Budget monkey magic: how does cutting another $3 billion improve healthcare exactly?

3 minute read

Last night's budget was like watching an episode of 'Monkey'. Lots of smoke and talk then $3 billion less for healthcare


A short summary of the key healthcare and GP budget measures that were brought down last night by the government with a few responses from around the sector. Warning, it’s not pretty

What Sussan Ley said and what she did:

She said:

“We have a clear focus on integration, innovation and modernisation to deliver the 21st century health services Australians expect.”

Click here for her full budget Press release

She did:


Click here for Budget Paper 2, Expense Measures, Health

The ‘longer’ rebate winter: $1 billion cut…ka ching!

Extending the rebate freeze for another two years until the mid 2020 will cut nearly $1billion from healthcare spending and the potential take home pay of a a lot of GPs. The budget paper says the savings will be reinvested in health priorities but you can’t see that anywhere in this budget. A tweet from the AMA commented that we were now in a “rebate ice age”.

Ley defended the freeze saying it was “in recognition of the current fiscal environment and the Healthier Medicare reforms that will be designed and trialled over this period, including a new, fairer bundled payment and incentive model for GPs treating chronically ill patients that will no longer rely solely on the fee-for-service Medicare rebate model”.

The RACGP tweeted that the move would force lower socio-economic patients into hospital EDs, so the savings would be illusory. Another tweet pointed out that it would potentially create an even greater market for the after-hours corporates that were starting to boom, creating even far greater potential for waste.



$1.2 billion cut to aged-care funding

How? Just change the scoring matrix on the funding formula apparently. We aren’t entirely sure how this simple measure actually achieves “efficiencies” as it’s not explained. This is all the Budget paper 2 said: “The Government will achieve efficiencies of $1.2 billion over four years through changes to the scoring matrix of the Aged Care Funding Instrument (ACFI) that determines the level of funding paid to aged care providers. The Government will also reduce indexation of the Complex Health Care component of the ACFI by 50 per cent in 2016?17”.

Which we think sounds a little bit like “we’re cutting $1.2 billion from aged care”.

PIP ‘redesigned’  to cut  $21.2 million to fund Health Care Homes trial

Budget paper 2 : “The Government will redesign the Practice Incentives Program (PIP) to introduce a new Quality Improvement Incentive from May 2017 which will provide general practices with increased flexibility to improve the detection and management of a range of chronic conditions in the primary care setting, and to focus on issues specific to their practice.

Wow, that actually sounds good so far.

“As a result of redesigning the PIP, the Government will achieve savings of $21.2 million which will contribute to the related expense measure titled Healthier Medicare — Trial of Health Care Homes.

Oh. We get it.

Extending pause of Indexation on Medicare Levy Surcharge and Private Health Insurance rebates – $744 million

The pause on income thresholds for the Medicare Levy Surcharge and private health insurance rebates will continue for another three years following July 2018 realising “efficiencies” of $744.8 million.

Medicare compliance crackdown – $66 million saving

By implementing “tougher Medicare compliance approaches that will use data and analytics to better detect fraud, abuse, waste and errors in Medicare claims”, the government thinks they can save a further $66 million.

Responses to the above items were universally decried by most of the peak medical bodies. The RACGP may have summed it all up with these two tweets.



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