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Medibank: Australia's new national health insurance program By R.J. Rossiter, DM, D Phil (Oxon) The Australian federal government, centred in Canberra, is a Westminster-

to form a caretaker government pending another general election. Both style constitutionai democracy not un- houses were dissolved, and in the Dec. like that of Canada. There are two 13 election the Liberal-National Coun¬ elected houses, the House of Represen¬ try party coalition, headed by Mr. tatives and the Senate. In health care, Fraser, decisively defeated the Labour the federal government has come to party. Medibank was never a major elec¬ play a much more prominent role than in Canada. tion issue. The chief issues were the Medibank was initiated July 1, 1975. state of the economy, inflation, unemThe proposals of the progressive La¬ ployment, alleged corruption and inefbour government of Gough Whitlam ficiency in the Whitlam government for a national health insurance program and the constitutionality of the action were outlined in a green paper in April of the Governor-General. Mr. Fraser 1973. This paper, prepared by a health insurance planning committee chaired Dr. Rossiter, vke president, health of Western On¬ by Dr. J.S. Deeble, was quickly fol¬ sciences, University tario, London, was in Australia from lowed (November 1973) by a govern¬ September to December 1975* He arment white paper authorized by the rived 6 weeks after the introduction of then minister of social security, W.G. Medibank and was there during the Hayden. Legislation to establish a unprecedented November constitutionai health insurance program and a com¬ crisis and the subsequent general elec¬ mission to administer it was prepared tion. He was able to discuss the impact the same year. These two bills, together of Medibank with physicians, medical with other legislation, were passed by educators, officials of the federal gov¬ ernment and officers of the Australian the House of Representatives in which Medical Association. His report follows the Whitlam government had an assured by Ron Lord (CMAJ 112: 112^ majority; they were then defeated in the that 1975). Senate. After the dissolution of both houses, followed by a general election, the two bills were readily passed by made it clear that the essentials of the re-elected Whitlam government in Medibank, as established by the Whit¬ lam government, would continue vir¬ 1974. Soon after Medibank (a term intro¬ tually unchanged. duced by Mr. Hayden in 1974) became The program operative July 1, 1975, Whitlam's Medibank is operated by a health Labour party ran into difficulties. The insurance commission (HIC) under the Senate consistently defeated all bills on of Dr. R.B. Scotton. The chairmanship money matters, including the national HIC is responsible to the minister of budget, approved by the House of Re¬ social security, administrative presentatives where the Whitlam gov¬ officer being Dr.itsJ.S.chief Deeble, the viceernment still had a clear majority. On Nov. 11 Governor-General Sir John chairman of the commission. To an Kerr took the unprecedented step of outsider it seems an anomaly that the HIC reports to the minister of social a prime dismissing Mr. Whitlam minister with a majority in the House security rather than to the minister of health. on the grounds that he was unable to govern. Sir John requested the Lead¬ Reprint requests to: Mrs. B. M. Potts, H120, Health sciences centre, University of er of the Opposition, Malcolm Fraser, Western Ontario, London, ON N6A SCI .

.

Before Medibank 87% of Australians insured by various government or government-approved programs against both medical and hospital expenses. Now every person in Australia, whether a new arrival, visitor or permanent res¬ ident, is eligible for Medibank benefits without registration and without a wait¬ ing period. The benefits are also avail¬ able to Australian residents temporarily were

overseas.

Persons receiving the old age pension (previously covered by a pensioner med¬ ical service), veterans (previously cov¬ ered by a repatriation medical service) and persons belonging to other special groups may now choose between the benefits offered by Medibank and those available through their previous med¬ ical schemes. Medibank benefits, which in many instances should prove considerably more

attractive,

cover

general practi¬

tioner services and specialist consulta¬ tions provided that the patient is re¬ ferred to the specialist by a general practitioner. Exceptions to this referral rule are the services of pathologists, radiologists, and anesthetists. The scheme also covers x-ray services, pa¬ thology services, optometric consulta¬ tions (but not the cost of spectacles or contact lenses) and certain. dental pro¬ cedures carried out in the dental de¬

partments of approved hospitals (but

office dental procedures). All persons covered by Medibank, regardless of income, are eligible to claim for medical benefits up to 85% of an approved fee schedule. Where the schedule fee exceeds $33, the plan pays the schedule fee less $5. not the usual

Hospital services A primary feature of Medibank is that all persons, regardless of income, may choose to become (using the scheme's terminology) either a hospital

