Medicare rort claims: experts respond

Is the Medicare model suitable for a population with increasingly complex health-care needs? AAP

Medicare is again in the news after the former director of the Professional Services Review (PSR) Dr Tony Webber published an article critical of its workings in today’s Medical Journal of Australia (MJA), highlighting inefficiencies in the system, which he estimates could have opened the way for rorting of up to $3 billion.

We asked researchers in related fields to share their views on the health-care funding system.

Gawaine Powell Davies, Associate Professor at University of New South Wales and Director of the university’s Centre for Primary Health Care and Equity.

The articles in today’s MJA about Medicare and its capacity to deal with abuses by clinicians and by corporate interests raise important issues.

There are many with strong interests in Medicare: it allows doctors a reliable source of income that impinges little on their professional independence, consumers a passport to the health care that they choose (if they can find it and pay the gap!), and commercial interests a safe revenue stream. On the other end stands Treasury, holding the thin blue line for the taxpayer. In the middle stands the Professional Services Review team, with the government on the sidelines, understandably wary of annoying powerful interests.

This would not matter if Medicare were up to the job of providing equitable and affordable health care for a population with increasingly complex health care needs. Unfortunately in its present form it increasingly isn’t. Fee for service is not good for supporting preventive or chronic disease care. Important areas of care – think dental – are not funded because of the difficulty of controlling expenditure. Allowing clinicians to determine – by their choice of where to practice – where public funds will be spent leaves disadvantaged communities and populations underserved.

It is ironic that the areas that were cited as open to abuse – dental and allied health care for people with chronic conditions – are areas where the government has tried to extend Medicare to meet important needs. The lesson is not to pull up the fee for service drawbridge but to find more effective funding systems for these and other areas of public – the public’s – publically funded – health care.

David Baker, Research Fellow at University of Canberra and The Australia Institute, and author of Bulky Billing: Missing out on fair and affordable health care

The former director of the Professional Services Review, Dr Tony Webber, argues that upwards of $2 billion in Medicare funding is being rorted. The insider rorting of public health funds is possible in part due to policies that use incentive payments to achieve savings.

In the recent research paper – Bulky Billing: Missing out of fair and affordable health care – The Australia Institute found that despite the payment of incentives to GPs, pharmacists and providers of diagnostic testing to increase bulk billing rates, Australians were still paying more than $1.1 billion in extra fees for these services and prescription medicines.

Incentives, it appears, are not producing the intended savings for Medicare or Australians as taxpayers or patients.

The use of incentives is largely invisible to patients engaging with the health system and with most Australians only having sporadic engagement with the health system, the associated learning costs of understanding health funding is very high.

As such, people don’t know when government incentives are affecting how much they have to pay for medical care. And due to the nature of the relationship between patients and their GP, they are unlikely to challenge what their doctor charges. By extension this would also include referrals for diagnostic testing or allied health care.

Medical professionals, on the other hand, have a greater knowledge of the ins and outs of medical funding and – for some – the opportunity to find ways of rorting the system.

There are at least three billion reasons why structural changes to Medicare and not band-aid policies, such as paying incentives, are needed to ensure greater value for the health dollar and that the goal of Medicare to provide fair and affordable health care is realised.

Jane Hall, Professor of Health Economics and Director, Centre for Health Economics Research and Evaluation at University of Technology, Sydney

The report by Tony Webber on the professional review component of Medicare really brings two issues to the fore – one is around fraud and the other is around the appropriateness of the level and type of services provided.

Fraud is dishonesty – at its most blatant it’s claiming for services under Medicare that haven’t been provided. Clearly, there should be no place for fraud within the health-care system but in any large and complex organisation, there needs to be a process for ensuring that the expenditure of funds and the use of resources is indeed appropriate.

That’s part of what needs to be done and we see it in all sorts of systems, whether in insurance systems or financial systems. Big corporations require ongoing audits, and that’s all about the responsibility for accountability and trust.

Clearly as the system gets more complex, it needs a more complex auditing system and that’s auditing in terms of process, not just financial accounts.

That’s one issue raised by the report and the extent to which processes need to be further developed within the Medicare payment system really requires very detailed knowledge of the current processes – to be able to say exactly what the situation is. But there’s no doubt that the principle of continually improving processes means there needs to be ongoing investment in developing fraud detection.

The other issue raised by Webber is the extent to which all those services provided under public funding are indeed appropriate. And appropriate from the social perspective; appropriate in terms of their effectiveness and their efficiency.

What we know is that the provision and determination of what is appropriate depends a lot on clinical judgement. And that judgement varies across individuals, that what one person judges to be appropriate may not be found by another to be appropriate even though they have the same training.

So there’s the possibility for variations in the way that appropriateness is determined. This isn’t about honesty or dishonesty, it’s about the exercise of judgement.

What we also know is that the way people are paid for the provision of services – whether they be doctors or people in other occupational groups – affects the decisions that they make, whether wittingly or unwittingly. In general, where there’s room for discretion, people will take the course that most rewarding to them – financially or otherwise.

Not surprisingly, under a fee-for-service health-care system, we see a tendency to provide more services than under alternative ways of paying for health care.

What we see in other countries around the world, where people are also grappling with this, is the attempt to develop financial systems that reward appropriate care. And that’s appropriate in that socially-optimum sense. So we’re seeing attempts to move away from fee-for-service and to use other ways of paying for service; for rewarding providers who deliver optimum care and penalising those who don’t.

There are some attempts to develop these approaches within Australia but at this stage we’re behind the international leaders in developing alternative financing mechanisms and pay-for-performance approaches. What we can learn from other countries is how important it is not just to agree on the principles on which these payments will be based on but to agree also on getting the details right.

Details such as the level of payment, mechanics of identifying what services are being provided and what should be provided.

Australia is really falling behind the rest of the world in making the best use of research evidence and of modern information systems to ensure that the implementation of new approaches will be based on the best available information and will be monitored and evaluated so that we don’t make expensive mistakes.