March 16, 2017 Edition.
The enthusiasm for President Trump’s plans on healthcare, tax and regulation seems to have peaked and I sense that we may see some continuing easing in the US equity markets as well as the bond markets.
The quote of the week comes from Bill Gross last week!
Investment Outlook
Monthly Investment Outlook from Bill Gross
“Central banks attempt to walk this fine line – generating mild credit growth that matches nominal GDP growth – and keeping the cost of the credit at a yield that is not too high, nor too low, but just right. Janet Yellen is a modern day Goldilocks.
How is she doing? So far, so good, I suppose. While the recovery has been weak by historical standards, banks and corporations have recapitalized, job growth has been steady and importantly – at least to the Fed – markets are in record territory, suggesting happier days ahead. But our highly levered financial system is like a truckload of nitro glycerin on a bumpy road. One mistake can set off a credit implosion where holders of stocks, high yield bonds, and yes, subprime mortgages all rush to the bank to claim its one and only dollar in the vault. It happened in 2008, and central banks were in a position to drastically lower yields and buy trillions of dollars via Quantitative Easing (QE) to prevent a run on the system. Today, central bank flexibility is not what it was back then. Yields globally are near zero and in many cases, negative. Continuing QE programs by central banks are approaching limits as they buy up more and more existing debt, threatening repo markets and the day to day functioning of financial commerce.
I'm with Will Rogers. Don't be allured by the Trump mirage of 3-4% growth and the magical benefits of tax cuts and deregulation. The U.S. and indeed the global economy is walking a fine line due to increasing leverage and the potential for too high (or too low) interest rates to wreak havoc on an increasingly stressed financial system. Be more concerned about the return of your money than the return on your money in 2017 and beyond.”
In Australia there has been rising concern about housing affordability and increasing worry about how the issue can be addressed. It seems the May Budget will be providing a plan. As always time will tell. We can expect all sorts of kites to be flown in the next few weeks as we count down to the Budget!
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Here are a few other things I have noticed.
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National Budget Issues.
Reserve Bank spells out company tax choices to politicians
Ross Gittins
Published: March 5, 2017 - 9:00PM
Published: March 5, 2017 - 9:00PM
The pollies can't help themselves. When the Reserve Bank heavies make their regular appearance before the House of Reps economics committee, the main game is to get the governor to say something that favours your side of politics and gives the finger to the other side.
So, when Dr Philip Lowe and friends appeared before the committee a fortnight ago, the Liberal chair of the committee, David Coleman, saw his chance to get Lowe to repeat his remarks in favour of cutting the rate of company tax to make it internationally competitive, remarks that drew headlines of Governor Slams Labor in the national press.
Sorry, Lowe had seen this game before, and wasn't playing. He'd switched to "analytical" mode. In truth, he was backing off at a rate of knots.
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Federal budget to include housing package: Treasurer Scott Morrison
Tom McIlroy
Published: March 5, 2017 - 10:52AM
Published: March 5, 2017 - 10:52AM
Treasurer Scott Morrison says the government is developing a package of reforms to address housing affordability, rental stress and homelessness for inclusion in the May federal budget.
Mr Morrison said while Labor's only policy to address housing issues was a "silver bullet" plan on negative gearing, the government was preparing to work with the states and territories on housing supply issues.
"We're working on a package for the budget. It will deal with the challenges in housing affordability from those who are reliant on social housing in our community, all the way through to those who are trying to break in to the first home ownership market," he told Sky News on Sunday.
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Australia poised to seize world economic record
Jessica Irvine
Published: March 6, 2017 - 12:00AM
Published: March 6, 2017 - 12:00AM
Australia is on the cusp of achieving something truly remarkable – not to mention unprecedented in modern world history.
In 26 days, as the clock ticks over to April 1, Australia will likely have bested the Netherlands to lay claim to the title of the longest economic expansion on record, entering our 104th quarter of economic growth without recession.
The Dutch winning streak kicked off in 1982 thanks to the biggest natural gas field in Europe and lasted for 103 quarters before the Netherlands succumbed to the turmoil of the global financial crisis in 2008.
