NACCHO Aboriginal healthly debate: Medicare Locals (MLs) their future is unclear ?


We are committed to reducing waste and spending on administration

and bureaucracy, so that greater investment can be made in services

that directly benefit patients and support health professionals who

deliver those services to patients.”

Health Minister Peter Dutton:

For more info about review

NACCHO has provided our members the following viewpoint in the interest of “healthy debate”


Adjunct Associate Professor Public Health at University of Canberra

Primary health care in Australia is a messy beast, with many heads and all sorts of body parts. But it’s centrally important because it plays a major role in achieving public health outcomes, such as better co-ordinated care for people with chronic conditions, good immunisation rates and programs to help people quit smoking and lose weight.

Medicare Locals (MLs) now have a role in coordinating and improving this care, but their future is unclear.

MLs were set up during the Rudd-Gillard health reforms to tame the beast, plan for better preventive health, fill gaps in service and improve coordination by drawing on local knowledge.

This means working with hospitals, Aboriginal medical services, community health services, patient advocacy groups, the aged, refugees and immigrants, as well as state and local governments.

Before the election, health minister Peter Dutton derided MLs as merely an “extra layer of bureaucracy”, foreshadowing the possibility they could be axed under a Coalition government. Professor John Horvath, chief medical officer from 2003 to 2009, is now reviewing the role and function of MLs. Submissions closed last month and he will report to government in March.

There are 61 Medicare Locals across the country, the first of which have been operating for a little over two years. Since MLs have now provided more than 500,000 services and 4,700 professional development and education sessions for health professionals, it will take more than a click of the fingers to cut them out and return to the pre-2011 system where the Divisions of General Practice did some (but nowhere near all) of this work.

Submissions to the review

There are many more services and providers involved in Medicare Locals than general practitioners and specialists, though listening to some of the dominant voices involved in the review gives the opposite impression.

Disappointingly, the submission of the Australian Medical Association (one of the doctors’ advocacy groups with a big voice in policy debates) takes the simple view that Medicare Locals don’t work because they are not dominated by doctors. The AMA role is to protect the earnings and interests of doctors but its submission is a thin piece of analysis referring to none of the successes, strengths or potential of MLs.

On the other side, the submission from the Australian Medicare Local Alliance is all sunshine and flowers. It gives a very positive set of reasons to give MLs a longer go and is thin on the real criticisms that may have to be addressed. Helpfully, it attaches appendices with some statistics and many examples of the work and success stories so far.

The Greater Metro South Brisbane Medicare Local, for instance, has offered 11 Chronic Disease Self-Management Programs to Aboriginal and Torres Straight Islander peoples, including for diabetes.

In between these extremes we have some mixed views in other submissions.

On the positive side, there is some great work on health promotion and coordination which might deliver considerable health savings in the longer term if not cut off at the knees. There are also more voices at local level getting together to map what services exist, weigh up what is needed and plan to get the care the community prioritises.

But there is some duplication and wasted effort when MLs provide services now that are competing with other providers rather than filling gaps.

The name is also a problem, as people think they can make payment claims at the ML – a role for the national Medicare offices.

Overall, there is a strong case to let the MLs have a few more years to prove their worth and to see what savings elsewhere in the health system may be countable by the ML-driven effect on reducing hospital costs, unnecessary tests, screening and doctor visits and the burden of chronic conditions. The current UNSW-Monash-Ernst and Young evaluation, (separate to the review), should shine some light on these questions.

What are the likely review outcomes?

There are three broad categories of possible outcomes and we may not know before the federal budget in May.

The first is a “let it run longer and see what the evaluation says” approach, with minor tweaks to clarify roles and perhaps changing the name.

The second is more drastic: to cut the ML roles by, for example, taking much of the preventive health planning and education functions out. This would leave a focus on service delivery, while trying to reduce duplication of effort.

The third is to axe the MLs entirely and phase a return to something more like the old Divisions of General Practice.

The two more drastic approaches would weaken Australia’s primary health care system. It would go against the professional and community input to the national health reform discussions in 2008-09. And state governments might have very negative views about radical chopping and changing of this scale at this time.

How do the economics stack up?

MLs were set up with a modest budget. Depending how they are counted, the savings from axing them are likely to be less than A$1 billion over four years, allowing for transition arrangements and current contract commitments to be met.

There are certainly bigger fish to fry in health savings. These include the Grattan Institute’s proposed Pharmaceutical Benefits Scheme reform, which might save A$1.3 billion a year, or removing the private health insurance rebate. Reducing the rebate by 25% could save A$549 million per year.

We need a rational analysis rather than an ideological knee-jerk reaction to another Labor hangover; we need to give Medicare Locals a chance to improve health outcomes and consider building on their strengths after more

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