tag:theconversation.com,2011:/ca/topics/medicare-co-payment-15215/articlesMedicare co-payment – The Conversation2017-02-09T19:11:54Ztag:theconversation.com,2011:article/722782017-02-09T19:11:54Z2017-02-09T19:11:54ZFactCheck: are bulk-billing rates falling, or at record levels?<blockquote>
<p>Falling bulk-billing rates … – <strong>Labor leader Bill Shorten, <a href="http://www.billshorten.com.au/address_to_the_national_press_club_canberra_tuesday_31_january_2017">address</a> to the National Press Club, Canberra, January 31, 2017.</strong></p>
<p>Bulk-billing is at record levels … – <strong>Prime Minister Malcolm Turnbull, <a href="http://malcolmturnbull.com.au/media/address-at-the-national-press-club-and-qa-canberra">address</a> to the National Press Club, Canberra, February 1, 2017.</strong> </p>
</blockquote>
<p>In speeches delivered 24 hours apart, Labor leader Bill Shorten and Prime Minister Malcolm Turnbull made conflicting claims about the state of bulk-billing rates in Australia. </p>
<p>A bulk-billed consultation occurs when the fee charged by the doctor or medical provider is equal to the benefit paid by Medicare - leaving zero out-of-pocket cost to the patient. The percentage of Medicare-funded consultations that are bulk-billed is referred to as the <em>bulk-billing rates</em>. These rates are widely seen as a proxy indicator of the accessibility of Medicare-funded health care. </p>
<p>Shorten said that bulk-billing rates are falling. The next day, Turnbull stood at the same lectern and said bulk-billing rates are at record levels.</p>
<p>Who was right? </p>
<h2>Checking the sources</h2>
<p>When asked for sources to support his statement, a spokesperson for Bill Shorten said:</p>
<blockquote>
<p>The government’s figures <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/1A9DB6D72BD5879ACA257BF0001AFE28/$File/MBS%20Statistics%2020163%20SepQtr%2020161006.pdf">show</a> that from June to September 2016 the bulk-billing rate for non-referred attendances fell from 84.6% to 84.1%.</p>
</blockquote>
<p>The spokesperson added:</p>
<blockquote>
<p>Through an information request through the Parliamentary Budget Office, we know that for item 23 – a standard GP consultation – we also know the bulk-billing rate is falling: from 82.81% in April 2016 to 82.38% in May 2016 to 81.97% in June 2016. This trend continues as is reflected in the rate falling for all non-referred attendances from June to September.</p>
</blockquote>
<p>The Conversation has independently verified those figures, which are not publicly available.</p>
<p>A spokesperson for Malcolm Turnbull told The Conversation that:</p>
<blockquote>
<p>The headline <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Medicare+Statistics-1">bulk-billing rate</a> of 85.1% for GP services is the official bulk-billing figure for 2015-16. This is the highest bulk-billing rate for GP services since 1984-85 (when Medicare started) – ie: record levels.</p>
<p>The headline bulk-billing rate of 78.2% for all Medicare services is the official bulk-billing figure for 2015-16. This is the highest bulk-billing rate for Total Medicare services since 1984-85 (when Medicare started) ie: again, record levels … the bulk-billing rate has been reported on a consistent basis under all governments since 1984-85.</p>
</blockquote>
<p>You can read the full responses from Shorten and Turnbull <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">here</a>.</p>
<h2>Same source, different statistics</h2>
<p>Both Shorten and Turnbull’s statements are supported by the Department of Health’s Medicare Statistics – but Shorten has quoted <a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">quarterly statistics</a> while Turnbull has quoted <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Annual-Medicare-Statistics">annual figures</a>. </p>
<p>They are also both looking at slightly different categories within the Medicare bulk-billing data collected by the Department of Health. </p>
<p>Overall, however, neither politicians’ sound bite provide a complete picture on what’s happening with bulk-billing in Australia. </p>
<h2>Yearly data on bulk-billing rates show record highs</h2>
<p>The chart below shows the annual bulk-billing statistics for the financial years from 1984-85 to 2015-16. It shows the bulk-billing rate for all Medicare claims combined and selected services – not just GP visits. </p>
<iframe src="https://datawrapper.dwcdn.net/UbmwH/2/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="520"></iframe>
<p>For overall Medicare claims (the red line), the bulk-billing rate in 2015-16 reached 78.2%. As correctly stated by Turnbull, this is an all-time high within the annual statistics. </p>
<p>Annual bulk-billing levels were also at record highs last financial year for non-referred GP attendances (which, by and large, means going to see your GP), pathology services and diagnostic imaging. </p>
