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Wonky Health launches, revealing how co-payments will increase the health gap

The impacts of a Medicare co-payment would be far-reaching, including increasing the health gap between wealthy and poorer areas, and making it harder for general practices to survive in disadvantaged areas.

MPs (and others) wanting some evidence-based insights into how the co-payment would affect people and general practices across electorates are advised to dive into the first edition of this new column by Dr Tim Senior.

For my first Wonky Health column, I’m going to start very close to home with the Medicare co-payment. You may have heard of this. There’s a lot been written about it.

We already know that it makes health care more expensive, that it keeps people struggling to afford it away (so that richer people can get appointments more easily?) and it’s pretty unpopular.

But don’t worry, say advocates of the co-payment. It’s a price signal that’s too small to operate as a price signal, it’s a policy designed to keep people away from the doctor that won’t keep people away from the doctor. It will make the budget more sustainable by paying doctors more, building up a big research fund and contributing nothing to the budget bottom line.

That’s a magic pudding of a policy. Or perhaps just a normal pudding.

What we haven’t heard much about is the way the co-payment policy systematically takes money away from where it is needed.

It’s as if those responsible for the policy had read Julian Tudor Hart, who worked as a GP in a Welsh coal-mining village, on the inverse care law – and said “that sounds like a good idea.” (The inverse care law holds that “the availability of good medical care tends to vary inversely with the need for the population served”.)

If I were to write the Ladybird book of Medicare Co-Payments, the introduction might go something like this:

  • Not everyone lives in North Sydney
  • Wealth is not distributed evenly across Australia
  • People without much money tend to live in the same areas, and people with lots of money tend to live in the same areas.
  • People who can afford to pay for appointments and prescriptions tend to live in the same areas
  • People who struggle for these tend to live in the same areas, and so go to the same General Practice.

In the follow-up volume “Inequality for Dummies,” I might add:

  • Poor people have worse health than rich people
  • A strong general practice and primary care sector can help with this health problem, and keep people out of expensive hospitals.

For people to whom this is new information, I’d then invite them to consider that many practices who bulk bill people need to bulk bill almost everyone – in a particular area, if one person can’t afford to see a doctor, most people can’t afford to see a doctor.

I’d then invite them to understand the nature of general practice in these areas. Let me introduce you to the next generation of Julian Tudor Harts, led by Graham Watt, Professor of General Practice at the University of Glasgow.

They call themselves GPs at the Deep End, and they serve the 100 most deprived practices in Scotland. Through their meetings, we heard that “there are no easy cases.” They describe the multiple conditions their patients have, and the complex social and mental health problems.

“Social and medical problems are often not differentiated by patients who look to GP practices for help,” they say, analysing the gatekeeper role of GPs in accessing a range of important services. They identify one of the most crucial factors: “The most important barrier to addressing the inverse care law remains the shortage of time within consultations.”

They recognise the importance of a sequence of face-to-face contacts in tackling these problems. They talk about multi-morbidity, barriers to patients engaging in their own care, and high practitioner stress. In short, it is difficult work.

But hang on! These GPs in Scotland are describing my work in an Aboriginal Medical Service in south-west Sydney. In fact, it sounds very similar to the description of consultations described in several Aboriginal Medical Services – longer consultations, more problems managed in each one, more health professionals seen each visit.

I would even go so far as to hazard a guess that GPs working in any deprived community in Australia would recognise this pattern. This includes many rural communities, and would include all the Aboriginal Medical Services I know.

So let’s look at how Medicare supports these practices to provide longer consultations to deal with these complex problems. And how this mechanism attracts doctor to work in these underserved areas.

Um. Well. There are GP Management plans for chronic disease and their reviews, which have limits on the number of times they can be charged.

And there are health assessments, which probably don’t work, and certainly don’t attract people who need them most. And then there are the routine Medicare attendance items, which encourage 6-minute medicine, where the financial incentive is to see a lot of people quickly.

So if you spend the time required on the complex problem, the practice earns less, which means fewer or lower paid practice staff.

Of course, privately billing general practices will earn significantly more than bulk billing ones, because they set their own fees. If you want to repay the debts you built up as a medical student, you’re not attracted into working in deprived areas, clearly. And privately billing GPs won’t be affected by the co-payment (though their patients will get $5 less back from Medicare).

If the co-payment comes in, practices will be able to choose to ask people for the co-payment of $7 (and will get a pay increase of $2 for each patient they see). However, most of their patients won’t be able to afford $7 in these areas (remember, we don’t all live in North Sydney) and will choose optional discretionary spending like food or electricity or rent that week.

So many practices will waive the co-payment, because they need to if they actually want to help people, resulting in $5 less from Medicare, $2 of the co-payment less from the patient and loss of the low-gap incentive for pensioners and children. And this happens with almost every patient, because we don’t all live in North Sydney.

So the result is less money for the practices that need longer consultations for all their patients.

Meanwhile, the AMA says the policy will encourage 4-minute medicine. And it does – mainly in areas that need longer consultations for more complex consultations. The other thing that will happen is fewer practice staff. But not in North Sydney, where we can privately bill.

