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FactCheck: Have average out-of-pocket costs for GP visits risen almost 20% under the Coalition?

Was Labor’s Catherine King right about the rising cost of GP visits? AAP Image/Julian Smith

FactCheck: Have average out-of-pocket costs for GP visits risen almost 20% under the Coalition?

Was Labor’s Catherine King right about the rising cost of GP visits? AAP Image/Julian Smith

These statistics ignore the fact that under this government, average out-of-pocket costs for GP visits are up by almost 20%. – Shadow minister for health and Medicare Catherine King, quoted in The Australian, September 27, 2016.

In 2013, Labor introduced a fee freeze on Medicare rebates in an effort to rein in the cost of government health spending. After winning the 2013 election, the Coalition government extended that fee freeze twice. Labor has now said it would lift the Medicare rebate freeze if elected.

In that context, the Australian Medical Association is recommending GPs raise their fees for a standard appointment of less than 20 minutes to A$78 from November 2016.

A news report in The Australian quoted shadow minister for health and Medicare, Labor MP Catherine King, saying that average out-of-pocket costs for GP visits are up by almost 20% under the current government.

Is that right?

Checking the source

There are two components to pricing for medical services in Australia: bulk-billing rates, and rates for services that aren’t bulk-billed.

For services that aren’t bulk-billed, patients pay an “out-of-pocket cost”, which is the difference between the Medicare rebate and the fee the doctor charges.

When asked for sources to support the statement, a spokesperson for Catherine King said:

The figure was taken from the Medicare quarterly statistics to June 2016 (Tab 1.5b).

The average patient contribution for a patient billed GP service was $29.11 in September 2013, and is now $34.61 – a 18.9% increase. Accordingly, when we say “this Government” we are referring to the Abbott/Turnbull Liberal Government.

An additional source which might also be of use – the Royal Australian College of General Practitioners (RACGP) note that in the last 12 months, out of pocket costs have risen by 6%.

So King’s figure of “almost 20%” comes from a reliable source.

Have average out-of-pocket costs for GP visits gone up by almost 20% since 2013?

Yes. According to Medicare data, out-of-pocket costs for GP visits have increased by nearly 20% since the Coalition won government in 2013, as the chart shows.

It’s not entirely clear why the cost consistently dips slightly in the December quarter, creating the step-shaped formation in the chart above. It may be because of the way the Department of Health processes Medicare claims around this time of year. Nevertheless, the trend is clearly upward over time.

And it’s not just out-of-pocket costs for GP visits that have been rising. The Medicare quarterly statistics to June 2016 show out-of-pocket costs for all Medicare services have increased by 25.1% since September 2013. Over the same period, out-of-pocket costs for specialist appointments are up by 29.7%.

Costs were also climbing under Labor

However, that rise in out-of-pocket costs started well before the Coalition took power in 2013.

In fact, as the chart above also shows, under the previous Labor government out-of-pocket costs for GP services grew from around $18.31 in December 2007 (when Labor’s Kevin Rudd was sworn in as prime minister) to $29.11 when Rudd lost power in September 2013.

(As a side note, the rate of growth in out-of-pocket costs for specialist services has continued to rise faster than that for GPs.)

While out-of-pocket costs rose, bulk-billing rates have too

Interestingly, Medicare data also show bulk-billing rates continue to climb, even after the fee-freeze was introduced by Labor in 2013 and after the Coalition government decided to extend the freeze:

This may be because the best way to get many patients to return (and so maintain doctor earnings) is not to charge them at all – competition is at play and is keeping bulk-billing rates high.

Research has shown that GPs in affluent areas are less likely to offer bulk-billing, and more likely to charge higher prices.

Verdict

Catherine King was correct to say that “under this government, average out-of-pocket costs for GP visits are up by almost 20%.” However, that’s not the whole story.

Average out-of-pocket costs for visiting a GP have been rising for some time and rose under Labor too. – Anthony Scott


Review

I agree that the statement by Catherine King is factually accurate, out-of-pocket costs for GP visits have increased by almost 20% since September 2013, but there is more to the story than that.

Out-of-pocket costs for going to see a GP also rose during the Rudd/Gillard period. In fact, using the same data that Catherine King refers to and shown in the article above, I have calculated that out-of-pocket costs rose faster under the last Labor government (in terms of percentage change) than the current Coalition government.

To compare how fast GP out-of-pocket fees grew under Labor (between 2007 and 2013) and the Coalition (between 2013 and 2016), I looked at the percentage change over four quarters. This is a way of using the quarterly data to see how things are changing every 12 months.

Using this method, the average yearly percentage change in out-of-pocket costs under Labor was around 8%. The average yearly percentage change under the Coalition to date (between 2013 and 2016) was 5.4%. (These figures only cover patients who were not bulk billed.)

An important point noted in the article is that bulk-billed patients, who are not represented in this figure, do not pay any out-of-pocket costs. Bulk-billing rates have increased over the same period, to record levels around 80%.

So the proportion of patients paying any out-of-pocket costs has actually been falling. Competition fostered by an increase in supply of GPs in recent years is likely keeping bulk-billing rates high and slowing the growth in out-of-pocket costs. – Peter Sivey


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.