What’s in a named referral? Money

4 minute read

A critical look at state vs. federal funding of hospital specialists’ time.

A named referral may be a bunch of roses to a public hospital, but it does not smell as sweet to those who think states shouldn’t be siphoning Medicare funds.

Named referral requests normally come in the form of a letter from a public hospital to a GP, informing them their patient has elected to attend a bulk-billed clinic within the public system, and needs to be re-referred to a specific clinician.

These requests come in due to a relatively obscure loophole in the National Health Reform Agreement, subclause G19b.

This subclause allows for public hospital outpatients – who would normally have their treatment covered by the state-based health service – be treated as a private patient if they are referred to a named medical specialist who is exercising right of private practice.

Once the hospital has a named referral, it can bulk-bill the patient’s appointment, accessing federal rather than state funds.

The patient will still have an appointment at no out-of-pocket cost; but GPs argue this practice indirectly results in poorer outcomes in primary care.

University of Queensland Associate Professor Gino Pecoraro, former AMA Queensland state president and an obstetrician and gynaecologist, told TMR he sees named referral requests as “double-dipping”.

“The only people who suffer are the taxpayers of Australia, who are paying twice for the public hospitals to do their job, because you pay money to the state government and you pay the Medicare levy to the federal government,” Professor Pecoraro said.

“Because [the state governments are] taking money away from Medicare, rebates aren’t being kept up to date with inflation.

“When someone sees a GP or specialist in the community, the rebates that the patient is given are next to meaningless because they haven’t been indexed to the true cost of providing health care.”

For Professor Pecoraro, a step in the right direction would be for public hospitals to publish their waiting list times.

“If I could tell a patient up front [how long it will be until they are treated] then a percentage of people who can either afford health insurance or self-fund will do that,” he said.

“That will have two effects: one, those people will get appropriate treatment in a timely manner; two, their names will be taken off the waiting list so that people who truly have no option other than relying on our public system will receive treatment faster.”

This is one of the few points on which Professor Pecoraro and public health economist Professor Stephen Duckett agree.

“In most states, there is no transparency about what the waiting times are for outpatient services, and so we end up with a hidden, or secondary, waiting list which could be very, very long,” Professor Duckett told TMR.

This, however, is where their opinions diverge; Professor Duckett, who is Director of the Health Program at Grattan Institute, sees named referrals as a viable way of addressing these long wait times.

“Any increase in [public hospital] activity is capped, and this in turn caps, growth in hospitals – but the hospitals still have to respond to increasing demand,” he said.

“The private clinics are essentially 100% funded by the commonwealth because they’re private activity, making them a way of increasing services to the local communities at no extra cost to patients.”

Despite seeing named referrals as an innovative solution, Professor Duckett admits the core issue is a lack of healthcare funding in general – a point which can get lost during these federal-vs-state discussions.

“We shouldn’t just be seeing this as a cost shifting issue – we should be asking what the best system for the patient is,” he said.

Professor Pecoraro, for his part, also acknowledged a lack of healthcare funding as a major roadblock.

“If the solution is to give more money, that’s fine,” Professor Pecoraro told TMR.

“But let’s make the politicians whose job it is to come up with ingenious ways to funding things put their energies towards that, rather than finding ingenious ways of hiding things.”

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