CMA JOURNAL/FEBRUARY 21, 1976/VOL 114 361

INDICATIONS: Sustained moderate through severe hypertension. DOSAGE SUMMARY: Start usually with 250 mg two or three times daily during the first 48 hours, thereafter adjust at intervals of not less than two days according to the patient's response. Maximal daily dosage is 3.0 g of methyldopa. In the presence of impaired renal function smaller doses may be needed. Syncope in older patients has been related to an increased sensitivity in those patients with advanced arteriosclerotic vascular disease and may be avoided by reducing the dose. Tolerance may occur occasionally between the second and third month after initiating therapy. Effectiveness can frequently be restored by increasing the dose or adding a thiazide. CONTRAINDICATIONS: Active hepatic disease such as acute hepatitis and active cirrhosis; known sensitivity to methyldopa; unsuitable in mild or labile hypertension responsive to mild sedation or thiazides alone; pheochromocytoma; pregnancy. Use cautiously if there is a history of liver disease or dysfunction. PRECAUTIONS: Acquired hemolytic anemia has occurred rarely. Hemoglobin and/or hematocrit determinations should be performed when anemia is suspected. If anemia is present, determine if hemolysis is present. Discontinue methyldopa on evidence of hemolytic anemia Prompt remission usually results on discontinuation alone or the initiation of adrenocortical steroids. Rarely, however, fatalities have occurred. A positive direct Coombs test has been reported in some patients on continued therapy with methyldopa, the exact mechanism and significance of which is not established. Incidence has varied from 10 to 20%. If a positive test is to develop it usually does within 12 months following start of therapy. Reversal of positive test occurs within weeks to months after discontinuation of the drug. Prior knowledge of this reaction will aid in cross matching blood for transfusion. This may result in incompatible minor cross match. If the indirect Coombs test is negative, transfusion with otherwise compatible blood may be carried out. If positive, advisability of transfusion should be determined by a hematologist or expert in transfusion problems. Reversible leukopenia with primary effect on granulocytes has been seen rarely. Rare cases of clinical agranulocytosis have been reported. Granulocyte and leukocyte counts returned promptly to normal on discontinuance of drug. Occasionally fever has occurred within the first three weeks of therapy, sometimes associated with eosinophilia or abnormalities in one or more liver function tests. Jaundice, with or without fever, may occur also, with onset usually within first 2 or 3 months of therapy. Rare cases of fatal hepatic necrosis have been reported. Liver biopsies in several patients with liver dysfunction showed a microscopic focal necrosis compatible 'with drug hypersensitivity. Determine liver function, leukocyte and differential blood counts at intervals during the first six to twelve weeks of therapy or whenever unexplained fever may occur. Discontinue if fever, abnormalities in liver function tests, or jaundice occur. Methyldopa may potentiate action of other antihypertensive drugs. Foldow patients carefully to detect side reactions or unusual manifestations of drug idiosyncrasy. Patients may require reduced doses of anesthetics when on ALDOMET*. If hypotension does occur during anesthesia, it usually can be controlled by vasopressors. The adrenergic receptors remain sensitive during treatment with methyldopa. Hypertension occasionally noted after dialysis in patients treated with ALDOMET* may occur because the drug is removed by this procedure. Rarely involuntary choreoathetotic movements have been observed during therapy with methyldopa in patients with severe bilateral cerebrovascular disease. Should these movements occur, discontinue therapy. Fluorescence in urine samples at same wave lengths as catecholamines may be reported as urinary catecholamines. This will interfere with the diagnosis of pheochromocytoma. Methyldopa will not serve as a diagnostic test for pheochromocytoma. Usage in Pregnancy: Because clinical experience and follow-up studies in pregnancy have been limited, the use of methyldopa when pregnancy is present or suspected requires that the benefits of the drug be weighed against the possible hazards to the fetus. ADVERSE REACTIONS: Cardiovascular: Angina pectoris may be aggravated; reduce dosage if symptoms of orthostatic hypotension occur; bradycardia occurs occasionally. Neuro/ogical: Symptoms associated with effective lowering of blood pressure occasionally seen include dizziness, lightheadedness, and symptoms of cerebrovascular insufficiency. Sedation, usually transient, seen during initial therapy or when dose is increased. Similarly, headache, asthenia, or weakness may be noted as early, but transient symptoms. Rarely reported: paresthesias, parkinsonism, psychic disturbances including nightmares, reversible mild psychoses or depression, and a single case of bilateral Bell's palsy. Gastrointestinal: Occasional reactions generally relieved by decrease in dosage: mild dryness of the mouth and gastrointestinal symptoms including distention, constipation, flatus, and diarrhea; rarely, nausea and vomiting. Hematological: Positive direct Coombs test, acquired hemolytic anemia, leukopenia and rare cases of thrombocytopenia Toxic and Allergic: Occasional drug related fever and abnormal liver function studies with jaundice and hepatocellular damage (see PRECAUTIONS) and a rise in BUN. Rarely, skin rash, sore tongue or "black tongue", pancreatitis and inflammation of the salivary glands. Endocrine and Metabolic: Rarely, breast enlargement, lactation, impotence, decreased libido; weight gain and edema which may be relieved by administering a thiazide diuretic. If edema progresses or signs of pulmonary congestion appear, discontinue drug. Miscellaneous: Occasionally nasal stuffiness, mild arthralgia and myalgia; rarely, darkening of urine after voiding. Full prescribing information available on request. How Supplied: Tablets ALDOMET* are yellow, film-coated, biconvex shaped tablets, supplied as follows: Ca 8737-each tablet containing 125 mg of methyldopa, marked MSD 135 on one side, supplied in bottles of 100 and 1,000. Ca 3290-each tablet containing 250 mg of methyldopa, marked MSD 401 on one side, supplied in bottles of 100 and 1,000. Ca 8733-each tablet containing 500 mg of methyldopa, marked MSD 516 on one side, supplied in bottles of 100 and 250. Also available: Ca 3293-Injection ALDOMET* Ester hydrochloride, a clear colourless solution containing 250 mg methyldopate hydrochloride per 5 ml, supplied in 5 ml ampoules. *Trademark (MC-1 20)