Currently 20% of Medicare GP services are privately billed and 80% of services are bulk-billed. It’s important to point out, though, that this 80% figure is an average. “Never walk across a river with an average depth of 5cm” I was once told – you don’t know how deep it goes!

Interestingly, there are some data hidden away on the Department of Health website that show the bulk billing rates for each electorate so we can find out the range around that 80%.

Rosie Williams, over at InfoAus has put these figures into her online database, so you can all go searching for your own electorates, or those of your favourite MPs.

Step forward GPs in the electorate of Chifley, who manage a bulk billing rate of 98.9%. Perhaps Rooty Hill will be significant in another general election campaign fought on the co-payment!

The lowest bulk billing rate is 45.8% – in the seat of Canberra. I’ll leave others to theorise about the impact of this on MPs’ experience of co-payments for health care.

Clearly, there are some electorates that will be much more affected by the co-payment than others. You can see how they are distributed across parties hereWe can also add in the measures of deprivation (the SEIFA scores) to the bulk billing rates and – lo and behold – there is a correlation.

I’ve deliberately presented this by electorate, as this brings the issue directly into the eyesight of our elected members in a way that other figures might not.*

The implications for your electorate are this: If you are in a well off area, with low bulk billing rates, you are unlikely to be affected by the co-payment very much. If your bulk billing rates are high in your electorate, then the co-payment will hit your electorate hard.

If you are in an area of economic disadvantage, the co-payments may well be waived and you will find it harder to sustain successful general practices in your area.

The removal of health resources from deprived areas happens just at the time that a BMJ paper from the UK shows that providing extra funding to areas of deprivation reduces mortality. Oh dear.

This analysis doesn’t even mention the potential of Medicare Locals to support practices in deprived areas and provide and link to those social and community services that were so important to the GPs at the Deep End. New organisations will need to find their feet very quickly across many localities to support this.

This recent paper shows how, with really good co-ordination, a universal network of primary care services (through something like a Medicare Local) can reduce cardiovascular mortality in a deprived area. It took about 10 years. We might be starting again, from scratch. Oh dear, again.

The conclusion to my Ladybird book might go something like this:

Current policy removes resources from the primary care sector in deprived areas, just when the evidence shows doing the opposite can improve health.

It might be time for everyone to move to North Sydney.

*Meanwhile, over at the National Health Performance Authority website there are similar figures about Bulk Billing rates by Medicare Local, as well as figures about the number of people who struggle to pay for care. There are also stats here showing the deprivation index for each Medicare Local, and one day I’ll put these together.

 ©2014 – Dr Tim Senior

• Dr Tim Senior is a GP who works in an Aboriginal Medical Service in a south-western Sydney

• Wonky Health is a crowdfunded project. Croakey acknowledges and thanks all those who have contributed (please see more details here – including the details of those who donated).

Comments 5

  1. Terry Barnes says:

    Obviously I disagree with almost everything you say, but congratulations on starting Wonky Health.

  2. Charles Alpren says:

    Thanks Tim, and congratulations on a fantastic first Wonky Health column. I disagree with one small point though: that privately billing GP practices will not be affected. I actually wonder if the copayment will affect privately billing practices more than those that currently bulk-bill.

    I think that the copay will affect patients who currently cannot afford private fees, but because the rebate will go down, if a private practice keeps their fees the same the out-of-pocket expense for each consultation will go up by $5 per patient. This will drive many patients away (to the bulk-billing practices who have lost patients who can’t afford the $7). If the practice reduces their fees, their revenue will also go down. Either way the practice makes less.

    Furthermore, in privately billing practices loads of items are bulk-billed. Quick consultations and follow-ups, vaccinations (every flu vaccine given!), consultations with many item numbers charged, nurse-led consultations with a quick look-in from the doctor – all these get bulk billed. This will be unsustainable under the proposed changes.

    Our focus is quite rightly on the effect of the proposals on our patients, and it is clearly the patients with the least ability to pay who will suffer the most, but I think that the effect on on the more well-off practices will be substantial.

  3. claire francis says:

    Hi Dr Tim,

    Thanks for a great column: it didn’t make me feel better about the budget, but it is heartening to read a great column that outlines the issues so clearly. As continually outraged by the governments health policy as I continue to be, I’m reassured and inspired – both as a medical student, and as a person from a disadvantaged background – by doctors such as yourself, who are proudly and vocally committed to social justice and health equity. Thank you 🙂

  4. Jennifer Doggett says:

    I think I’ve got my money’s worth already 😉

  5. Fiona Moore says:

    On the electorate of Canberra – you paid full fees for the doctor because you really didn’t have much choice. There was one bulk billing clinic in Woden, which I went to when I HAD to get in that day and was okay to wait three hours to see someone (drop in only). Otherwise it was beg the receptionist at my usual GP for a same day appointment, pay the $70 and suck it up.
    There’s a reason that the ACT gov now lets you get a medical cert for 1-2 days off work from a pharmacist/

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