Medicare Locals may be scrapped under review

Clinical services ... Health Minister Peter Dutton says the Abbott Government's priority is to ensure that Commonwealth health funding is used as productively as possible. Source: Supplied

Health Minister Peter Dutton will announce on Monday that Professor John Horvath, who served as the Commonwealth Medical Officer from 2003-2009, will head the review.

The terms of reference for the inquiry include an investigation into whether Medicare Locals provide actual clinical services rather than a just another bureaucracy.

The inquiry will also examine whether Medicare Locals have been able to improve the co-ordination of after-hours medical care.

The 61 Medicare Locals were set up as part of Kevin Rudd's health reforms and were given the job of better co-ordinating general practitioners and local primary health care providers.

They were also put in charge of after hours health care in a bid to relieve the pressure on busy hospital emergency departments.

Although the general public never had a direct interaction with Medicare Locals, the former government claims they had co-ordinated the delivery of many thousands of health services such as diabetes education, podiatry and other allied health services.

In Opposition Health Minister Peter Dutton talked first of scrapping the bodies which he identified as a wasteful bureaucracy, but during the election the Coalition instead promised to review the program.

Announcing the review Mr Dutton said the government's priority was to ensure that Commonwealth health funding was used as productively as possible.

"We are committed to reducing waste and spending on administration and bureaucracy, so that greater investment can be made in services that directly benefit patients and support health professionals who deliver those services to patients," he said.

The inquiry will begin immediately and is due to hand its advice to the government by March next year.

The inquiry will examine the performance of Medicare Locals against their stated objectives.

It will check whether they have enshrined general practice as the cornerstone of primary care in

their functions and governance structures.

The interaction between Medicare Locals and Local Hospital Networks and other health services will also be included on the terms of reference.

The inquiry comes as the government is poised to announce a $50 billion budget deficit in a major economic statement this week.

It will be searching for ways to save money to bring this under control.