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MRI scam: Minister must stand down, Royal Commission must be held.

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Media Release



Federal Member for Jagajaga

Shadow Minister for Health


18 October, 1999




Shadow Health Minister, Ms Jenny Macklin, said today’s revelations about the exte nt of the MRI “scam” required the standing down of the Minister for Health, Dr Wooldridge. so that a judicial inquiry can be held.


“After many months of stonewalling, the Minister has finally admitted that the problem is even worse than Labor has been alleging.


“Labor had claimed that there were 31 suspect contracts for purchase of Magnetic Resonance Imaging machines in place on Budget night, 12 May 1998. Today the Minister has revealed there were in fact 52 such contracts.


This is an extraordinary and unbelievable number of machines — at around $3 million each — given that it had taken the previous ten years to build the national stock of such machines up to about 60.


“It is now clear that some radiologists knew in advance of the decision announced in the Budget extending Medicare benefits to existing MRI machines, and to machines subject to binding purchase contracts on Budget night.


“It is now clear even to this bungling Minister that some radiologists cashed in on some inside information on the Budget by securing contracts before Budget night, and that in some cases radiologists may have tried to illegally backdate contracts.


The extension of Medicare rebates to MRI machines for the first time was a multi-million dollar windfall for anybody who owned an eligible machine. MRI machines can each generate around $1.5 million a year in rebates.


“Last week the Minister said he personally took the decision on the Budget night cut-off and got the backing of the Expenditure Review Committee on 5 th May 1998. This was the day before he met with a group of radiologists from the Royal College. and a week before the 1998 Budget.


“Now he has admitted that the “aggressive offering of non binding contracts” by manufacturers of MRI machines occurred in the last week before the Budget.


“There is a very real issue to be investigated. Has the Minister given a complete account of what he told the radiologists, and was he responsible for the Budget leak?


“The Auditor General is not in a position to investigate this serious allegation. The appropriate mechanism is a full Royal Commission which will have the powers to take sworn evidence and cross-exam witnesses.


“The prospect of other court proceedings against some radiologists should not be allowed to draw a veil of silence over the main issues in this case.


“This is an unprecedented bungle and the responsibility lies directly with the Minister.


“If it’s good enough for Dr Barry Catchlove to stand aside voluntarily as Chair of the Health Insurance Commission, then the Minister - the person who actually handled the negotiations with the radiologists and managed the Budget decision - should stand down as well.


I understand Dr Wooldridge is scheduled to travel overseas this week. In view of today’s bombshell, I believe the Minister must stay at home and explain his bungle to the Australian people, pending a Royal Commission.”




For further information:

Andrew Herington 0418 573 504; Jenny Macklin 0419 593 622


rw  1999-10-21  14:30