Drastic change need to end $4 billion rural health spending shortfall

The peak rural health organisation wants the winner of the upcoming election to stop the political trend of funding small, fragmented initiatives that merely plug gaps across Australia's deficient rural health system.

NRHA chief executive Gabrielle O'Kane said rural areas had half the number of health providers per capita in rural Australia compared to major cities, which was contributed to regional citizens becoming ill, hospitalised and dying prematurely at a much greater rate.

Dr O'Kane said the lack of services meant rural people utilise Medicare and the Pharmaceutical Benefits Scheme at a much lower rate, which resulted in an annual "spending shortfall" of $4 billion in rural health, and called for the government to seriously consider block funding to address the inequality.

"The way health services operate in the city doesn't translate to the country; it's just incompatible, which leaves rural areas missing out on that $4 billion in taxpayer health funding every year," Dr O'Kane said.

"Our current fee-for-service Medicare rebate system rewards high volume patient throughput, which does not work for smaller rural GP practices.

"The situation is even worse for many private allied health services, as there are very few MBS items that patients can claim, making those services unaffordable for many rural people."

NRHA wants to make wholesale change to the funding structure of rural health services and has developed a new model of care called Rural Area Community Controlled Health Organisations, or RACCHOs, which are designed to be flexible enough to accommodate the unique circumstances of individual communities.

RACCHOs aim to address workforce barriers to offer financially and professionally rewarding careers and lifestyles in the bush. Health professionals would be employed with guaranteed income as part of a multi-disciplinary team, allowing them to reach their full scope of medical and health-related practice.

Dr O'Kane said the RACCHO model was backed by the expertise of its 42 health and consumer member organisations.

"We are calling for the immediate funding and rollout of 30 RACCHOs across the country," Dr O'Kane said.

Regional Health Minister David Gillespie denied there was a $4 billion underspend on healthcare in the bush and said block funding would be detrimental, as it would restrict Medicare funding to defined amount.

"The current system is demand driven, meaning the federal government does not place restrictions on Medicare expenditure," Dr Gillespie said.

"Having practiced medicine for 33 years, much of that time in regional Australia, I am acutely aware of the workforce challenges in our health workforce. There is an unhealthy metro-centric concentration of all health workers, and the policies we have developed and continued to develop are geared to address this."

However, Dr O'Kane said Mr Gillespie's comments were misleading, as a system couldn't be truly demand driven if there was no supply.

Dr Gillespie said the government was making inroads through its 10-year Stronger Rural Health Strategy, which had already added more than 700 GPs and 700 nurses to regional and remote areas after the first two years of the plan.

Labor acting health spokesperson Clare O'Neil said NRHA's criticism was a "damning indictment" of the government's rural health strategy.

"We've seen the issues confronting Australia's rural health workforce go from bad to worse under the government's 'so-called' strategy," Ms O'Neil said.

"Patients are waiting weeks for routine appointments, practices have been forced to close their books, and frontline workers are at breaking point.

"Healthcare access is increasingly determined by where you live and how much you earn, and the further you live outside big cities, the harder it is to access care."

Ms O'Neil said did not say if Labor supported the NRHA proposal, but her party would "continue to engage" with the organisation on its policies.

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