Put patients before pathology profits

Patients would be spared the threatened co-payment for pathology, and taxpayers could save hundreds of millions if the lucrative pathology industry were subject to much-needed market-based reforms, a new report shows.

“This significant report from the Grattan Institute shines a fresh light on the pathology costs issue and shows that we as taxpayers and consumers are already paying too much for pathology tests,” says the Chief Executive Officer of the Consumers Health Forum, Leanne Wells.

“The Grattan report argues that consumer co-payments have no place in the system: tests are ordered by doctors, not by patients. Most importantly, they erode quality and timeliness of care and put at risk greater pressure on the system because the consequence of failure to have a test due to cost can be great.

Grattan’s Professor Stephen Duckett rightly shows that there are other ways to generate savings in pathology service delivery without reducing access to life-saving tests.

“The analysis provides some support for the stand taken by the Health Minister, Sussan Ley, that Medicare payments are not provided to guarantee the revenue of publicly-listed companies.

“It shows that the existing payment system of Medicare payments fails to reflect modern day benefits such as automation and the consolidation of the pathology sector, such that 75 per cent of all tests are now performed by just two companies. Neither taxpayers nor individual consumer have benefited from these changes.

“Professor Duckett has proposed a range of options to modernise the payments system without penalising patients. Pathology is more than ever part of the commercial world. Its service provision should be put on a more commercial footing”.

“The report recommends that Government could shift away from the current fee-for-service payment regime and call tenders for the right to participate in the market, stimulating greater price competition. This would be combined with the contracts that stipulate no copayments bulk billing.

“Importantly, at a time when we all need to be concerned about access, sustainability and affordability in our health system, this report shows that transparency, accountability and new ways of procuring and organising healthcare services can yield substantial benefits for consumers and taxpayers - an approach long called for by the Consumers Health Forum,” Ms Wells said.

“CHF would encourage the Government to give the report’s recommendations serious consideration in consultation with industry and the community. If some of the steps in the report were to be implemented it would be critical to ensure the triple aim of protecting consumers from co-payments and up-front costs, deriving savings from industry efficiencies, and that industry is paid a fair market price”.

Read the Grattan Institute's report, Blood Money: paying for pathology services (goes to an external website: Grattan Institute)

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Media contact

Mark Metherell

Em.metherell@chf.org.au
T:  02 6273 5444 
M: 0429 111 986