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Budget 2014: more for medical research, less for hospitals

15 May, 2014

A bright future lies ahead for medical research with the creation of the 'world's largest medical research endowment fund', although $15 billion will be shaved off the commonwealth's share of hospital funding, in Treasurer Joe Hockey's 2014 federal budget.

In a move that has the potential to revolutionise medical research in Australia the government will set up the Medical Research Future Fund (MRFF) for cutting-edge research. The government hopes to have the fund reach a target of $20 billion by 2020.

The endowment fund, when mature, will effectively double current medical research funding with an additional $1 billion a year, the government said in its budget overview statement.

''This investment, to be managed by the Future Fund Board of Guardians, will help to ensure Australia can continue to advance world leading medical research projects, attract and retain first-class researchers and deliver improved health and medical outcomes for all Australians," according to the statement.

Controversially, the MRFF will come to fruition from savings from a new patient contribution to health services and redirected commonwealth public hospital funding – a move that has been largely opposed by various health groups.

Under the new patient contribution scheme, patients could be charged for treatment in public hospital emergency departments; and face a new co-payment fee for a visit to the GP, obtaining a blood test or an x-ray.

More than $200 million in reward payments will also be cut for hospitals meeting federally-imposed performance targets for surgery and emergency treatments, a system put in place originally to reduce "bed block" – essentially a shortage of resources preventing hospitals from moving patients from emergency to bed.

The government will, in a landmark move, allow states to charge patients for public hospital treatment, hoping to discourage people from avoiding the fee for a GP visit.

Prescription medications will also cost more, with general patient contribution rising in 2015 by $5, and concessional payment contribution by 80c.

Read what various medical groups have had to say about the federal budget 2014:

AMA Vice President, Professor Geoffrey Dobb:

"Many Australians already pay a co-payment, and there is a place for co-payments for patients with the right model – but this is not the right model. It does not have the right protections.

"Put together, the cuts and co-payments threaten fairness and equity in the health system.

"The AMA recognises the government's priority is to achieve a budget surplus, but it should not be achieved by costing health services out of the reach of ordinary Australians."

Consumers Health Forum Chief Executive, Adam Stankevicius:

"The government has traded the Medicare card for the credit card in requiring millions of Australians to pay out of pocket towards their primary medical care.

"The introduction of a $7 co-payment to see the GP, the prospect of charges to attend public hospital EDs, plus a $5 increase in PBS fees, shatters the notion of universal access to primary care under Medicare.

"This is a retrograde health budget that will shock Australians who thought this government was the best friend Medicare ever had.

"It not only imposes a cost barrier to get medical care on those who often need it most, but it also appears to deny the stark realities associated with the steady rise of chronic illness in Australia."

Australian Nursing & Midwifery Federation Acting Federal Secretary, Annie Butler:

"Ultimately, it's everyday Australians who will suffer. They will be paying $7 to see a GP and paying more every time they go to get their prescriptions filled.

"The government claims patient fees will help sustain the health system, but this is destined to fail, as it will only increase costs and worsen health outcomes.

"Co-payments will shift the cost burden onto individual consumers and the Australian public hospital system overall by driving more and more people into busy emergency departments.

"Rather than choosing to slash spending and end Medicare, (the government) should be directing resources into preventative and primary care, preventing unnecessary procedures and readmissions which will control costs and ensure that we use evidence based practice."

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