What the budget means for doctors

By the time Tuesday night’s budget speech was delivered, most people working in the health sector probably felt like we were watching the season finale after weeks of spoilers, leaks and early announcements. 

In the aftermath of the budget, it is time to look past the headlines and read the tea leaves to understand what this week’s budget signals about the government’s next moves. 

For doctors, several budget measures revealed what the government is prepared to do and what it intends to do next. 

The government’s emerging health agenda 

The clearest signal about the government’s intent came through a publicly-stated $674 million target for Medicare compliance over the next four years while also investing $140 million in more sophisticated systems to monitor compliance activity. 

In setting such a large target, it is clear that the government will apply significant scrutiny to MBS billing practices although exactly how, and to what degree, is not yet known. Avant supports good practice, but any changes must be measured and done with the sector, not to the sector.  

A more subtle, but potentially important, signal about what may come next was the $2.1 million commitment to commission specialist advice on specialist affordability reforms. While, in terms of the overall health budget, this is a very modest spend it raises several interesting possibilities. “Specialists” may mean medical specialists, or it may refer to the lawyers and consultants advising government on how to navigate constitutional issues involved in regulating or even capping fees. 

Either way, the government will continue using health cost-of-living measures as a major political tool in the lead-up to the next election. It has already demonstrated that health costs can shift votes in previous campaigns, and it is unlikely to step away from a successful strategy ahead of the next election in two years’ time. 

What we already knew 

The budget also locked in several measures we already knew were coming including embedding Medicare Urgent Care Clinics as a permanent structural feature of the health system. Much of this is delivered through large corporate primary care operators. 

The NDIS savings measures represent some of the most significant reforms in any recent federal budget, although the government telegraphed them in the weeks leading up to budget night. Many in the sector are calling for more certainty on what these changes will be mean for families and providers.  

Another significant health measure, though not a new one, is the $25 billion in additional funding to states and territories for public hospitals through the recently inked National Health Reform Agreement. The government also announced $598.3 million over two years for continued operations and improvements to the My Health Record and a larger investment in health and medical research through the Medical Research Future Fund. 

There were also measures to improve the infrastructure of Aboriginal Community-Controlled Health services, and increased funding in culturally safe mental health support and Birthing on Country services. 

Political reactions 

The politics from here will become particularly interesting. Opposition Leader Angus Taylor is heavily criticising the government’s decision to scrap the private health rebate for Australians over 65 but did not pledge to restore it in his budget in reply.

The Greens, by contrast, will likely support the rebate changes, although they may also use the issue as leverage in negotiations over broader NDIS reforms or proposals for higher taxes on resource companies. 

The budget also included a handful of smaller measures that may ultimately carry more significance than their price tags suggest. One of those was the $3.2 million allocated to consultation on reforms to the private health system. It is a relatively modest amount, but it sends an interesting signal nonetheless. 

What to watch 

Over the next 12 months, several issues will deserve close attention: 

• whether the Medicare compliance crackdown expands to include more aggressive review of routine billing practices
• how the newly announced consultations on specialist affordability proposals evolve, whether they genuinely involve medical specialists rather than consultants and lawyers, and how they intersect with government focus on specialist fees
• how reforms to the Medical Costs Finder evolve, with Avant actively working to improve the legislation to make it practical and fair for doctors while still delivering meaningful transparency for patients 
• whether consultation on private health system reform signals a broader policy shift in the relationship between government, insurers and private providers
• whether the reduction in the private health insurance rebate for over 65s is a “test case’ for future reductions in the rebate, with savings potentially redistributed back into public hospital funding or aged care. 

The direction of travel now looks clearer with the government seeking tighter oversight, more visible cost-of-living interventions, and a more active role in areas of healthcare pricing and system design that Canberra once approached far more cautiously.