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Malcolm Turnbull plans cash splash to win back regional votes
Renee Viellaris, The Courier-Mail
March 7, 2017 1:00am
BILLIONS of extra dollars from resource exports would be siphoned off to bankroll a national infrastructure building spree under a Turnbull Government plan to boost jobs and win regional votes.
The plan, yet to be ticked off by Cabinet, centres on finding the right balance between Budget repair and paying for infrastructure that revitalises regions and creates long-term jobs.
Prime Minister Malcolm Turnbull, who is bleeding support in regional Australia to minor parties but especially One Nation, is said to be keen on the blueprint.
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Scott Morrison plans to woo middle Australia with ‘credible’ budget for all
- The Australian
- 12:00AM March 6, 2017
Sarah Martin
Simon Benson
Scott Morrison is framing a budget aimed at boosting the government’s flagging stocks in middle Australia, vowing to address housing affordability, possibly with tax changes, and avoiding funding cuts to critical services such as Medicare, schools and hospitals.
The Treasurer has left open changes to the capital gains tax and signalled that the government may dump $13.5 billion in “zombie’’ savings measures blocked by the Senate if Labor fails to pass them in the remaining two sitting weeks before the May budget, warning that projections must be “credible’’.
However, Labor would be to blame for the loss of Australia’s AAA credit rating if a failure to pass savings measures caused ratings agencies to downgrade the nation’s standing with credit markets, he said.
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The Reserve Bank digs in. No cut for the forseeable future, and then perhaps a hike
Peter Martin
Published: March 8, 2017 - 12:00AM
Published: March 8, 2017 - 12:00AM
The Reserve Bank is increasingly certain the economy is picking up and increasingly determined not to cut its cash rate again.
The statement released by Reserve Bank governor Philip Lowe after Tuesday's board meeting says the global economy improved further since the February meeting when he said both business and consumer confidence had picked up.
"Above-trend growth is expected in a number of advanced economies," he says.
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Statement by Philip Lowe, Governor:
Monetary Policy Decision
Number 2017-06
Date 7 March 2017
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy have continued to improve over recent months. Business and consumer confidence have both picked up. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by higher spending on infrastructure and property construction. This composition of growth and the rapid increase in borrowing mean that the medium-term risks to Chinese growth remain. The improvement in the global economy has contributed to higher commodity prices, which are providing a significant boost to Australia's national income.
Headline inflation rates have moved higher in most countries, partly reflecting the higher commodity prices. Long-term bond yields are higher than last year, although in a historical context they remain low. Interest rates are expected to increase further in the United States and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and stock markets have mostly risen.
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Politicians have worked hard to make houses so dear
Ross Gittins
Published: March 7, 2017 - 11:18AM
Published: March 7, 2017 - 11:18AM
It has cost the budget a lot of money to make the prices of homes as hard to afford as they now are.
If this shocks or puzzles you, it's intended to. It shows the economics of house prices is more complicated than most people realise. And that can be deduced from the things politicians on both sides say and do in the name of improving home affordability.
The surprising truth is that most of the things pollies – state as well as federal – do in the name of making housing more affordable actually make it less affordable – as well as having a significant cost to their budgets.
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We cannot let modernity undermine shared values
- The Australian
- 12:00AM March 8, 2017
Paul Kelly
While voters are disillusioned with the major parties in Australia and the West, the cause of the problem is deeper than usually depicted — the system of representative parliamentary democracy is being discredited because it conflicts with the mood, culture and technology of the age.
Representative democracy looks obsolete. People want answers now and problems solved by tomorrow. Impatience is now bred into daily life on the escalator of technology. In a society where the pace is set by the mobile phone, digitalisation and the internet, parliamentary government seems trapped in another time.
When the answers seem elusive and problems stretch into years the public descends into anger and disgust with governments and ministers.
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There's no housing bubble in Australia, heads of big four banks say
Emily Cadman
Published: March 9, 2017 - 6:04AM
Published: March 9, 2017 - 6:04AM
Soaring home prices in Australia's biggest cities don't necessarily mean the country is in the grip of a housing bubble, according to the heads of the big four banks.
Testifying at the parliamentary inquiry into banking this week, the chief executives of National Australia Bank, Westpac and Commonwealth Bank all said that while they are worried about elements of the housing market, prices aren't over-inflated.
