It Is Probably Worth Having The ADHA Testimony At Senate Estimates (May 29, 2017) Available To Review.

Here is a transcript. (E&OE)

First the Senatorial Cast

SENATE

COMMUNITY AFFAIRS LEGISLATION COMMITTEE

Monday, 29 May 2017

Members in attendance: Senators Dastyari, Di Natale, Dodson, Duniam, Griff, Hanson, Hinch, Leyonhjelm, Lines, Ludlam, McCarthy, O'Neill, Polley, Reynolds, Siewert, Singh, Smith, Urquhart, Waters, Watt.

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And the Government:

HEALTH PORTFOLIO

In Attendance

Senator Nash, Minister for Regional Development, Minister for Regional Communications, Minister for Local Government and Territories

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And the Department:

Mr Martin Bowles PSM, Secretary

Mr Paul Madden, Special Adviser, Strategic Health Systems and Information Management

Ms Bettina Konti, First Assistant Secretary, Digital Health Division

Mr Tim Kelsey, Chief Executive Officer, Australian Digital Health Agency

Mr Ronan O'Connor, Executive General Manager, Core Services Systems Operations Division, Australian Digital Health Agency

Mr Terence Seymour, Executive General Manager, Organisational Capability and Change Management Division, Australian Digital Health Agency

Ms Bettina McMahon, Executive General Manager, Government and Industry Collaboration and Adoption Division, Australian Digital Health Agency

Mr Tony Kitzelmann, General Manager, Cyber Security, Australian Digital Health Agency

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Now the text:

29 May, 2017 - [21:16]

Senator SINGH:  Turning to eHealth—we will wait for the relevant officials to come up.

Mr Bowles:  Certainly. We might then need the digital agency at the same time—is that right?

Senator SINGH:  We may indeed.

Mr Bowles:  We will see where we go with this, but we have the digital agency and the department.

Senator SINGH: Yes. Labor set up the Personally Controlled Electronic Health Record and remains very supportive of that concept. I am a bit concerned by the budget measure on the My Health Record, which I am looking at. What is the net spend on the My Health Record over the next four years?

Mr Madden: For the next two years, we have funding to cover operation of the My Health Record system for next year and the year after plus we have the funding to move the system from opt-in to implement a national opt- out scheme for Australia and to make significant changes to provide a registration scheme. The values of that  are $195 million for opt-out, $182 million for the operations across the two years—that is additional to the already appropriated for next year—and $6.8 million for the provider registration redevelopment.

Senator SINGH: Can you answer the question of: what the net spend on My Health Record over the next four years will be—that was the question I just asked you.

Mr Madden: Sure.

Ms Konti:  Net spend is $68.7 million over the four years.

Senator SINGH: Thank you. That is spending of $374.2 million minus savings of $305.5 million. Is that correct?

Mr Madden:  Could you repeat that, please?

Senator SINGH:  Spending of $374.2 million minus savings of $305.5 million.

Ms Konti: Yes.

Senator SINGH:  The 2015 budget included $485.1 million over four years for the My Health Record, and it  is now providing $69 million. Isn't that a massive cut to My Health Record of over $400 million?

Mr Madden: I think the spend on the My Health Record system will increase. We now have access to offsets and saves in the same budget period, which nets against that overall cost.

Mr Bowles: This system is designed to develop efficiencies in the system over time because of less duplication, fewer medical errors, and so on and so forth, over the life of this. There is a significant benefit to the health system for the long-term use of My Health Record.

Senator SINGH: With all due respect, Mr Madden, saying the spend will increase where there has been $400 million cut—

Mr Bowles:  That is not true.

Senator SINGH:  It is true, because—

Mr Bowles:  No, it is not.

Senator SINGH:  I have the 2015 budget measure here—

Mr Bowles:  You need to understand that there are revenue and expense measures in these things.

Senator SINGH:  I do understand that.

Mr Bowles:  That is what makes the difference.

Senator SINGH: All right—take me through the spending of My Health Record, year by year, from 2015-16 to 2020-21, so that I can understand it.

Mr Madden:  We do not have the—

Senator SINGH:  You do not have it?

Mr Madden: budgetary figures for 2015, but what I can offer you is that the 2015 measure was a three-year funded program. The last year of funding for the program is, in fact, next year. We have appropriations of about $137 million for next year from the 2015 measure. We have additional budget to spend on the My Health Record system for the next two years in operations—a total of $182 million additional, plus there is an additional $185 million to implement national opt-out arrangements for the My Health Record system. As Mr Bowles pointed out, the netting effect is that we have actually calculated offsets and savings that will be recognised during this estimates period, which does, in fact, give us a reduction in diagnostic tests which would otherwise have been duplicated because GPs or hospitals would not otherwise have access to tests that have been taken within the  last six-week period. There is, in fact, additional expenditure, but some of that expenditure is, in fact, offset by  savings that are expected to be recouped by the operation of the system.

