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Plan B: the political appeal of a GP co-payment

It’s clear from the reaction to the Government’s ‘Plan B’ for the GP co-payment that most health groups and experts don’t think the proposal makes any policy sense.  Why, then, has the Government been so insistent on pursuing a co-payment for GP services in the face of ongoing opposition?  Why focus on general practice, a speciality that has become significantly more complex since the introduction of Medicare, when a number of other medical specialties have arguably become less demanding in terms of both time and skills, due to the introduction of new technologies? In the following piece, former political adviser (and former GP) Dr Ruth Kearon answers these questions and more in her analysis of the Government’s plan. She writes:

Simply put, the new plan is an immediate cut in the Medicare rebate and an ongoing effective cut over time as indexation is paused until July 2018.

Contrary to common perception, Medicare is a universal insurance scheme that provides a patient rebate, not a doctor payment, for medical services.

Until now, this rebate has been universal, not defined by your income, where you live or whether you see a fully trained GP or a trainee.

So, regardless of whether your doctor chooses to lower their fee for their professional service or maintain their fee and charge you an additional $5, the Government has cut the medical insurance payment for the service you receive.

Who will this affect the most?

Thankfully, the Governments new plan excludes the most vulnerable in our community; concession cardholders, children under 16, and residents of aged care facilities. 

Many people who are not in these categories already pay an out of pocket expense and this will clearly get larger. 

Self-funded retirees, working families who just don’t qualify for concessions and those with chronic illness whose GPs often make the decision to bulk bill for follow up appointments will all pay an additional price for visiting the doctor.

Why target general practice services?

The Government have simply picked the largest specialty area, with high overall expenditure and an easy target in terms of the political cohesiveness of the sector.

Evidence tells us that investing in a strong primary care system provides better health outcomes for less money.

What would be more difficult but fairer is to look at those areas of medical practice that are well remunerated and have changed over time to become more efficient while the Medicare rebate has remained the same. It is these anomalies that lead to the large disparity in the average income of specialist general practitioners compared to their consultant specialist counterparts.

Decreasing the rebate for cataract procedures in 2009 was the last time a targeted approach was taken in relation to making Medicare more sustainable. The then opposition health spokesperson the Hon. Peter Dutton and Senator Matthias Cormann opposed these changes, including disallowing the new Medicare rebate item on two occasions to force the Government to reintroduce it at a higher rate.

While arguably, the initial announced reduction was too great, the principle of targeting a Medicare reduction for a procedure that had clearly become more efficient over time is inherently fairer than taking a blanket approach to all general practice services.

Why target patient rebates for general practice services while maintaining private health insurance rebates at current levels?

The private health insurance (PHI) rebate is a non-universal Government contribution to individuals who choose to take out private health insurance.  PHI to date has not covered general practice services, so the benefit flows to the consultant specialty workforces who provide private services in private hospitals. 

If raising the price signal in primary care is considered a good idea, why not for consultant specialist services in private settings. 

Is this move a Government step in the direction of extending private health coverage to general practice?

Ruth Kearon is a former advisor to Hon. Nicola Roxon during the time she was the Minister for Health and Ageing (2008-2010), a former GP and a current board member of Family Planning Tasmania.

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Comments 17

  1. Fake Account says:

    Axe the tax

  2. Scott says:

    “Many people who are not in these categories already pay an out of pocket expense and this will clearly get larger. ”

    Don’t think so. 80% of vists to the GP are bulk billed (85% in NSW, the richest state)

    So obviously, doctors are bulk billing religiously, rather than optionally. The question is why?

    I had a look at some research from the AIHW which detailed the reasons why people visit the GP. Top 3 are below

    Check-up 9.0% of visits
    Prescription 7.5% of visits
    Test results 5.2% of visits

    So you have most people rocking up at the doctor for the hell of it, rather than to address particular ailments. And test results? Wow, you can get those over the phone. Prescriptions, longer repeats will help with that.

