“The bulk-billing rates are at historic highs now. Visits to GPs are 82% bulk-billed. When Tony Abbott was minister it was 67%.” Health minister Tanya Plibersek, National Press Club Health Debate, 27 August.
A central tenet of the Australian healthcare system is that doctors can set their own fees. The basic premise of Medicare is that the government pays a fixed sum for each type of service (the Medicare rebate), with the patient paying the remainder. When services are bulk-billed, the doctor charges the government directly, and only receives the Medicare rebate, with patients paying nothing.
The claim the health minister is making relates to the proportion of general practitioner (GP) visits that are bulk-billed. Plibersek made a similar claim in a media release on 19 March this year, which said “the new figures were in stark contrast to when Tony Abbott was health minister when bulk-billing rates hit rock bottom at just 67%”.
What does the data show?
The best source of evidence regarding bulk-billing is the Department of Health and Ageing figures. These show bulk-billing rates by quarter going back to 1989. The graph below shows the aggregate figures for GP services in Australia. State-specific figures for bulk-billing suggest that where you live matters – there is considerable difference depending on where the doctor is based. New South Wales has the highest rates of bulk-billing, consistently around 5 percentage points higher than the Australian average. The Northern Territory and the Australian Capital Territory have low bulk-billing rates.
The trend in GP bulk-billing shows a steady increase until the mid-1990s, then a steep decline from 1999 until 2003. Rates have been increasing steadily since, with the greatest increase between 2003-2005.
Abbott became the Minister for Health in October 2003, replacing Senator Kay Patterson. This point is denoted in the graph as the first vertical blue line. The fourth quarter of 2003 figure for the proportion of GP services that were bulk-billed was 65.7%; presumably the 67% figure relates to the 66.7% figure reported for the third quarter of 2003, which was the best estimate of the prevailing rate of bulk-billing at the point at which Abbott became health minister.
Abbott’s tenure as health minister is shown by the four-year period between the two blue lines in the graph. During this time, GP bulk billing rates climbed from around 66% to around 77%.
Certainly bulk-billing rates have continued to increase since then, and it is correct to say that they are at an historic high. But it is also correct that the trend towards higher bulk-billing rates began under the previous government, particularly when Abbott was health minister.
Thus, if the claim is that at some point during Abbott’s tenure as health minister, the proportion of GP services that were bulk-billed was 67%, as is claimed in the media release, that is reasonable. However, this figure does not represent a typical bulk-billing rate during the four years of Abbott’s ministry, so is not a fair or reasonable reflection of the data.
What’s behind the rise in bulk-billing?
A number of factors, both on the supply and demand side of GP services, might explain the trend in bulk-billing rates before 2003 and since then. In 2000, the Australian Medical Association claimed in a submission to a Senate inquiry that the rebate for general practice had not kept pace with the costs of providing the services, forcing more doctors to charge, and hence not to bulk-bill. This is a plausible explanation for at least some of the fall in bulk-billing before 2003.
A range of government policy changes during the period from 2003-2007 contributed to higher bulk-billing rates for GPs (notably MedicarePlus and Strengthening Medicare). Two of these are likely to have contributed to higher bulk-billing rates. The first was the introduction of an incentive payment (starting at $5-$7.50, depending on location and patient, and now at $7.05-$10.65) for bulk-billed consultations.
The second was the increase in the Medicare benefit to 100% of the Medicare Benefits Schedule (MBS) fee for GP services, as introduced in January 2005. The MBS fee reflects the cost of providing the service and, prior to this point, the government paid 85% of this fee for each GP service. This effectively increased the price per service that GPs could receive when they bulk-billed.
Another important factor contributing to rising bulk-billing rates has been the increasing numbers of GPs. The Australian Institute of Health and Welfare estimated that the number of primary care practitioners in 2009 was 25,707, a significant increase from 20,616 in 1999. Greater competition may mean that GPs need to compete on price to attract sufficient patients. We know this from the differences in bulk-billing rates by region, with areas with fewer GPs having much lower bulk-billing rates.
Bulk-billing rates are indeed at record highs, and at the level stated by Tanya Plibersek. However, the comparison with rates under Tony Abbott is misleading, and demonstrates the problem with comparison of only two time points. The bulk-billing rate was that low at the beginning of Abbott’s tenure as health minister, but the typical rate over the period was higher. Indeed, the four years in which he was minister were characterised by a sharp increase in bulk-billing.
This fact check is a thorough and fair account of the bulk-billing issue during Tony Abbott’s period as health minister.
The debate over bulk-billing can only be understood as part of broader philosophical differences over the role of Medicare. Is it a welfare safety net, which should be targeted at those who can’t pay their own way? Or is it a universal insurance scheme to which everyone contributes according to income, receiving in return a right to coverage?
As the above article demonstrates, bulk-billing rates declined during the first two terms of the Howard government. There were a number of causes, but these were all linked to government policy, a point underlined by Prime Minister John Howard’s repeated reference to Medicare as a “safety net” scheme.
This suggested that bulk-billing should be confined to the poor. A Fairer Medicare policy, announced by the Howard government in April 2003, offered GPs incentives to increase bulk-billing rates, but was restricted to low-income health card holders, with extra incentives in rural areas.
The decline of bulk-billing happened slowly, a policy of drift rather than public announcements. However, by 2003 it had become a source of political discontent, a problem for a government facing election the next year. It was a major element in Abbott’s appointment as Minister for Health in October 2003.
As this fact check notes, Abbott’s assumption of the portfolio was followed by moves to restore bulk-billing. The government’s language also changed. Abbott introduced the Medicare Safety Net as embodying “the principle of universality”, and pointed to the rise in bulk-billing rates as evidence that the Howard government was now “Medicare’s greatest friend”. - James Gillespie
(James Gillespie is the co-author of The Making of Medicare: the politics of universal health care in Australia, published by UNSW Press this month.)