Medicare Locals likely to face the axe in May budget, health executives warn

Updated

The ABC has learned a number of Medicare Local chief executives have been told the Federal Government plans to shut down the current system.

Speculation has been mounting that the local health bodies, which were set up under the Rudd government in a $1.8 billion initiative to organise community-specific health programs, will be scrapped in next month's budget.

Late last week chief executives of the 61 community-based health organisations held a series of conference calls to discuss the Government's plans for the scheme.

Some of the Government's proposals for 2014-15 under serious consideration include:

ending funding to Medicare Locals

establishing larger statutory agencies to funnel state and federal funding

heavier involvement of private health insurers

more focus on GP involvement

putting services out to public tender

abolishing the peak body Australian Medicare Local Alliance

The potential changes have caused widespread angst among the local healthcare organisations.

A circular obtained by the ABC, sent to the heads of each Medicare Local by its peak body, urges each organisation to lobby their local member of Parliament.

"I would urge MLs [Medicare Locals] to continue to engage across the political spectrum and highlight, not only the good work of MLs but what would be lost if MLs were not there," it said.

There are concerns the changes will lead to more centralised control and a move away from the locally driven programs offered by each organisation.

Sources say communities would no longer be involved in deciding what programs would run.

"Many of the programs have been running for two years and are just starting to hit their straps and show results," one industry source said.

Medicare Local jobs under threat

Medicare Locals employ 3,000 people and there is no guarantee employees would keep their jobs under changes.

It is understood many staff have already left because of the lack of certainty around employment.

There are also worries about handing back control to general practitioners after the success of working with multi-disciplinary teams.

Medicare Local Alliance chairman Dr Arn Sprogis says about 70 per cent of their employees are frontline workers.

He says the small organisations are doing a good job of keeping people out of hospital.

"Medicare Locals would do services for people who fall through the gaps - homeless, the disabled, the aged - people who normally struggle to get access," he said.

"It would be an enormous mistake to reduce the number of Medicare Locals and to reduce the activity that they're currently undertaking."

Dr Sprogis's colleague, Sean Rooney, says international evidence supports investment in organised primary healthcare in the community.

"The thing to keep in mind is value for money," he said.

"The international evidence suggests investment in organised primary healthcare, such as Medicare Locals, is a worthwhile investment that provides a high return.

"Moving away from that and looking at redeploying the costs elsewhere, I think you'd have to see the evidence to support that type of decision.

"A recent Productivity Commission report looked at avoidable hospitalisations in 2012-13 and stated there were over 2 million attendances at emergency departments that might otherwise be better seen at the local level with general practitioners.

"That equated to $2 billion that financial year of potential costs that could have been avoided."

Federal Opposition health spokeswoman Catherine King says she has been hearing from communities concerned about the fate of their service.

"We've had some 3,000 workers in this country, health professionals, direct workers in the health sector ... have speculation running rife where they believe they are potentially going to lose their jobs and we've heard absolutely nothing from the Government," she said.

'A lot of question marks around what's being done'

Medicare Locals were established by the Rudd government as part of its response to a National Health and Hospitals Reform Commission recommendation to create locally focused regional health organisations.

They have faced criticism for using Medicare in the title, with many people confusing the outlets with the Commonwealth rebate offices.

Before the election, Prime Minister Tony Abbott said he could not guarantee all Medicare Locals would stay open and in their current form.

But during a leaders' debate last August Mr Abbott also said "we are not shutting any Medicare Locals".

Last year, Health Minister Peter Dutton said there remained "a lot of unanswered questions about the formal role of Medicare Locals".

"Our overall desire, not just Medicare Locals, but across the portfolio, is to, in a very tight fiscal environment, get every dollar back to the frontline service," he said.

"We understand that there's some good work, but there's also a lot of question marks around what's being done."

The Federal Government ordered a review into the $1.8b scheme. It looked at whether the program provided more clinical services or simply added to bureaucracy.

A spokesman for Mr Dutton says the Government has the completed review but that no decision has been taken.

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Topics: health-administration, health-policy, doctors-and-medical-professionals, federal-government, government-and-politics, budget, australia

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