    Having a co-payment might clear up some of these useless visits to the GP that are clogging up the system.

  3. Minerva says:

    Sure Scott, the doctor’s receptionist could tell you that your Anti Nuclear Antibody titre was 1/640 and you would know exactly what she was talking about. And of course you would be happy for the same receptionist to tell you that your Chlamydia swab was positive, with the crowded waiting room all listening to the conversation. Yes, no-one needs to see a doctor to get their test results.

  4. Delia says:

    There have already been extensive reports pointing out areas where cost cutting would be appropriate. Over servicing, fraud and waste are reported to account for 30% – 40% of the USA health budget, and Australia is likely to be close behind.

    This refers to ordering tests, hospital admissions and treatments that have no statistical benefit to the patient. Doctors can be confused by the lack of coordinated medical health records and concerned about the risk potential litigation. The integration of all medical health records with Medicare payments, private insurance databases and Best Practice Clinical Guidelines could fix this billion dollar problem. “Has this CT already been ordered?” “Yes”. “Is the nuclear med bone scan appropriate for someone just diagnosed with a breast lump, before the pathology and lymph nodes have been checked?” “No”.

    Politicians can easily access these reports. They choose not to.

    It’s all about the money. Every tax payer’s dollar wasted on over servicing, fraud and waste is a dollar gained for a private company.

    We are headed down the USA style privatisation pathway. So is the UK, with the NHS being rapidly privatised. Have a look at this Daily Mirror list of UK politicians involved with the companies bidding for private health care contracts. And draw your own conclusions. http://www.wikihospitals.com.au

  5. Delia says:

    Daily Mirror list – Selling off the NHS for profit. http://www.mirror.co.uk/news/uk-news/selling-nhs-profit-full-list-4646154

  6. Norman Hanscombe says:

    Doesn’t any poster realise [as did Labor long ago] the whole system is financially unsustainable and will crash unless costs can be reduced?

  7. Karey says:

    While this article (A fairer way to increase co-payments 12 Dec 2014) notes that many of of us who are not counted as ‘vulnerable … already pay an out-of-pocket expense for doctors’ visits’ I have yet to see any comment on the particularly heavy impact any reduction in medicare rebate or imposition of co-payments will have on regional Australians. As a resident of a large regional centre I have had to pay a $15-30 co-payments for at least the last 15 years. A shortage of doctors in regional areas makes it difficult for new arrivals to find a clinic that will even see them. There are at most a handful of bulk billing clinics and these have no appointments, so you need to be prepared to wait 2-3 hrs to see a doctor – making the lost earning greater than the $20 odd co-payment all the other clinics charge. In regional centres the medicare rebate is already well on the way to being less than out of pocket expenses, and these proposals will just hasten the process.

  8. drsmithy says:

    Doesn’t any poster realise [as did Labor long ago] the whole system is financially unsustainable and will crash unless costs can be reduced?

    There are two sides to the equation. Why is it everyone only ever talks about one ?

  9. drsmithy says:

    I had a look at some research from the AIHW which detailed the reasons why people visit the GP. Top 3 are below

    Can you provide a source for the data so we can see what the other ~80% of visits were for ourselves ?

  10. CML says:

    This whole unsustainable Medicare system going forward, is a load of c+ap! As far as I know, Australia is one of the best and most efficient healthcare systems in the OECD.
    If you want to see an inefficient system, just have a close look at the USA – and that is what they want us to become.
    I have been banging on here for months about the best way to cover any shortfall in Medicare funding. Since the levy has only ever covered some of the costs of health-care – the remainder coming from consolidated revenue – it would appear that we get what we pay for. In order to maintain the percentage of the cost covered by the levy, as costs increase, WHY IS THE LEVY NOT BEING INCREASED? Historically, that’s the way it has always been done.
    The rAbbott was interviewed by Jon Faine on local ABC radio in Melbourne earlier this week, and was asked why this had not been considered. I understand the answer from rAbbot was that the LNP had promised not to raise taxes!!
    What the hell does he think the $5/7 co-payment is/was???? And he is still asking some of the most vulnerable (low paid workers, chronically ill, self-funded retirees) to pay the co-payment.
    This is not about the unsustainability of Medicare. It is about setting the wheels in motion to destroy Medicare over time. If it were the former, why isn’t the $5 saved, as a reduced rebate, NOT being ploughed back into the healthcare budget? To do otherwise, even for such a lofty ideal as medical research, makes NO sense at all!!
    I hope the cross-bench senators are awake to what is going on here.

