tag:theconversation.com,2011:/global/topics/gp-co-payment-10546/articlesGP 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/662782016-10-19T04:35:27Z2016-10-19T04:35:27ZFactCheck: Have average out-of-pocket costs for GP visits risen almost 20% under the Coalition?<blockquote>
<p>These statistics ignore the fact that under this government, average out-of-pocket costs for GP visits are up by almost 20%. <strong>– Shadow minister for health and Medicare Catherine King, <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">quoted in The Australian</a>, September 27, 2016.</strong></p>
</blockquote>
<p>In 2013, Labor introduced a <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">fee freeze on Medicare rebates</a> 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.</p>
<p>In that context, the Australian Medical Association is <a href="https://ama.com.au/ausmed/health-costs-rise-rebate-freeze-bites">recommending</a> GPs raise their fees for a standard appointment of less than 20 minutes to A$78 from November 2016.</p>
<p>A news <a href="http://www.theaustralian.com.au/national-affairs/health/bulkbilling-rates-stay-high-for-poor-increasing-for-wealthy/news-story/b29d5bc3c91b3bc2aa5a68e527e9cff4">report</a> 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.</p>
<p>Is that right?</p>
<h2>Checking the source</h2>
<p>There are two components to pricing for medical services in Australia: bulk-billing rates, and rates for services that aren’t bulk-billed. </p>
<p>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. </p>
<p>When asked for sources to support the statement, a spokesperson for Catherine King said:</p>
<blockquote>
<p>The figure was taken from the <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016 (Tab 1.5b)</a>.</p>
<p>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.</p>
<p>An additional source which might also be of use – the <a href="http://www.racgp.org.au/home">Royal Australian College of General Practitioners</a> (RACGP) <a href="http://www.racgp.org.au/yourracgp/news/media-releases/medicare-rebate-freeze-new-evidence-showing-patient-out-of-pocket-costs-increasing/">note</a> that in the last 12 months, out of pocket costs have risen by 6%.</p>
</blockquote>
<p>So King’s figure of “almost 20%” comes from a reliable source. </p>
<h2>Have average out-of-pocket costs for GP visits gone up by almost 20% since 2013?</h2>
<p>Yes. According to Medicare <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">data</a>, out-of-pocket costs for GP visits have increased by nearly 20% since the Coalition won government in 2013, as the chart shows.</p>
<iframe src="https://datawrapper.dwcdn.net/KSaJZ/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="409"></iframe>
<p>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.</p>
<p>And it’s not just out-of-pocket costs for GP visits that have been rising. The <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Medicare quarterly statistics to June 2016</a> 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%.</p>
<h2>Costs were also climbing under Labor</h2>
<p>However, that rise in out-of-pocket costs started well before the Coalition took power in 2013.</p>
<p>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.</p>
<p>(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.)</p>
<h2>While out-of-pocket costs rose, bulk-billing rates have too</h2>
<p>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:</p>
<iframe src="https://datawrapper.dwcdn.net/3MtmG/1/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="400"></iframe>
<p>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 – <a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">competition</a> is at play and is keeping bulk-billing rates high. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/joie.12098/full">Research</a> has shown that GPs in affluent areas are less likely to offer bulk-billing, and more likely to charge higher prices.</p>
<h2>Verdict</h2>
<p>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.</p>
<p>Average out-of-pocket costs for visiting a GP have been rising for some time and rose under Labor too. <strong>– Anthony Scott</strong></p>
<hr>
<h2>Review</h2>
<p>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.</p>
<p>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 <em>faster</em> under the last Labor government (in terms of percentage change) than the current Coalition government.</p>
<p>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. </p>
<p>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.)</p>
<p>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%. </p>
<p>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. <strong>– Peter Sivey</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/66278/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Scott's current research is funded from the National Health and Medical Research Council, Australian Research Council, Medibank Private Ltd, and the World Bank. He is a member of the Patient Identification Working Group of the Health Care Homes Implementation Advisory Group of the Australian Government Department of Health.
