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New Medicare reforms won’t fix everything but they start to tackle the system’s biggest problems


Federal Health Secretary Mark Butler has long said that Medicare in the worst form it’s been decades. Prime ministers have come to successive national cabinet meetings to say that primary care is failing – and to demand reform and investment.

Fortunately, the policy is Secretary Butler outlined today at the National Press Club to strengthen Medicare rises to the challenge. These reforms will be funded with a total of A$2.2 billion

They certainly won’t solve everything. But instead of going down the drain or just tackling superficial symptoms, they’re starting to address some of the biggest challenges in GP practice: outdated technology, underserved GPs, a broken funding model and restrictive regulation.

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Diagnose the problem

There are many visible and urgent healthcare crises, ranging from declining bulk billing rates to overcrowded hospital emergency departments. But the minister focused on the one major structural failure that is causing many of these problems: Medicare has not kept up with Australians’ health needs.

Medicare was founded in the 1980s. Today Australians are living longer, often with chronic illnesses. Chronic diseases – such as heart disease, diabetes, asthma and depression – are the leading cause of illness and death. Almost half of Australians have one chronic condition; more than half of Australians over 65 have two or more.

Nearly half of Australians have a chronic health condition.

As Secretary Butler noted, Medicare has not kept up and is “starting to show its age.” A system designed for quick, one-time consultations with physicians does not sit well with the more complex offerings of ongoing care and support many patients require today.

To update Medicare, the minister announced three areas of reform.

1. Modernize digital systems

With people likely to have multiple health conditions and a range of professionals across the health system, it is more important than ever for patients and clinicians to have relevant and up-to-date health information. This helps clinicians understand the needs of their patients. It also means patients don’t have to provide the same information over and over again or take duplicate, wasteful tests.

Read more: My health record aims to empower patients – but is it worth keeping if little useful information is stored?

Australia’s digital systems are outdated, difficult to use and ineffective. My health record, our main digital health tool, is only used by a small minority from specialists, private hospitals and paramedical care providers. According to Secretary Butler, only one in ten specialists use it and only one in five results of radiology tests (such as X-rays or MRIs) are uploaded.

Computer systems in practices and hospitals usually cannot talk to each other and are often not connected to My Health File.

To address this, more than $950 million will be spent on digital health, including keeping the Digital Health Agency running and improving My Health record.

2. Build bigger teams

To meet the growing complexity of people’s health needs, most countries are moving towards “multidisciplinary” teams in general practice. Those teams may include nurses, physical therapists, pharmacists, psychologists, and administrative positions. This approach can improve care and relieve GPs.

As with digital systems, Australia is way behind other countries. Our GPs are more likely work independently or with little support. That’s because the way we fund GP practice is stuck in the past, mostly limited to paying GPs for disconnected, one-off consultations.

The Employee incentive program, which funds GP surgeries to employ a range of different health professionals, will be increased. For small clinics and in areas with too little care to go around, Primary health networks (regional bodies responsible for improving primary care) will fund and attract paramedical health workers and nurses to work in GP clinics.

Mark Butler at the National Press Club
Butler announced more funding for practices to hire a range of health professionals.
AAP/Lukas Coch

But the biggest change is a new way of funding healthcare. Our outdated fee-for-service system does reward rushed consultations complicated and confusing for physicians, and blocks team-based care. For clinics and patients who choose to participate, a new system called My Medicare will change that.

Patients register with a preferred practice. The practice is then given a budget to treat them, in addition to the fees for each visit. In addition to a patient-centric budget, care teams gain the flexibility to plan and deliver care in new and better ways.

Registration with a clinic supports strong relationships between patients and their care teams. The funding will focus on that relationship, not isolated visits, and will reflect the work of the entire healthcare team, not just the GP.

3. Unlock staff skills

In addition to measures to attract nurses to primary care, there will be an assessment of the barriers preventing healthcare workers from using all their skills.

Australia has a tangle of inconsistent regulations and complex funding rules leading to duplication of effort, high costs, wasted talent and GPs being overworked. The review is an opportunity to remove many of these barriers and ensure that staff roles reflect the best evidence of how to provide safe, high-quality care.

Pharmacists will too do more, with new funding for free vaccinations and expansions of treatment for people addicted to opioids. There will also be more training places in primary care for nurses and efforts will be made to recruit nurses who have left the profession back into general practice.

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Evolution, not revolution – and a team effort

The breadth of the proposals is important – there will be little progress without improvements in all those areas.

At the National Press Club, Secretary Butler said that “remaking Medicare for the 21st century will take sustained evolution, not overnight revolution.”

That step-by-step approach is also important, including making the most complex reform voluntary, My Medicare. These changes will be difficult, so participating clinicians and patients must be convinced of the benefits, willing to change and ready for inevitable setbacks.

The nurse shows a patient a pamphlet
The Medicare reform process will be incremental.

The reforms won’t please everyone, but this may be the biggest opportunity for primary care reform in a generation.

The minister commented on the “pointed elbows and loud voices” of the various health care professionals who are Strengthening the Medicare task force. This package needs the support of all professionals involved in primary care and a strong voice for patients. Hopefully they will work together to ensure that these reforms succeed.

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