Mr Bowles: Which has been the design of the system—to get better patient outcomes, which mean less duplication and less medication errors. That is the whole basis of the system.

Senator SINGH: The budget measure that includes the $305.5 million in savings—does that come from the My Health Record itself or elsewhere?

Ms Konti: It comes from elsewhere. Sorry, I will clarify—there is a calculation about reduced spending in the medical benefits system for reduced pathology and diagnostic imaging, which comes to a total of $136.8 million over the forward estimates period.

Senator SINGH:  So the savings are coming from diagnostic imaging?

Ms Konti: Reductions of the duplication in pathology and diagnostic imaging that will be able to accrue when that information is in the My Health Record and once the My Health Record system has moved to opt-out participation.

Senator SINGH:  The measures say that some of the savings come from health system efficiencies.

Ms Konti:  That is the other area of savings.

Senator SINGH:  What exactly are they?

Ms Konti:  We will have to take that on notice.

Senator SINGH:  Are they savings from Medicare?

Mr Bowles:  No, this has got nothing to do with MBS or PBS.

Senator SINGH:  I am trying to give you examples.

Mr Bowles: I have already said that it is efficiencies across the health system, particularly hospitalisation issues—the whole range of issues across the system. It will impact on all parts of the system—yes, probably  MBS, PBS, hospitals and the whole lot.

Senator SINGH:  It will?

Mr Bowles: It has to, because if you reduce duplication of testing, it has to have an impact. Again, this is  about improving health care for patients. If you reduce duplication and stop people getting the wrong drugs and getting adverse events from the wrong drugs, you get a benefit to the system and, most importantly from my perspective, you get a benefit for patients.

Senator SINGH: I think you were taking on notice to provide the savings coming from the health system efficiencies.

Ms Konti: Yes.

Senator SINGH:  Could I have a breakdown by program and year, when you provide that on notice?

Mr Madden: Yes.

Senator SINGH: Going back to the efficiencies, do you really not know where they are coming from? How can you bank on them if you do not know where they are coming from?

Ms Konti:  They are part of the overall budget for the health portfolio.

Mr Madden: The categories we have included, as Mr Bowles has said, avoided hospital admissions, through fewer adverse drug events; reduced duplication of tests; better coordination of care for people seeing multiple providers; and better-informed treatment decisions. All of those things will reduce pressure on the health system. So there are things across the entirety of the health system across this period, and we will break those down into programs.

Senator SINGH:  What does a reduction in the duplication of pathology and diagnostic testing really mean?

Mr Madden: There are categories where there are tests that would not necessarily be repeated within finite periods, which we find through the statistics in Medicare claims. We have people who have the same test repeated in a period of less than six weeks in two different settings—one in primary care and one in acute care—testing for the same condition, and the same results are available. But because today those results are not available in those two settings—the GP will have access to the results taken six weeks ago—a person turns up in hospital and the hospital currently does not have access to those so they have to run the tests again.

Reducing the duplication means that if the hospital finds that they have had that test within the last period— many of them are around about six weeks—they might observe those results rather than running the test again.

Similarly, if hospital pathology tests are taken and the patient comes back out after discharge, the results of those things are available to the GP without running those tests again. So these are reductions that we achieve by looking at the current statistics for specific tests, which are not usually repeated. Repeat diabetes tests and those sorts of things are not picked up. They are those things you would not expect to see repeats of.

Senator SINGH: But My Health Record is still relatively new, so is it not incredibly speculative to be  banking savings based on how GPs, specialists and hospitals might behave?

Mr Madden: I think the key to this, in where we have set the trajectory over the last three years—we did the review of My Health Record in 2013; it was very new at that point and usage was low. Recommendations to that review were to look at opt-out as an arrangement for consumers in the system on the basis that healthcare providers gave us an assertion: if the majority of our patients were in the system and you improve the usability we will use it.

We trialled opt-out last year and the usage rates by GPs, hospitals and other healthcare providers in the sites was phenomenally higher than we found in the rest of the opt-in part of the world. So we have modelled based on the expected results of opt-out, where we have an exponential take-up by healthcare providers. With all of the consumers in the system we actually will get a higher usage across the whole sector. Again, the benefit here is not a GP seeing what the GP put in there last week. It is when another GP, a hospital, an allied health professional or  a specialist can see that same information, which otherwise would have been obscured from them.

