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Analysis of the Federal health budget and related provisions 2015-16

7 Jul 2015

The impacts of the 2015-16 Budget must be assessed in light of the previous Budget, which casts a long shadow.

ACOSS estimates that, combined, the two budgets strip approximately $15 billion / 4 years from basic services and supports that affect low and middle income households. Analysis from NATSEM highlights that the Abbott Government’s Budget changes are being g made at the expense of the less well-off and that its second Budget has done little to reverse the unfair redistributions of its first budget.

The over-arching aim appears to be to improve the federal budget deficit by shifting costs off the Commonwealth Government’s balance sheet on to the States and Territories, service providers and consumers.

The Health Budget this year sees the Government using the same methods to take savings with the same objectives as last year, but what leaps out is the continuing failure to develop and implement strategies and policies to underpin these decisions. Budget decisions smack of policy on the run, or in some cases, no policy at all. There is no inkling of any reformist imagination.

The Government continues to find savings by using price signals (or co-payments) to reduce demand.  The controversial Medicare co-payment has been abandoned but changes to Medicare reimbursements will see patients’ out of pocket costs grow – effectively implementing co-payments by stealth. And PBS co-payments remain on the table, at least until replacement savings are found. Other common methods for achieving savings include: tightening up eligibility and funding rules for patients’ benefits and providers’ incentives; cutting funds from health programs and agencies in the name of efficiency and rationalisation; and re-negotiating agreements with service providers, including states and territories, non-government providers and the private sector.

This Budget also reinforces the Government’s intent to claw back $80 billion over the next decade from the States’ and Territories’ budgets for health and education, with $57 million of this to come from funding for public hospitals. This has service to reignite the ‘blame game’ at a time when cross jurisdictional and cross sector efforts and collaborations are needed to deliver integrated care and improve efficiencies.

The one substantial Government commitment is to the Medical Research Future Fund, which has become the beneficiary, even the justification, for savings from many areas in the Health portfolio. It is ironic that these program cuts will quickly lead to impacts on the health of individuals and the population as a whole – the very things that the MRFF is lauded as addressing through the research it will support.

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