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  • Financial incentives and psychiatric services in Australia: an empirical analysis of three policy changes

    Author(s)
    Doessel, D.
    W. Scheurer, Roman
    C. Chant, David
    Whiteford, Harvey
    Griffith University Author(s)
    Doessel, Darrel P.
    Year published
    2007
    Metadata
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    Abstract
    Australia has a national, compulsory and universal health insurance scheme, called Medicare. In 1996 the Government changed the Medicare Benefit Schedule Book in such a way as to create different financial incentives for consumers or producers of out-of-hospital private psychiatric services, once an individual consumer had received 50 such services in a 12-month period. The Australian Government introduced a new Item (319) to cover some special cases that were affected by the policy change. At the same time, the Commonwealth introduced a 'fee-freeze' for all medical services. The purpose of this study is two-fold. First, it ...
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    Australia has a national, compulsory and universal health insurance scheme, called Medicare. In 1996 the Government changed the Medicare Benefit Schedule Book in such a way as to create different financial incentives for consumers or producers of out-of-hospital private psychiatric services, once an individual consumer had received 50 such services in a 12-month period. The Australian Government introduced a new Item (319) to cover some special cases that were affected by the policy change. At the same time, the Commonwealth introduced a 'fee-freeze' for all medical services. The purpose of this study is two-fold. First, it is necessary to describe the three policy interventions (the constraints on utilization, the operation of the new Item and the general 'fee-freeze'.) The new Item policy was essentially a mechanism to 'dampen' the effect of the 'constraint' policy, and these two policy changes will be consequently analysed as a single intervention. The second objective is to evaluate the policy intervention in terms of the (stated) Australian purpose of reducing utilization of psychiatric services, and thus reducing financial outlays. Thus, it is important to separate out the different effects of the three policies that were introduced at much the same time in November 1996 and January 1997. The econometric results indicate that the composite policy change (constraining services and the new 319 Item) had a statistically significant effect. The analysis of the Medicare Benefit (in constant prices) indicates that the 'fee-freeze' policy also had a statistically significant effect. This enables separate determination of the several policy changes. In fact, the empirical results indicate that the Commonwealth Government underestimated the 'savings' that would arise from the 'constraint' policy.
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    Journal Title
    Health Economics, Policy and Law
    Volume
    2
    Issue
    1
    Publisher URI
    http://journals.cambridge.org/action/displayJournal?jid=HEP
    DOI
    https://doi.org/10.1017/S1744133106006244
    Subject
    Applied Economics
    Policy and Administration
    Law
    Publication URI
    http://hdl.handle.net/10072/27362
    Collection
    • Journal articles

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