"I would draw the distinction between a speculative bubble in prices and prices beyond what fundamentals would justify," Westpac's Brian Hartzer told the parliamentary committee on Wednesday. A bubble isn't occurring in Sydney or Melbourne, where house prices have risen the most, he said.
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Shift in RBA thinking points to rate hike this year, Goldman Sachs says
Jens Meyer
Published: March 8, 2017 - 4:55PM
Published: March 8, 2017 - 4:55PM
Financial markets have sharply lowered the odds of a rate hike this year, while Goldman Sachs says a move in 2017 is now its base case, widening the divergence with most other economists who predict the central bank will remain firmly on hold until well into next year.
Market pricing of RBA tightening this year jumped following Tuesday's decision by the central bank to keep rates on hold, with cash rate futures signalling a 34 per cent chance, up from just over 20 per cent on Monday.
Citi calculations see the probability of a rate rise by the end of the year even higher, at 36 per cent.
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Energy crisis: Wholesale power prices have doubled since the carbon tax was axed
Adam Morton
Published: March 9, 2017 - 12:53AM
Published: March 9, 2017 - 12:53AM
A growing crisis in the electricity market has led to wholesale power prices more than doubling in a year - and rising to at least twice what they were under the much-maligned carbon price.
An analysis by the University of Melbourne's Climate and Energy College, produced for the Greens, found the average wholesale electricity price soared to $134 a megawatt hour in the summer just finished, compared with $65-$67 in the two summers the carbon price was in place.
It nearly tripled in 12 months in Queensland and NSW, and doubled in South Australia. Only Victoria escaped among eastern mainland states.
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A shared home equity scheme will put roofs over more people's heads
Peter Martin
Published: March 8, 2017 - 11:45PM
Published: March 8, 2017 - 11:45PM
Anyone would think Victoria had single-handedly reignited the housing crisis.
The critics leapt on the weekend announcement of a (small) pilot program in which the government would take an equity share in private homes, saying it would "drive up prices" and force homeowners to borrow from both a bank and the government.
Yet if it's such a bad idea (socialist, even) why was it first proposed by the Liberal Party-aligned Menzies Research Centre, why did Prime Minister John Howard commend it to his home ownership task force, why have both Malcolm Turnbull and Scott Morrison championed it, and why was Tony Abbott an early adopter?
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Coalition talks up housing affordability package in May budget
Housing package slated for May budget
- The Australian
- 10:48AM March 8, 2017
Rosie Lewis
The government has raised expectations that a housing affordability package to be delivered in the May budget will help more Australians enter the market, amid declarations Malcolm Turnbull and Scott Morrison are “exercised by this issue like few others”.
Michael Sukkar, the Liberal MP charged with forming the government’s policy on housing affordability, refused to rule out changes to Capital Gains Tax and noted the Treasurer’s admiration for a shared ownership scheme, which could see governments co-purchase properties.
The Assistant Treasurer was also at odds with Commonwealth Bank of Australia chief Ian Narev, who told a parliamentary committee yesterday that first home buyers were not saying houses were “overpriced” but “difficult to afford”.
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Morrison stands his ground on PRRT as oil giants cry foul
- The Australian
- 12:00AM March 9, 2017
David Crowe
The federal government is holding out against an industry push to stop a tax hike on the $200 billion oil and gas sector in a furious dispute before the May budget, as Scott Morrison insists on waiting for a full review before ruling on the idea.
The Australian has been told the Treasurer stared down demands to kill off the tax proposal in recent weeks as the big oil and gas exporters warn against changes to the resource rent tax, in place since the 1980s.
With the nation’s credit rating under pressure, the government has launched an inquiry into the Petroleum Resource Rent Tax that is considering changes that could lead to an increase from the $920 million forecast this year.
A leading option, revealed in The Australian yesterday, is a “minimum resource tax” that would operate like a royalty and could limit the ability of companies to use big capital expenses to push their PRRT obligations far into the future.
