STATEMENT FROM NORFOLK WOMEN S FORUM July 2012

Transcription

1 MEDICARE AND THE PHARMACEUTICAL BENEFITS SCHEME: The case for urgent introduction on Norfolk Island. A Report prepared by the Norfolk Women s Forum July 2012

2 Norfolk Women s Forum Report 2012 BACKGROUND Many members of our community and other interested parties have been asking for a copy of the Submission on Medicare and PBS sent by the Norfolk Women s Forum in June to the Hon. Simon Crean MP., Minister for Regional Australia, Regional Development and Local Government Minister for the Arts. This is not possible as the letter was addressed to Mr Crean personally. However, the following document is an outline of the information sent. To date (21 July 2012) we have not received an answer from either Mr Crean or his Department. STATEMENT FROM NORFOLK WOMEN S FORUM July 2012 The Women s Forum believes that there is need for immediate action to bring Medicare and PBS to Norfolk Island because the economic conditions are worsening by the day, even since the writing of the original paper. In 2011 the monthly average of food parcels distributed on the Island was In 2012 monthly distribution to the end of June was The population is approximately 1400! We believe: The Commonwealth and Norfolk Island Governments can agree now immediately to relieve the burden on Norfolk families and amend Norfolk Island Healthcare legislation to bring it into line with Medicare and PBS. Norfolk Island laws can be changed quickly. The Commonwealth could fund the new arrangement pending the amendment of Commonwealth laws to allow income tax, Medicare and the PBS to extend to Norfolk Island. This would be in line with federal funding arrangements for other Australian Territories and for other Australians. The funding required would be very small for the Commonwealth because approximately 50 residents already have a Gold DVA card which covers 100% of their medical and hospital expenses. We are talking about less than 1400 residents. It would also relieve the financial burden on the Norfolk Island Government, enabling it to redirect its limited financial resources to other essential services. Norfolk Island residents could contribute via a levy equivalent to the Medicare levy. The amended laws could deem residents or households to have a certain income based on the Australian average income unless they could apply and prove to the Administration that they had a lower income. There could be a right of review to the Administrator. This would be fairer than continuing to rely on the inequitable healthcare levy. 1

3 2 As mentioned on page 6 of the Report, for Australians on the mainland to pay $780 in Medicare levies, they must be earning $51,000 pa. Many on Norfolk earn much less than this amount, but face much higher costs of living than Australians on the mainland. The Norfolk Island Government itself has realized the healthcare is unfair. It has announced changes to its healthcare laws to exempt from the healthcare levy residents earning less than $6500 in a six month period or under $13000 per year. That is, persons will be exempt from the levy if they can satisfy the Administration that they earn $270 or less a week. The OECD considers the poverty line in mainland Australia to be 40 per cent of the median household income. In mainland Australia, the median household income is about $80,000, so 40% would represent an income of $32,000 or $616 a week. We believe that the number of people below the poverty line on Norfolk is far higher than this mainland figure. The Fogarty report set out in detail the much higher cost of living on Norfolk Island compared to mainland Australia. For the above reasons, The Women s Forum believes that until Medicare and the PBS extend, Norfolk residents should only be required to pay a levy equivalent to the Medicare levy. July 2012 Norfolk Women s Forum The Secretariat admin@nofolkwomensforum.nf 2