<p>However, the bulk-billing rate for specialist services (the black line) in 2015-16 was at 30.2%, still below the record level set in 1995-96 of 32.5%. </p>
<p>So, technically, Turnbull is right to say bulk-billing rates are at record highs – as long as you use annual statistics and ignore the most recent data for the July to September 2016 quarter. </p>
<h2>But quarterly data show bulk-billing rates fell in the third quarter of 2016</h2>
<p><a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Quarterly statistics</a> on bulk-billing rates are shown in the chart below. </p>
<iframe src="https://datawrapper.dwcdn.net/3I9Lr/2/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="520"></iframe>
<p>As you can see, drilling down to the quarterly data reveals that bulk-billing rates fell in the third quarter of 2016.</p>
<p>For total Medicare claims (the red line), bulk-billing rates fell by 1.1% in between the June and September 2016 quarters. But it is worth noting that it fell from the highest bulk-billing rates on record (78.7%). </p>
<p>The fall between June and September 2016 is the 11th biggest quarterly decrease (in percentage terms) since Medicare’s inception. But while it was a relatively large drop in bulk-billing, it is still within the range of quarterly variability that we’ve seen historically. </p>
<p>For non-referred GP attendances (the blue line), the September quarter data shows a 0.6% fall in bulk-billing rates compared to June 2016. For pathology services (the orange line), the bulk-billing rate fell by 1.7% in the September quarter which is in addition to a 0.23% fall in the June quarter. </p>
<p>So, technically, Shorten is correct to say that the latest data show a fall in the bulk-billing rate – but he has zeroed in on a very recent fall that is within the range of normal variability. This recent drop doesn’t tell us much about the overall trend. </p>
<p>There is considerable variation in the quarterly bulk-billing rate. This makes it difficult, at this stage, to say anything certain about whether bulk-billing rates will continue to fall as part of a downward trend, or whether the latest quarterly decline is just an anomaly.</p>
<h2>Longer-term trends trump quarterly data</h2>
<p>The Department of Health is set to release the December quarter data later this month. This much anticipated release will give further insights into whether a downward trend in bulk-billing rates is emerging or whether the last quarter was a blip. </p>
<p>The figures for the last quarter of 2016 are likely to attract considerable attention as policymakers will be eager to learn whether the Medicare indexation freeze is having an effect on bulk-billing rates. </p>
<p>The freeze has been in place since 2014 and is set to continue until 2020. In effect, that means that the Medicare contribution to each health care service has not changed for the last three years. </p>
<p>Others have <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">argued</a> that this will put pressure on doctor’s ability to bulk-bill. </p>
<p>Note that there was substantial negative bulk-billing growth in the period after the last Medicare indexation freeze and this did impact the annual level of bulk-billing.</p>
<h2>What bulk-billing rates don’t tell us</h2>
<p>One of the fundamental aims of Medicare is to improve access to care. Bulk-billing rates serve as an important proxy on how Medicare is performing with respect to allowing people of all income groups to access health care.</p>
<p>However, there are significant limitations. Bulk-billing rates cannot tell you, for example, whether bulk-billing services are fairly distributed across income groups or people in high health care need.</p>
<p>And headline bulk-billing rates do not reveal out-of-pocket costs for those patients who are not bulk-billed. </p>
<p>For example, for people who were not bulk-billed (almost 70% of specialist consultations) the average patient co-payment for a specialist consultation was $72 (<a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">as shown in Table 1.5a in the quarterly Department of Health statistics</a>). </p>
<p>So any discussion of health care access needs to go beyond one simple headline measure.</p>
<h2>Verdict</h2>
<p>Technically, Shorten and Turnbull were both right – but their quotes don’t tell the whole story.</p>
<p>Shorten’s statement that we are seeing “falling bulk-billing rates” is correct if you look at the most recent quarterly statistics for total Medicare bulk-billing claims. But that fall was within the range of variation that we observe every quarter. Furthermore, one quarter of data is not enough to be making such generalised statements on total Medicare bulk-billing rates. </p>
<p>As Shorten’s <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">full response</a> notes, there has also been a fall for three consecutive quarters in bulk-billing for GP visits lasting less than 20 minutes. However, this data is not publicly available so we can’t say for sure that there’s a trend in this particular item.</p>
