Senate debates

Monday, 10 September 2018


Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment Bill 2018; Second Reading

8:52 pm

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party, Shadow Assistant Minister to the Leader (Tasmania)) Share this | | Hansard source

I rise to speak on the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment Bill 2018. Here we have another Liberal bill designed to clean up another Liberal mess. You'd be forgiven for thinking that that is all this government does in health—clean up the messes of its own making. This bill amends the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 2000—I'd call it the 'Pathology Tax Bill' for short—to change the frequency of the tax paid by approved pathology collection centres. Presently, Australia's roughly 6,000 collection centres each pay a tax of $1,000 when first approved and when their approval is renewed each year. Under this bill, collection centres will pay a tax of $2,000 every two years instead of $1,000 every year. This is intended to reduce the regulatory burden for government and industry while maintaining the revenue raised by the tax. This is a minor but welcome change, and we will support this bill.

But let's look at the real reason the government has put this bill forward. This is damage control. This issue goes back to 2009, when Labor introduced bulk-billing incentives for pathology and diagnostic imaging services. It was a sensible policy and it worked. By 2014-15, 114.3 million pathology services were provided out of hospital, with almost all of them, 98.7 percent of them, at no cost to the patient. Diagnostic imaging bulk-billing rates rose 10 per cent in just six years, thanks to Labor's measures.

What did the Liberals do? They did what they always do in the health portfolio; they stuffed it up. One of the most significant cuts in this Prime Minister's first Mid-Year Economic and Fiscal Outlook was to Labor's bulk-billing incentives, in a bid to save $650 million. There was no commitment to reinvest the money in the health portfolio; rather, the money would go to fund their other policy priorities. Health is always their last priority. After all, they would rather give big business an $80 billion tax cut than properly fund health care.

We on this side knew that these changes would hurt patients, forcing out-of-pocket costs even higher. Obviously, the pathologists were also going to pass the costs on to the patients. Even worse, it would force some people to delay getting critical tests, putting their lives at risk. So we did what Labor always do when the Liberals try to cut funding from our health system; we fought back. The sector fought back too. Describing it as a 'copayment by stealth', the AMA warned the move would hit the poorest and sickest the hardest. But when has this government ever cared about those sorts of people? The sector's Don't Kill Bulk Bill campaign delivered a petition with 600,000 signatures, showing once again that the Australian people are deadset against this government's health cuts.

This campaign clearly gave the Prime Minister quite the fright because, the next thing you knew, he was standing up in the middle of the first election debate with the opposition leader and announcing he had struck a hasty pre-election deal with the sector—in a bid to shut them up for the rest of the campaign. It was a shameless and cynical stunt to get his government through the election.

Under this dodgy deal, pathologists accepted the abolition of the bulk-billing incentive in exchange for the government's pledge to regulate the rents that pathologists pay GPs to co-locate in their practices. GPs were of course furious, so in the government's hasty attempt to buy the silence of the pathologists they had made enemies of the family doctor. That is typical of this government's approach to health—half-baked ideas and unnecessary cuts followed eventually by the inevitable humiliating backflips. The government capitulated again and used the 2017 budget to break its deal with pathologists and ditch the rent regulation plan, and to backflip on the bulk-billing incentives that set off this whole sorry saga.

This bill is one of a number of policy changes the government has offered to the pathology sector by way of a grovelling apology. This bill is not health policy; it is dispute resolution. Thank you.

8:58 pm

Photo of Richard Di NataleRichard Di Natale (Victoria, Australian Greens) Share this | | Hansard source

I rise to speak to the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Amendment Bill 2018. The Greens support this bill, which makes an administrative change to allow for the tax payable on the grant of an approved pathology collection centre to be $2,000 for a two-year period rather than annually at $1,000.

Pathology is essential to health care in Australia. Over 70 per cent of all healthcare decisions affecting diagnosis or treatment involve a pathology investigation, and all cancer diagnoses involve pathology. Pathology is ordered in one in every two visits to the GP. It's a vital service. It's an essential public service. There are now 5,804 pathology collection centres in Australia, and pathology actually has the highest bulk-billing rate of any medical service, at over 87 per cent. It's clearly something that Australians value. It's important. It's critical to providing access to good health care.

However, we Greens are concerned about the loss of diversity within the pathology sector. One of the consequences of that is the rise of corporatisation over public pathology. Since we've had the deregulation of collection centres—under the previous Labor government, it must be said, in 2010—there's been a significant change in the ownership of pathology practices. Instead of being owned by individual groups of specialist pathologists servicing a local community, pathology practices are now generally owned by very large corporations with a centralised laboratory structure. Pathology corporations are looking for more and more ways to dominate the market so that they can get economies of scale. That often means that they locate themselves inside GP clinics to try to capture patients.

