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| Journal of the New Zealand Medical Association,
05-November-2010, Vol 123 No 1325
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Changes to the eligibility to bill on Medicare in
Australia: a threat to New Zealand’s medical workforce?
Katie Elkin
For the most part, New Zealanders and Australians have an
unfettered ability to live and work in each other’s country. Since 1994,
this arrangement has been facilitated by the automatic granting of a Special
Category Visa (SCV) to New Zealanders upon arrival in
Australia.1
While New Zealanders must still apply for (and be granted)
permanent residence in Australia to enable them to access some social security
benefits, apply for Australian citizenship, or sponsor others to migrate to
Australia,2 for many New Zealanders residing
across the Tasman, such action never becomes necessary. However, until 2010, a
further (and little known) restriction was imposed on New Zealand doctors
wishing to practice in Australia.
In Australia, services provided in the public health system
are funded by the government under the Medicare scheme. Treatment provided in a
public hospital is fully subsidised by Medicare and so is free to any eligible
patient. General practitioner and other specialist services provided in the
community are also subsidised by Medicare, although a doctor is able to charge
patients a fee in addition to the amount covered by the Medicare subsidy.
However, in order to be able to “bill on Medicare” outside of the
public hospital system the doctor providing the services must have a Medicare
provider number.3
The section 19AB restrictionsIn the mid-1990s, amidst concerns about an apparent
oversupply, and unequal distribution, of medical practitioners, the Australian
Government amended the Health Insurance Act 1973 to restrict the granting of
Medicare provider numbers.4
Of particular importance to New Zealanders was the enactment
of section 19AB, which came into force on 1 January 1997. Under that section,
any doctor defined as a “former overseas medical student” or
“overseas-trained doctor” was unable to bill on Medicare for 10
years from the latter of the date on which they became a permanent resident or
citizen of Australia, or the date of first medical registration in that country.
The only way around this so-called “10 year
moratorium” was for the doctor to agree to work in a designated District
of Workforce Shortage (DWS), as defined by the Australian Department of Health
and Ageing, or to be granted a personal exemption under the Act (for example,
where the doctor was taking up an academic appointment).
Indeed, allowing exemptions for those working in a DWS was
designed to influence the “distribution of the medical workforce in
rural and remote areas of
Australia”5 and is generally
considered to have been successful in this aim, with the contribution of
overseas-trained doctors “fundamental to the delivery of health care
in rural and remote areas”.6
The issue for New Zealanders and for New Zealand medical
schools was the way in which the critical terms were defined. Despite New
Zealand medical schools being accredited by the Australian Medical Council (in
the same way as Australian medical schools), those gaining a primary medical
qualification from Auckland or Otago in New Zealand were designated as
“overseas-trained doctors”, irrespective of residency and
citizenship.7
The situation for New Zealanders studying at Australian
medical schools was even more counter-intuitive, as illustrated by the case of
Dr Mike Belich which was picked up by the mainstream media last
year.8 Dr Belich is a New Zealand citizen who
migrated to Australia at the age of 14. Having graduated from the University of
New South Wales in 2002 and nearing the end of his vocational training as a
general practitioner, he was refused a Medicare provider number on the basis of
section 19AB. Having not been an Australian permanent resident or citizen at the
time he enrolled at medical school (despite having become one since), Dr Belich
was considered to be a “former overseas medical student”.
Due to family reasons Dr Belich was unable to relocate to a
DWS so, instead, he filed a “human rights” challenge to the section
19AB restrictions in the Federal Court of New South
Wales.9
Changes to section 19ABDue to a recent change in the law, Dr Belich’s case
now does not need to be heard. On 1 April 2010, the Health Insurance Amendment
(New Zealand Overseas Trained Doctors) Act 2009 came into effect, amending
section 19AB and associated sections of the principal Act.
The Act no longer refers to former overseas medical
students. Instead, the term “foreign graduate of an accredited medical
school” is used. An accredited medical school is one accredited by the
AMC, either in Australia or New Zealand, and includes both Otago and Auckland
Medical Schools.
A foreign graduate of such a school is a person who was not
an Australian or New Zealand permanent resident or citizen at the time of first
enrollment.10 As a result, no New Zealand or
Australian permanent resident or citizen enrolling in a medical school in
Australia or New Zealand will be subject to the 10-year moratorium upon
graduation any longer, including:
However, a person who was not an
Australian or New Zealand permanent resident or citizen at the time of enrolling
in medical school or who graduates from a non-accredited medical school
(including all medical schools outside of the two countries) will still be
subject to the restrictions in section 19AB.
The Explanatory Memorandum to the Bill expressly recognises
the pattern of overseas-trained doctors entering New Zealand and obtaining New
Zealand citizenship as a pathway to residence and medical practice in
Australia.5
Such doctors will continue to be covered by the moratorium
for 10 years after the date of their first medical registration in Australia,
provided Australian permanent residence or citizenship has also been obtained by
that date.11
While the restrictions in section 19AB have been relaxed,
the conditions on Medicare billing imposed by section 19AA remain. In short, to
bill on Medicare, all doctors registering to practice in Australia on or after 1
November 1996 must have completed specialist training, including as a general
practitioner.12
Consequently, the changes to section 19AB will not impact
directly on new graduates, but on those who have already completed specialist
training or who are making decisions with that future in mind.
Likely impact of the changesClearly the changes to the legislation will have significant
personal impact for doctors such as Dr Belich who now will not be subject to the
moratorium. There are also those for whom the moratorium will end earlier than
they had anticipated, either because it will cease to apply or due to a change
in the date from which the 10-year period is
calculated.11 What is perhaps more
controversial is the impact the changes are likely to have on the medical
workforce on each side of the Tasman, particularly in New Zealand.