4 Norfolk Women s Forum Report 2012 MEDICARE AND THE PHARMACEUTICAL BENEFITS SCHEME: The case for urgent introduction on Norfolk Island. A Report prepared by Norfolk Women s Forum Introduction The Executive Summary gave Mr. Crean a history of the activities of Norfolk Women s Forum and went on to explain the necessities for introducing Medicare and PBS. The Norfolk Women s Forum came into being on Norfolk Island as an initiative following International Women s Day in 2007 and in direct response to a number of issues raised by women who felt their voices were not being heard. For the benefit of readers, Norfolk Women s Forum operates under the auspice of EcoNorfolk Foundation Inc., a not for profit organization of many years standing. It is registered on Norfolk Island and is a National Compact Partner with a Shared Vision. The Forum aims to give the previously silent women of Norfolk a voice, to provide leadership, support, and to advocate for positive change in the community. Since its inception there have been five formal forums, three workshops and a number of informal meetings, facilitated in order to identify priorities and advocate for change. The Norfolk Island Public Service Review ( ) states that In staging the (Health) (29 September 2011 & 17 November attendees from broad spectrum of backgrounds) Workshop the Women s Forum is filling the void and providing leadership and (strategic) direction in the area of Health Services. We explained that the principal concerns of residents on the island are issues to do with health, more specifically the relative unaffordability of physical and Solution The immediate introduction of the PBS and Medicare systems as available to Australians on the Mainland. 3

5 4 mental health services and pharmacy costs, and the debt burden caused by this. These issues are caused and compounded by: 1. anomalies, inconsistencies and lack of information about the Norfolk Island Healthcare Fund, particularly when services are accessed on the mainland, the relationship to Australian Public Health providers, Medicare and Private Healthcare Funds entitlements, and administration; 2. lack of reciprocity and recognition of entitlements to Healthcare and the PBS between Australians residing on Norfolk Island and the mainland; and 3. the inequitable impost of health insurance on Norfolk Island. The Public Service Review also states that Norfolk Islanders ineligibility for Australian social security payments renders an entire set of Australian citizens at a disadvantage to their mainland peers. As with Indigenous Australians, this disadvantage is a human rights issue for Australian citizens residing on Norfolk Island. Norfolk residents are paying the non -indexed per capita amount of $3380 per annum for health insurance as compared with an indexed 1.5% of income tax (see page 5). Very few statistics of reliable quality are kept by the Health Service (Norfolk Island Hospital Enterprise and the Health Insurance Scheme and the Norfolk Island Government). Anecdotal evidence has been included in the original paper to provide Mr. Crean with a clearer picture and to highlight significant inadequacies of the current system. This anecdotal evidence was very powerful and is of extreme concern to those of us who are constantly listening to the related episodes. Some of this anecdotal evidence is attached as Cases in the Appendices to Mr. Crean, but for privacy purposes has NOT been included in this Report. We also stated that the ACIL Tasman Economics Development Report for Norfolk Island confirms the concerns of all evidence, anecdotal and data. The Report states that The question of the main trigger for a family or individual needing financial assistance was explicitly raised (by the Service Clubs), and all organizations agreed that the most common trigger for financial stress was a large medical bill. We suggested to the Minister that there are ways that the Federal Government could receive financial contributions from the Norfolk Island population in lieu of 1.5% of taxation revenue to facilitate the immediate introduction in support of the argument and that: 4 There is extreme and urgent need for the Australian Federal Government to immediately introduce the benefits of Medicare and the Pharmaceutical Benefits Scheme to Norfolk Island, notwithstanding and before the introduction of taxation on the Island.

6 Norfolk Women s Forum Report 2012 DISCUSSION AND EVIDENCE 1.The Financial Burden of the Current Health System We explained to the Minister that the ACIL Tasman Economics Development Report for Norfolk Island, in interviews with the main service and sporting clubs, reported that: fundraising has become more difficult. In general, service clubs become aware of an individual or family that is in need through informal means. The overall situation reported was one of increased need and shrinking base of people capable of providing financial assistance...the most common trigger for financial stress was a large medical bill. The Case Studies we provided to Mr. Crean indicated that there was little or no help provided by the healthcare system to those specific patients. The ACTIL Report also confirms that Figures from the Hospital show that 49% of the total value of the debts outstanding has been outstanding for more than 90 days. In part these reflect the fact that some Norfolk Island residents have incurred substantial medical bills and are now on a repayment plan where repayments are scheduled over a number of years. The ACIL Tasman Economics Development Report for Norfolk Island goes on to explain that Norfolk residents over the age of (18)* pay an annual levy of $780 (which includes Medivac). In addition to the levy residents must pay, from their own pockets, the first $2,500 in any one financial year in approved costs. These approved costs cover a wide range of expenses, but not all, particularly transport and accommodation off Island and not all medicines. It is therefore possible for residents on Norfolk to quickly incur large medical bills. In effect, Norfolk residents are paying an annual levy of $780 + $2,500= $3,380 before any rebate is available. *The ACIL Tasman Economics Development Report for Norfolk Island incorrectly stated that the age was 15. 5