</span></em></p><p class="fine-print"><em><span>Peter Sivey receives funding from the Australian Research Council and has previously has previously been funded by Health Workforce Australia and the National Health and Medical Research Council.</span></em></p>Shadow minister for health and medicare Catherine King said under this government, average out-of-pocket costs for GP visits are up by almost 20%. Is that true?Anthony Scott, Professor, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/618592016-07-12T19:45:03Z2016-07-12T19:45:03ZMany Australians pay too much for health care – here’s what the government needs to do<figure><img src="https://images.theconversation.com/files/130163/original/image-20160712-13847-8qrbqx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australians contribute almost a fifth of all health care spending through fees.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-185740/stock-photo-man-pulling-money-out-of-wallet.html?src=ImAwC4nvLvaHqSUBIDf5zQ-1-106">Cre8tive Images/Shutterstock</a></span></figcaption></figure><p><em>A federal election is an opportunity to take stock of how Australia is doing, where it’s going, and what governments can do about it. <a href="https://theconversation.com/au/topics/advice-to-government">This series</a>, written by program directors at the Grattan Institute, explores the challenges that Australia faces and advocates policy changes for budgets, economic growth, cities and transport, energy, school education, higher education and health.</em></p>
<hr>
<p>Health policy was an important factor in the election outcome, but one of the most important issues in the health sector – out-of-pocket costs – was mostly ignored.</p>
<p>Labor made health policy a battleground at this election, claiming the poll was a “<a href="http://www.6minutes.com.au/News/Latest-news/Shorten-describes-poll-as-a-Medicare-referendum">referendum on Medicare</a>”. The ALP tried to whip up alarm by <a href="https://theconversation.com/is-medicare-under-threat-making-sense-of-the-privatisation-debate-61308">highlighting the risks of “privatisation”</a>, bringing out former prime minister <a href="https://theconversation.com/alp-uses-bob-hawke-to-boost-its-campaigning-on-health-60918">Bob Hawke as part of its campaign</a>.</p>
<p>The Coalition naturally tried to keep health off the front page, even <a href="https://theconversation.com/liberals-shielding-minister-sussan-ley-from-debate-about-health-61309">avoiding the normal National Press Club debate</a> between the health minister and her shadow. </p>
<p>In health policy, <a href="https://theconversation.com/the-policy-agenda-what-the-government-should-do-now-61518">as elsewhere</a>, the second Turnbull government’s wafer-thin majority constrains what is possible. Some changes can be implemented administratively or with immediate bipartisan support. Some will only occur if the government takes the time and political capital to build public support for the proposal. Other changes should simply be ditched.</p>
<p>In the first basket of “can dos” are reforms to help the health system adapt to emerging needs. Examples of these reforms include better <a href="https://theconversation.com/more-australians-can-stay-healthier-and-out-of-hospital-heres-how-55746">managing chronic diseases</a> such as diabetes and improving <a href="https://theconversation.com/a-good-death-australians-need-support-to-die-at-home-32203">end-of-life care</a>. </p>
<p>The Coalition has started down this path with its <a href="https://theconversation.com/time-for-better-chronic-disease-management-in-primary-care-57035">“health care homes”</a> initiative in the 2016 budget, but <a href="http://insidestory.org.au/reshaping-medicare">more needs to be done</a>. </p>
<p>Other “can dos” include reducing waste in the health system, such as <a href="https://theconversation.com/public-hospital-efficiency-gains-could-save-1-billion-a-year-23779">excessive hospital costs</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/130165/original/image-20160712-9285-1mkhg2a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Reducing unnecessary hospital admissions will cut costs and improve efficiency.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-392468545/stock-photo-comfortable-hospital-bed.html?src=RbdFUjYKfpUXVvPGRSQNyg-1-58">inomasa/Shutterstock</a></span>
</figcaption>
</figure>
