House of Representatives

Replacement Explanatory Memorandum

Circulated By the Authority of the Minister for Health and Ageing, the Hon. Nicola Roxon MP

OUTLINE

The purpose of the Healthcare Identifiers Bill 2010 ('the Bill') is to implement a national system for consistently identifying consumers and healthcare providers and to set out clear purposes for which healthcare identifiers can be used.

The establishment of this national system, described as a Healthcare Identifiers Service, is a joint initiative of all Australian Governments and will put into effect a number of decisions made by the Council of Australia Governments (COAG).

In February 2006, COAG agreed to a national approach to developing, implementing and operating systems for healthcare identifiers for individuals and providers as part of accelerating work on a national electronic health records system to improve safety for patients and increase efficiency for healthcare providers. COAG reaffirmed this decision in 2008 and agreed to universally allocate a unique identifying number to each individual healthcare recipient in Australia.

On 7 December 2009, COAG signed a National Partnership Agreement for E-Health This Agreement provides a framework for cooperative jurisdictional arrangements and responsibilities for e-health and sets out the objectives and scope for the Healthcare Identifiers Service, as well as relevant governance, legislative, administrative and financial arrangements.

Communication of health information is a vital part of effective healthcare. The accurate identification of individuals is critical in all health communication. Mismatching of patients with their records and results is a documented problem for the health system and a clear link has been established between avoidable harm to patients and poor medical records management.

The costs of adverse events and medical errors are significant. It has been estimated that 10% of hospital admissions are due to adverse drug events and that up to 18% of medical errors are due to the inadequate availability of patient information. ^[1]

Using an individual healthcare identifier will provide a way for healthcare providers to more accurately match the right records to the person they are treating and improve accuracy when communicating information with other healthcare providers. This will help to avoid medical mix-ups or one person's information being recorded on another patient's file.

Healthcare identifiers are part of the core national infrastructure required to support secure electronic communications across Australia's healthcare system.

Implementation of a national healthcare identifiers system will:

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support secure messaging from one healthcare provider to another by providing a consistent identifier that can be used in e-communication;

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facilitate electronic communications between providers by providing a way for healthcare providers to look up the contact details of other providers; and

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support the implementation of a security and access framework to ensure the appropriate authorisation and authentication of healthcare providers who access national e-health infrastructure.

Failing to establish this infrastructure is likely to result in further duplication or fragmentation of investment, limited uptake and adoption of e-health initiatives, and limited interoperability of available solutions creating a 'rail gauge' problem that will become difficult or expensive to rectify.

E-health implementations overseas demonstrate significant direct productivity improvements for specialists, GPs and pharmacists by helping to automate routine interactions between care providers such as referrals, prescriptions, and image processing. For example:

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E-prescription implementations in Sweden, Boston and Denmark reduce provider costs and save time to improve productivity per prescription by over 50% ^[2]

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E-referrals in Denmark reduced the average time spent on referrals by 97% ^[3] by providing more effective access to patient information for both clinicians ^[4]

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Test ordering and results management systems reduce time spent by physicians chasing up test results by over 70% in implementations in America and France. ^[5]

Australia's National E-Health Strategy outlines solutions for e-prescriptions, e-referrals and electronic test ordering to minimise the time spent by care providers in discovering information known by other providers. The estimated benefit for care provider time, reflecting a conservative 10% reduction of total time spent on messaging costs for clinical and ancillary staff and improvements from improved messaging quality, is in the order of $2.8 billion in net present value over ten years. ^[6] The Healthcare Identifiers Service is an important step in realising these benefits.

The availability of healthcare identifiers is likely to lead to efficiencies in booking appointments, ordering treatments and sharing information across the health sector. It is estimated that 25% of a clinician's time is spent seeking information about the patient ^[7] and 35% of referrals are inappropriate due to insufficient direct access to specialists and insufficient information being passed from primary care to specialists. ^[8]

The use of identifiers will also help to reduce time and cost spent on unnecessary or duplicated treatments such as diagnostic tests. Studies in hospital environments indicate unnecessary duplicate testing occurs at a rate of 9% to 17%. Based on an estimate of $36 as the mean cost of tests prevented and a conservative estimate of a 15% reduction in tests, e-health could realise benefits of around $800 million in net present value over ten years. ^[9]

Healthcare provider organisations who choose to participate in the Service may incur some costs associated with complying with obligations set out in legislation and regulations. For example, a healthcare provider organisation will need to nominate a representative to act on behalf of the organisation in any interactions with the Healthcare Identifiers Service.

In addition, there may be some costs associated with upgrading of IT systems to ensure they incorporate appropriate minimum standards and security features to access to the Healthcare Identifiers Service. As the Service draws heavily on the same IT infrastructure as Medicare Online, it is anticipated that most providers will already have this in place. The other cost associated with participation will be the time required for staff education and training and standardised reference materials will be available to minimise any impact associated with this.

There is expected to be some impact on staff time in terms of considering information supplied to the healthcare provider about how healthcare identifiers should be implemented and because consumers are likely to seek advice from their healthcare provider about the new healthcare identifiers and how they can and cannot be used.