<p>Turnbull’s statement that “bulk-billing is at record levels” is correct if you look at the yearly statistics, though it doesn’t factor in the decrease in bulk-billing in the third quarter of last year.</p>
<p>It is too early to say whether the recent quarterly fall in total Medicare bulk-billing rates was an anomaly or perhaps signals a broader trend. Data due for release within the next week will tell us more about the true state of bulk-billing in Australia. <strong>– Thomas Longden and Kees Van Gool</strong></p>
<hr>
<h1>Review</h1>
<p>This FactCheck is accurate and fair. It presents the statistical information most relevant to the problem and clearly contrasts the data that each politician drew from in making their statements. A couple of further points:</p>
<p>First, the <a href="http://theconversation.com/full-responses-from-malcolm-turnbull-and-bill-shorten-72407">full response</a> provided by Bill Shorten’s office mentions that bulk-billing rates specifically for item 23 (a standard level B GP consultation lasting less than 20 minutes) decreased in the three consecutive quarters to June 2016. Compared to the bulk-billing rates for the broader Medicare Benefit Schedule categories, this may suggest a slightly more convincing pattern of decline – but only for this particular item.</p>
<p>Second, bulk-billing rates vary considerably across states. Some states experienced a larger drop in bulk-billing rates in the September 2016 quarter than others. For example, Tasmania’s bulk-billing rate for non-referred GP services declined by more than 2% whilst the Northern Territory’s rate showed no decline. Likewise, the annual statistics show that Tasmania’s bulk-billing rate for non-referred GP services fell between 2014-15 and 2015-16 even as the country’s bulk-billing rate rose to record levels. </p>
<p>These variations in state trends can be obscured when we focus solely on data for Australia as a whole. <strong>– Rosemary Elkins and Stefanie Schurer</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” worth checking? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/72278/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Thomas Longden receives funding from the Department of Health.
</span></em></p><p class="fine-print"><em><span>Kees Van Gool receives funding from the Australian Research Council and the Department of Health.</span></em></p><p class="fine-print"><em><span>Stefanie Schurer receives funding from the ARC and the NHMRC.</span></em></p><p class="fine-print"><em><span>Rosemary Elkins does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In twin speeches to the National Press Club, Labor leader Bill Shorten said bulk-billing rates are falling, while Prime Minister Malcolm Turnbull said bulk-billing is at record levels. Who was right?Thomas Longden, Senior Research Fellow, University of Technology SydneyKees Van Gool, Health economist, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/383742015-03-11T03:20:33Z2015-03-11T03:20:33ZFactCheck: has Medicare spending more than doubled in the last decade?<blockquote>
<p>This is necessary with government expenditure on Medicare more than doubling from about A$8 billion to A$20 billion over the past decade, despite the proportion of Medicare spending covered by the Medicare levy falling backwards from about 67% to 54% over that same period. – Health Minister Sussan Ley, <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/223AE2CC4BB4C324CA257DFD0014DDD3/$File/SL013.pdf">press conference</a>, March 3, 2015.</p>
</blockquote>
<p>Concern over a growing Medicare bill has underpinned policy proposals such as the GP co-payment, so it is important to have an accurate picture of the true levels of government health spending.</p>
<p>What does the data say?</p>
<h2>Has Medicare spending more than doubled in the last decade?</h2>
<p>A spokesman for the health minister told The Conversation that budget papers showed that Medicare spending overall is expected to be “about $20.3 billion in 2014-15”, a figure that checks out with the expenditure estimates in Statement 6, Table 8.1 in <a href="http://www.budget.gov.au/2014-15/content/bp1/download/BP1_combined.pdf">Budget Paper 1</a>.</p>
<p>Until 2008-09, budget papers did not reveal expenditure on the line item “Medicare”. To keep the estimates for the Private Health Insurance Rebate confidential, Medicare and the Private Health Insurance Rebate (and some other expenses) were bundled in one item, “Medical Services and Benefits”.</p>
<p>According to the minister’s spokesman, Medicare expenditure in 2003-4 was A$8,599,952,315 (a surprising level of precision!). He said this figure was available on the Department of Health and Human Services website, though did not provide a link. </p>
