Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697640125863.pdf (Australia)
Arthritis Foundation of Australia Level 2, 255 Broadway, Glebe NSW 2037 PO Box 550, Broadway NSW 2007 p: +61 2 9518 4441 f: +61 2 9518 4011 e: info@arthritisaustralia.com.au w: www.arthritisaustralia.com.au Supplementary submission: Senate inquiry into out of pocket costs in Australian Healthcare Further to Arthritis Australia’s previous submission into this inquiry, we would like to add some further information regarding the impact on people with arthritis of the proposed Medicare co-payments and increased co-payment for PBS scripts announced as part of the 2014/15 Federal Budget.
Arthritis can be a very expensive disease to manage and many people who are forced to reduce their working hours or leave the workforce altogether as a result of their condition face the double impact of reduced income at a time of increased medical expenses.

The added cost of pharmaceuticals is of particular concern as it is not unusual for people with rheumatoid and other inflammatory forms of arthritis to need to fill more than 100 scripts a year.
In addition to the costs of GP visits and PBS subsidised pharmaceuticals, many people with arthritis need to visit a range of specialist and allied health practitioners and require a number of over the counter analgesics and supplements eg paracetamol, folic acid and calcium supplements, to manage their condition and the side-effects caused by its treatment.. Non-PBS scripts do not count towards the PBS safety net and only five allied health consultations a year attract Medicare rebates under the existing chronic disease management items.
Private health insurance coverage for allied health consultations is also limited.

People also usually need to be able to pay the full up-front costs of medical and allied health services before they can claim the Medicare rebate or private health insurance rebate on the medical and allied health services they require.

This can create a barrier to accessing timely and appropriate care especially when budgets are already stretched as a result of reduced income.
While safety nets can assist, people still need to find the money to meet the cost of their care and prescriptions until the safety net thresholds are reached.

This can cause substantial financial difficulties and many people report that they need to carefully ration their care and household expenditure and often have to go without essentials until the thresholds are reached.
For people whose medical and pharmaceutical expenditure is high and ongoing, the benefits of safety net thresholds should be spread across the year, to ease the financial pressure that is currently created at the beginning of the year.
A single safety net across both medical and pharmaceutical expenditures would also be of benefit and some consideration should be given to including the costs of necessary over-the-counter supplements when these are required for managing the effects of an existing chronic condition or its treatment.
We are particularly concerned about the impact on people who are on low incomes but who do not qualify for existing concession cards and who will need to meet the full additional cost imposed by these new and increased co-payments.
For someone who needs to fill 150 scripts a year, needs to visit their GP every month and requires monthly blood tests to monitor their disease and drug toxicities, the additional out of pocket costs under the new proposals would total nearly $1000 a year, on top of their already high out-of pocket expenses.

Subsequent to our last submission, a number of people with arthritis have provided details of their current out-of-pocket expenses incurred in managing their arthritis (see below).
A number have reported current out-of-pocket costs of over $4000 annually.

Out-of-pocket costs in Australian healthcareSubmission 74 - Supplementary Submission Case study number 1 Alison is 57 years old and has had severe rheumatoid arthritis for 15 years.

Due to the effects of her condition, she had to retire in 2007 at the age of 50.

She was able to draw down her superannuation early, but she is on a low income and does not qualify for disability support or the aged pension.
She still has a mortgage on her home.

Alison requires many medical appointments and scripts to manage her arthritis and the side-effects of its treatment.

She currently needs to fill 169 scripts per year for her arthritis-related care and faces out of pocket yearly expenses of around $4,500 a year, even higher if surgery is required.

She generally visits her GP every three months for review and her rheumatologist twice a year but may need to see them more often if she is unwell.
She requires monthly pathology tests to monitor potential drug toxicities associated with her treatment and is reviewed twice a year at a skin clinic as her medication increases the risk of developing skin cancer.

She also needs to visit a psychologist for chronic pain management, a podiatrist for orthotics, an endocrinologist, a cardiologist and orthopaedic surgeon for monitoring and review for potential complications and deterioration associated with her condition and its management.
Massage therapy and warm water therapy classes help to keep her mobile and maintain posture and muscle alignment.

Alison’s yearly out-of-pocket costs in recent years (claimable for tax purposes) are detailed below.

Year 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Case study number 2 Out-of pocket costs Comments $6,865 $5,212 $6,429 $4,650 $4,618 $4,373 Hip replacement, foot arthrodesis Spinal fusion, carpal tunnel repair x 2 Michelle has RA and fibromyalgia and requires 174 scripts per year.
She is unable to work because of her condition but is not eligible for a concession card because of her partner’s income.

Her out-of-pocket costs for pharmaceuticals alone for 2012/13 are $3,509.

Under the increased co-payments she is likely to face an increase in out-of-pocket pharmaceutical costs of around $800.

Michelle also incurs substantial costs for medical services.
She is currently seeing her GP fortnightly, and like Alison, needs to see a range of health professionals to manage her condition and her co-morbidities, including a rheumatologist, gynaecologist, endocrinologist and podiatrist.

Case study number 3 Helen, who is retired, has rheumatoid arthritis and Sjogren’s syndrome.

Her dental costs are very high because of her Sjogren’s syndrome.
Her out-of-pocket healthcare costs for 2012/13 were: Pharmaceuticals Medical costs(Medicare gap) Imaging, physiotherapy, dentistry (gap not paid by health fund) Total Case study number 4 $2,553 $379 $834 $3766 Anne-Maree* visits the doctor 16 times a year and needs to fill 144 scripts per year.

Under the new co- payments system she will face additional out-of-pocket costs of an estimated $832 a year.
2 Out-of-pocket costs in Australian healthcareSubmission 74 - Supplementary Submission Conclusion The proposed co-payment for GP, pathology and imaging items under Medicare and the increased co- payment for pharmaceuticals under the PBS will significantly increase financial pressures for people with chronic conditions such as arthritis who already face high and ongoing costs to manage their condition.
People on low incomes who do not qualify for concession cards are particularly vulnerable to the impact of these increased costs.

As a result many may need to delay or not proceed with appropriate care or medication, risking an aggravation of their condition that is likely to lead to higher costs to the health system in future.

If the co-payments proceed, special arrangements should be put in place for people on low incomes facing high medical and pharmaceutical costs.
Existing safety net arrangements and thresholds should also be reviewed to better address the overall financial burden of healthcare costs on those with chronic conditions on low incomes.

Arthritis Australia would be pleased to provide further information to the Senate Inquiry if required.

For further information contact Franca Marine 27 June 2014 3 Out-of-pocket costs in Australian healthcareSubmission 74 - Supplementary Submission