7 6 We outlined the Healthcare Levy payment on Norfolk Island. This applies to individuals and not income earners, and is levied at a flat rate (as opposed to a minimum 1.5% levy on tax for those employed in Australia), low income families on Norfolk Island pay comparably more for government provided healthcare. The only exceptions to this rate are those on the Norfolk Island Pension, those with proven adequate private health cover, fully funded DVA recipients, or those under 18 years of age. In order for mainland Australians to pay the equivalent of $780 per annum in Medicare levies, they must be earning $51,000pa. The 2011 Norfolk Island Census reports that the median weekly income for residents aged 18 and over is $555 per week. If 20% is added to this value to reflect the absence of income tax on Norfolk, then the median resident would pay an annual Medicare levy of $520. However, the most important thing to remember is that, if covered by Medicare, the majority of medical expenses would not incur further costs to the contributor. Relevant prescribed medications would also be covered by the PBS at a vastly lower rate than that available to Norfolk Island residents. Inequity is one of the key problems shown in this report. The statistics provided by the Norfolk Island Administration (April 2012) in regards to those eligible to receive healthcare benefits are as follows: According to Norfolk Government figures, there are 1,403 people who are eligible to receive the healthcare benefits under the levy. 457 of these do not pay a levy, and these comprise: 369 children under the age of 18 years 64 local Pensioners and 9 HMA recipients 32 DVA card holders 3 people have full Medical Insurance and are exempted from the levy 4 people have medical Insurance but are required to pay the Medivac component ($32.50 per quarter). We acknowledged the significant contribution that the Department of Veteran Affairs makes to the Island Healthcare Service. These also benefit residents other than veterans at a fee for service cost. 6 Furthermore, we demonstrated that apart from the actual impost of the levy, the delivery and capacity of the health services is lacking in clarity, particularly regarding treatment off island and ancillary support services. These include issues of transport and accommodation for those with ongoing serious health issues such as, for example, cancer and major surgery. Problems have occurred in coverage and honouring reimbursements when referrals are not specific enough or are too specific (e.g. not covering complications or ongoing problems relating to the original referred condition).

8 Norfolk Women s Forum Report 2012 Hospital Enterprise Debt We included for the Minister information obtained from Norfolk Island Assembly Hansard, December 2011, further illustrating the enormous burden of health debt being experienced by the community: Outstanding debts as of June 2011, was 45 persons with an average debt of $ per person The average debt March 2005 to June 2010, per person, was $ The average debt per person September 2010 to June 2011 was $2, The average debt over the last 4 levy periods is higher than the average over the last 6 years. Graph of Average Amounts Owed against Financial Years to *The debt per person in 2010/11 is actually in excess of $2,000 off the graph Further Cost to Norfolk Island Residents Norfolk Island patients often have to find large sums of money up-front when transferring to the mainland. These include: Airfares often up to $1,000 / $1,200 per person. Resident or medical airfare for last minute transfers for patient and family no longer exist. A $200 discount on the airfare is available for those referred off Island; Other transport, accommodation and communication with family; Upkeep of family left at home, such as sustenance, loss of income and childcare; Up-front hospital, medical, surgical, anaesthetic, radiology, pharmacy, pathology, radiotherapy, and other expenses need to be paid on the mainland as no refunds from the Norfolk Island Insurance Fund are made until after the patient returns home. The level of refunds appears seemingly arbitrary with low level of recompense in many cases, often leaving the patient with a large amount of debt. 7

