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National Mental Health Action Plan- one year on

Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
van Gool, Kees
Health Policy Issues: 
Benefit Basket, Remuneration / Payment
Reform formerly reported in: 
National Action Plan on Mental Health
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes yes no
Featured in half-yearly report: Health Policy Developments 9


There has been a growing recognition of the lack of community based mental health care in Australia. This recognition galvanised governments to develop a national action plan on mental health, released in mid-2006, and reported on in survey round 8. Since then, the Australian Government has expanded the national Medicare program to include many new mental health items. The high rate of uptake of these new items confirms the degree of unmet need in the mental health field.

Recent developments

In November 2006, the Australian Government introduced a number of new Medicare items, enabling patients to access more subsidised mental health services. For the first time, Medicare covered mental health consultations provided by psychologists, occupational therapists and social workers. These items were in addition to the existing services provided by psychiatrists. The government also introduced a specific item for GP consultations relating to a mental health.

At the time of introduction, the government estimated that the items would add AU$538million over five years to the Medicare budget (equivalent to around 1% of the Medicare budget).

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Characteristics of this policy

Degree of Innovation traditional neutral innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal neutral fundamental
Public Visibility very low high very high
Transferability strongly system-dependent rather system-neutral system-neutral
current current   previous previous

The initiatives reported on in this survey are part of the existing Medicare program.  The addition of new items to the Medicare Benefits Schedule is a routine process. The one aspect that makes this initiative unique is that it has extended Medicare coverage beyond recognised medical practitioners. For the first time, patients using the services of psychologists, occupational therapists and social workers (for the purposes of mental health) have access to Medicare subsidies. This represents a fairly major change and is likely to drive a greater use and supply of private mental health services in the community.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes yes no

Initiators of idea/main actors

  • Government
  • Providers

Stakeholder positions

The new Medicare items have been generally welcomed by most provider organisations but some groups did raise concerns about specific aspects of the policy.

Just prior to their introduction, the Australian Medical Association (AMA) argued that the government was not placing due emphasis on the role of GPs in mental health care.  They stated that the package was inequitable because the rebates for psychologists were higher than those for GPs. They also argued that the government wanted to impose too many hurdles for GPs to access the mental health items, including a condition of additional training.

Under the MBS Scheudle Fee, a 20 minute GP mental health consultation is AU$66, which is slightly higher than a standard 20 minute GP consultation. The Medicare Schedule Fee for a psychology consultation is AU$88 and AU$129 for an initial assessment, however, these consultations must be at least 50 minutes. It is unclear whether the government changed the relative Medicare Schedule Fees as a result of the lobbying.

 It does appear as though the government changed its stance on making additional  GP training compulsory.  Whilst providing additional training resources, GPs are not required to complete such training to be eligible for the Medicare mental health items.  

Actors and positions

Description of actors and their positions
Minister for Healthvery supportivevery supportive strongly opposed
Prime Ministervery supportivevery supportive strongly opposed
Psychologistsvery supportivevery supportive strongly opposed
Occupational therapistsvery supportivevery supportive strongly opposed
Social workersvery supportivevery supportive strongly opposed
General practitionersvery supportivesupportive strongly opposed
Australian Medical Associationvery supportivesupportive strongly opposed
current current   previous previous

Influences in policy making and legislation

The introduction of new Medicare items does not require legislation or parliamentary consent.

Actors and influence

Description of actors and their influence

Minister for Healthvery strongvery strong none
Prime Ministervery strongvery strong none
Psychologistsvery strongneutral none
Occupational therapistsvery strongneutral none
Social workersvery strongneutral none
General practitionersvery strongstrong none
Australian Medical Associationvery strongvery strong none
current current   previous previous
Psychologists, Occupational therapists, Social workersMinister for Health, Prime MinisterGeneral practitionersAustralian Medical Association

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The new Medicare items came into effect on the 1 November 2006, providing us with four months worth data to make a initial assessment of its success.

In those four months, the new items subsidised nearly 400,000 mental health services, with 56% and 38% of these relating to GPs' and psychologists' consultations respectively. The remaining 6% relate to psychiatrists' consultations. The Department of Health has stated that due to pent-up demand, a high initial surge in service use had been anticipated but it appears that the uptake has been higher than expected.

In terms of funding, the government has spent nearly AU$42 million on the mental health items, with 60% of this amount subsisiding GP related services and 30% flowing to psychology services (and 10% to psychiatrists)

There are some concerns that due to the mal-distribution of psychologists and other mental health care workers in outer metropolitan and rural areas, patients living in these areas will miss out on better access to community mental health services.   

Monitoring and evaluation

The Australian Senate announced that it will set up a watchdog to ensure that the mental health promises are being delivered. This initiative will focus on many of the other key aspects of the National Mental Health Plan (see survey round 8 for more details) which some commentators suggest are at a stalemate. The terms of reference for this inquiry are:

  1. the extent to which the action plan assists in achieving the aims and objectives of the National Mental Health Strategy;
  2. the overall contribution of the action plan to the development of a coordinated infrastructure to support community-based care;
  3. progress towards implementing the recommendations of the Select Committee on Mental Health, as outlined in its report A national approach to mental health - from crisis to community; and
  4. identifying any possible remaining gaps or shortfalls in funding and in the range of services available for people with a mental illness.

Expected outcome

The National Action Plan on Mental Health sets out a list of aims and progress measures, including:

  • Reducing the prevalence and severity of mental illness in Australia.
  • Increasing the proportion of people with an emerging or established mental illness who are able to access the right health care and other relevant community services at the right time, with a particular focus on early intervention.


Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low low very high
current current   previous previous

One of the potential problems with this reform is that in the short term the overall supply of psychologists is fairly fixed. This means that any services provided through Medicare may well come at the expense of reduced access in other health care sectors such as public hospitals.

Secondly, because Medicare is a fee-for-service program it may not be the most efficient way of funding these services. The way Medicare is set up means that providers can raise fees beyond what would be economically efficient.  However, it should be noted that a fee-for-service program may encourage higher throughput of services.

Thus it is theoretically feasible that with reduced access to mental health care services in some health sectors (e.g. public hospitals) and potential higher fees under Medicare, access will not have been greatly improved. To a limited extent administrative data will be able to monitor and variation in uptake as well as out-of-pocket costs for the new mental health items.

One of the great unknowns of this initiative is whether the quality (and therefore the effectiveness) of mental health care will be improved. Our capacity to monitor this is very limited.


Sources of Information

 Australian Association of Social Workers., Media Release 11 October 2006.

Australian Division of General Practice, "Media Release - Mental health Medicare measure welcome, but equity at risk"  9 October 2006.

Australian Medical Association "Media release - Mental Health Package regrettably undervalues the role of GP" 9 October 2006

Department of Health and Ageing. "Better Access to Mental Health Care Fact Sheets" available at

Metherell, Mark., "Health Scheme Swamped" Sydney Morning Herald, 28 March 2007.

Senate Community Affairs Committee, Inquiry into Mental Health Services in Australia, Terms of Reference.

Reform formerly reported in

National Action Plan on Mental Health
Process Stages: Implementation

Author/s and/or contributors to this survey

van Gool, Kees

Suggested citation for this online article

van Gool, Kees. "National Mental Health Action Plan- one year on". Health Policy Monitor, April 2007. Available at