Thursday, June 30, 2016

The Macro View - Budget, Election And Health News Relevant To E-Health And Health In General.

June 30  Edition.
There are two big issues this week.
First we have the Brexit which is still playing out in terms of impact. Right now no one is sure how all this will play out. I am not sure we will understand for years if this has been a good or bad move on the part of the UK public.
Second we have the election just a few days ahead.
Basically pretty much anything else has slipped into the background. A few articles I have found interesting follow.

General Budget Issues.

Bonds sink to new low as growth stagnates

  • The Australian
  • 12:00AM June 13, 2016

David Uren

World bond yields sank to new lows on Friday amid fears the global economy is losing further momentum, which will make it impossible for the US Federal Reserve to press ahead with planned rate rises.
The German government is now able to borrow 10-year funds for just 0.01 per cent while fresh record lows were set for bond yields from Australia, Japan and Britain among others.
Australian 10-year government bond yields also fell, ending the week at 2.09 per cent, compared with a low during the depths of the global financial crisis of 4 per cent. US 10-year bond yields dropped to 1.64 per cent, their lowest in three years.

The biggest lie of the campaign: economy management does not trump all

Date June 12, 2016 - 10:31PM

Jessica Irvine

Senior Writer

I am consistently irritated to hear political pundits declare in serious tones that all elections ultimately come down to economic management.
Who do you trust to run the economy?
First, the statement reflects a quaint, Stalinist-like faith in the ability of politicians to run a command and control economy.
In case you missed it, Australia is a capitalist economy, where market forces decide most prices and transactions in the economy.
Individual businesses ultimately make the decision about whether to invest in expanding their operations. Bosses decide jobs and growth, not politicians.
  • Updated Jun 13 2016 at 11:30 PM

Economists challenge Labor claim Coalition 'tripled the deficit'

Labor's accusation that the Coalition has tripled the budget deficit over the past two years makes as little sense as blaming the opposition for the global financial crisis that in 2009 wiped out the last surplus, say budget experts.
While it is true that the official forecast for the 2016-17 deficit has grown over the past two years from $10.6 billion in the 2014 budget to $37.1 billion in the May budget, about two-thirds of the deterioration is due to a collapse in revenue expectations. The remainder is because of policy decisions.
In the same way that former Labor treasurer Wayne Swan blamed his failure to deliver a surplus in 2012-13 on plunging commodity prices that eroded tax revenues, the current government has been unable to stop the deficits because the economy has been worse than forecast, the experts say.

Federal election 2016: lack of ideas keeps budget in deficit

  • Simon Cowan
  • The Australian
  • 12:00AM June 25, 2016
This week saw the sixth anniver­sary of Julia Gillard’s challenge to Kevin Rudd. Though Gillard held on in the following election, Rudd soon would have his revenge and return. In 2013 Tony Abbott swept to a Rudd-style election victory, yet just two years later he suffered a Rudd-style fall to Malcolm Turnbull, the fifth Prime Minister in a little more than five years.
Less well known is the fact Australia also has had four treasurers during this period. Six years ago in May Wayne Swan delivered the first budget to promise a return to surplus after the global financial crisis. While Labor, notoriously, never delivered a surplus, for the budget handed down this May Scott Morrison stopped even promising one.
Next Saturday, the voters will decide whether the Prime Minister and Treasurer’s economic leadership is an irredeemable failure. Even if they judge it too soon to take such a drastic step, it is hard to argue Turnbull and Morrison have been a success thus far.

Election 2016: We're in for a year of falling standards says BusinessDay forecasting panel

Date June 25, 2016 - 4:56PM

Peter Martin

Economics Editor, The Age

Economists predict feeble economy

The economy will fail to fire in the coming year and underperform government expectations, according to the Scope BusinessDay survey of 23 leading economists. Peter Martin explains.
Australian top economic forecasters expect living standards to fall in the year ahead as economic growth weakens and the budget deficit blows out.
The findings in the mid-year Scope economic survey are revealed in today's BusinessDay. The survey is Australia's longest running, aggregating the views of financial market economists, academics and industry researchers. It includes the chief economists of each of the four big banks.