Australia—The Bill Digest for the Act
predicts that the removal of New Zealanders from the ambit of the section 19AB
restrictions is “unlikely to have any significant effect”
on the number of doctors required to work in
DWS.6 This conclusion is based on the
“negligible number of New Zealand medical students studying in
Australian medical schools”6 and so
the relatively small number of New Zealanders previously able to be directed to
DWS under section 19AB. However, it is not only New Zealanders who have studied
medicine in Australia who were subject to the moratorium, but any New Zealander
wishing to bill on Medicare who had been registered to practice in Australia for
less than 10 years or who had been a permanent resident of Australia for less
than that period.
As about 25% of the Australian medical
workforce completed their primary medical training outside of Australia, and
around 8% of that number trained in New Zealand,13
the impact could be rather greater than is anticipated. Indeed, over the
next few years, as the pressure on internship places grows, it is likely that
fewer overseas students will be able to continue their medical education and
career in Australia; leading to fewer doctors who can be directed to
DWS.14
However, while the number of doctors who can be required to
work in DWS is likely to decrease, the total number available for work may well
increase due, in no small part, to the additional contribution of New
Zealand-trained doctors.
New Zealand—With higher salaries and
arguably more opportunities on offer elsewhere, New Zealand loses significant
numbers of doctors every year.15 Due to its
proximity and the ability to work, Australia is the destination of choice for
many. Two years after graduation, retention rates for New Zealand-trained
doctors are about 83%, dropping to between 76% and 78% over the next few years
and levelling out at between 63% and 68% in years 8 to 12 after
graduation.16
For three groups, the disincentive to relocate to (or remain
in) Australia has been removed: New Zealanders trained at New Zealand medical
schools, Australians trained at New Zealand medical schools, and New Zealanders
trained at Australian medical schools. Such doctors will now be able to bill on
Medicare immediately upon satisfying the training criteria in section 19AA of
the Act. As expressed by Dr Tim Malloy of the New Zealand Rural General Practice
Network, “[i]t’s one less barrier—or one more hurdle for us in
retaining our own medical
practitioners”.17
At present, many doctors move to Australia immediately after
graduation in order to begin practice in the Australian health system as soon as
possible. While many are motivated by the impact of higher salaries on the size
of their student loans,15 others have sought to
begin their 10-year moratorium so that they will be free from location
restrictions soon after completing specialist training. It is quite possible
that the removal of the moratorium will lead some new graduates to delay moving
across the Tasman as the urgency to be registered and resident in Australia (so
as to begin the 10-year period) decreases.
The bigger impact of the change in the legislation is likely
to be those doctors in the years of specialist training or who have already
qualified as specialists or general practitioners—the very doctors in whom
New Zealand has made the most investment to date.
But what can be done to stem this tide? Clearly, it is not
just a problem for the medical workforce, with around 550,000 New Zealanders
citizens currently residing in Australia, many of them other skilled
professionals.2 But for medicine, the shortages
are already being felt. For some time, overseas-trained doctors have been
recruited to fill the gaps and now constitute around 38% of the New Zealand
medical workforce. However, retention of overseas-trained doctors in New Zealand
is very poor, with fewer than 50% remaining 1 year after initial registration,
dropping to around 30% over the next couple of years; representing a less than
ideal return on investment for this country.16
Again, this situation has an Australian dimension as
research suggests that New Zealand is commonly used as a gateway for those
wishing to ultimately end up practicing in
Australia.18
Putting all of these pieces together creates a concerning
picture for the New Zealand medical workforce and the public that rely on it for
services. Already New Zealand has the highest proportion of overseas-trained
doctors in the OECD18 so the changes to section
19AB will likely increase this percentage.
As more New Zealand-trained doctors are attracted to
Australian shores, New Zealand will need to compensate somehow, probably by
importing more and more overseas-trained doctors. While there is no evidence
that overseas-trained doctors are of lesser skill or quality, there is
inevitably a period of cultural, social, and systems adjustment needed for every
such doctor, the degree of which will depend on the doctor’s country of
origin. Then there are the ethical issues inherent in recruiting doctors from
countries such as Zimbabwe where the shortages in the health workforce are of an
entirely different magnitude to our
own.19
One area in which the migratory flow towards New Zealand may
actually increase is with respect to medical students. If they know that it will
not restrict their ability to later practice in Australia, more Australians may
choose to study medicine at Otago or Auckland University. While this may seem
like a positive outcome for New Zealand, it is really only a short-term gain as
any students motivated to study here as a result of the section 19AB changes are
likely to be doing so with the plan to return to Australia afterwards, amounting
to still more New Zealand-trained doctors migrating across the Tasman.
ConclusionWhile the changes to section 19AB are predicted to be
insignificant from Australia’s perspective, they have the potential to be
significant for New Zealand. It remains to be seen exactly what the impact will
be but the author predicts a net-loss to New Zealand of locally trained doctors.
It is anticipated that the most influenced section of the medical workforce will
be those training to work as, or who currently work as, specialists or general
practitioners.
Curtailing the outflow of much needed medical talent from
New Zealand is one of the biggest challenges facing our country today. The
Australian changes are simply one more factor to be taken into account in
formulating an appropriate policy response.
Competing interests: None.
Author information: Katie Elkin, PhD
candidate, School of Population Health and Faculty of Law, University of
Melbourne, Melbourne, Australia—and Senior Associate, Minter Ellison Rudd
Watts, Wellington, New Zealand
Correspondence: Katie Elkin, Senior
Associate, Minter Ellison Rudd Watts, Level 17, 125 The Terrace,
Wellington, New Zealand. Fax: +64 (0)4 4985001; email: katieelkin@gmail.com
References:
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