Options for regulation of unregistered health practitioners Decision Regulation Impact Statement

Table 15: Option 2A – estimated costs by state and territory of complaints assessment and investigation

	NSW	Vic	Qld	SA	WA	Tas	NT	ACT	Australia	Australia excl. NSW
Pop. weight	0.321391	0.24791	0.201031	0.072951	0.107139	0.022571	0.010351	0.016519
No. of Complaints	90	69	56	20	30	6	3	5	280	190
No. of Investigations	13	10	8	3	4	0.91	0.42	0.67	40	27
Costs
Complaints Assessment (no. of complaints x $$676)	$60,840	$46,930	$38,056	$13,810	$20,282	$4,273	$1,959	$3,127	$189,276	$128,436
Investigations (no. of investigations by $18,174)	$236,262	$182,244	$147,783	$53,628	$78,760	$16,592	$7,609	$12,144	$735,023	$498,761
Total costs									$924,299	$627,197

Assumptions:

• 
  Using NSW data, assumes an additional 90 complaints resulting in 13 investigations per year with population weighting (ABS,2011b)
  
• 
  Cost per complaint assessment $676, cost per investigation $18,174
  
• 
  Some complaint numbers have been rounded up but costs are done on weighted figures
  
• 
  NSW costs excluded as already in operation, SA costs included as not yet fully operational.
  

Therefore the total additional costs for HCEs is $1.625 + $0.627 = $2.252m per year.

In the absence of any information about the increased cost to professional associations of working with health complaints entities to develop voluntary codes of practice and improve their complaints handling, it is assumed that the increase in costs will be similar to that experienced by the state and territory HCEs, or $2.252 m a year across Australia.

The increased costs to professional associations is likely to be passed on to their members in the form of increased membership fees and that this would be passed on by members in the form of higher prices for health consumers. The price increases have not been quantified, but are assumed to be minimal as these would be spread over a large number of consumers.

There would be one-off implementation costs to government to develop a Code of Conduct in consultation with consumers and professional associations. No legislative changes would be expected to be required for HCEs to take on this role, although jurisdictions may decide amendments are required to formalise these extended functions. It is assumed that the additional costs to government of implementing this option would be met from within existing State, Territory and Commonwealth government resources.

There is potential for strengthened complaints mechanisms to affect professional indemnity insurance premiums and therefore costs for unregistered health practitioners. While there might be an increase in complaints/claims against insurance policies within the early stages of the complaints mechanisms implementation, overall, insurers would be expected to see this as a positive risk management approach that should provide long term benefits in terms of the risk profile of this sector. As at July 2011, the availability of cost effective insurance policies for allied health practitioners was strong.

Option 2B: Strengthen self-regulation – government monitored voluntary registers

Under this option, governments would lead the establishment of an agency (or extend the role of an existing agency) to act as a national standard setting and accrediting body for self-regulating professional associations and the voluntary practitioner registers they maintain. The role of the agency would be to set governance and operational standards and assess professional associations and voluntary registers against these standards, including assessing the effectiveness of association complaints handling and disciplinary processes. The standards agency would charge associations and other bodies for the accreditation service on a user pays basis.

Benefits

For the purposes of this analysis, it is assumed that under Option 2B, benefits in terms of a reduction in the incidence of harm would by very low, mainly because the system is voluntary.

Under this option there may be benefits in terms of cost savings associated with a reduced administrative burden on government and non-government bodies that already credential practitioners for various purposes, notably employers, health payers (transport accident and workers compensation insurers), the Australian Tax Office and the Department of Veteran’s Affairs. However, these benefits depend on changes to policy by these agencies to recognise only those associations (and their members) that have been accredited by the standards agency.

Another potential benefit of Option 2B is the reduction in court costs associated with reduced harm. It is assumed that the reduction in harm will be very low due to the voluntary nature of Option 2B.

Costs

The cost of Option 2B includes the costs of establishing a new agency, or extending the functions of an existing government or a non-government agency. The agency would set governance and complaints handling standards for professional associations and voluntary registers, audit against those standards and accredit organisations that meet the standards.

To estimate the increase in annual ongoing costs associated with an agency that sets accreditation standards, audits performance and accredits against these standards, several existing government and non-government bodies that undertake similar health care standard setting or accreditation functions were identified. These included the Australian Commission on Safety and Quality in Health Care (ACSQHC), the Reproductive Technology Accreditation Committee (RTAC) and National Association of Testing Authorities Australia (NATA).