The Drugs Aren’t Working for Australia’s Economy as Reform Lags

June 15, 2016 — 6:00 AM AEST
  • Pharmacies’ political clout insulates industry from reform
  • Central bank has called for more competition in economy
In downtown Sydney, adults can buy a pack of 30 painkiller tablets for less than A$10 ($7.33) that are banned over-the-counter in most developed nations, because they partially convert into morphine after taken.
Futile attempts to regulate the sale of codeine despite addiction risks, and the lack of debate on the issue in the run-up to next month’s election, illustrates the strength of the pharmacy lobby. It’s also an example of a wider impasse on structural reforms that’s put a brake on Australia’s productivity.
Changing the rules on codeine sales would be a small step compared with the broader overhaul of the industry that economists say would boost competition and spur the kind of efficiency gains that Australia’s economy needs. Pharmacy-ownership restrictions, along with protection within the taxi, shipping, medical and legal industries, have been cited as priorities for reform by an independent government-chartered group.
In an increasingly tight July 2 election contest, neither side in politics is carving out regulatory change as an issue. While voters haven’t experienced a recession for 25 years, economists are increasingly worried that the drivers for growth are diminishing. With commodity prices in retreat and national income sliding, one way to reverse the trend is by bolstering competition in industries like pharmacies. 

Federal election 2016: surplus delays risk budget’s AAA rating

  • The Australian
  • 12:00AM June 16, 2016

Michael Bennet

widgetDavid Uren

Standard & Poor’s, the most powerful credit ratings agency, has fired a fresh warning shot to both major political parties that the budget must be brought back into surplus as forecast or they risk losing the coveted AAA rating.
Craig Michaels, director of sovereign ratings at Standard & Poor’s, yesterday expressed concern about the “quite considerable fiscal slippage” in recent years, noting how the forecast to return the budget to balance had drifted from 2012-13 to 2020-21 “at the earliest”.
“We think there isn’t much more scope for that to keep occurring if the rating is to remain consistent with the AAA,” he told an S&P conference in Sydney yesterday.

Health Budget Issues.

Federal election 2016: Consultants suck up savings from MBS review

  • The Australian
  • 12:00AM June 23, 2016

Sean Parnell

A much-lauded review of the Medical Benefits Schedule banked its first prospective savings of $5.1 million in the federal budget — and then had to spend $4.95m hiring consultants to help out.
In another illustration of the complexities of reform, The Australian can reveal the Department of Health engaged experts at management consulting firm McKinsey to provide secretariat and research support to the MBS ­review through to July next year.
The review, launched by the Coalition government and headed by former Sydney Medical School dean Bruce Robinson, is examining the evidence base and usage of about 5700 items on the $21 billion MBS. Targeting obsolete MBS items has brought savings of $5.1m over four years. The next round of recommendations will cover the specialties of ear, nose and throat surgery, obstetrics, thoracic medicine and gastroenterology.
  • Updated Jun 22 2016 at 5:50 PM

Election 2016: Christine Bennett slams Labor's Medicare scare

Former Labor Prime Minister Kevin Rudd's handpicked top health reform adviser has criticised current Labor leader Bill Shorten's Medicare privatisation scare campaign as misleading and missing the main game.
Christine Bennett, the academic doctor who led the first Rudd government's 2009 health and hospitals review process, said the Turnbull government's now abandoned plan to contract out Medicare's payments function was "just a business efficiency process in government - it's not the privatisation of Medicare".
Professor Bennett,  now dean of medicine at the University of Notre Dame Australia and chair of the Sydney Children's Hospital Network, compared outsourcing of Medicare payments to hospitals outsourcing food and laundry operations and said it was not the main game of health reform. 

Labor continues its attack on Malcolm Turnbull over Medicare

June 22, 2016 9:01am
LABOR is today is defending its contested claim Liberals want to privatise Medicare by pointing to the extended freeze on rebates for GP visits.
The freeze, extended by two years to six in the Budget in May, could result in doctors charging more for consultations.
Labor is today arguing that means more private money — that of patients — will be needed for Medicare to operate.
This is being billed as “another form of privatisation” after Labor was challenged to produce hard evidence Prime Minister Malcolm Turnbull wanted to sell off parts of Medicare to private interests.

Election 2016: AMA rebukes Labor on Medicare privatisation claims

Date June 22, 2016 - 5:42PM

Michael Koziol

National political reporter

Labor claims the coalition wants to privatise Medicare; the government vehemently denies it. But what do voters think?
The newly-elected head of the Australian Medical Association says there is "no evidence at all" that the Turnbull government wants to privatise Medicare, rebuking a Labor scare campaign that has come to dominate the penultimate week of the election campaign.
Michael Gannon, who took charge of the high-profile doctors' organisation last month, said that although there were several elements of Labor's health policy the AMA supported, Opposition Leader Bill Shorten had overreached on his claims about privatisation.

