Angus Taylor (Hume, Liberal Party) Share this | Hansard source

We know health is an increasingly important issue for Australia, and it is an important issue for my electorate of Hume, so it was disappointing to have to listen to the speech of the member for Wakefield. He treated this issue in a facetious way, which is how he often treats important issues. He has been thrown out of this House more than any other member, because he shows no respect. He showed this issue no respect. He talked about shooting stars, but this is a member who lives on the dark side of the moon. We have seen one great example of transparency in the last government's health policy, and that was what the Auditor-General had to say about their pharmacy agreement. I recommend it as very good reading for anyone who wants to know how not to enter into a pharmacy agreement. The Auditor-General was scathing about the agreement that that government entered into.

I do not want to talk about that today—I want to talk about our health policy. It is a health policy directed at better health outcomes and lower costs for consumers. That is what a government that understands productivity in health and health effectiveness can do that the last government was completely incapable of. Let us look at the situation left to us by the last government. We had a medical benefits scheme where costs were rising at nine per cent a year—these are the numbers from the Parliamentary Budget Office—and hospital costs were rising at seven per cent a year. You do not have to be Einstein to work out that if that keeps going, you send the country broke. When you look at the health outcomes, we were not making progress. We saw that in what the Auditor-General told us and we have seen it in a great deal of data coming through—more spending by Labor governments does not lead to better outcomes. I am sure union officials are very happy with it, but it does not lead to better outcomes.

In my electorate of Hume we do have an older population, and this is an indication of what we are going to see right across Australia in the coming years. We have less access to the highly specialised health care that other regions, particularly metropolitan regions, enjoy. Central to our health system is the network of wonderful health practitioners who provide extraordinary outcomes in rural health—the community pharmacies, the hardworking general practitioners, the specialists and the local hospitals. All of them, as well as the allied health practitioners, combine to deliver extraordinary health outcomes. My central point is that traditional rural GPs, community pharmacies and rural hospitals, as well as specialists, can work together exactly as a health system should. If you want to know how a health system should really work, go to rural Australia because those practitioners know how to combine together as a team to deliver wonderful health outcomes. But we need to encourage more of this, not less of it. Much of what these people do is unpaid work—they do it because they are professionals totally dedicated to their communities and their patients' health needs. The PBS in community pharmacy in particular plays a role in rural areas which is less common in our cities.

This legislation is part of a package which is making badly needed changes across the pharmaceutical supply chain—changes that the last government did not deliver; changes referred to in the Auditor-General's report but that the previous community pharmacy agreement did not get to. They are all focused on better health outcomes and lower costs for health consumers. Central to this government's strategy in this area is the creation of a more sustainable framework for payment to pharmacy, and a key part of this is the $18.9 billion Community Pharmacy Agreement. While not all areas of that agreement require legislation, the agreement is profound in what it is setting out to do and what it will deliver. Included in the agreement and in the amendments before this House are a number of features. The first is a shift from a margin-based model for pharmacists to a fixed dispensary fee. This is absolutely critical. We know there are significant savings to be found in the pharmaceutical supply chain but we do not think it is appropriate that pharmacists should bear the full burden of those savings. By moving them away from a margin-based model in their businesses we can ensure that they have a sustainable business model and yet we find significant savings that we can put into new drugs and better health outcomes.

A series of pilots are central to the agreement. They will support a shift in pharmacy away from pure dispensary towards wrapping health services around the dispensary. It is a $1.26 billion set of primary health programs. It is a doubling of the previous investment, with scrutiny from the government's expert Medical Services Advisory Committee—scrutiny we did not see in the last agreement—to improve transparency and ensure programs are evidence based and cost-effective.

Part of this package is a choice for pharmacists about whether to deliver a customer co-payment of up to a dollar, and that should see some savings at least to consumers, beyond those that are being achieved in the lower cost of drugs. We see in the agreement the continuation of the legislative provisions for pharmacy location rules.

Then, on the drug side, we see significant savings—and this is where I have always seen big opportunities. We want to make sure that the drug companies do have sustainable business models. But I know, from watching other chemical and drug supply chains, that there were very significant savings to be made in the wholesale price of pharmaceuticals in this country. So we have a one-off statutory price reduction for single brand medicines after they have been listed as F1s for five years, and for F2 products we are implementing a change in the price disclosure for multiple brand medicines which have been F2s for three years or more by removing the originator brand from the brand calculations. So that means we will effectively achieve a lower cost of drugs. Then we will be applying a flow-on price disclosure series of reductions from drugs to multiple brand combination medicines. So all of this is designed to deliver to consumers a lower cost of drugs, and to ensure that the government burden is reduced for those drugs that are already listed and that will allow us to list further pharmaceuticals and further health solutions and deliver better health outcomes.

