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Changes to healthcare spending and fee structures

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The 2014-15 Federal Budget included provision for a $20 billion medical research future fund.  The fund will be kicked off with a $4 billion injection, and will build capital until it reaches $20 billion in 2020, at which time it is expected to distribute $1 billion a year to medical research.

The government will also spend $200 million over five years on dementia research, $95.9 million to expand the National Bowel Screening Programme, and $18 million over four years on the Orygen Youth Health Research Centre to establish and operate a National Centre for Excellence in Youth Mental Health.

Healthcare spending presently sits at just over 4% of GDP. Estimates suggest that it will increase to 7% if no changes are made to the current system. To help control the costs to government, it is also proposed that from July 2015, patients will be charged a $7 co-contribution payment for GP consultations and out-of-hospital pathology and x-ray services.

GPs can choose to waive the co-payment, and they will be paid an incentive payment if they do not charge concession card holders or children under 16 more than the $7 co-payment. Concession card holders and children will also only be liable to pay the fee for the first ten services they use.

State and territory governments will also be permitted to charge co-payments for GP-like visits to hospital emergency departments.

In other changes to the health system, Australians will pay an extra $5 towards the cost of each Pharmaceutical Benefits Scheme (PBS) prescription from 1 July 2015. Concession card holders will pay an extra 80 cents.

From 2016, a new Medicare Safety Net will be introduced with lower thresholds for most people. Indexing on all Medicare rebates, excluding GP services, will remain frozen until July 2016. The Medicare Levy Surcharge and Private Health Insurance Rebate income thresholds will not be indexed.

Medicare rebates for specialist and all health services except GP care will be frozen, and funding for public dental services will be slashed by $390 million.

Primary Health Networks will replace the Medicare Locals established by the former Labor government. The networks are expected to align more closely with state and territory health network arrangements

The government has also made changes to public hospital funding, indexing funding to a combination of growth in the consumer price index and population, from 2017-18.

There are plans to abolish Health Workforce Australia and consolidate its functions into the Department of Health; while the National Preventative Health Agency will be scrapped.

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