Testing time for diagnostics Author: Annabel Stafford Date: 03/03/2006 The Financial Review, Page: 24
The diagnostic imaging and radiology industry is trying to head off a cut to its fees after a blow-out in Medicare spending on diagnostic tests. Industry bodies have commissioned Access Economics in a bid to prove the blow-out was a consequence of changes to government policy and that providers should not be punished. But federal Health Minister Tony Abbott, who earlier said he planned to crack down on increased Medicare rebates going to company profits, is not expected to be moved. The growth in Medicare benefits paid out for pathology and diagnostic imaging this year is limited to about 5 per cent under a government-industry agreement. If it blows out beyond that, the industry has to cut the price of its services to bring the growth back into line - unless it can prove the growth was a result of government policy changes, in which case providers get a top-up. According to Medicare Australia figures, the number of diagnostic imaging tests ordered in the year to date is up 6.14 per cent on the year-earlier period, while benefits paid out in the year so far have increased by 10.04 per cent. But the Royal Australian and New Zealand College of Radiologists' manager of economic affairs and workforce, Sandra Keogh, said that growth in the number of tests ordered "coincides with the policy initiatives of the government . . . We are trying to unpack the whole range of government initiatives and work out what, if any, impact they've had. But it is obvious to us that something has happened." In particular, the introduction of the Medicare safety net, whereby the government pays 80 per cent of a patient's out-of-pocket health costs once a certain amount is reached each year, and incentives to encourage GPs to work after hours "could be having an effect", she said. "When we went into the agreement in July 2003 there was an assumption of a stable policy environment. But in the event that there is [a change in policy] the government [said under the agreement] it is willing to make an adjustment. "The problem is proving the linkage to the policy change. It's very difficult to unpack all the initiatives and to relate them to the trends we're observing in radiology." The government is reported to have commissioned its own report to compare the volume of services ordered for pathology and diagnostic imaging. And a Citigroup client note in January was not optimistic about the industry's chances of getting a top-up. "Although crude, our examination of the available data on a state-by-state basis does not show a consistent impact from government policy change; this may put the industry and government position further apart than we previously appreciated," Citigroup said. "Our assessment at this time is that the government 'top-up' is likely to be partial at best (less than 50 per cent of the overspend)." KEY POINTS * The diagnostics industry says government policy changes mean it should get a fee top-up. * But the government top-up could be partial at best. --- _______________________________________________ Gpcg_talk mailing list [email protected] http://ozdocit.org/cgi-bin/mailman/listinfo/gpcg_talk
