Full response from Catholic Health Australia

In relation to this FactCheck, The Conversation asked Catholic Health Australia for comment.

Its spokesperson said:

Unfortunately, due to huge and sustained financial pressure being felt by the not-for-profit pathology sector, the introduction of co-payments is possible and ultimately the prerogative of the provider. Independent and not-for-profit pathology providers may have to adopt co-payments simply in order for their services to remain viable.

The not-for-profit pathology sector is currently under extreme financial pressure as a result of ongoing cuts to MBS rebates, a freeze in MBS indexation since 1998, unilateral reductions in benefits paid by private health insurers and rapid increases in collection centre rent costs. Turnbull’s deal with “The Pathology Sector” was made without taking not-for-profit providers into account. Also, the Grattan Institute Pathology Report, used by Minister Ley to claim $175 million in pathology savings could be made by government annually, only focussed on the big corporate players.

In May CHA CEO Suzanne Greenwood said that: “Whilst CHA welcomes the commitment that a returned Turnbull government will address the issue of high collection centre rents, this will disproportionately assist the larger corporate providers and will not be sufficient to adequately offset the cuts imposed on smaller providers by removing the bulk billing incentives… In the absence of effective action, not-for-profit providers will have no choice, but to continue to close smaller and regional laboratories, undertake further redundancies and potentially impose co-payments.”

The introduction of co-payments is a real possibility and will ultimately leave patients out-of-pocket. Independent and not-for-profit pathology providers may have to adopt co-payments simply in order for their services to remain viable.

The not-for-profit pathology sector is currently under extreme financial pressure as a result of ongoing cuts to MBS rebates, a freeze in MBS indexation since 1998, unilateral reductions in benefits paid by private health insurers and rapid increases in collection centre rent costs.

Take a look at this media release about the Grattan Institute Pathology Report, and its claims government could save $175 million a year by changing its remuneration arrangements. CHA notes its displeasure that the report ignored not-for-profit pathology providers, and suggested would simply narrow the margins of profitable corporations.

This would put the independent providers at even greater disadvantage and put further pressure on smaller not-for-profit pathology companies. Also, Catholic sector pathology providers have a strong representation of laboratories in regional Australia, with 58% of laboratories located in regional areas, and a further 8% of laboratories operating in rural and remote areas – ultimately, providing needed services to people living in locations that present a less attractive market for corporate pathology investment. A further constrained funding environment for pathology services will result in market exit, greater industry concentration, staff redundancies and closure of not-for-profit laboratories and collection centres. Unless government action is taken to ensure appropriate remuneration to pathology providers, ultimately the Australian community will see increased out-of-pocket costs and have reduced access to services with reduced choice of services, particularly in regional and remote areas.

CHA CEO Suzanne Greenwood said in response to the ALP’s pledge to reverse cuts to the MBS pathology bulk billing incentives that:

This proposal will remove some of the current financial pressure facing the sector and will help to ensure current levels of bulk billing are maintained.

Too many vulnerable and disadvantaged patients are already not accessing necessary health services due to high out of pocket costs for GP and specialist visits. We should not be adding to this burden.

The removal of the bulk billing incentives later this year, as proposed by the current government, will be particularly challenging for the not-for-profit and independent sector. Whilst this may be offset to some extent by reform of collection centre rents, which CHA has welcomed, the benefits of rent reform will particularly help large corporate providers.

If we are not to end up with a duopoly of two big corporates in pathology, whoever wins the election on 2 July must provide a funding framework that will ensure that not-for-profit pathology and independent providers are able to take their place in a diverse sector that continues to provide Australians with access to world-leading pathology services.

Not-for-profit and independent providers are particularly committed to investment in innovation, research and education as well as the provision of services to regional communities.

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