The way corporates embed themselves in general practice within those clinics—and, let's remember, one of the concerns here is that you get this vertical integration, where you go and see a GP and they are associated very directly with one of the large companies—is by paying sometimes exorbitant rents for collection centre space. They often pay well over market rent to get a space in a GP surgery, knowing that they will get a significant return on the business they get from that practice. The reason they can do it is that, under the Health Insurance Act 1973, the rents are defined as 20 per cent of the market rate. That's the permissible rent—20 per cent of the market rate. But, when the market's defined as what a party is willing to pay, the limit's actually meaningless, and it's led to drastic increases. If it was redefined under the act as the rent for a comparable medical suite in the same geographic area then rents would come down. They would have to come down.

So, currently, public pathology providers, many of whom simply can't afford to pay huge rents, are now being outbid for collection centre space, sometimes having been in the same centre for years. There are strong clinical relationships between the GPs and other requesters of services, and the pathologists. They've got a long history in the centre, but they just can't afford to pay the rent anymore. Public pathology providers are being squeezed out. And of course that's made worse by the fact that, for some inexplicable reason, the government pays private pathology providers more for the same test than it pays the public pathology services under Medicare. For every specimen that's collected, private providers receive between $5.95 and $17.60, while public pathology providers receive only $2.40 under the MBS. There's a huge differential. It's no wonder that those minority players, those small groups of public pathology providers, can't compete. They're not being remunerated to the same degree, under the MBS item numbers, and they are being squeezed out by these huge rents that are being charged by GPs.

I don't blame GPs in this, by the way. When you've got general practices struggling because of the freeze on Medicare indexation—something begun by Labor but really taken somewhere very bleak under the Liberal coalition government, and it has hit so many practices so hard—they are looking for ways to supplement their revenue. One of the ways they see of doing that is by increasing the rents they charge to pathology providers. Of course, that leaves the providers between a rock and a hard place. If they want to find themselves located within a GP clinic then they have to pay those rents. What happens then is that the public providers, who simply can't compete with the private providers, are squeezed out. They are at a significant disadvantage.

A couple of things need to happen here. One is that we need to redefine what charging market rent is. As I said, if we had a simple change that meant it was the rent charged for a comparable medical suite in the same area, you would find that they couldn't charge well above market rent. Of course, that means more transparency in the system. It would hurt some general practices, but you don't fund general practices by having a business model that forces them to charge over the odds to try and get a pathology provider within their clinic; you do it by having a transparent model that funds Medicare appropriately and that ensures that Medicare item numbers keep up with indexation.

The second thing that needs to happen, quite clearly, is that we need to make sure that there's a level playing field in the pathology sector. The Greens are very strong supporters of ensuring that we have a well-funded, universal public health system. That means we're strong supporters of public pathology providers, and we do want to see a level playing field, including addressing out-of-control rents through amendments to the act and making sure that there's MBS parity between public and private pathology. We think that's only fair. These steps would lead to better outcomes for patients and a reduction in overservicing and would mean that we would put the interests of patients ahead of the interests of some of these very large corporate providers.

9:06 pm

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

I'm perhaps the person in this chamber most learned to speak on this subject because 22 years ago I had a valve put in my heart, which proves that, unlike Senator Cameron, I can say that I have a heart! Since then, I've had to be on warfarin—

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

A point of order, Senator Cameron?

Photo of Doug CameronDoug Cameron (NSW, Australian Labor Party, Shadow Minister for Human Services) Share this | | Hansard source

Yes, a point of order: that is not a judgement that you can make!

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

That's not a point of order.

Photo of Ian MacdonaldIan Macdonald (Queensland, Liberal Party) Share this | | Hansard source

But I can actually prove I have a heart. It was sitting on the table next to me. I challenge Senator Cameron to, in any way, prove that he has a heart. I can do it; very few others can. But, as a result of that, I am on warfarin, which is a blood thinner, which is needed. So every three, four, five or six weeks, I go to a pathology collection centre, and have done for the last 22 years.

I must say that, as with most things that the Greens talk about, they have a very narrow, city-centric view of any aspect of life in Australia. I live, as I said in the previous debate, in a big, small country town—there are about 20,000 people in the district—and my community is very well served by two pathology agents. There is QML, who actually have a collection centre in the medical centre operated by my general practitioner and his partners. I don't go there—not for any reason; QML deliver a wonderful service, I'm sure. I deal with the other provider in the north, a group called Sullivan Nicolaides, who are very big in Queensland. They have a collection centre in Ayr, and I use them because they're more or less across the road and down the street a bit from where I live, and I've been going to them for 22 years now. They're not in a rented premises of a doctor; they're in a shop downtown, not far from where I live.

The comments by the previous speaker again were directed at anyone who seeks to run a private, profit-making business in Australia. The Greens, again, demonstrate their supersocialist approach. They want to regulate market rentals, just as they want to regulate prices for absolutely everything—a typical old communist approach that even the Greens should have learnt failed in Russia, the USSR, and eastern Europe over the last 70 or 80 years. Communist or socialist, market-price fixation simply does not work. I'm not sure what more of history the Greens need to research to understand that market forces are far better than government regulation of any sorts of prices, be they market rents or others.