Federal Election: Labor promises to continue funding bulk-billing incentives for pathology, radiology

Date June 19, 2016

Jane Lee

Labor has pledged not to introduce the Coalition's planned cuts to bonus-payments for pathologists and radiologists who bulk-bill, in a move expected to cost $884 million.
The Turnbull government last year vowed to cut bulk-billing incentives in both sectors, to save $650 million for the Medical Research Future Fund over four years, sparking a public row with both. But it reached separate deals with Pathology Australia and the Australian Diagnostic Imaging Association, with both agreeing to absorb the planned cuts in exchange for reduced rental regulation and a review of Medicare rebates respectively.
Labor leader Bill Shorten will promise to continue funding the incentives if elected, at the launch of the party's official campaign on Sunday.  A spokeswoman said the Parliamentary Budget Office had estimated this would cost about $884.2 million over the next four years and $2.9 billion over the decade to 2026-27. 
12:20pm June 18, 2016

Radiologists sold out, Shorten says

Opposition Leader Bill Shorten has accused radiologists of "selling out" to the federal government after the industry labelled his policies an insult.
The Australian Diagnostic Imaging Association says it's been left out of Labor's $2.4 billion commitment to unfreeze indexation on the Medicare rebate.
It says Labor's policy ignores the 18-year funding freeze diagnostic imaging has endured, which has seen patient gap payments for scans and x-rays double in the past decade.

Election 2016: Who's Medicare's friend? Examine bulk-billing

Date June 23, 2016

Peter Martin

Economics Editor, The Age

Medicare or Medi-scare?

The coalition will 'never ever sell Medicare' declares Malcolm Turnbull, but Labor asserts the government can't be trusted. Courtesy ABC News 24.
The key to examining whether one side or the other wants to destroy Medicare is the baked-in feature that makes it work: bulk-billing.
The Coalition twice knocked it back in the Senate, forcing Whitlam to call a double dissolution. 
It's far more clever than is widely realised, far more than a convenience.

Federal election 2016: Medicare reform falls victim to ALP scare campaign

  • The Australian
  • 12:00AM June 25, 2016

Judith Sloan

Evidently Malcolm Turnbull has a secret plan to privatise Medicare. It’s so secret that even he hasn’t heard about it. One can just imagine all the buyers sharpening their pencils to bid for Medicare.
Or can one? Medicare hands out over $20 billion each year to healthcare providers under the Medicare Benefits Schedule, it costs more than $2bn to run and doesn’t make a cent of profit. Medicare is not exactly Telstra or the Commonwealth Bank.
It’s not just the case that Medicare won’t be privatised by a Coalition government; it can’t be privatised. Of course, Bill Shorten knows this, but the Opposition Leader thinks there are votes in creating misinformation about Medicare and peddling fear among voters who like Medicare but dislike privatisation.

The two main political parties unveil their health policies

AAP | 14 June, 2016 |
Two different health policies with two very different priorities have been unveiled by the major parties (see table below). The question is, which one matters more to voters?
Labor on Sunday pledged a $2 billion boost for public hospitals, returning to the 2011 agreement the previous Labor Government made with states and territories.
The Coalition hit back with its plan to reform private health insurance, stamping out junk policies and creating gold, silver and bronze categories to help consumers work out what they are and aren't covered for.

Health Insurance Issues.

ACCC accuses Medibank of deliberately misleading customers

June 16, 2016
Sue Dunlevy News Corp Australia Network
THE consumer watchdog will take Australia’s largest health fund to court, claiming it engaged in false, misleading and unconscionable conduct by failing to inform members it limited benefits for in-hospital blood tests and scans in 2014.
And it alleges it kept consumers in the dark about the change because it wanted to ensure the highest price when the government privatised the health fund.
News Corp revealed how Medibank had limited the benefits it paid for in hospital pathology and radiology services in 2014 but did not tell its members about the change.
It was a change that increased the out of pocket charges for its members.

Medibank chief Craig Drummond faces calls for private health overhaul

  • The Australian
  • 12:00AM June 17, 2016

John Durie

New Medibank boss Craig Drummond faces an industry-wide reputational problem of similar proportions to that he encountered in his days at NAB, with the ACCC backing government calls for a major overhaul of the private health industry.
This will be a fight in which the industry has few friends ­because it has led the campaign for lower costs while maintaining a chronic lack of transparency on its own pricing.
Yesterday’s action by the ACCC against Medibank alleging misleading misrepresentations and unconscionable conduct is but the first of many actions the regulator has lined up against the industry.

Medibank shareholders in rude health as sick customers cough up

  • Michael Roddan
  • The Australian
  • 12:00AM June 18, 2016
The way private health insurers treat their customers could be enough to send you to the doctor, but as these things always seem to play out, the situation for shareholders is much healthier.
The latest scandal to rock the industry comes from recently listed Medibank Private, the country’s biggest health insurer, which has been accused of covering up policy changes. The hidden changes left patients with unexpectedly large bills for radiology and pathology services, for which they had been previously covered.
The timing of this week’s Australian Competition & Consumer Commission’s legal action against Medibank is likely to cause significant reputational damage to the insurer.