<p>I had been surprised by the Minister’s initial statement of “about A$8 billion”, but that low figure results in part from the minister having used a rounded down figure: it would have been more conventional to have rounded that figure up to “about A$9 billion”.</p>
<p>But assuming that expenditure on Medicare comprised the same percentage (71%) of “Medical Services and Benefits” expenditure in 2003-04 as it did in the years 2007-08 to 2014-15, when it was revealed, my estimate for 2003-04 was that it would have been about A$9 billion. In other words, the minister’s statement of expenditure does not seem to be out of line. </p>
<p>Ley’s figures for Medicare spending, therefore, are broadly correct when she says that Medicare spending more than doubled from about A$8 billion to about A$20 billion in the last decade, although it would have been more conventional to have rounded the figure up to “about A$9 billion”. It would also have been more conventional to have used a deflator, such as the GDP deflator, to bring the figures to constant prices. Rounding down the base figure, and failing to adjust for inflation, tends to overstate the impression strongly rising in expenditure. </p>
<p>Using the minister’s 2003-04 Medicare expenditure statement (A$8.6 billion), the 2013-14 estimate ($19.3 billion) from <a href="http://www.budget.gov.au/2014-15/content/bp1/download/BP1_combined.pdf">Statement 6, Table 8.1 in Budget Paper 1</a>, and deflators from Table 4 of <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5204.02013-14?OpenDocument">2013-14 National Accounts</a>, an accurate presentation would be to say: in 2014 prices, Medicare outlays have risen from about A$11.9 billion to A$19.3 billion over the decade to 2013-14. (We do not yet have deflators for 2014-15). Even that figure does not account for the rise in population over that period.</p>
<h2>Has the proportion of Medicare covered by the levy fallen from 67% to 54%?</h2>
<p>The minister’s spokesman said the Australian Bureau of Statistics’ <a href="https://data.gov.au/dataset/taxation-statistics-2011-12/resource/f163573b-49a8-483a-bb21-f858a94414ee">Taxation Statistics</a> show that the <a href="https://www.ato.gov.au/individuals/medicare-levy/">Medicare levy</a> plus the <a href="https://www.ato.gov.au/individuals/Medicare-levy/Medicare-levy-surcharge/">Medicare levy surcharge</a> in 2003-4 came to just over A$5 billion. So as a percentage of the total Medicare expenditure that year (about A$8.6 billion), the Medicare levy and surcharge is about 67%. </p>
<p>You can see <a href="http://www.budget.gov.au/2014-15/content/bp1/html/bp1_bst5-03.htm">here</a> that the 2013-14 budget estimated that Medicare levy would raise about $10.4 billion that year. As a percentage of total Medicare spending that year of <a href="http://www.budget.gov.au/2014-15/content/bp1/download/BP1_combined.pdf">$19 billion</a>, it’s close to 54%.</p>
<p>So the health minister is broadly correct when she says that the proportion of Medicare covered by the levy has fallen backwards from 67% to 54% in the last decade.</p>
<h2>What Medicare and its levy were designed for</h2>
<p>Linking the Medicare levy to the cost of Medicare is questionable in policy terms. The Medicare levy was never meant to cover the entire cost of Medicare. </p>
<p>When the Hawke Government re-introduced universal health insurance in 1984, the levy was based on the incremental cost of providing universal publicly-funded health insurance under Medicare. The levy was a once-off political expedient 30 years ago. It is past its use-by date and ideally should be built into tax tables.</p>
<p>Nevertheless, the levy’s share of total Commonwealth health expenditure has held up fairly well at about 17% of the Commonwealth’s health care expenditure.</p>
<p>It should be noted that the word “Medicare” has a specific definition in budget papers to refer to benefits funded under the <a href="http://www.health.gov.au/internet/mbsonline/publishing.nsf/Content/432EE55FAB58E5C4CA257D6B001AFB8A/$File/201411-MBS.pdf">Medicare Benefits Schedule</a>. That schedule does not cover government expenditure on pharmaceuticals, dental care, or state government expenditure in public hospitals (although it does cover medical expenditures in private hospitals). But politicians use the term “Medicare” loosely, sometimes referring to the whole government health funding system, and sometimes focusing only on GP services as in the recent arguments over co-payments.</p>
<p>In a recent <a href="http://www.abc.net.au/radionational/programs/breakfast/sussan-ley/6278872">interview on RN Breakfast</a>, when the health minister made the same claim about the falling contribution of the Medicare levy, Ley suggested strongly that she sees free Medicare services (that is, bulk billed) services as a distributive welfare measure for those of limited means, rather a universal tax-funded insurance scheme.</p>