Scott Morrison examining new ways to kick tens of millions into community housing
James Massola
Published: March 10, 2017 - 12:40AM
Published: March 10, 2017 - 12:40AM
The Coalition government is considering the creation of a new affordable housing finance corporation to kick-start tens of millions of dollars in investment in community housing, in one of several major initiatives being examined for the federal budget.
Work has been under way for months on new ways to fund community housing, using a so-called "bond aggregator" model, based on an approach taken in Britain.
Research on a bond aggregator model by the housing think-tank, the Australian Housing and Urban Research Institute, went to state and federal governments last December and the federal government will now create an implementation taskforce that will take charge of the plan.
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Scott Morrison ‘sidelined by Malcolm Turnbull amid likely reshuffle after the May budget’
March 10, 201710:37am
TREASURER Scott Morrison has rejected suggestions he’s being sidelined in the lead up to the May budget.
Government sources told the ABC’s 7:30 program Prime Minister Malcolm Turnbull would be taking the lead on a number of key economic-focused speeches in the coming weeks to promote a stronger, more coherent economic position.
Meanwhile, talk of a Cabinet reshuffle after the May budget is mounting.
The Treasurer laughed off reports he was being sidelined due to colleagues’ concerns about his ability to deliver the Government’s economic message.
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Investment is about capacity and confidence
Ross Gittins
Published: March 11, 2017 - 12:15AM
Published: March 11, 2017 - 12:15AM
Governments and economists have been worried for ages about investment. First we had too much, then we didn't have enough. But what is "investment"? What's so special about it and why are we likely to be living with less of it in future?
The first trap is that the word "investment" is used to mean two quite separate – though related - things.
People say they've invested in some shares in a bank or invested in some government bonds. This is financial investment in financial assets – a piece of paper (or, these days, an entry in an electronic ledger) that records the owner's legal claim on the finances of the particular company or government.
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Investors storm back into housing market, elbowing out first home buyers
Peter Martin, James Massola
Published: March 11, 2017 - 7:23AM
Published: March 11, 2017 - 7:23AM
Investors have roared back into the housing market, buying properties that would have otherwise gone to owner-occupiers, and embarrassing the government by taking out more than half of the new money meant for housing.
The latest figures for January mark the first time the share of loans taken out by investors has climbed back above 50 per cent since strong action by the Australian Prudential Regulation Authority in 2015 to curb bank lending to would-be landlords and negative gearers.
The surge in investors entering the housing market and squeezing out owner-occupiers comes as the Turnbull government prepares a housing affordability package for the May budget that will aim to make entry into the market easier for first home buyers, while also addressing rising rents that are squeezing people out at the bottom of the market.
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Widening wealth gap a risk to investment, Labor MP warns miners
Mark Kenny National affairs editor
Published: March 9, 2017 - 11:45PM
Published: March 9, 2017 - 11:45PM
The widening gap between rich and poor in Australia should be viewed as a new form of "systemic risk" endangering billions of dollars tied up in long-term resources projects, the nation's big miners will be told on Friday.
The results of rising resentment could also fuel violence and social discord and should be seen as a variable on par with other risk factors such as as climate change, global economic downturns, and changes in government policy affecting energy or taxation.
Labor's assistant treasury spokesman Andrew Leigh, will use a keynote speech to the Minerals Council of Australia's tax conference in Melbourne to urge the big end of town to recognise that unfair societies end up being unstable ones. This wealth disparity could fuel populist disrupters such as Donald Trump and Pauline Hanson, or worse, making investments less safe.
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The problem with gas: why it's so expensive and we risk of running out of it
Adam Morton
Published: March 11, 2017 - 8:49AM
Published: March 11, 2017 - 8:49AM
So how did we get here?
It is by no means certain we will have shortages, but even the possibility – in a country with extraordinary energy resources – is a mess that could and should have been foreseen.
What for most of its history has been just a local gas industry in eastern Australia has been transformed in recent years by the creation of an export market in liquefied natural gas (LNG). Three plants at Gladstone in Queensland now sell two-thirds of the gas produced to Asia.
It has been the major reason the price of gas used for heating, cooking and electricity has roughly tripled – the international price sets the domestic price.
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Incentives for elderly to downsize homes
- The Australian
- 12:00AM March 11, 2017
David Crowe
The federal government will move within weeks to break down barriers that discourage older Australians from “downsizing” to smaller homes, in a bid to release more property to the market and help tackle housing affordability for younger families.