I thought it was worthwhile talking to some of the pharmacists in my electorate about how they felt about this agreement. Mark Douglas is a community pharmacist with a pharmacy in Harden and also one outside of my electorate, or nearby, in Gundagai. He is the vice president of and a national councillor on the Pharmacy Guild. We have heard that the guild was somewhat critical of some aspects of this agreement along the way. Like most pharmacists, Mark does not love every aspect of this agreement, and he did voice real reservations about the co-payment in particular. But, like most pharmacists, he has evaluated this agreement in a mature and holistic way. As he says, this bill 'means that over the next five years we can plan—moving from six years ago when we were in a supply phase into a health solutions phase'. He wants to deliver health solutions, and this is an agreement that will support him to deliver health solutions. That is what pharmacists want to do—they want to deliver health solutions. They do not just want to sell products. Mark says that it is about a 'transition from one model of pharmacy to a new model.' He says: 'It means we have the heads up to change and, importantly, the time to do so.' The focus is about sustainability of the sector, leaving pharmacists, as Mark says, 'with enough petrol in the engine' to change, rather than continuing along a trajectory where there would be no capital left for the sector to adapt. So we are giving the pharmacists time to adapt to this health solutions model which they need to move to. As part of this, Mark says the government has approached this issue in a 'mature way', providing a 'clear vision' for pharmacy into the future. The government has been 'pulling the levers of transition', in conjunction with some 60,000 retail pharmacies, toward a focus on primary health care, recognising that pharmacists have an enhanced role to play in the needs of people with disease, being a 'tool in recovery' in support of GPs and in support of patients.

I certainly hope that pharmacists like Mark will be central to the pilots we run around Australia. And I am very confident that, with the sorts of aspirations that he and others I have spoken to have, they will move into a role in the health system which will be enhanced, and I am very confident that this agreement is moving them in that direction.

There is also much more to the government's health policy than just the pharmacy agreement. The minister is doing wonderful work not just in delivering this agreement but in other areas of reform. She has announced a chronic and complex illness review. We know that, in this area, we are spending as much as $300 million to $500 million each year additional to the previous year. That is extraordinary growth in expenditure on chronic and complex illness.

We spend $850 million per annum on Medicare items for producing care plans and allied health visits for people identified as having chronic disease. That is growing at 25 per cent a year. It grew 25 per cent a year between 2006 and 2014—much of it under the previous government—and we did not see the reforms in this area that were necessary.

We also know that much of this money is spent in ways which are not well targeted. In fact, we know from the data that more people in relatively low-risk categories are under care plans than people in high-risk categories. But the idea of this is to focus on high-risk patients. So the minister has put together a Primary Health Care Advisory Group led by former AMA president Steve Hambleton. The purpose of this is to provide better care for people with complex and chronic illness, as well as to look at innovative care and funding models, better recognition and treatment of mental health conditions and greater connection between primary care and hospital care. This is the future of our healthcare system.

We know that an important part of this is to make sure that the money we are spending on care plans is well spent. I am confident that there will be significant changes coming out of that review—changes that will matter greatly in my electorate.

We also have an MBS item review. The government has established a Medicare Benefits Schedule Review Taskforce led by Professor Bruce Robinson, dean of the medical school at Sydney university. We know that currently the MBS has 5½ thousand services listed, but we know that they do not all reflect clinical best practice and we know that not all of these items should be on the MBS. We have seen one example, that of vitamin D testing, where the government has spent an enormous amount of money in recent years: we went from spending nothing at all in 2001 to spending $146 million on vitamin D testing by 2012. Much of that increase was under the last government. And we know from the Medical Journal of Australia that the effectiveness of that testing is highly questionable. So these are the sorts of MBS items that we need to be reviewing, and we need to be focusing our money on outcomes that can really make a difference.

Finally, we are looking at clearer Medicare compliance rules and benchmarks, working with clinical leaders, medical organisations and patient representatives to ensure that the Medicare system, the medical benefits system, is not being abused.

It is true that the vast majority of practitioners provide first-class services. But I hear from GPs across my electorate that a small number do abuse the system, and we cannot afford for that to continue. The Auditor-General had a look at what the last government did in this area: the human services area recovered $18.9 million from these problems, having targeted $147 million. Again, the Auditor-General was scathing about how that program was executed.

Let me finish with a comment on the role of pharmacy in the health system. Every pharmacist I speak to knows that they can do more. Many of them are doing more than they are paid for, because they believe in the importance of health. They know that the MBS is not, in some cases, getting the outcomes it needs to. And they know that with the right payments and the right incentives they will be able to deliver more for our health system at a reduced cost overall.

I commend this bill to the House and I commend the pharmacy agreement to the House. I ask that all of us give our complete support to such an important set of reforms.

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