Post-election update: changes in the health sector

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In this alert, we look at key changes expected in the health sector following the election of a Labor Government, specifically in:

Healthcare was a key issue for both parties in the lead up to the federal election. Both made several commitments. Labor’s focus was on aged care, GP clinics, and management of complex conditions. Both parties promised to reduce the cost of medications under the PBS and to establish a National Centre of Excellence in Intellectual Disability Health.

Aged care in the spotlight

Following the Royal Commission into Aged Care Quality and Safety, the Australian Government has faced continued pressure to improve the quality of aged care in Australia. Accordingly, in the lead-up to the federal election, both major parties made announcements about their respective plans for the aged care sector. We discussed the Coalition’s proposed reforms in detail in our Federal Budget sector deep dive.

Labor’s plan focused on care standards in residential aged care, the aged care workforce and accountability in the aged care sector. Labor announced five priorities for aged care reform in Albanese’s budget reply speech. With the Labor Government now in power, stakeholders operating in the aged care sector can expect these five priorities to guide reform over the next three years:

  1. Introducing a requirement for every aged care facility to have a registered nurse on site 24/7;
  2. Mandating that every aged care resident receive at least 215 minutes of care per day;
  3. Supporting aged care workers in their Fair Work Commission case for a 25% wage increase;
  4. Implementing mandatory nutrition standards for aged care residents; and
  5. Increasing transparency and accountability in the aged care sector.

Residential aged care providers should monitor changes in minimum staffing requirements and ensure they are ready to comply with regulatory changes. The minimum requirement for every aged care facility to have a registered nurse on site 24/7 is planned to commence from July 2023. The minimum requirement of 215 minutes of care time per day is planned to commence from October 2024. In the meantime, Labor is expected to maintain the current minimum care time requirement at 200 minutes per day from October 2023.

Stakeholders operating in the aged care sector should also stay up to date with regulatory changes and increased reporting requirements that are aimed at increasing transparency and accountability in the sector. For example, Labor proposed a new ‘General Duty of Care’ for aged care providers. The imposition of this duty is intended to establish a minimum standard of care that service providers must provide aged care residents. If breached, aged care residents could seek compensation and providers could face class actions and criminal and civil penalties.

Other accountability and transparency measures that stakeholders may expect under the Labor Government include a new aged care complaints commissioner, civil penalties to protect people who make complaints and whistle-blowers, increased investigative powers for the Aged Care Quality and Safety Commission and additional reporting requirements for aged care providers. These reforms will necessitate amendments to the Aged Care Act 1997 (Cth), which will be closely watched by the sector.

In addition to its support for aged care workers in their Fair Work Commission case, Labor announced further measures for workers in the aged care sector. These measures include a national registration scheme for personal care workers that includes requirements for ongoing training, criminal checks, English proficiency and a new code of conduct from mid-2023. Labor is also expected to require providers to preference direct employment and reduce the sector’s reliance on temporary employment. The direct employment preference will likely be implemented from January 2023.

Labor also proposed a cap on Home Care administration and management fees —while caps have not yet been specified, we understand that stakeholders will be consulted. Accordingly, participants in the aged care sector should monitor any consultation process for these reforms closely.

Disability health research and improved care models

Like the previous Coalition Government, Labor announced plans to establish a National Centre of Excellence in Intellectual Disability Health (National Centre). The stated purpose of the National Centre is to lead research in intellectual disability health, synthesise and disseminate research and support the translation of research findings into practice. The National Centre forms part of the previous Government’s broader plans under the National Roadmap for Improving the Health of People with Intellectual Disability (National Roadmap). This roadmap was released in July 2021 and sets out a plan that aims to improve the health system’s ability to meet the needs of people with intellectual disability.

The stated objectives of the National Roadmap are to:

  • improve support for people with intellectual disability, their families and carers;
  • develop better models of care for people with intellectual disability;
  • provide support for health professionals to help them deliver quality care for people with intellectual disability;
  • improve the oral health of people with intellectual disability, as a central requirement for improving their general health and overall wellbeing;
  • strengthen research, data and measurement to monitor the health outcomes of people with intellectual disability, and assess the effectiveness of initiatives in improving their health; and
  • improve emergency preparedness and response to ensure that the needs of people with intellectual disability are considered and met.

Stakeholders should expect the introduction of government initiatives and funding aimed at achieving the above objectives.

The PBS: increasing subsidies

Both parties foreshadowed reducing the maximum co-payment under the Pharmaceutical Benefits Scheme (PBS) – that is, the amount patients contribute to the cost of PBS subsidised medicines. Currently, this contribution is $42.50 for non-concession patients. The Coalition promised to reduce this cost to $32.00, and Labor promised to lower it to $30.00.  The change is set to take effect from the 1st of January 2023, and we anticipate existing safety net provisions will remain the same.  Currently, co-payments are adjusted yearly, in line with the Consumer Price Index and in accordance with the formula set out at section 99G of the National Health Act 1953 (Cth).

GP grants

A $220 million investment in GP practices to support telehealth, upskill staff, purchase new equipment, and upgrade infection control was proposed by Labor through a ‘Strengthening Medicare GP Grants’ program.

Grants are likely to depend on the size of the GP practice, with smaller practices being able to access grants of $25,000 and larger GP practices being able to access grants of $50,000.

Medicare funding boost

A ‘Strengthening Medicare Fund’ was also announced by Labor.  The Fund is to provide $250 million per year from 2023-24 to deliver on key priorities as determined by the new ‘Strengthening Medicare Taskforce’. This taskforce is expected to be chaired by the Minister for Health and include health policy leaders (the AMA, RACGP and the Australian College of Rural and Remote Medicine, amongst others) and representatives from nursing and allied health professions. Key focus areas are likely to include access to general practitioners (including after-hours), access to multidisciplinary team care, affordability, management of chronic conditions and pressure on hospitals. The taskforce is tasked with making recommendations in relation to funding priorities by the end of this year.

These measures will implement significant change across a number of areas of the health sector and interested stakeholders will need to watch developments closely as they are discussed and implemented to ensure ongoing compliance.

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