In terms of use, the other thing we have moved in the last 12 months is the electronic incentives for practices. It has taken the GP community from a non-user sector of the system to a point where we have nearly a million shared health summaries in the system that represent those people with chronic illnesses that need care on a regular basis by multiple carers. So the take-up rates have already started to show.

With our opt-out trials and the modelling we did for the benefit series, if we continued with opt-in we would be waiting for another several years before we would pulled those benefits forward. But in opt-out we modelled  those benefits from years 2, 3 and 4 from opt-out, and that is where those things start to accrue. There will be further savings we will calculate as we go stepping further into it.

Senator SINGH: What if you do not achieve these savings? Can you rule out cuts elsewhere in the health portfolio to make up the difference?

Mr Bowles: We are not going to go into that. We have modelled this. We are confident around these measures—

Senator SINGH:  I know, but it is only a model, Mr Bowles.

Mr Bowles: We are confident around these measures and we will re-look at these all of the time, like we do with every one of our programs.

Senator SINGH:  I will hold you to that.

Mr Bowles:  You can.

Mr Madden:  Part of the measure will give us those measurements as we go, as well.

Senator SINGH: We will see. The measure also says that some savings come from utilising 'uncommitted health program funds'. Which programs are they? Can you provide a breakdown?

Mr Bowles: We would have to take on notice specifically where they would be, but if we have uncommitted funds in some of our program areas we would look to use those. We can take that on notice though.

Senator SINGH:  If you could take on notice some kind of a breakdown.

Mr Bowles: Yes.

Senator SINGH:  In 2019-20 and 2020-21 the measure only shows savings—that is, there is no funding for  the Digital Health Agency. Is the government planning to abolish My Health Record in June 2019?

Mr Bowles: No.

Senator SINGH:  The government will need then to spend more money on My Health Record in 2019?

Mr Bowles: Yes.

Senator SINGH:  And 2021?

Mr Bowles: Yes.

Senator SINGH:  How much will it need to spend?

Mr Madden: We have some variables in the cost of the system, which we will work through in the next 12 to 18 months. Our commitment is to come back to the budget in 2019 to paint out those costs for the four years beyond. The variables in there include the re-platforming of the system to an open source environment, using cloud technology, which is expected to net some significant dividends, and there is also the establishment of call centre operations to integrate administrative clinical calls and the clinical incident management, which will be something we will not know the cost of until we hit the market to get a view on that. Once we know those things across the next 12 months—and those costs will only really come out of testing the market—and those costs to be tested are factored into the process as well.

Senator SINGH:  So you are banking the savings without budgeting for the spending that will be necessary.

Mr Madden: As I said, we have a commitment to come back to the budget for 2019 to bring that forward, again on the basis—

Senator SINGH:  But isn't that going to be a black hole in the government's books?

Mr Bowles:  No, because again—

Senator SINGH:  Why didn't you include it in the budget then?

Mr Bowles: Obviously, as Mr Madden said, we are doing more work. There actually will be additional  savings over time as the system ramps up. Every extra year you get, savings across that system will increase, because of the introduction of My Health Record.

Senator SINGH: I cannot see why you did not put that in the budget, when you are banking on savings. I am going to move on because it is getting late.

Senator REYNOLDS:  Senator Singh, can I ask one question for clarification?

Senator SINGH: Yes.

Senator REYNOLDS: The modelling and the costing process you have just described to me sounds like what you always do. In terms of new programs and new situations, it sounds like a normal fastidious process that you go through. Is there anything out of the ordinary in this process in terms of how you do it?

Mr Bowles: Not particularly. We do this. We do benefits realisation on all major programs like this. It is part and parcel of what we do.

Senator REYNOLDS:  And there is no exact science down to the dollar, is there?

Mr Bowles: In fact, we will probably find over time, because we are being quite conservative, that there actually will be greater savings to the system overall. The states and territories believe that. They  are  all absolutely signed up to getting My Health Record. They are very keen. They are fighting about who goes first.

Senator REYNOLDS: And they would not do it if they thought they were going to have to spend a lot more money I guess. Thank you, Senator Singh.

Senator SINGH:  Thank you, that 'dorothy' is over with.

Senator SINGH: Just getting back to this quote from the minister, in his speech at the AMA conference on Friday, he said:

But the great challenge is the issue of ensuring it works for the medical workforce. And so now we are going to a consultative period over the next few months on real initiatives to assist the medical workforce in their work…

Can you tell me about these consultations.