Retired Australians would gain new incentives to save the proceeds from selling their houses to move into more practical homes, with forecasts suggesting the measures could free up more than 50,000 properties a year.
The government is preparing to introduce more “lenient” rules to the Age Pension asset test and the caps on superannuation to ease the penalties on retirees who enjoy the once-in-a-lifetime windfall from selling their family homes.
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How the housing boom has left us all with more debt, not just house buyers
Matt Wade
Published: March 12, 2017 - 12:00AM
Published: March 12, 2017 - 12:00AM
The main characters in Australia's never-ending house price drama are the buyers and the sellers.
Their stories appear on news bulletins most weekends alongside auction clearance rates and suburban price records. As polls reveal growing anxiety about the soaring cost of housing, special attention has focused on struggling first time buyers and on our burgeoning investor class.
Much less attention is given to how rising property values affect the vast majority of households – those that own a home but are not buying or selling.
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Health Budget Issues.
Reining in excessive specialist fees
4 March, 2017
There are marked variations in fees within specialties, which means out-of-pocket payments by patients can vary enormously, according to health policy experts.
In fact, for some specialties, there is a fivefold variation in fees, they say.
Researchers from the University of Melbourne have looked at Medicare claims data for an initial visit to 11 specialities, finding that although all bulk-bill, some do so more often than others.
They have also found that certain states have higher rates of bulk-billing than others, with the NT topping the country at 76% and WA showing the lowest rate at below 20%.
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Cost-effective health funding
- The Australian
- 12:00AM March 6, 2017
Public hospital waiting lists and rising private health cover premiums are likely to worsen if state governments increasingly encourage public hospitals to bill health insurers for their members’ treatments. As reported on Saturday’s front page, a report by Ernst & Young, commissioned by the Independent Hospital Pricing Authority, has found more than 20 per cent of NSW public hospital services are funded by insurers. The national average is 14.1 per cent. The Medicare system, as reported today, is wide open to multi-million-dollar abuse.
Such revelations cast a new spotlight on healthcare funding, raising questions about how increasingly sophisticated medical procedures should be paid for from a limited pool of taxpayers’ money. The range of services covered by private insurance and the issue of gap fees also need to be considered.
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- Updated Mar 5 2017 at 9:00 PM
Grattan Institute report explains why Australians pay nearly four times more for drugs than other countries
Australians pay an average 3.7 times more for their prescription drugs than the best price available internationally and introducing reforms can save the Pharmaceutical Benefits Scheme (PBS) more than $500 million a year, says a new think tank report.
The Grattan Institute report, Cutting a better drug deal, recommends the benchmarking of wholesale prices of generic drugs against international peers, the closure of loopholes it claims allow pharmaceutical companies to overcharge for marginal improvements in drugs, and the relaxation of pharmacy location and ownership rules it claims "stifle competition".
The report acknowledges that prescription drug prices have been falling, but claims it can be happening faster. A policy of "price disclosure" was introduced in 2007, requiring drug companies to reveal regularly the prices they charge pharmacies for generic medicines, which the government then uses to calculate the amount it pays pharmacies for sales of each drug.
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Seeing a specialist. How variations in fees are hidden from patients
Julia Medew
Published: March 6, 2017 - 12:15AM
Published: March 6, 2017 - 12:15AM
Wendy Favorito knows only too well the cost of seeing a specialist doctor. Having lived with arthritis since the age of six, the mother of two sees a rheumatologist up to five times a year to manage the symptoms of her condition.
A 15-30 minute consultation costs her $96 out-of-pocket each time. The initial consultation fee for her doctor would be $160.
Despite spending more than $370 a month on private health insurance for herself and her family, the insurer does not cover this expense.
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The role of pharmacists should be overhauled, taking the heat off GPs
March 6, 2017 6.13am AEDT
Pharmacists should be trusted to issue repeat prescriptions and adjust dosages, according to a new report. from www.shutterstock.com.au
Author: Stephen Duckett
Director, Health Program, Grattan Institute
A Grattan Institute report released today, Cutting a better drug deal, calls for a major shake-up of pharmacies and pharmaceutical pricing.