As a regular user of pathology collection centres, I have been through the ups and downs of the pathology industry. There was a time there when the government made some changes to moderate the payments made to pathologists. There was a huge hue and cry over that period of time, but it quietened down. I think the pathologists do pretty well financially—not that I begrudge them that. They do a wonderful job. They provide a wonderful service. What I love about the pathology companies that I am familiar with in Queensland, and I am sure it happens like this elsewhere in Australia, is that they do have these collection centres where someone like me—who lives 100 kilometres from the laboratory of Sullivan Nicolaides—just has to walk down the street, the collection of blood is taken and it is shipped up to Townsville a couple of times a day. It is then assessed by the skilled doctors, the specialists who understand what blood is all about, and they get the results back to my GP very, very quickly.

That happens not only in my town but in most towns in North Queensland. I am aware that both QML and Sullivan Nicolaides have a number of collection centres around the City of Townsville, which is a city of around 200,000 people. That's so that people don't have to drive for hours through city traffic to get to a collection centre. They can go to one that is near to them. They do provide a very worthwhile service. Unless you are a patient, a user of these services, you perhaps don't understand. But someone who does use them regularly, like me, understands just what a wonderful service these pathology centres provide. I know from experience over the last 22 years that the nurses who take the blood samples are exceptionally skilled nurses and also exceptionally lovely people, if I can say that, in looking after not just me—forget about me—but so many people who I see at the pathology collection centre. They are looked after, encouraged and administered to by the nurses who operate in those areas.

I understand that, I am hopeful that and I am assured by the government that this bill will lessen the regulatory burden on pathology agencies. Instead of paying a tax of $1,000 each year, they will now pay a tax of $2,000 every two years. As far as the money goes, it is not going to be any cheaper for the pathology agencies. It is going to mean that the government receives no less revenue for the services provided, but it does mean that some of the red tape will be reduced. The regulatory burden of pathology providers will not negatively impact smaller pathology providers, as there is no increase in the financial component, as I said. It is simply that the tax and the associated paperwork will now happen every two years rather than every year. I understand that these changes are welcomed by the pathology sector because it does decrease the effort currently involved in the annual renewal of the ACC tax—that is, the approved collection centre tax. This is a bill that is another approach by the government to reduce the regulatory burden on small businesses and it should be supported. I urge support by all senators.

9:14 pm

Photo of Zed SeseljaZed Seselja (ACT, Liberal Party, Assistant Minister for Treasury and Finance) Share this | | Hansard source

Just before I briefly sum up—I won't respond directly to all the contributions, but I thank all senators for their contributions—I will just respond to some of what Senator Polley had to say, claiming cuts here, there and everywhere, which is of course not the case. In fact, I would point not just to the coalition government's record investment in hospitals but also, when it comes to things like PBS listings, being able to list so many new drugs and save Australians who are doing it tough, to give them access to medicines that would otherwise simply be out of reach. That includes Spinraza for spinal muscular atrophy, saving patients over $350,000; Kisqali for breast cancer, saving Australian women over $70,000 a year; and Orkambi for cystic fibrosis, saving patients up to $250,000. So, I do reject some of the assertions made by Senator Polley. This is what happens when you get control of the budget, and indeed we see that, in stark contrast to the former Labor government, who deferred the listing of many of these medicines because they simply didn't have the money.

But putting that aside, I want to thank members for their contributions to the debate and support for this bill. This bill will amend the Health Insurance (Approved Pathology Specimen Collection Centres) Tax Act 2000 to increase flexibility by enabling tax payable on the grants of an approved specimen collection centre to be calculated for approvals granted for periods longer than one year. The bill will amend tax payable on the grant of an approval of an ACC from $1,000 paid annually to $2,000 paid two-yearly. The rate of the tax has not been changed since the act was enacted in 1999. Careful consideration was given for no increase to the tax to ensure that smaller ACCs were not negatively impacted. The changes to the tax and the proposed corresponding amendment to the Health Insurance (Eligible Collection Centres) Approval Principles 2010 to extend approvals from one year to two years will be welcomed by the sector as they assist in reducing operational and administrative burden.

There are a number of parallel projects that support the development and implementation of the government's direction for pathology that include administrative changes by automating and streamlining processes to reduce the regulatory burden for pathology providers. The department has been engaging with and will continue to engage with key stakeholders prior to the amendment to the tax and the extension of the time frame for new and renewed ACC applications, including reaffirming the key elements of the measure announced in the budget.

In summary, this bill will amend the tax payable on the grant of an approval for an ACC from $1,000 annually to $2,000 to be paid two-yearly. This amendment is an essential component to the budget measure as part of streamlining processes and reducing the administrative burden for pathology collection centres. I table a supplementary explanatory memorandum relating to a government amendment to be moved to this bill. Thank you.

Photo of David LeyonhjelmDavid Leyonhjelm (NSW, Liberal Democratic Party) Share this | | Hansard source

The question is that this bill be read a second time.

Question agreed to.

Bill read a second time.