2019 Federal Budget: What it means for Health

Mental health, aged care and frontline and primary care were key initiatives for the health sector this year.


What did business want?

This Budget is framed against a background of significant potential health care reform following: reviews of the Medicare Benefits Schedule (MBS) and the private health insurance (PHI) sector; negotiations with the states and territories around public hospital funding via the Council of Australian Governments (COAG) processes; and the Aged Care Royal Commission.

In their Pre-Budget Submission, the Australian Medical Association (AMA) was particularly keen to see which of the MBS review recommendations would be adopted as Government policy and expected the Government’s strong ongoing commitment to the Pharmaceutical Benefits Scheme (PBS) to be reflected in this Budget. The AMA was also adamant that more funding (and co-operation) is needed to ensure hospital capacity to meet rapidly growing patient demand.

The Australian Dental Association (ADA) had called for additional Budget relief for those Australians with poor dental health and who are unable to pay for care because of genuine extenuating circumstances and are forced to face extended periods,oftenyears, waiting to receive basic dental care.

Optometry Australia (OA) urged the Government to recognise in the Budget the impact it could have on the eye health of millions of Australians. OA’s key recommendations included: reinstatement of the biennial Medicare rebates for a comprehensive initial examination (for Australians aged 45-64); expansion of the Visiting Optometrists Scheme; and enhanced integration of optometric care into primary care.

Finally the Pharmacy Guild had recommended that the Budget improve the affordability of medicines by removing the optional $1 discount and reducing official patient co-payments by $1. Since January 2016, pharmacists have had the option to discount the PBS patient co-payment for claimable PBS prescriptions by up to $1.

What did the Budget deliver?

The Treasurer noted that health was “front of mind” for all Australians announcing a range of health initiatives including new spending in aged care and mental health, a promise to make Medicare more affordable (bringing forward the end of a freeze on Medicare rebates), and services more accessible. Ending the freeze has been a key aim of the AMA and other doctors’ groups. A standard doctor’s appointment currently attracts a rebate of $37.60 and is expected to go up about 60¢.

Primary health care services received a boost of around $1.1bn (over five years) including:

  • a new funding model for chronic disease care for patients over 70 (totalling $448.5m over three years from 2020-21);
  • $201.5m (over five years) to increasing funding for the revised Practice Incentive Program Quality Incentive and maintain the current aged care incentive;
  • the resuming indexation for previously frozen GP services under the Medicare Benefits Schedule ($187m over four years);
  • $62.2m to support for training and placement of GPs in rural, remote and regional communities.

Mental health and suicide prevention programs were allocated $736.6m (over seven years) some of which has already been allocated or announced. Allocation to Youth programs over this period is $461.6m, including $263m (over seven years) to increase services and reduce waiting times for the national headspace network.

Access to aged care service will be helped by a $724.8m (over five years) allocation, including:

  • a one-off increase to the basic residential aged care subsidy in 2018/19 ($320m in 2018/19);
  • a further 10,000 home care packages over the five-year period ($282.4m); and
  • an increase in dementia and veterans’ home care supplements to support in home aged care ($35.7m).

The Pharmaceutical Benefits Scheme will be extended to cover a range of new and amended medications, covering a range of conditions that includes lung cancer, leukaemia, cutaneous T-cell lymphoma and renal cell carcinoma, at a cost of $331m (over 5 years).

Diagnostic imaging services were allocated an additional $308.9m, including for:

  • additional 23 Magnetic Resonance Imaging (MRI) licences to provide Medicare subsidised access to imaging services
  • indexation of ultrasound and x-ray diagnostic services from 1 July 2020 and
  • two new items on the MBS for diagnosis of breast cancer.

Commitment made to pharmacies in March was enshrined in the Budget, highlights being:

  • better cash flows because the Government will reduce claims processing times from 9-16 days to 2-9 days
  • increased administration, handling and infrastructure fees on PBS scripts ($215m over three years from 2020/2021).

The Child Dental Benefits Schedule will be extended, with $1.0bn (over three years from 1 January 2020) provided for eligible children aged between 2 and 17 years access to $1,000 of dental services over a two-year period. Provision for this funding has already been included in the forward estimates.

How did business react?

Australian Medical Association (AMA) President Dr Tony Bartone welcomed the boost to general practice detailed in the Budget, describing it as “a strong health Budget, which has a particular emphasis on primary care” and “hardworking GPs will be happy to see a commitment of almost $1bn to general practice”. The AMA also welcomed funding for new PBS medicines, the retention of the Aged Care Access Incentive and rural workforce program, but noted “obvious gaps in mental health, prevention, Indigenous health, pathology, and public hospital funding to improve all hospitals”.

Welcoming the announcement of the sustainability of the Child Dental Benefits Schedule for the next few years, Australian Dental Association (ADA) President Dr Carmelo Bonanno, said “this was a good investment in our children’s future” and that “a child’s oral health is a good predictor for the future so it is critical that we embed good oral health habits at an early age”.

The ADA does however have concerns about the future of the National Partnership Agreement (NPA) which provides a commonwealth contribution to states to help fund public dental services. While it wasn’t expected that the NPA would feature in this budget, the ADA urged the Government “to finalise an agreement with states and to ensure certainty around the commonwealth contribution”.

To find out more about what the budget means for business, read our 2019 Federal Budget  – What the budget means for small and medium sized businesses.