The market for retail pharmacies is highly regulated. States regulate who can own pharmacies – essentially prohibiting anyone other than pharmacists owning them – and how many pharmacies one person can own. The Commonwealth regulates where pharmacies can be located, and have used that regulation to slow the growth of big discount pharmacies.
The current rules prevent competition in a way that benefits pharmacy owners more than consumers. International evidence suggests deregulation, allowing more pharmacies in urban market areas, actually improves access. The regulations in Australia restricting the number of pharmacies need to be changed.
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Fees: let patients shop around for value
Authored by Sarah Colyer
CONSUMER advocates are calling for health system reforms to enable patients to shop around for the best value specialists, as new figures reveal huge variations in out-of-pocket costs.
The amount paid by patients for an initial outpatient consultation varied more than five-fold in some specialties, according to a study of Medicare billing data in the MJA. The difference in average out-of-pocket costs between the least and most expensive practitioners was $100 or more for eight out of 11 specialties – cardiology, endocrinology, gastroenterology, haematology, immunology/allergy, neurology, respiratory medicine and rheumatology, the study found.
The most expensive initial consultations were in immunology/allergy and neurology, with average out-of-pocket costs of $128.70 and $123.70 respectively.
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Medicare: Sick system open to abuse
- Mike Steketee
- The Australian
- 12:00AM March 6, 2017
Hung Dien Phan came to Australia as a refugee in 1979 after fleeing Vietnam with his family, obtained a degree in medicine from Monash University and then discovered how easy it can be to make serious money in this country.
As a GP locum in Melbourne, he earned almost $3 million between 2006 and 2013 in Medicare payments based on valid claims for patients he had seen. During the same period, he decided to top up his income by making additional claims for 14,565 services that he did not perform, using the names and Medicare details of patients he had seen previously. By the time the federal government caught up with him, he had raked in $854,188.20 in fraudulent claims.
The Victorian Supreme Court sentenced Phan to three years’ jail with a non-parole period of 16 months and issued an order for him to repay the money. The prosecution argued the sentence was inadequate and last year the Victorian Court of Appeal increased the term to four years, with a non-parole period of two years.
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Commonwealth will no longer pick up bill for botched surgeries
Rania Spooner
Published: March 6, 2017 - 6:55PM
Published: March 6, 2017 - 6:55PM
If a surgery is seriously botched, a medication is mixed up or an inpatient takes their own life, the Commonwealth will no longer foot the bill.
The federal government will stop funding medical care that involves a gross error resulting in a death or serious injury to a patient – known as a "sentinel event" – from July 1.
Under the change, the states will have to cover the costs of medical care linked to these errors.
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Donald Trump's FDA plans could affect drug regulation in Australia, leading medic warns
Marcus Strom
Published: March 9, 2017 - 5:00AM
Published: March 9, 2017 - 5:00AM
Drug safety and regulation in Australia are under threat from US President Donald Trump, says leading Australian doctor John Rasko.
Professor Rasko, with two international colleagues from Japan and Canada, has penned a comment article in the journal Nature published on Thursday calling for the US Food and Drug Administration to continue regulation of pharmaceuticals for both efficacy and safety.
In January, Mr Trump told pharmaceutical industry executives: "We're going to be cutting regulations at a level that nobody's seen before."
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Greg Hunt wants state help on affordable health
- The Australian
- 12:00AM March 11, 2017
Sean Parnell
Federal Health Minister Greg Hunt wants the states to help address problems with private health insurance, starting with the issue of public hospitals billing members for treatment they could receive without charge.
Mr Hunt already has the support of NSW Health Minister Brad Hazzard who, despite his state having the highest rate of private billing, has vowed to work with him on the rising cost of insurance.
The Weekend Australian last week revealed an Ernst and Young report had found NSW, Victoria, Queensland, Western Australia and Tasmania setting targets for public hospitals to find insurance money outside the national funding arrangements established under the Rudd-Gillard Labor governments.
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Health Insurance Issues.