9 8 The refusal of the Norfolk Island Healthcare Fund to pay for ongoing treatment after the acute stage of the condition, the lack of specialists and videoconferencing on the Island, adds further to the stress and financial burden, particularly with ongoing chronic issues which are the result of funded critical conditions. Residents with Private Health Insurance One of the few Private Health Insurance Schemes able to be purchased by Norfolk Island residents is BUPA (formerly MBF), but claims can only be made for mainland services not Norfolk Island services. Some Issues Put to the Minister Were: Most Private Health Insurers will not cover any treatment incurred on Norfolk Island. Many long term residents who have held Private Health Insurance with Australian companies were distressed when these companies decided that they would no longer provide coverage to the Island. An Example of the Costs for a Norfolk Island Couple is: Advantage Visitors Cover and Gold Extras (medium cover): $ ($ per week) Cost for same level of cover if residing in Australia $ ($63.90 per week) If you are a Norfolk Island couple you must also pay the local levy of $1560 ($ per week, as the BUPA cover only covers you in Australia) Sub-total yearly premiums : $ $ $1560 = $ ($166.25/week) Norfolk Island annual exclusion of benefits : $2500 Total expenditure before making a claim: $11, ($214.16/week) Norfolk Island residents with private health Insurance with an Australian fund have to pay an added Medicare Levy premium, making the insurance level much more than twice that of a mainlander with the same insurance. This cover often excludes existing conditions, so there could be limited cover from both the Norfolk Island Health Care Scheme as well as the private fund. 8

10 Norfolk Women s Forum Report Health Insurance Anomalies for People Moving to and from Norfolk Island Australian visitors to Norfolk Island are often horrified to discover that, whilst their Medicare coverage exists if they visit Great Britain or New Zealand (examples), on Norfolk Island they are not covered. If they have not taken out travel insurance many elderly visitors face huge costs should they require medical attention. If such help is not available on the Island then they will require a medivac costing in the vicinity of $34,000. Despite being advised some years ago that a mandatory travel insurance policy should be put in place to protect the Norfolk Island Health Service from bearing the cost of such a Medivac, no action has been taken. For visitors to Norfolk from the mainland the cost of medical care and pharmaceuticals is very expensive: a. Hospital bed per day: $488 -$1181 b. Inpatient consultation: $77 - $155 c. Out of hours consultation: $155 - $233 d. Prescription for medicine (e.g. lost bags) : $38 e. Ambulance: $129 f. Local anaesthetic: $171 - $761 g. General anaesthetic: $405 - $2,974 h. Pathology: general fee MBS book + 100% i. X-rays: general fee MBS book + 195% j. Ultrasound: general fee MBS book + 140% k. Cost of pharmaceuticals is also very expensive compared with the mainland for most medications (See Appendix 1) l. Medivac is in the vicinity of $34,000. Australian (mainland) residents with Norfolk Island family: If Norfolk family members return to Australia to look after their aged or affirmed relatives, again they are not covered by Medicare, PBS or the Norfolk Island Scheme. However, should their family reside in New Zealand they will have access as Australian Citizens. Previous Norfolk residents returning to the Island to visit family: Unless they take travel insurance they are not covered by either Medicare, or PBS, and neither does the local Healthcare Scheme cover them. Even Travel Insurance cover excludes existing conditions so elderly or those with medical complaints have limited cover and no cover for their serious existing conditions. After 5 years, Australian residents who move to Norfolk Island, and who have paid taxes all their working lives, are excluded from Medicare and PBS cover in Australia if they return for visits or medical care. 9