Mr Kelsey: I was actually at the conference last week. The point the minister was making is that the agency is working very closely with colleagues in states and territories in peak bodies in frontline clinical service to develop a whole range of improvements to My Health Record that will drive increased clinical benefits on which this measure is dependent. For example, we now have the first uploads of public pathology in New South Wales into My Health Record. We will shortly be announcing the first uploads of private pathology, private radiology and views of medications dispensed in community pharmacy. These are the kinds of content that will drive clinical practice, which has been sought after by peak bodies and clinicians on the ground. That is what the minister was referring to. It is certainly a period of very close collaboration as we design the program for implementation of the national expansion in close collaboration with clinical leaders.

Senator SINGH:  So he was not referring to financial incentives?

Mr Kelsey:  Not as far as I know.

Senator SINGH: Just with this opt-in or opt-out: the government is moving from the current opt-in, as you said, to the opt-out model. When will the national opt-out model be?

Ms Konti:  It will be implemented before the end of 2018 calendar year.

Senator SINGH:  So that has been accounted for in the budget?

Mr Kelsey: Yes.

Senator SINGH:  What happens when someone opts out?

Mr Madden: Part of what we went through in the trials was to make sure we knew the best methods for communicating to the community to let them know that they are going to get a record. They will be getting information about the opt-out arrangements about the My Health Record and the reasons why it would be good  for them. They will get a set of resources for them to learn about the My Health Record, and then it is up to them to make a choice.

Senator SINGH:  But I am asking: say, I want to opt out.

Mr Madden:  You want to opt out?

Senator SINGH:  I want to opt out; I have decided.

Mr Madden:  You will be able to go online.

Senator SINGH:  What happens?

Mr Bowles:  I encourage you not to, first of all.

Senator SINGH:  Are my records erased?

Mr Madden:  You do not actually have a record until we get past a period where you have had an option to  opt out. If you flag that you wish to opt out, we just will not create one for you.

Senator SINGH: Everyone in Australia has a Medicare record. The My Health Records would be created on the basis that those with a Medicare record would get a My Health Record, unless you opt out, in which case we will not give you one.

Senator SINGH:  So you opt out before there is a record created—is that you were saying?

Mr Madden: Yes.

Senator SINGH:  What if the record has already been created?

Mr Madden: You have opted out, so we do not give you a record. You have a Medicare record. After that, if we create one and then you choose to not want one, you can delete that record or cancel that record at any time into the future.

Senator SINGH:  You delete that record?

Mr Madden: You can. As the consumer, you can call the call centre or go online and say, 'I had this created. I don't want it any more. Cancel.' And then it becomes unavailable

Senator SINGH:  So I call a call centre, and my record is erased from the system.

Mr Madden:  Your record will no longer be available to anybody to view.

Senator SINGH:  Is it erased from the system though?

Mr Madden: On the basis that it existed for you, it will continue to exist as a record for while you were in the system, but it will not be available to any healthcare providers. What that allows you to do is, at some time in the future you, if you say, 'I didn't want it then, but I think I want now,' you can have it reinstated.

Senator SINGH: Just to understand this correctly: it is not deleted from the system; it is just effectively closed—is that right—it is still there?

Mr Madden: If you did not opt out before it was created, it would be closed. It would be there but not  available for anybody to view. If you opted out you would not have a record. Nothing would be sent to that  record. Nothing would be stored. Nothing would be available to any healthcare provider or to yourself through the My Health Record system.

Senator SINGH:  Last question: does it become unavailable or is it deleted?

Mr Madden: Unavailable.

Mr Bowles: Unavailable.

Ms Konti: Unavailable.

Senator REYNOLDS: I am wondering whether you can advise us what the COAG position is on the issues  we have been discussing with opt in and opt out.

Mr Madden: The COAG Health Council met on 24 March and unanimously agreed that opt out would be the future model for the My Health record. That was, of course, pending a decision from the Commonwealth government. So we have support from all states and territories for a national opt-out implementation.

Senator REYNOLDS:  This is not a frolic of the Commonwealth's own out there somewhere doing this?

Mr Madden: No. This was consulted and collaborated on with the states and territories before it was taken to the Commonwealth government, on the basis that we needed solidarity.

Senator REYNOLDS:  Great project; well done. Thank you.

CHAIR:  We will move to the National Health and Medical Research Council.

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To me the greatest weakness of the answers provided was the lack of details on the expected benefits / efficiencies.  I would really like to see the modelling on just how the savings will come about.

What did others think about what was said?

David.