Health insurers ‘should be allowed to cover outpatients’
- The Australian
- 12:00AM March 6, 2017
Sarah-Jane Tasker
Private health insurers should be allowed to cover outpatient care, a new study has revealed, as it also highlights that out-of-pocket costs for many specialists varied by more than 400 per cent.
Professor Gary Freed, of the Centre for Health Policy at the University of Melbourne, and Amy Allen, from the Melbourne School of Population and Global Health, have analysed Medicare claims data from 2015 and found marked differences in specialties in the range of fees charged for an initial consultation.
The research, published by the Medical Journal of Australia, showed that on average the range of charges varied by more than 70 per cent.
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No public funding for serious mistakes in hospitals
- The Australian
- 12:00AM March 7, 2017
Sean Parnell
Public hospitals will be financially penalised for serious mistakes under a quality-based funding scheme that has received the go-ahead from Health Minister Greg Hunt.
The Independent Hospital Pricing Authority has been ordered to roll out the scheme from July 1, with the most serious mistakes, known as sentinel events, to receive “nil funding”. The authority was already consulting on such a move and while some stakeholders warned it might lead to cover-ups, Mr Hunt quietly gave the ministerial direction on February 16.
In 2013-14, there were 102 sentinel events across Australia, including 36 patient suicides, 27 instances where instruments or other foreign matter were left inside a patient after surgery, and 20 medication errors leading to the death of a patient.
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- Updated Mar 8 2017 at 6:31 PM
Greg Hunt to rule on 'corrupting' prostheses regime
A leading US medical device manufacturer says it can not offer cheaper products to Australians because of a "corrupting" government-sponsored price-fixing system ruled by "secret committees of lobby groups" operating like a criminal cartel.
The claims by California-based company Applied Medical – described as the "Specsavers" of the health industry – heap pressure on Health Minister Greg Hunt to introduce a more transparent pricing regime for medical devices.
Applied Medical has escalated its fight with Australia's medical establishment a year after losing a legal action aimed at opening up Australia's prostheses and medical device market to more scrutiny and competition.
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Moves to end veto on health insurance premiums
- The Australian
- 12:00AM March 9, 2017
Adam Creighton
Health insurers are stepping up their campaign to end government veto power over insurance premiums, arguing the annual premium approval process is a straitjacket that stifles competition and forces consumers to pay more.
NIB chief executive Mark Fitzgibbon said the approval process took pressure off insurers by allowing them to signal price rises to each other. “Insurers will be reluctant to offer lower prices at lower margins to attract more customers for fear they won’t be able to ever recover margins if need be — because of the uncertainty of the approval process,” Mr Fitzgibbon said.
Health insurance ministers have approved health insurance premium increases averaging 5.7 per cent a year since 2012.
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The secret slug that will make the $200 annual increase in health fund premiums cost more
Sue Dunlevy, National Health Reporter, News Corp Australia Network
March 10, 2017 12:00am
EXCLUSIVE
IT’S the secret double whammy that means next month’s health fund premium rise will hit your hip pocket even harder than you expect.
The value of the government’s private health insurance tax rebate will drop on April 1 adding an extra $50 a year to the cost of your premiums.
And by 2026 surging premiums will see the value of the rebate halved from the original 30 per cent to just 16 per cent.
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Pharmacy Issues.
Fury over new attempt to slash PBS revenue
6 March, 2017
A new threat to dispensing revenue has emerged, with a Grattan report stating price disclosure has not gone far enough or fast enough.
It calls for radical cost-saving measures based on international benchmarking, and author Dr Stephen Duckett has told Pharmacy News he would like this to be included in the May Budget.
Dr Duckett also makes a case for the overhaul of pharmacy location rules to increase competition.
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Government shrugs off price disclosure report
7 March, 2017
The federal health department has shrugged off Monday’s Grattan Institute report which says price disclosure does not go far enough.
A department spokesperson says price disclosure has achieved significant reductions in medicine prices and is on track to save $20 billion by 2019-20.
“The Australian government is providing affordable access to more lifesaving drugs than ever before – in the past few years $5 billion worth of drugs have been added to the PBS.”
The spokesperson highlighted problems with the report’s call for generic drug wholesale costs to be based on the cheapest international pricing
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I look forward to comments on all this!
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David.