<p>Other reforms to improve efficiency may be harder but are achievable with a campaign to build public support. Examples include reducing <a href="https://theconversation.com/australians-are-undergoing-unnecessary-surgery-heres-what-we-can-do-about-it-46089">unnecessary hospital admissions</a>, addressing <a href="https://theconversation.com/blood-money-pathology-cuts-can-reduce-spending-without-compromising-health-54834">high pathology payments</a> (for blood and tissue tests), <a href="http://grattan.edu.au/report/premium-policy-getting-better-value-from-the-pbs/">reducing pharmaceutical prices</a> in line with the additional benefit from the drug and <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/EDD3D98E14376FC8CA257F5E00186D45/$File/Consultation-paper-public-submissions_MBS-review-final.pdf">updating the Medicare schedule</a> to remove outdated and inappropriate items.</p>
<p>Finally, some measures need to be ditched. Removing <a href="https://theconversation.com/election-factcheck-has-the-coalition-cut-bulk-billing-for-pathology-and-scans-to-make-patients-pay-more-61360">bulk-billing incentives</a> for pathology and diagnostic imaging (such as X-rays and MRIs) is destined to join increased Pharmaceutical Benefits Scheme (PBS) co-payments as a zombie measure in the Senate. </p>
<p>If the government recognises political reality and takes these measures off the table, it would leave room to build support to address an emerging issue in health care: over-reliance on out-of-pocket costs.</p>
<h2>Out-of-pocket costs are high and rising</h2>
<p>In most countries, universal coverage, especially for medical care, meant the end of all financial barriers to access, including out-of-pocket payments. </p>
<p>In Australia, by contrast, consumers contribute almost a fifth of all health care spending through fees. <a href="http://www.oecd-ilibrary.org/social-issues-migration-health/out-of-pocket-expenditure-on-health_oopexphtl-table-en">Among wealthy countries</a>, we have the third-highest reliance on out-of-pocket payments. </p>
<p><strong>The proportion of health expenditure met by out-of-pocket payments in Australia is high compared to other advanced economies (2011 or nearest year)</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=645&fit=crop&dpr=1 600w, https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=645&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=645&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=810&fit=crop&dpr=1 754w, https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=810&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/130154/original/image-20160712-9307-p6uu3d.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=810&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Grattan Institute</span></span>
</figcaption>
</figure>
<p>Since 2007, the average out-of-pocket payment across all Medicare out-of-hospital services where a payment is required has risen by 61% in real terms; about 5.5% above inflation every year. </p>
<p>Fees have grown <a href="http://grattan.edu.au/wp-content/uploads/2014/07/Grattan_Institute_submission_-_inquiry_on_out-of-pocket_costs_-_FINAL.pdf0.">fastest in very remote areas</a>.</p>
<h2>Out-of-pocket costs stop people receiving care</h2>
<p>While Australia <a href="https://theconversation.com/australian-health-care-where-do-we-stand-internationally-30886">has a more efficient health system than most countries</a>, rising health costs are a big source of our budget woes.</p>
<p>For the last government, increasing co-payments seemed like an easy solution. The Abbott government introduced a <a href="https://theconversation.com/higher-health-co-payments-will-hit-the-most-vulnerable-29590">A$7 GP co-payment</a> and a <a href="https://theconversation.com/hidden-cost-of-increasing-drug-co-payment-poses-a-high-risk-37482">A$5 PBS co-payment</a>. Neither was popular. </p>
<p>The latter measure is still stuck in the Senate and the former was substituted by a <a href="http://www.abc.net.au/news/2015-03-05/duckett-we-still-have-a-gp-co-payment-by-stealth/6282094">GP co-payment by stealth</a>: a six-year <a href="https://theconversation.com/confused-about-the-medicare-rebate-freeze-heres-what-you-need-to-know-59661">freeze on Medicare Benefits Schedule fees</a> that will push GPs to eventually increase co-payments themselves. </p>
