Key messages

  • Funding for genetic testing is flowed to public clinical services that order the tests.
  • Laboratories that undertake the tests receive their funding by billing clinical services for the tests they have ordered.
  • The arrangement provides incentives for clinical services to efficiently order tests through greater funding transparency and accountability.

Summary of funding policy

The department provides funding for genetic tests to the public clinical services that, as part of their activities, order genetic tests to be undertaken by pathology laboratories.  The laboratories that perform the test and supply the results invoice the clinical services for the costs of undertaking the test. 

This arrangement aligns the decision to order a test with the resources to pay for the test and therefore provides a clear signal for the efficient ordering of tests.

This policy does not apply to the two publicly funded genetic reference laboratories (i.e. the Victorian Cancer Cytogenetics and the Thalassaemia and Haemophilia Molecular Reference laboratories), which continue to receive block funding.

Justification for the funding policy approach

The funding policy for genetic testing is based on:

  • Rising demand for genetic and genomic testing
  • Providing a price signal for clinical services

Rising demand for genetic and genomic services

Genetic and genomic services are becoming recognised as part of routine clinical practice, and they are expected to deliver significant future improvements in health outcomes.  While this practice is encouraged and aligned to the policy directions, the funding model needs to support the efficient use of the available limited resources.

Genetic and genomic testing is becoming more advanced and more accessible.  As a result, the demand for testing has grown considerably and is now consuming significantly more resources.  There is a need to ensure the limited resources available are being used in the most productive way.  This means ensuring clinicians order only those tests that are necessary for the patient’s circumstances and that the funding model supports appropriate resource use.

Price signal for clinical services

The department’s funding approach for genetic tests flows funding to the public clinical services that order the tests.  This aims to provide the services with knowledge of the resources they are consuming and support them to make active decisions about how best to allocate those resources to ensure patients receive the appropriate care. 

Previously laboratories were provided with separate funding. This lacked transparency for the decisions about the level of resources being consumed and resulted in pathology suppliers being left to implement demand management strategies such as ceasing or delaying supply of tests or operating beyond their current financial means.

The arrangement of aligning the decision to order a test with the funding to purchase the test aims to support more efficient genetic testing by providing greater transparency and accountability for managing the limited resources.

Further information

Manager, Genetics & Health Technology
Phone: 61 3 9096 2142
Email: paul.fennessy@dhhs.vic.gov.au

Senior Policy Officer, Genetics
Phone: 61 3 9096 6126
Email: margaret.howard@dhhs.vic.gov.au