ACCC allegations: Medibank ‘trying to stop doctors overcharging’

  • The Australian
  • 12:00AM June 18, 2016

Michael Roddan

Medibank is facing claims it intentionally misled customers
Medibank Private is likely to argue its alleged “unconscionable conduct”, involving keeping customers in the dark over policy changes, stemmed from a legitimate attempt to clamp down on doctors overcharging for pathology tests.
While Australia’s largest private health insurer puts itself on a war footing after the Australian Competition & Consumer Commission launched legal action against the company on Thursday, analysts believe any reputational damage from the scandal will likely blow over, minimising any financial blow to the insurer.
The ACCC alleged Medibank failed to inform members that it would limit benefits paid on in-house pathology and radiology services, meaning patients had to cover the “gap” between Medicare Benefit Schedule and the doctor’s charge for the service, known as the “Medigap”.

Health insurers could be due for an overhaul

  • The Australian
  • 12:00AM June 21, 2016

Michael Roddan

The ACCC says Medibank failed to inform members of new limits on benefits.
Private health insurers have largely escaped the regulatory overhaul the scandal-ridden financial advice sector has been dragged through, but Medibank Private’s stoush with the Australian Competition & Consumer Commission could change that.
The increased complexity and number of health insurance products means that customers are often presented with hundreds of products by salespeople who aren’t held to the same standard as financial advisers.
“Health insurance is now quite complex and almost requires advice, but it’s basically being sold under a general advice operation,” said Simon Swanson, managing director at financial services firm ClearView.
The ACCC last week alleged Medibank purposely failed to inform members of new limits on the benefits paid to patients, amid concerns of industry-wide lack of communication between insurers and their customers over policy changes. The revelations of Medibank’s quiet withdrawal of gap payments come as federal Health Minister Sussan Ley reviews the $20 billion private health industry and Labor and the Greens ramp up calls for a royal commission into the financial services industry.

Health insurance: can anyone be trusted?

  • James Kirby
  • The Australian
  • 5:59PM June 17, 2016
ASIC is bringing Medibank Private to court over “misleading and unconscionable conduct”
It may not be that hard to pick a health insurance stock — after all, there are only two: NIB and ­Medibank Private. But try picking a health insurer — that’s a whole different exercise.
There are at least 20,000 policies in the market among more than 30 providers, and the extreme deficiencies of the sector have just been dramatically brought to light with the Australian Securities & Investments Commission’s audacious announcement it is bringing Medibank Private to court over “misleading and unconscionable conduct”.
ASIC’s dramatic move might just be the start of a long-awaited crackdown in this sector, which most investors must access each year, whether they like to or not, as failing to take out private health insurance means you may face an elevated Medicare levy.

Superannuation Issues.

  • Updated Jun 16 2016 at 6:00 PM

Middle Australia no better off from super changes

by Sally Patten
Many low and middle-income earners will be no better off from the superannuation changes unveiled in the May budget, despite the Coalition's promise that half of the $6 billion saved from the proposed reforms will be ploughed back into helping "the other 96 per cent".
New modelling shows that measures aimed at improving the retirement savings of middle Australia, such as more favourable terms for spouse contributions and allowing catch-up contributions, will have little impact on the target market.
If the budget reforms are adopted, the bottom 90 per cent of full-time wage earners will receive no additional government support from the super system, analysis by the Australian Institute of Superannuation Trustees and consultancy firm Mercer shows.

Scott Morrison concedes ground on super reform

Date June 26, 2016 - 12:15AM

Noel Whittaker

Money columnist

Just one week out from the election, Treasurer Scott Morrison has taken steps to remove some of the retrospective aspects of the proposal in last month's budget to limit non-concessional caps. The original proposal was a lifetime limit of $500,000 on such contributions, to take effect from budget night – it was to be backdated so as to include all non-concessional contributions made in the preceding 10 years.
A situation where the proposal was undoubtedly retrospective is where the trustee of a self-managed superannuation fund had entered into a contract for the purchase of an asset using a limited recourse borrowing arrangement prior to budget night, with the settlement of the contract due after budget night. In these types of transactions, it would be normal for part of the sales proceeds to be provided by the fund members making non-concessional contributions to the fund to enable the fund to complete the contract.
As I pointed out in previous columns, this could put the purchaser of the assets in an impossible position: if their non-concessional contributions before budget night had already exceeded $500,000 in the last 10 years they may well be unable to contribute the funds to allow the purchase to proceed. Consequently, the contract could be rescinded and the deposit forfeited.
I look forward to comments on all this!

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