<p>However, raising co-payments is unlikely to save Australia money in the long run. Moving an expense from the Commonwealth budget to household ones just reallocates costs, it does not reduce them. </p>
<p>There is <a href="http://link.springer.com/article/10.1007/s10198-013-0526-8">strong evidence</a> from Australia and around the world that co-payments stop people seeking health care. This can save money when it prevents unnecessary visits, but it costs patients, the health system and the broader economy <a href="https://theconversation.com/higher-health-co-payments-will-hit-the-most-vulnerable-29590">much more</a> when simple health problems become complex ones. Worse still, out-of-pocket costs hit poorer people hardest.</p>
<p><strong>About one in every 20 people who needed to see a GP skipped the visit or delayed it because of cost (2014-15)</strong></p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=535&fit=crop&dpr=1 754w, https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=535&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/130311/original/image-20160713-17957-14ykkpr.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=535&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Grattan analysis of ABS survey, Patient Experiences in Australia: Summary of Findings, 2014–15</span></span>
</figcaption>
</figure>
<h2>Fixing the out-of-pocket problem</h2>
<p>Government regulates out-of-pocket costs for some services, but for others they are set at the whim of the provider. Safety nets mitigate the cumulative impact for some health care costs but not others. </p>
<p>The result is a confusing situation where consumers cannot be sure of the total costs they face in a year. General practitioners generally do not know the costs their patients face from specialists they refer to, and have no way of knowing what costs safety nets are meeting for their patients.</p>
<p>Safety nets are supposed to keep total out-of-pocket expenses from getting too high. Yet some people have health needs in several different areas, covered by separate Medicare and PBS safety nets, or in areas with no safety net at all, such as dental care. These people often face high out-of-pocket costs simply because they have many health problems.</p>
<p>There are only two tiers for our safety nets: general patients and concession card holders. Rather than smoothly tapering support, the cut-off between categories affects many lower and middle-income households. </p>
<p>In addition, eligibility for support isn’t always tied to ability to pay. About 80% of mature-age households with a million dollars in net assets receive welfare benefits, which often makes them eligible for concession card rates.</p>
<p>The first step in reducing the impact of out-of-pocket costs is to rationalise the confusing array of safety nets and out-of-pocket policies. </p>
<p>On average, every visit to a general practitioner is associated with <a>at least one prescription</a>, and about half also have further diagnostic tests ordered. One set of these costs – the prescriptions – have defined and known co-payments; the doctor and diagnostic visits do not. </p>
<p>These costs should be harmonised so that patients do not suffer a double whammy of having to meet separate, significant out-of-pocket thresholds for different health care interactions.</p>
<p>The second step should be to put pressure on out-of-pocket costs through transparency. Patients and general practitioners should know what specialists charge for common procedures. Medicare already holds information about the fees that specialists and general practitioners charge for each consultation or procedure. It should publish this.</p>
<h2>Time to get rid of financial barriers</h2>
<p>Medicare was designed to eliminate financial barriers to access to medical care. It has been a great success in some ways with about 85% of all visits bulk-billed. </p>
<p>Yet we should <a href="https://www.mja.com.au/insight/2016/21/bulk-billing-indicator-no-longer-useful">no longer measure affordability just with bulk-billing rates</a>. These rates vary across the country and do not measure the cost barriers faced by people where bulk-billing rates are low. And a focus on bulk-billing ignores the other areas of health care where people may have to pay out-of-pocket.</p>
<p>Improving health care access by improving safety net arrangements and transparency about who charges what will be a major challenge for the new government. With careful attention to system waste, and maybe by increasing the Medicare levy a little, Medicare can fulfil its mission of providing access to health care without breaking the budget.</p>
