Medicare needs urgent and intensive care

An independent federal government-commissioned review has confirmed what a , and report first revealed: that the health system is haemorrhaging up to $3 billion annually in waste and could be losing billions more in rorts due to its weak regulation and the corporatisation of medicine. Only a small proportion of 500 million transactions a year are scrutinised and the growing corporate ownership of medical clinics has weakened the doctor-patient relationship and limited oversight of billing, the review revealed.

Dr Pradeep Philip, a health economist and former head of the Victorian health department, found the 6000 items on the Medicare Benefits Schedule were difficult to understand, and he has flagged several areas requiring urgent attention, including a continuous monitoring system that would send SMS alerts when claims were made and a simplifying of the Medicare billing system with items that better catered for complex conditions, clearer language and more details of the service, such as length and location. It’s a good start but this alone won’t be enough.

An independent review has found Medicare is so poorly structured and loosely scrutinised that it is no longer fit for purpose, and has left “the gate wide open” to significant levels of fraud.

Alex Ellinghausen

Philip recommends the establishment of a new Medicare oversight committee made up of department representatives and independent experts, as well as stripping the powerful Australian Medical Association of its veto power over who runs the system’s regulator, the Professional Services Review (PSR). The is not suggesting any individuals on the Medicare oversight organisation engaged in any wrongdoing, but rather that its ties to the AMA give the PSR the appearance of a body that lacks true independence. It is inappropriate for any lobby group to have veto power over a regulator that supposedly governs its members’ actions.

If accepted, the removal of the veto power would be an unprecedented setback for the AMA. The powerful doctors’ union has played a pivotal role in pushing its own interests and shaping Medicare since its first manifestation as Medibank in the Whitlam government era, through the endless whittling away of the Fraser government to the Hawke government reboot as Medicare in 1984.

That year, then president Bruce Shepherd memorably led an unprecedented “doctors dispute” when some 70 of the 270 NSW public hospital honorary physicians and surgeons and visiting medical officers resigned, protesting that their autonomy was threatened by government plans to introduce contracts.

The AMA’s close links with the regulator that oversees Medicare’s integrity was revealed in a joint investigation by Adele Ferguson and Chris Gillett that appeared late last year in The Sydney Morning Herald, The Age and on the ABC’s 7.30. Our report was based on research by PhD student Margaret Faux, who uncovered flaws in Medicare’s systems with medical practitioners making mistakes or charging for unnecessary or non-existent services that made it easy to rort and almost impossible to detect fraud, incorrect payments and errors.

As a result, Minister for Health Mark Butler commissioned Philip to investigate the integrity of the health system. Our report prompted strong feelings: doctors’ professional organisations attacked the investigation and its authors, saying the claims were inaccurate and an unjustified slur on the medical profession. Faux was subject to such fierce threats and abuse she was afraid to leave her house.

There was no intention of criticising the profession or individual doctors. Rather, our investigation was an attempt to shine a light on the inescapable and stark fact that our health system, once the envy of the world, is not fit for purpose and is losing billions of taxpayer dollars through billing mistakes, overservicing and outright fraud. This finding has been completely validated by this latest report.

Butler faces a Herculean task in dragging Medicare from its 1970s origins into the 21st century, overhauling a system that is outdated and open to abuse and improving accessibility to all Australians in an increasingly diverse and ageing society. He also needs to control very vocal and powerful lobby groups that are no longer representing the views of ordinary, decent medical practitioners.

Faux and others have called for a royal commission, believing the scale of the problems are so extensive that only a comprehensive inquiry can reveal all the flaws.

Medicare has been a bleeding sore, ignored for decades by governments, but Butler displayed common sense in quickly ordering the review and a willingness to get on with the job of reform.

It is in the national interest for such a massive undertaking to be conducted immediately and a comprehensive solution delivered as efficiently as possible. Australians deserve nothing less.

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