Healthcare providers will be provided with supporting materials and appropriate sources to refer consumers to for more information. A public awareness program on the HI Service will provide information to consumers via a range of methods.

As noted above, it is expected that these start-up costs, and any ongoing costs, will result in efficiencies in a number of areas. One of the key benefits is that use of healthcare identifier numbers is likely to result in improved business practices and more efficient communication with other providers.

The inclusion of healthcare identifiers in a health records system or a patient's file will not change how and when healthcare providers share information about individuals, but will provide a much more reliable way of referencing information, particularly in electronic communications and information management systems. Patients will continue to be involved in decisions about how health information is handled by their healthcare team.

If a health provider is unable to obtain a person's IHI from the HI Service, or the IHI is not available for any reason, patients will not be refused treatment. An IHI will also not be required for claiming healthcare benefits.

It will not alter the way in which anonymous healthcare services are currently provided. Where it is lawful and practical, individuals can seek treatment and services on an anonymous basis. In these instances, an IHI would not be used by the healthcare service.

Pseudonyms are used when seeking healthcare, in special circumstances, such as for witness protection. These arrangements will continue.

The design of the Healthcare Identifiers Service draws on existing elements of Medicare Australia's infrastructure including trusted personal information about individuals, consumer Medicare cards, information policies, and customer services such as shop front and online services. For these reasons Medicare Australia will be the operator of the Healthcare Identifiers Service. An independent review of the Service, including Medicare Australia's role as operator will be undertaken after two years.

Legislation is required to establish the Healthcare Identifiers Service and to permit the use and disclosure of healthcare identifiers for specified purposes. The Bill once enacted will operate in conjunction with the National Partnership Agreement for E-Health to support the operation of the Healthcare Identifiers Service.

The Bill establishes arrangements for operating and maintaining the Healthcare Identifiers Service, including the conferral of functions on the Chief Executive Officer of Medicare Australia. These functions include:

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assigning, collecting and maintaining identifiers for individuals, individual healthcare providers and organisations by using information already held by Medicare Australia for its existing functions;

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collecting information from individuals and other data sources;

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developing and maintaining mechanisms for users to access their own records and correct or update details;

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using and disclosing healthcare identifiers and associated personal information, for the purposes of operating the Healthcare Identifiers Service; and

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disclosing healthcare identifiers for other purposes set out in the Bill.

The Bill sets out the permitted purposes for which healthcare identifiers may be used or disclosed and the offences relating to the misuse of healthcare identifiers and penalties for breaches of the legislation. This provides a clear framework to support the proper use and disclosure of healthcare identifiers and ensures that any inappropriate handling of healthcare identifiers can be addressed.

The Federal Privacy Commissioner will provide independent regulation of how healthcare identifiers are handled and the operation of the Healthcare Identifiers Service. This will include handling complaints against Medicare Australia, as the service operator and private sector healthcare providers.

Where a state or territory has existing privacy arrangements in place, including an appropriate regulator, that regulator is to be responsible, under legislation passed by a state or territory, for handling complaints relating to healthcare identifiers which are made against a public sector organisation in their jurisdiction. Until state or territory arrangements are in place, complaints against a state or territory public body will be handled by the federal Privacy Commissioner.

The handling of any personal information associated with a healthcare identifier will continue to be subject to existing privacy arrangements under Commonwealth, state or territory law that apply to the body holding the information.

A role for the Ministerial Council responsible under the National Partnership Agreement for E-Health for oversighting the Healthcare Identifiers Service has also been included in the Bill.

Key functions of the Ministerial Council to be established in the legislation include development and review of legislation and regulations and issuing policy directions to the HI Service Operator.

Annual reports must also be provided to the Ministerial Council by the Privacy Commissioner and Medicare Australia (as service operator).

Regulations in a number of areas are required to support the operation of the Healthcare Identifiers Service. Regulations may be made in regards to:

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prescribing additional identifying information to support the assignment of healthcare identifiers to healthcare providers;

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prescribing bodies as data sources;

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prescribing a service operator other than Medicare Australia; and

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prescribing requirements for assigning a healthcare identifier to a healthcare recipient or healthcare provider, such as eligibility criteria for healthcare providers and any security obligations that healthcare providers must meet to be assigned a healthcare identifiers and/or participate in the Service.

The development of regulations will be subject to consultation with the Ministerial Council.

The Healthcare Identifiers (Consequential Amendments) Bill 2010

The purpose of the Healthcare Identifiers (Consequential Amendments) Bill 2010 is to ensure the Healthcare Identifiers Bill 2010 (once enacted) operates appropriately and effectively. This will be achieved by making minor amendments to the Health Insurance Act 1973 to authorise the Chief Executive Officer of Medicare Australia to delegate functions to officers to support the day-to-day running of the Healthcare Identifiers Service.

In addition, minor amendments to the Privacy Act 1988 will provide for the Privacy Commissioner's role as the independent regulator of the Healthcare Identifiers Service.