I MERCK k.

SHARP I & DOHME CANADA LIMITED POWJTE CLAIRE, QUEBEC

or a private patient. The former receives free, standard-ward accommodation and free treatment in public hospitals (including medical, nursing and diagnostic services) and such dental and paramedical services as are available in the hospital. In certain states these services were available from the outset, and negotiations with the remaining states quickly followed. The hospitals are funded through the state governments by arrangement with the HIC, and the specialists providing services are paid by the hospital on a salary, sessional or contract basis. There is no fee-for-service payment to doctors attending hospital patients. A person who elects to become a private patient must pay for the upgraded accommodation, which may be private or semi-private, in either a public hospital or an approved private hospital. The patient then has complete freedom of choice of doctor, and the doctor receives fees for service through Medibank. Hospitals, public or private, that accept such patients receive from the HIC per diem subsidies so that the daily hospital charges to the patient are considerably less than previously. The HIC recommends that persons opting for such services continue contributing to a private hospital insurance fund. Although medical fees have been virtually eliminated and hospital fees, even for private patients, considerably reduced, private insurance funds have continued to operate by increasing their coverage to items not included in Medibank benefits. With the approval of HIC, coverage includes such items as prescribed spectacles and contact lenses, hearing aids, dental benefits, home nursing and private physiotherapy services. Outpatient facilities Another feature of Medibank is that the outpatient departments of public hospitals are available to all at no cost and regardless of income. The range of services provided includes treatment, drugs and paramedical services. In some hospitals a means test is maintained for certain special services such as dental ones to ensure they are available to patients who need them most. Billing options

How are doctors paid? There are three billing options: the patient may pay the bill submitted by the doctor and claim from Medibank for 85% of the permitted fee schedule; the patient may transmit the doctor's bill to Medibank and the doctor receives the 85% benefit from Medibank directly; or the doctor may submit statements to Medibank at regular intervals receiving CMA JOURNAL/FEBRUARY 21, 1976/VOL 114 363

the 85% benefit as a consolidated pay¬ ment, a procedure known as direct

billing. For the convenience of the public, well-appointed Medibank offices have been established in prominent locations throughout the country, chiefly in downtowh locations and shopping plazas. Financing The method of financing Medibank

was the source of considerable contro¬ versy from the outset. The entire cost of the scheme is now recovered from general taxation, with no charge, pre¬ mium, or levy on either the patient or his employer. The medical benefits of Medibank for patients not in hospital and the remuneration of physicians broadly re¬ semble the Ontario Health Insurance Plan (OHIP). On the other hand, hos¬ pital benefits and the remuneration of specialists treating patients in hospital differ considerably from OHIP and resemble more the British national health service. As in the UK, there are different methods of paying physi¬ cians who treat hospital (non-private) and private patients.