<p>It would not be surprising if the next move by the government will be an attempt to allow private health insurers to cover the “gap” between the dwindling schedule fee and what doctors charge, thus moving away even further from a universal tax-funded health insurance system.</p>
<p>If the government wishes to redefine Medicare as a distributive welfare scheme, rather than as a universal tax-funded insurance scheme, then it should engage with the public in an open debate, rather than changing it by stealth. And it should acknowledge that private health insurance is an <a href="http://cpd.org.au/2012/01/private-health-insurance/">expensive way to fund health care</a>.</p>
<p>If the Minister is concerned about a funding shortfall, the obvious question she should be putting to the electorate is “why not increase the levy?”.</p>
<h2>Verdict</h2>
<p>The health minister’s numbers are broadly correct, but they are framed in a way that overstates the impression of rising health care expenditure. And linking the Medicare Levy to the cost of Medicare is misleading, because the levy was never meant to cover the full cost of Medicare.</p>
<hr>
<h2>Review</h2>
<p>I agree with this analysis. It’s also important to note that the Medicare levy is not <a href="http://en.wikipedia.org/wiki/Hypothecated_tax">hypothecated</a> to or earmarked for health: it is just another income tax. The most recent increase in the levy was not even linked to health care – it was designed to fund the <a href="https://www.google.com.au/search?q=ndis&oq=ndis&aqs=chrome..69i57j69i60l5.624j0j7&sourceid=chrome&es_sm=91&ie=UTF-8">National Disability Insurance Scheme</a> trials. </p>
<p>The failure to use deflated figures and to ignore population growth in the Minister’s statements helps to obscure the real issues. It makes the cost escalation more dramatic, but equally exposes the minister to the type of analysis undertaken here that shows the figures are correct but misleading.</p>
<p>Health costs are increasing on a real, per capita adjusted basis. We should use adjusted figures in public debate so we can have an informed discussion about whether this is a problem (do the benefits outweigh the costs?) and, if so, what we should do about it. – <strong>Stephen Duckett</strong></p>
<hr>
<p><div class="callout"> Have you ever seen a “fact” that doesn’t look quite right? The Conversation’s FactCheck asks academic experts to test claims and see how true they are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/38374/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Health Minister Sussan Ley is broadly correct on the numbers – but they are framed in a way that overstates the impression of rising health care expenditure.Ian McAuley, Lecturer, Public Sector Finance , University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/383112015-03-03T12:01:55Z2015-03-03T12:01:55ZMedicare co-payment: a case study in policy implosion<figure><img src="https://images.theconversation.com/files/73599/original/image-20150303-31852-1u0iz33.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The trouble is that when Prime Minister Tony Abbott periodically seeks absolution he doesn't necessarily improve.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>Tony Abbott was in full confessional mode after Tuesday’s formal interment of the Medicare co-payment.</p>
<p>As a former health minister, “I should have known better than to attempt health reform without the strong co-operation and support of the medical profession”, Abbott told parliament.</p>
<p>“I accept chastisement,” Abbott said. “But it is much better to learn than to be obstinate.”</p>
<p>Indeed. That should have applied to a lot of what the prime minister has done since the election. But the trouble is that when he periodically seeks absolution he doesn’t necessarily improve. Does he really grasp the need for good process?</p>
<p>The Medicare co-payment has been a spectacular case study in bad policymaking, marked for a long time by breathtaking arrogance and hubris on the government’s part.</p>
<p>And while the co-payment might be, as Abbott said, using his own recycled phrase, “dead, buried and cremated”, the government’s policy on Medicare is still a work in progress, with negotiations ongoing with the Australian Medical Association and the government preparing for a fresh search for savings through a forensic review of the Medicare schedule.</p>
<p>The co-payment, announced in the budget, was driven by a combination of ideology and budget needs. The government was convinced that people capriciously overused doctors’ services.</p>
<p>Abbott and his office, including chief of staff Peta Credlin, had a major hand in the design, including the level, of the co-payment. Credlin did not think A$7 was unreasonable. The Medicare package, which also included a freeze on the indexation of rebates, was to save $3.5 billion over the budget years.</p>
