Introduction by Croakey: As the federal election campaign brings a rash of promised health commitments, researchers have cautioned against reforms that incentivise ‘fast medicine’.
A system that incentivises fast medicine is likely to disadvantage an ageing population with higher rates of chronic illness, a growing burden of mental health conditions, and anyone with complex healthcare needs, they say.
As well, financial incentives that favour shorter consultations not only undermine the needs of patients but also contribute to a gender wage gap in the medical profession, write Dr Rafal Chomik, Associate Professor Michael Wright and Dr Shona Bates, from the International Centre for Future Health Systems at USNW.
Rafal Chomik, Michael Wright and Shona Bates write:
In what has become the ‘healthcare election’, the Australian Labor Party has pledged over $10 billion to boost Medicare, GP training, women’s health, urgent care clinics, hospitals, and the Pharmaceutical Benefits Scheme.
The Coalition has pledged to match most of Labor’s policies dollar for dollar, including Medicare, pharmaceutical and women’s health and also promised $900 million for mental health services (Labor has this week pledged $1 billion to support improved access to mental healthcare).
The core of the Medicare funding proposals would see an expansion in incentives for GPs providing ‘bulk-billed’ consultations to all patients, extending the current incentives beyond children under 16 years of age and Health Care Card holders.
A bulk billed consultation is one where the patient faces no out-of-pocket cost for the consultation, making such visits free to the patient.
Clinics offering all bulk-billed consultations would receive a further 12.5 percent loading on Medicare payments.
This could contribute to cheaper access to primary care in some practices.
However, the incentives are unlikely to be sufficient for many GPs to abandon out-of-pocket fees because Medicare rebates have for a long time failed to keep pace with rising costs.
Medicare rebates for GP consultations, $ per minute
Reforms promote ‘fast medicine’
Instead, the changes potentially reinforce existing payment disparities within Medicare that prioritise shorter consultations and high patient turnover – making it less suited to Australia’s ageing population with increasingly complex health needs.
For example, as shown in the figure above, GPs currently receive up to $3 per minute in rebates on consultations lasting over 40 minutes, but up to $7 per minute for those under 20 minutes.
The proposed changes will further widen this reimbursement rate gap between shorter and longer consultations.
While longer consults will pay up to $4 per minute, the shortest ones will reimburse at more than $11 per minute in the city and over $14 in rural areas. Consultations for mental health issues will also increase but at lower rates.
A system that incentivises fast medicine is likely to disadvantage an ageing population with higher rates of chronic illness, a growing burden of mental health conditions, and anyone with complex healthcare needs.
Addressing chronic illness
We know that about 60 percent or over 15 million Australians are living with at least one long-term health condition and prevalence increases with age (see figure below).
Indeed, 94 percent of those aged 85 and over have at least one chronic health condition.
Such conditions require ongoing management, more frequent and longer GP visits, and coordinated care across different providers. In international comparisons, Australia generally performs well in primary care, except for scheduled time for consultation.
As the population ages, the need for better management of chronic illness in primary care will rise.
While average GP consultation times have seen a recent increase, the current financing model is acting against this trend and placing undue financial strain on doctors.
Selected long term health conditions by age, 2021
Mental health in primary care
GPs are also the frontline of responding to Australia’s mental health crisis. Mental health concerns rank as the most common reason for patients visiting a GP, even ahead of chronic disease (see figure below).
Female GPs report seeing significantly higher rates of psychological presentations than their male counterparts, with nearly four in five female GPs listing mental health among their top three reasons for patient visits, compared to just over three in five male GPs.
This is one reason: female GPs spend more time with their patients, an average of 20.2 minutes compared to 16.7 minutes for male GPs.
The financial incentives favouring shorter consultations not only undermine the needs of patients but also contribute to a gender wage gap in the profession.
Most common presentations according to GPs, 2024 (%)
Misdirected funding
These trends indicate that investing in healthcare isn’t just politically attractive, but a necessity for our future. Yet how the extra funding is spent matters.
For example, international evidence consistently shows that robust primary healthcare delivers better health outcomes and is cost-effective in the long run – improving health outcomes and reducing expenditure on more expensive hospital healthcare.
Recent research suggests that it is important to distinguish between different types of primary care expenditure. This approach shows that direct expenditure on primary care delivered by primary care professionals has declined (see figure below). It made up 6.4 percent of the public health budget in 2016 but declined to 5.5 percent by 2023.
Spending on longer consultations that support continuous, comprehensive, coordinated care, for more complex consultations, has flat lined at 0.7-0.8 percent of the healthcare budget.
This is on top of the fact that the health budget itself has declined as a proportion of government spending.
Primary care spending as percentage of healthcare spending, 2014-2023
Get smart
At a time when Australia’s health system faces increasing pressure, political parties are right to promise more funding to primary care. It is welcomed.
But we also need to develop funding models that better suit health needs, including ones that incentivise continuity and coordination of care for complex health needs.
This includes targeted fee-for-service payments or additional payments for managing the patient population.
Better funding of longer consults is one option within the current fee-for-service model.
Other reforms could include expanding the existing Practice Incentives Program, which is currently paid to clinics to incentivise quality improvement, chronic disease management, and comprehensive care.
Another option is shifting towards a blended payment model, which balances fee-for-service with practice payments and performance-based incentives to better support ongoing, patient-centred care.
Without accompanying reforms, no amount of bulk-billing incentives will be enough to ensure the continuation of high quality, accessible general practice care for all Australians.
Author details
Dr Rafal Chomik is a Senior Postdoctoral Research Fellow at the UNSW International Centre for Future Health Systems (ICFHS). He specialises in social policy design, health policy analysis, and health and economic inequality. He has worked for government, international organisations, and spent the last decade at the ARC Centre of Excellence in Population Ageing Research (CEPAR), as research translation lead, producing and disseminating accessible, policy-related papers that communicate academic insights to policymakers, practitioners, and the media.
Dr Michael Wright is a Sydney based general practitioner, health economist, and health services researcher. Michael is Associate Professor at the International Centre for Future Health Systems at the University of New South Wales, and President of the Royal Australian College of General Practitioners.
Dr Shona Bates is a transdisciplinary Research Fellow at the International Centre for Future Health Systems. Shona’s research examines how services are organised and how different cohorts access and experience those services. Recent studies include research on systems such as primary care, mental health, criminal justice, and veterans services; different approaches to public administration including co-governance, place-based initiatives, and commissioning; and specific populations including First Nations, culturally diverse populations, children and young people, people with disability, and other vulnerable groups.
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