  11. drsmithy says:

    I understand the answer from rAbbot was that the LNP had promised not to raise taxes!!

    Indeed.

    This is what we call a “core promise”.

    Heck, we may as well call it an axiom when talking about neoliberals.

  12. Browny3000 says:

    @scott, massive oversimplification, it’s the fee for service system that encourages that behaviour, if you capitate payments for GP services all of those ‘useless’ visits would stop as there would no longer be a financial incentive for them. More efficient methods of service delivery would be found. This is the reform that a brave, ‘adult’ government would spend their political capital on, rather than the high-school economics concept of ‘price signals’.

  13. CML says:

    @Browny3000 – It doesn’t matter what colour the federal government is, they do not have the power to cap ANY doctor’s fees. That has been the major problem in the healthcare system in this country since the early 1950’s.
    To do so would be unconstitutional! How many people know that doctors and dentists are protected under the constutition? The only groups in the country to have such an ‘honour’. Have a look at Section 51 (xxiiiA), concerning the Powers of the Parliament, where the parliament can make laws for: “The provision of ……..medical and dental services (but not so as to authorize any form of civil conscription)…… As far as I am aware, ‘civil conscription’ has been interpreted as meaning no price setting and no employment on the basis of a wage/salary without the specific agreement of the individual doctor/dentist concerned. So fee for service is protected under the constitution. (I am not a lawyer, but did study medical law as part of another degree, and that was the way it was explained to me at university). My personal view is that that clause should be removed by referendum, which would then allow fee for service to be modified, and some costs to be capped. However, there does not seem to be any move in that direction, possibly because of the power of one of the strongest unions in the country – The AMA!
    Instead of bringing the medical profession to heel, all governments would rather blame the patients and make them pay more – either in monetary form, or by limiting healthcare for those unable to pay, leading to adverse health outcomes. The current government is worse than most, because it wants to dismantle Medicare over time, which will be disastrous for those in the lower socio-economic groups.
    As I said earlier – we need the cross-bench senators to be aware of what is going on here, and to vote accordingly.

  14. Browny3000 says:

    Understood, I meant move to capitated payments- a set fee per patient. Does this get around it?

  15. CML says:

    As far as I know, it doesn’t. That would require the feds to ‘set’ a price, which I don’t think is possible.
    They can set fees for individual services under Medicare, but that doesn’t stop the doctors adding on whatever ‘gap’ they wish over and above that amount. So the patient ends up paying the lot, one way or another, or going without treatment.
    As things stand, there is no way to fully price any particular service, unless the doctor chooses to bulk bill. Many GPs do that for selected patients, but rarely the specialists.

  16. Browny3000 says:

    So for a practice with, say 10,000 patients on its books, the government is unable to pay them a set fee per annum to manage that population’s health care needs? That way there is no longer an incentive to over-service. Additionally, KPI’s could be set for the contract- measures of improved health for that population, decreased hospital admissions for example.

  17. Scott says:

    @CML

    If you are interested in the legal definition of civil conscription as it refers to health care, read the 2009 case, Wong vs Commonwealth, Selim vs PSR, in the high court. It found that conscription refers more to the ability to dictate a doctor or dentist work in a specific way, or to make doctors work for the government. Nothing to do with fee for service. More about preserving or protecting the relationship between doctor and patient…excluding the government as much as possible.

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