<p>A modest, properly targeted co-payment would have been a reasonable idea. A $7 charge (potentially adding up to a substantial amount for a patient needing multiple tests) without exemptions for the needy, ignored political realities such as a hostile Senate, an inevitable public backlash, and the power of the medical profession to mobilise opposition.</p>
<p>But the government dug in for months, until its December rethink, which reduced the co-payment to $5, restructured the rebate for short GP consultations, and extended the rebate freeze until 2018.</p>
<p>Only weeks later, with all hell breaking loose ahead of the Queensland election, Abbott summoned his new health minister Sussan Ley from her holiday. The change for short visits was aborted, and Ley embarked on intensive consultations with the doctors.</p>
<p>That’s the brief history. Well before its December-January changes, the government asked the Australian Medical Association (AMA) to prepare an alternative plan, then snorted in derision at what it produced. Later on, the Prime Minister’s Office had a PR disaster when it tried to brief out proposed alterations.</p>
<p>Abbott absolutely should have known better all the way through. His first big dealings as health minister with the AMA were with its then-president Bill Glasson (who ran in 2013 for the Liberals against Kevin Rudd in Griffith, and contested the subsequent by-election). Glasson extracted a good deal on medical indemnity.</p>
<p>The government was a touch unlucky that at the start of the the co-payment row, the AMA – often seen as one of the most powerful trade unions in the country – got a new president.</p>
<p>Brian Owler, whose day job involves using the scalpel on patients’ heads, takes up blunter instruments when dealing with politicians. In the medical trade, they claim decisiveness is a surgeon’s trait. He is a capable and indefatigable media performer, had something to prove to his members and was more than a match for a government on the ropes.</p>
<p>As Owler said on Tuesday, the co-payment “has been dead for some time” – it was only a matter of pronouncing its passing.</p>
<p>Abbott did not attend the burial. He was more comfortable flanked by eight flags and the chief of the Australian Defence Force, Air Chief Marshal Mark Binskin and Defence Minister Kevin Andrews, announcing more Australian troops for Iraq. Ley’s news conference followed immediately. She was alone.</p>
<p>Dropping the co-payment plan has lost another $900 million from the budget.</p>
<p>All that’s left now the government has abandoned the $5 cut in the Medicare rebate and the $5 co-payment is the freeze on the indexation of the rebate, which is worth $1.3 billion if it runs through to 2018. But its length is up for grabs in further negotiations about ways to make savings that Ley will have.</p>
<p>Owler – who meets Abbott on Thursday – was already warning on Tuesday that a freeze until 2018 would mean increased costs for patients.</p>
<p>Ley has an uphill battle in keeping up with the doctors. Not only is she new to the area, but so is her departmental head Martin Bowles, who has recently arrived from Immigration.</p>
<p>Ley struggled on Tuesday with trying to hang on to the idea that a price signal was needed while she was abandoning the specific signal represented by the co-payment.</p>
<p>“It’s definitely good policy to put the right price and value signals in health to make sure that, number one, people value the service they get from doctors … and also that they make that modest contribution according to their capacity to pay, and those who can pay a bit more are asked to pay a bit more. It’s really that simple,” Ley told her news conference.</p>
<p>It’s not really that simple however, as was obvious when on Sky Abbott’s dead-and-buried line was stacked up against her declaration that the policy intent remained a good one. “So which is it?” Ley was asked.</p>
<p>“Well, it is both because what we want to make sure is that to keep Medicare sustainable, we find ways for those who can contribute more to the cost of seeing a doctor to pay a modest contribution. And at the moment, bulk billing rates are too high, too many people who can afford to make that modest contribution are in fact paying nothing.”</p>
<p>How a price signal is sent to the patient while the co-payment remains in ashes is a mystery, and how much the government can get in its new hunt for savings is a question mark.</p>
<p>So at the end of it all, the government is left with no price signal, and until it finds further efficiencies, no Medicare savings policy at all except the rebate freeze that the AMA is determined to chip away at. Not a bad effort at policy implosion.</p><img src="https://counter.theconversation.com/content/38311/count.gif" alt="The Conversation" width="1" height="1" />
Tony Abbott was in full confessional mode after Tuesday’s formal interment of the Medicare co-payment.Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.