Hayden out...

the profession accepted Medibank sur¬ prisingly well during its first months. The complaints of the public were for the most part minor and were con¬ cerned chiefly with administrative er¬ Medical view rors and delays in the processing of claims. Viewed from the outside, the Before the introduction of Medibank, consultation with the Australian Med¬ HIC seems to have been unduly opical Association was minimal. The La¬ timistic in leading the public to believe bour government perceived Medibank claims could be processed in less than in ideological terms. One gains the im¬ a week. Doctors as far afield as Perth in pression that the government was un- Western Australia and Townsville in willing to compromise and hence reluctant to meet the bodies most affected north Queensland expressed satisfacof the medical state governments, organized med¬ tion with the operation benefits aspect of Medibank. Most gave icine and officials of medical schools. impression that they believed that When the Deeble green paper first the the benefit of 85% of the fee schedule appeared, the AMA responded with the is reasonable, having in mind anti¬ critical document "AMA views on reductions in office stationery Deeble plan". In particular, the AMA cipated and postage expenses and elimination objected to the precipitate nature of of nonpaying patients and bad debts. the report of the health insurance plan¬ As to the Medibank hospital services, ning committee when the government reaction of the profession is consider¬ had already established within the more divided. Doctors in Queens¬ ably department of health a very credible where for years there has been a hospital and health service commis¬ land, service free to all regardless hospital sion, chaired by Dr. Sidney Sax. Since of income, appear to have accepted the then, the AMA has continued to oppose Medibank hospital services with little Medibank, chiefly through the medium but in Western Australia, a of its publications, the Medical Journal question, state that has operated a hospital serv¬ of Australia and the AMA Gazette. ice along lines more familiar to North In April 1975, just before the intro¬ Americans, the reaction of the profes¬ duction of Medibank, AMA President sion was more cautious. Dr. K.S. Jones sent a notice to mem¬ The profession seems convinced that bers urging them, among other things, the two categories of patient in public not to direct-bill Medibank and to en¬ hospitals, hospital patient and private courage their patients to purchase pri¬ patient, is reasonable, but doctors are vate insurance through existing health apprehensive. In New Zealand, for in¬ insurance funds to provide private or stance, all patients in public hospitals intermediate hospital coverage. are definitely hospital, a point greatly On the whole, the general public and at issue at present in Britain. In most .

364 CMA JOURNAL/FEBRUARY 21, 1976/VOL 114

Canadian provinces, on the other hand, all patients in public hospitals are vir¬ tually private. In Australia the HIC, following Britain, has chosen a middle course. One gains the impression that the HIC would like to see a single cate¬ gory only, hospital patient, as in New Zealand. It seems that the dual categorization of patients in public hospitals derives from political expediency rather than from ideology. Outstanding issues As anticipated, a number of issues remain. There is a general fear in Aus¬ tralian medical schools that Medibank will cause a significant reduction in the number and variety of patients avail¬ able for teaching purposes. Traditionally these patients have come from out¬ patient departments and the public wards of the major general hospitals. The limited (6 months) experience of operating Medibank indicates that the number of patients attending the out¬ patient departments of many leading teaching hospitals has declined. Now all patients, including pensioners, may be referred to the office of a private spe¬ cialist, rather than to the outpatient department of a general hospital. In New South Wales many outpatient de¬ partments closed for several months. The decrease in the number of ambula¬ tory patients available for teaching pur¬ poses has been real, but it has been offset to a certain extent by the rapid development of community health centres outside hospitals. With the ac¬ tive encouragement of the federal gov¬ ernment, many such health centres have been established, a large number of which are now available for clinical

teaching. What the effect of Medibank will be on the availability of hospital patients for teaching purposes is difficult to pre¬ dict. During the first 6 months there

was little indication of any decided trend. Both the HIC and the AMA anticipate that the percentage of patients who will elect to be designated hospital rather than private will increase, thus providing greater availability of patients for clinical teaching. Choice of doctor Under Medibank the patient has complete freedom of choice of doctor, whether general practitioner or special¬ ist, while not in hospital. In hospital as a private patient he has freedom of choice of specialist. If he elects to enter hospital as a hospital patient, the hos¬ pital and not the patient is, in theory, responsible for the choice of the spe¬ cialist who will provide the service. Physicians told me, however, particuJarly those practising in parts of the country where a similar system has

