$8.5 billion ‘new’ health budget injection raises questions on allocation priorities

As part of a broader health package set to be unveiled in Tuesday’s Federal Budget, the Labor government has earmarked $3 billion to strengthen Medicare and $227 million to establish 29 additional urgent care clinics nationwide, raising questions from the Australian Medical Association (AMA) and Royal Australian College of GPs (RACGP) on the government’s priorities.

Federal Health Minister Mark Butler MP has confirmed that the Budget will feature $8.5 billion injection of ‘new’ health investment.

Despite a slow start, the existing 58 bulk-billed urgent care clinics have collectively accommodated nearly 400,000 patient visits across the country, since their inception last July. Initially introduced as part of Labor’s 2022 election campaign, urgent care clinics are tailored to cater to non-life-threatening cases during extended hours on weekdays and weekends, thereby alleviating strain on the public hospital system.

However, during the most recent Senate estimates, it emerged that many clinics had not fully met their operational targets, with only 16 out of the 58 clinics advertising their adherence to the intended schedule of operation, spanning from 8 am to 10 pm, seven days a week.

A significant portion of the newly allocated $8.5 billion health budget over the next four years will also be directed towards the 8th Community Pharmacy Agreement (8CPA). This decision follows the federal government’s commitment to allocate an extra $3 billion to offset losses incurred by pharmacy businesses due to the 60-day dispensing initiative.

While the federal government had initially pledged to reinvest $1.2 billion accrued through the scheme into pharmacies, the Pharmacy Guild of Australia vehemently opposed the original proposal in the last year. The additional $3 billion is just a fraction of the value of the agreement. The funding for pharmacies under the 7CPA is around $25 billion over its five-year life.

A $49 million funding boost will also see two new Medicare Benefits Schedule (MBS) items added in July next year for specialist gynaecological appointments, for women living with endometriosis and complex gynaecological conditions.

While we await further details of the $8.5 billion investment in health, it is imperative that the Federal Budget accounts for consumer price index (CPI) growth, in addition to population growth and aging. Failure to do so would effectively lead to a decline in real-term funding for the health portfolio.

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