<p><em>Tomorrow in the <a href="https://theconversation.com/au/topics/advice-to-government">series</a>: energy and cities.</em></p>
<p><em>Read more: <a href="https://theconversation.com/a-snapshot-of-the-challenges-facing-the-new-turnbull-government-51661">A snapshot of the challenges facing the new Turnbull government</a></em></p><img src="https://counter.theconversation.com/content/61859/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett 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>Health policy was an important factor in the election outcome, but one of the most important issues in the health sector – the impact of out-of-pocket costs – was mostly ignored.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/590802016-06-06T04:31:47Z2016-06-06T04:31:47ZRebate freeze will set GPs back $11 per general patient consultation, but they’re likely to charge them more<figure><img src="https://images.theconversation.com/files/125271/original/image-20160606-11611-3nvdyg.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The amount doctors are paid for each consultation has traditionally increased year to year to account for the increased cost of care.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-284516555/stock-photo-female-consultant-working-at-desk-in-office.html?src=giW4oKnhqEXqIHFOUyd47A-1-60">Shutterstock</a></span></figcaption></figure><p>Health is shaping up to be one of the major election issues, with proposed changes to Medicare rebates and the Pharmaceutical Benefits Scheme (PBS) potentially costing patients more to receive health care.</p>
<p>Our new research shows that, by the end of June 2020, an average full-time GP will have lost A$109,000 in total income due to the freeze since July 2015. </p>
<p>By July 2019, this GP would need to charge their general patients an A$11.40 co-payment per consultation to make up for their lost income (relative to 2014-15). </p>
<p>Our modelling also shows the Coalition’s proposed increase to the PBS co-payment will most affect pensioners.</p>
<h2>What is the ‘freeze’?</h2>
<p>When GPs bulk-bill their patients, they directly charge the government for the service provided. What GPs are paid for each consultation depends on the <a href="http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/Home">Medicare Benefits Schedule</a> (MBS) item charged, with longer and more complex consultations earning them more. A “standard” consultation rebate is A$37.05, while a “long” consultation rebate is A$71.70.</p>
<p>Traditionally, the amount for each item increases year to year to account for the increased cost of care. This is called indexation. Since July 2014, the government has paused or “frozen” this indexation. The government initially planned this freeze to last until 2017-18. </p>
<p>At the time, <a href="https://theconversation.com/high-cost-of-gp-rebate-freeze-may-see-co-payments-rise-from-the-dead-38786">we modelled the effect of this initial freeze</a>. We found that by 2017-18, a bulk-billing GP would have a relative income loss of 7.1% (5.8%-8.5%) compared with their 2014-15 level of Medicare income. </p>
<p>We concluded that if GPs wished to keep bulk-billing their concessional patients (those with a government health care card), they would need to charge their non-concessional patients an A$8.43 (A$6.71-A$10.16) co-payment for each consultation to make up this loss. </p>
<p>The <a href="http://www.health.gov.au/internet/budget/publishing.nsf/Content/budget2016-glance.htm">2016 federal budget</a> extended the freeze until 2020. </p>
<p>Using the same assumptions we used in our previous modelling, we found that by 2019-20, a bulk-billing GP will have had a relative Medicare income loss of 11.6% compared to their 2014-15 income level (assuming a CPI of 2.5% a year). </p>
<p>However, CPI has been lower than earlier projected. The CPI projections in the <a href="http://budget.gov.au/2016-17/content/bp1/download/bp1.pdf">federal budget</a> were 1.25% in 2015-16, 2.0% in 2016-17 and 2.25% in 2017-18. Using these figures and assuming CPI of 2.25% per year in 2018-20, we estimate a relative income loss of 9.4%.</p>
<iframe src="https://datawrapper.dwcdn.net/QYNnp/3/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="430"></iframe>