operation for many years, that general practitioner familiar with the local hospital setting finds it quite easy to refer a hospital patient to the spe¬ cialist desired by both the patient and the referring general practitioner. Direct billing The possibility of doctors' submitting regular statements directly to Medibank became a major issue and was formally opposed by the AMA. The practice is frequently referred to as bulk billing, although HIC officials prefer the term direct billing. To one familiar with the OHIP system in Ontario, for example, the objections are perplexing. HIC of¬ ficials hope that ultimately more than 60% of Medibank claims will be by direct billing. It is of interest to note that by October 1975, only 3 months after the inauguration of Medibank, 40% of claims were direct billed, and the figure was rising, despite the vigor¬ ous AMA campaign against direct bill¬ ing. In fairness, it should be stated, however, that many of these claims were for pathology or x-ray services, where the patient is not intimately in¬ volved. It seems likely that with time direct billing of Medibank will become a major method for the remuneration been in

a

of doctors in Australia.

Schedule of fees The arbitrated fee schedule upon which Medibank benefits are based is approximately 12% lower than the AMA fee schedule, which varies from state to state and appears unnecessarily complicated. The Health Insurance Act provides for a medical benefits advisory committee "consisting of eight members including at least five medical practi¬ tioners Four of the members who are required to be medical practitioners shall be appointed after consultation by the minister with the Australian Medical Association or such other associations or colleges of medical prac¬ titioners as the Minister considers ..

.

appropriate." Many doctors are suspicious of the promised procedure and doubt whether it will permit the annual revisions of fee schedules that they deem neces¬ sary.

Physicians

and

hospital patients The Medibank proposal for the rem¬ uneration of specialists who provide services for hospital patients and who previously treated public-ward patients entirely on an honorary basis has met with considerable resistance in the larger states of New South Wales and Victoria. In Victoria, these specialists have refused to accept sessional pay-

Fraser in... ments for services rendered to

Whitlam out...

hospital these problems do not appear to exist, As mentioned previously, in and that Medibank is apparently work¬ New South Wales the outpatient de¬ ing to the satisfaction of both the public partments of many major teaching hos¬ and the profession. pitals were closed for several months, although in December it was an¬ Costs nounced that an acceptable agreement had been reached. From the first a major Medibank Much is made in Australia of the issue was one of costs. Almost too sanctity of the doctor-patient relation¬ many estimates, both government and ship inherent in fees for service. When private, were available. None leave one pressed, however, many of the reluctant with any sense of credibility. Figures doctors admit that their chief concern gained from the experience of the first is economic. As an official of the AMA 6 months of the operation of Medibank stated, "The real issue is pay both are so atypical as to be useless. Ausnow and in the future." Doctors would tralians appear willing to pay for Medi¬ be more ready to accept salaried or ses¬ bank, but they are astounded at the sional payments if convinced that the figure of 7% of gross national prod¬ HIC had in mind clear proposals for uct often quoted in Canada. One gained a machinery to keep their remuneration the impression that if Medibank costs in pace with the rising cost of living. could be contained within 6% of GNP, The writer was provided with in¬ a figure now achieved in New Zealand, stances of a specialist in a general hos¬ Australians would have obtained a pital who refused to accept a referral health care bargain and one for which, from a general practitioner of a hos¬ regardless of political persuasion, most pital patient, for which the specialist Australians would be prepared to pay. would receive no extra remuneration, but was willing to accept referral of the Acknowledgements same person as a private patient, for which a Medibank payment is per¬ The author gratefully acknowledges mitted. Consciously or unconsciously, the generous assistance offered by the temptation remains to ensure that many physicians in Australia extending beds available to hospital patients are from Perth (Western Australia) to always full. The writer heard of com¬ Townsville (Queensland). In particular, plaints from patients seeking elective he is indebted to Dr. Gwyn Howells, operative procedures in a public hos¬ director-general of health; Dr. Sidney pital that they would have to wait Sax, chairman, hospitals and health months for admission as a hospital pa¬ services commission; Dr. John Deeble, tient, but that they could be accom- vice-chairman, health insurance com¬ modated immediately as a private pa¬ mission and to Drs. K.S. Jones, L.L. tient in the same hospital for the same Wilson and G.D. Repin, president, procedure performed by the same treasurer, and secretary general, respec¬ surgeon. tively, of the Australian Medical Asso¬ On the positive side, however, it ciation. Any defects in interpretation should be reported that in many centres are solely those of the author. ¦ CMA JOURNAL/FEBRUARY 21, 1976/VOL 114 365 patients.

Medibank: Australia's new national health insurance program.

^fei*5^f?l Medibank: Australia's new national health insurance program By R.J. Rossiter, DM, D Phil (Oxon) The Australian federal government, centred...
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