The annual membership of $150 charged by the Fertility Society of Australia (that administers Reproductive Technology Accreditation Committee) has been assumed as indicative of the annual cost per member of an organisation accreditation function. It is assumed that half the number of unregistered health practitioners identified in Table 8 would be members of accredited voluntary registers, and that this cost would be passed on to members in the form of higher membership fees. Costs have been adjusted to remove NSW figures. See Table 16 below for full calculations.

Table 16: Option 2B – estimated costs associated with standard setting and accreditation agency

Component	Calculation	Subtotal
Cost of annual accreditation	Per professional association member	$150
Estimated number of accredited members of professional associations	0.5 x 206,649	103,324 accredited members
Subtotal	$150 x 103,324	= $15, 498, 675
Subtraction of NSW figures (using ABS population weighting of 0.321391)	0.321391 x 15,498,675	= $4,981,135
Total__$15,_498,_675_-_$4,981,135__=_$10,_517,_540'>Total	$15, 498, 675 - $4,981,135	= $10, 517, 540

It is assumed that the cost to governments of establishing a new national standard setting and accreditation entity would be approximately $500,000 in the first year, or half that figure ($250,000) if an existing body were to assume the role.

No legislative changes would be expected to be required with this option.

Option 2C: Strengthened self-regulation – voluntary national registration

Under this option, governments would, in cooperation with professional associations, lead the establishment of a national non-government agency that would administer voluntary practitioner registers on behalf of participating professions. The non-government agency would be a body similar to AHPRA in that it would administer the full range of regulatory functions for a profession (registration, program accreditation, complaints, discipline, practice guidance) on behalf of multiple professions. The key difference would be that the agency would not have statutory powers and registration on a practitioner register it administers would be voluntary.

Benefits

Option 2C is expected to be more effective in reducing harm than Options 2A or 2B as it would include professional registration, formal disciplinary procedures and a complaints mechanism. However, its effectiveness in reducing harm would be expected to be lower than Options 3 and 4 because registration is voluntary.

Some of the potential benefits of this option include:

• 
  economies of scale for participating professions in carrying out quality assurance of their members
  
• 
  cost savings due to the reduced administrative burden on employers, health insurers (Medicare, transport accident and workers compensation insurers, etc) who currently have separate accreditation processes for practitioners or their professional associations
  
• 
  a reduction in court costs associated with reduced harm due to improved quality assurance of practitioners
  
• 
  national consistency in the application of standards for voluntary registration, for participating professions.
  

Costs

The cost of Option 2C includes the cost of establishing a new non-government agency or extending the role of an existing agency. The agency would perform similar functions to AHPRA for health professions and occupations that wished to have voluntary national registration arrangements.

Under Option 2C, it is assumed that the ongoing costs would be similar to those of AHPRA. The average annual registration fee charged to registered health practitioners is $377, calculated using AHPRA’s 2011-12 data on general registration fees for the initial 10 professions, and the general registration fee for the four additional professions on entering the scheme in July 2012 (see Table 17 below).

Table 17: Annual registration renewal fee by registered health profession 2011-12

Registered health profession	Annual registration renewal fee	Registered health profession	Annual registration renewal fee
Chiropractic	$ 510	Physiotherapy	$ 196
Dental	$ 563	Podiatry	$ 362
Medical	$ 670	Psychology	$ 403
Nursing & Midwifery	$ 115	Chinese Med	$ 550
Optometry	$ 408	Medical Radiation	$ 325
Osteopathy	$ 496	Occupational Therapy	$ 280
Pharmacy	$ 305	ATSI Health Workers	$ 100
Average registration renewal fee across 14 professions	$ 5283 / 14 = $ 377

Assuming that half of the professional associations for unregistered health practitioners agree to participate in a national registration system, the increase in annual costs would be $26.4m, assuming that current professional association fees are similar to the average AHPRA fee of $377¹⁷. See Table 18 below for calculations.

Table 18: Option 2C – estimated costs associated with voluntary national registration

Component	Calculation
Cost of registration	Based on average registration renewal fee under NRAS	$377
Estimated number of voluntary registrants	0.5 x 206,649	103,324 vol. registrants
Total	$377 x 103,324	= $38,953,148