people.

$78.8 million will be spent over four years to improve access to primary health care services including clinical care, illness prevention and early intervention activities.

Funding of $20.6 million over four years will extend the Army/ATSIC Community Assistance Program to improve essential services for indigenous Australians, such as water, sewerage and power systems, roads, airstrips and the construction and upgrade of community housing.

Tough on Drugs

This Budget forges a further leading role for the Commonwealth in combating illicit drug use. The Tough on Drugs strategy will be bolstered by the contribution of an additional $221 million over the next four years to the ongoing fight against drug use and in reducing the devastating effects of illicit drugs such as heroin on users, their families and friends.

$158.2 million of this funding will go towards a variety of programs including those that focus on steering drug users away from our criminal justice system into education and treatment programs for rehabilitation. This diversionary approach is a new and extra element in the Commonwealth's leadership on this issue. Funding will be provided to assist communities to become more involved in addressing illicit drug issues and to increase awareness and knowledge of illicit drugs. This will help create a more unified approach in the campaign to help drug users and to educate the community about the serious repercussions of illicit drug use.

In fulfilment of election commitments, over $10 million will be allocated over four years to establish and expand treatment services, particularly for young people, people in rural communities and remote areas, women with children and to assist multiple drug users.

A balanced health system - public and private

This Budget contains a major, new reform measure - a new 'Lifetime Health Cover' scheme that rectifies a major structural weakness in private health insurance. 'Lifetime Health Cover' recognises early and long-term health fund membership, will stop 'hit and run' membership, reduce costs over time, reward long term members and counter 'adverse selection'.

The new scheme is workable and fair and provides for the health needs of older Australians.

Under this new scheme, registered health funds will be able to set different premiums so that people entering insurance at an early age pay a lower premium throughout their lives relative to people who join later. No one aged 65 or over at 1 July 1999 will pay a higher premium.

Special provisions apply to people who were born on or before 1 July 1934, that is, are aged 65 or more on 1 July 1999. People in this age group can take out hospital cover at any time in the future without paying a loading for joining later in life. If they choose to join a health fund at any time, they will pay the same premium as a 30-year-old new member.

Current members of health funds who have hospital cover, no matter what their age, will be treated as if they had joined a fund by the age of 30. A grace period of 12 months will be provided during which people who are not members can join a health fund and be treated as existing members.

Lifetime Health Cover will help to minimise future premium increases by boosting membership numbers, helping to balance the age distribution of fund members and deterring 'hit and run' membership. Funding for this initiative will cost around $17.3 million.

This Budget also allocates $3.1 million to the simplified billing initiative, which will streamline the present medical billing and payment arrangements for private in-hospital services. It will promote simplified billing and encourage private health funds to provide 'no gaps' and 'known gaps' products.

Lifetime Health Cover, when seen in tandem with other vital reform measures such as the reduction of the 'gap' and the 30 per cent rebate, will help restore the health of private health insurance and restore stability and fairness to the health system as a whole.

Fighting suicide

By the most r ecent figures, more than 2,700 Australians committed suicide in 1997. Through the Fighting Suicide program, the Government is taking significant steps to curb this alarming toll. Fulfilling the Government's election promise, the initiative will receive funding of around $39.2 million over four years. It will build on existing links between governments, business, and non-government and community organisations that support people at risk of suicide.

New measures to refound Australian health on the principles of science

The Government has instituted several other significant measures aimed at improving the quality of health services. These specific measures involve initiatives to promote greater quality in health services, extra support for population health i nitiatives and developing the evidence base for quality care.

Greater Quality in Health Services

  • One area targeted for improvement is prescribing practices. Three medicine groups have been identified as high-growth, high-cost treatments with considerable room for improvement in current prescribing practices. These are cardiovascular medicines, peptic ulcer/reflux medicines and antibiotics. These prescribing initiatives, which will involve the provision of financial incentives to general practitioners, will lead to improved quality of patient care and achieve budgetary savings. The estimated savings are $187 million over four years.
  • The Pathology initiatives, which will achieve savings of around $110 million over four years, arise from the Second Pathology Agreement that comes into effect on 1 July this year. This new agreement will strengthen the partnership between the profession and the Government to develop and implement a range of improvements to enhance quality ordering, testing, practice and use of pa thology services.
  • The Professional Services Review Scheme will be strengthened to improve its capacity to ensure that Medicare Benefits Scheme payments are not made for inappropriate medical practice.
  • This Budget also recognises the considerable burden a sthma places on the community, with a $9.2 million injection of funds over three years. The funds will be used to support the two million Australians with asthma through education, management and training.
  • The Innovative Health Services for Homeless Youth will be funded for a further four years at a total cost of $8.8 million funded from within existing resources. This important service provides advocacy and counselling, medical services, health prevention and promotion, and referral to other health servic es.

Support for population health initiatives

  • The Government is tackling the significant public health concern of hepatitis C with the allocation of around $12.4 million over four years to lower the current transmission rate. This funding will go towards resea rch, education and prevention, as well as health maintenance for those 200,000 people currently infected.
  • There is funding of around $8 million over four years to the National Breast Cancer Centre.
  • A new range of reforms will be put in place to improve t he efficiency and effectiveness of Australia's food hygiene standards. This will initially cost $1 million from within existing resources in 1999-2000.

Developing the Evidence Base for Quality Care

  • In line with an election commitment and with previous unde rtakings, funding of around $20 million over four years is also being provided for the new National Institute of Clinical Studies, which will work with the medical profession to promote best clinical practice throughout the public and private health sector s.
  • In this Budget, the Government announces the establishment of a new Population Health Evidence Base Advisory Mechanism with the aim of making health promotion and disease prevention strategies more cost effective. This will receive funding of up to $5 million over four years from within existing resources.


Adam Connolly, Dr Wooldridge's office, 0413.019.734


[Attachment to hard copy:

Fact sheet 1:  Massive health research boost - Australia's gateway to a healing century [3p]

Backgrounder : National Health and Medical Research Council - an overview [2p]

Fact sheet 2:  Better health care for Australians: new initiatives in primary health care [4p]

Fact sheet 3:  Better health care for Australians in rural and remote areas [7p]

Fact sheet 4:  Tough on drugs [2p]

Fact sheet 5:  Biotechnology: mapping out our future [2p]

Fact sheet 6:  Meeting the health needs of indigenous Australians [2p]

Fact sheet 7:  General practice the key to primary health care [5p]

Fact sheet 8:  Supporting quality in our health system [10p]

Fact sheet 9:  Lifetime health cover [2p]

Backgrounder: The Government's private health insurance plan [6]

Table 1:  Health and aged care budget at a glance [2p]

Held in DPL's Information Files]




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