11 10 3. Mental Health Issues We advised the Minister that mental health on the Island is under-recognised, undertreated and under-resourced, because Norfolk Island residents are not eligible for: the mental health initiatives being introduced on the mainland, for referral under Medicare Primary Healthcare Planning, specific mental health funding programs for community and support groups. We pointed out to the Minister that Norfolk Island is not included in the recent publicly released draft Ten Year Roadmap for National Mental Health Reform in Australia by the Department of Health and Aging. There would be significant cost savings on introduction of Medicare and PBS for Norfolk Islanders with mental health problems. Dr. Neil Phillips (Consultant Psychiatrist, Western Rural and Remote NSW) calculated that there are approximately 350 individuals requiring mental health services on Norfolk Island, based on the Australian National Mental Health Survey model. Addressing this would result in significant improvements, both in social and productivity terms for the Island and the healthcare budget. Anecdotal evidence abounds on the island. We included a selection of peoples stories and examples of relevant mental health care issues. However, to protect the privacy of these residents details of the case studies are not included in this report. 4. Pharmacy Issues Self-funded retirees: We reminded the Minister that the new Norfolk Island policy is to encourage self-funded retirees to come and live on Norfolk Island. They would have to be healthy, as their previous medical histories will be taken into account when they join the Norfolk Island Healthcare Fund. They would have to be wealthy, because they need full private health insurance cover. In many cases this would only be usable in Australia. If they don t belong to the local healthcare fund, they are deemed to be ineligible and would have to pay the higher costs incurred by the other category of visitors to the island. 10 We advised the Minister that it is anecdotally well known that Islanders frequently not only refuse hospital admission due to the cost, but do not go to see the doctor as regularly as they should and refuse or hesitate to buy medications for even some of the most common conditions, such as asthma, hypertension, cardiovascular disease, cancers, depression and diabetes. In Appendix 1 we illustrated to the Minister the cost of many drugs commonly used to alleviate mental health problems is prohibitive, for example the cost of Risperdal Consta, used in psychosis, can be anywhere from $300 to $600 per month. Under the PBS this drug would be subsidised. The attached list of the Pharmacy comparative costs between Norfolk Island and mainland Australia highlights the disparity and disadvantages for Norfolk Island residents.

12 Norfolk Women s Forum Report 2012 SOLUTIONS 1 The immediate introduction of the PBS and Medicare systems as available to Australians on the Mainland. This could be enabled by the payment of the Norfolk Island levy of $780 per eligible person per year to the Commonwealth in lieu of taxation revenue (see below Point 2). 2. The ACIL Tasman Economics Development Report for Norfolk Island recommends: The expansion of medical services (and PBS) such that they are the equivalent in cost to those on mainland Australia for Norfolk Island residents. The cost to Norfolk Island residents would be the revenue collected through the Norfolk Island Healthcare Levy (Until taxation is introduced projected 2015) $780 per year. The Norfolk Island Government would make a contribution from privatisation revenues. Ultimately, the difference between the full cost of service provision and the revenue collected through the Norfolk Island Healthcare Levy (or equivalent) is to be funded by the Commonwealth. In the immediate future costs are to be shared across the Commonwealth and Norfolk Island Government. 3. Partnership with South East Sydney Local Health District will assist in upgrading the health service to Australian standards (EQUiP). In conjunction with the introduction of Medicare and PBS this would have immediate and long term cost, social and health benefits. Conclusion: It is vital to gain a real understanding that the level of stress emotional, physical, mental and financial - caused by the current health system on Norfolk Island, a part of Australia, is enormous. The Norfolk Women s Forum considers that the introduction of Medicare and the PBS should be dealt with as a separate issue to the introduction of general taxation on Norfolk Island and should be introduced immediately. REFERENCES : 1. Norfolk Island Public Service Review : Prepared for the Department of Regional Australia, Regional Development and Local Government, 21 November ACIL Tasman Norfolk Island Economic Development Report, March Norfolk Island Government Gazette : Charges for Health Services 4. Pharmacy Cost Comparisons between Norfolk Island and the Mainland: A Report from Norfolk Island (See Appendix 1). 11

13 12 12