Annual Review 2013 a showcase of the vital work undertaken this year

CEO’s Report

Michael Roff, APHA Chief Executive Officer

For APHA, 2013 began much as 2012 ended, opposing further attacks on private health insurance policy settings and trying to ensure continued access to private chemotherapy services.  Both of these measures were a result of a hostile Government scratching around for fiscal savings to try and keep an oft repeated, but ultimately unachievable promise to return the Budget to surplus.

However, although there was no letup in the political drama, intrigue and treachery that the Australian public had become used to and ultimately tired of (resulting in yet another ALP leadership coup), the federal election in September led to a change of Government which hopefully, will not repeat the mistakes of their predecessors.

The Private Health Insurance Legislation Amendment (Base Premium) Bill 2013, announced as part of the 2012 MYEFO measures, sought to decouple health insurance rebates from actual premium increases, meaning the value of the rebates would steadily erode over time (not to mention adding another layer of administrative burden to health funds).

Despite our success in having the Bill referred to a Senate inquiry and garnering significant opposition, the legislation was ultimately passed in late June, in what was the final week of sittings before the election.  However, early discussions with the new Government indicate there may still be a possibility this pernicious change may never be implemented.

While the previous Government initially resisted calls to properly fund chemotherapy, a Senate inquiry and mounting political pressure saw them introduce an interim measure in the May Budget.  This involved an allocation of $29.5 million over six months to fund dispensing of chemotherapy drugs.  At the same time, they commissioned an inquiry to come up with a “sustainable” solution to report in October. Cynics might say this was simply an exercise in defusing the issue until after an election.

In another promising sign, new Health Minister, Peter Dutton, used the first question time of the 44th Parliament to declare he would fix this issue. And subsequent announcements have confirmed not only has funding certainty been provided for chemotherapy providers and patients, but that clinicians in private hospitals will now be able to use a patient’s medication chart to dispense and claim PBS medicines. 

Early in the year, APHA concluded negotiations with the Department of Health and Ageing that saw technical changes to the administration of the 2nd Tier Default Benefit Scheme that formalised the role of the 2nd Tier Advisory Committee in determining applications in addition to the role played by APHA in supporting the work of the Committee.

The 2nd tier arrangements remain under attack from health funds who blame the scheme, which accounts for less than 1% of total benefit outlays, for premium increases and lack of competition within their own sector.

In March, after an 18 month hiatus, we held the APHA Congress in Melbourne.  The new timing was introduced to differentiate us from the plethora of health conferences held at the end of year (which also results in difficulties sourcing venues).  While some teething problems with the new timing led to a slight decrease in numbers, we are confident these issues will be addressed and the March 2014 Congress to be held  in Brisbane will return to trend attendance levels.

APHA continued to represent the sector on the Australian Commission for Safety and Quality in Healthcare, helping the Commission to understand some key differences between the public and private hospital sectors.  This proved critically important this year as the new National Safety & Quality Health Services Standards were implemented.  Two key issues of note that had the potential to cause concerns for the private sector were requirements in relation to provision of information and responsibility for training VMOs. 

Even though we were able to negotiate a workable outcome on both of these issues, APHA continues to monitor the full rollout of the National Standards and will continue to assist members during the crucial implementation phase, while at the same time collecting information for use in the scheduled 2015 review.

Perhaps unsurprisingly given the continued attacks on health insurance support measures by the previous Government, the quarterly health insurance statistics indicate that over the course of 2013, growth in hospital cover flat lined, combined with a continued downgrading in the quality of policies held.  While there is yet to be a full flow-through of this impact into private hospital utilisation, this raises the potential for challenging times ahead for the sector.

Against this background, APHA has been quick to engage with the new Government on the theme of ‘demand management’ with a view to ensuring the inevitable growth in demand in hospital services is appropriately managed across both sectors. An obvious element of this approach is curbing the growth of private patients in public hospitals, which has continued unabated while the COAG Reform Council tells us that public elective surgery waiting times have increased.  A range of other elements are currently being developed under this theme to be pursued through a variety of Government processes.

As mentioned previously, the early signs from the new Government have been promising. Another example is the appointment of APHA’s Vice-President, Richard Royle, to Chair the Government’s inquiry into the troubled Patient Controlled Electronic Health Record.  This was a clear signal to the bureaucracy that the Government is serious about enhancing engagement with the private health sector, something that has been sorely lacking in the past.  We can expect to see more examples of this when the membership of the Ministerial Advisory Committee is announced.

There is no doubt the shape of the federal bureaucracy will be quite different by this time next year.  The findings of the Commission of Audit will be key in determining which agencies (particularly in the health space) survive and which do not.  APHA has already provided some thoughts in this regard and will continue to work with the Government at every opportunity.

In August the country’s largest health fund, Medibank Private, took out full page newspaper advertisements that selectively used data in a misleading way to try and blame private hospitals for their own cost increases.  APHA was forced to respond to correct the record to demonstrate that utilisation and demographics were the real cause, with the increase in average benefits per episode much lower than either CPI or Medibank’s own premium increases.

Medibank Ad Image

It was disappointing that a major health fund would firstly, seek to influence the public debate in such a misleading way, but secondly think that making an untrue corporate slur against the private hospital sector would do anything to increase demand for their own product.

After nine years of service to APHA, Kathryn Lee decided it was time to move on from her position of Director, Finance and Administration.  The strong financial position currently enjoyed by the Association is due in no small part to Kathryn’s prudent financial management.  We were fortunate to recruit Ruth McGorman-Mann to this position in April and Ruth has already become a valued senior member of the APHA team. 

More recently, Dr Mehrdad Khodai left us as Research and Data Manager to take up a position with Queensland Health. His successor is Meke Kamps, who joins us from the Australian Institute of Health and Welfare.

The entire team at the APHA secretariat are committed to providing the best representation of, and service to our members.  Hospitals that are part of APHA are well served by this committed and cohesive group and I would like to acknowledge their efforts this year.

Similarly, I would like to thank the volunteers from within the membership, without whom the Association simply could not function.  This includes not only your elected representatives on the Board and Council, but those many experts within the sector who volunteer their time to contribute to our own taskforces, or represent APHA externally in a wide range forums.


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