<p>For an “average” GP (who bills <a href="http://ses.library.usyd.edu.au/bitstream/2123/13765/4/9781743324530_ONLINE.pdf">5,050 consultations a year</a>), this 9.4% income loss will equate to approximately A$26,300 in 2019-20 alone. For an average full-time GP (7,680 consultations a year, assuming 160 consultations per 40-hour week, 48 weeks a year) the loss of relative income will be A$40,000 in 2019-20. </p>
<p>By June 30 2020, a full-time GP will have lost a total of A$109,000 since 2014-15 due to the freeze.</p>
<h2>What does this mean for patients?</h2>
<p>The 9.4% reduction in income may force GPs who bulk-bill to cover their loss by charging general patients (who make up 45.6% of encounters) a co-payment. This co-payment would need to be A$11.40 to maintain 2014-15 levels of income.</p>
<p>Our estimates are conservative as they would be the minimum charge needed to make up for the GP’s lost income. We did not account for: </p>
<ul>
<li>administrative costs in implementing new billing systems</li>
<li>increased bad debt from patients who are charged, but never pay</li>
<li>the previous freeze of fees</li>
<li>lost income when a GP chooses to bulk-bill general patients facing financial hardship.</li>
</ul>
<p>It’s therefore likely that GPs who opt to charge a co-payment will charge more than our estimates. Further, after abandoning bulk-billing, some GPs may take the opportunity to charge more than required to merely recoup their rebate loss.</p>
<p>A poll by <a href="http://www.australiandoctor.com.au/news/latest-news/most-gps-think-rise-in-gap-fees-likely-survey-rev">Australian Doctor</a>, a newspaper for GPs, found that over the next 12 months, almost one-third of the responding GPs said they would charge A$35 or more. More than half the sample said they would charge their general patients A$25 or more for a standard consultation. </p>
<p>In 2013, the Australian Medical Association (AMA) recommended a fee of <a href="https://ama.com.au/ausmed/medicare-lags-further-behind-doctors-forced-increase-fees">A$73</a> for a standard GP consultation. That equates to a co-payment of over A$35 if GPs chose to charge this amount, and even this would only be at 2013 AMA rates.</p>
<p>The freeze is likely to have a greater impact on practices that serve socioeconomically disadvantaged people, as the practices would have to absorb the reduction in gross income, which may not be viable.</p>
<h2>Labor’s alternative</h2>
<p>Isn’t Labor proposing to reverse the freeze? </p>
<p>Well, yes and no. Labor announced it will reintroduce indexation from January 1, 2017. This means the freeze will remain until then. </p>
<p>Prime Minister Malcom Turnbull has dismissed the potential impact of Labor’s proposed increase, <a href="https://www.liberal.org.au/latest-news/2016/05/23/doorstop-premier-new-south-wales-merimbula-new-south-wales">saying</a>:</p>
<blockquote>
<p>If the indexation were to be restored from 1 July, the increase in the benefit paid to doctors would be around 60 cents. 60 cents. And by 2019-20, it would be A$2.50. </p>
</blockquote>
<p>This is true only if you are talking about the rebate for a single “Level B” item (which is below the average rebate per consultation) and if indexation was set at only 1.65% a year, well below the CPI projections in the 2016 federal budget.</p>
<p>A more accurate estimate would be to use the average rebate claimed per consultation (A$50) and use the CPI projections in the budget. This would mean an average increase per consultation of A$1 in 2016-17 and A$4.50 in 2019-20. </p>
<p>Compared with continuing the freeze, the indexation would mean an additional A$34,700 in earnings in 2019-20 alone for an average full-time GP and an additional A$84,400 combined to 2020.</p>
<h2>Changes to the cost of medication</h2>
<p>The government subsidises the cost of important medications through the PBS. General patients currently pay a maximum of <a href="http://www.pbs.gov.au/info/news/2016/01/2016-pbs-co-payment-safety-net-amounts">A$38.30</a> for a PBS-subsided medication and concessional patients pay a maximum of <a href="http://www.pbs.gov.au/info/news/2016/01/2016-pbs-co-payment-safety-net-amounts">A$6.20</a>. These thresholds are indexed yearly, usually in line with CPI.</p>
<p>In the <a href="http://www.budget.gov.au/2014-15/content/glossy/health/html/index.htm">2014 federal budget</a>, the Coalition proposed that these co-payments increase by A$5.00 and A$0.80 respectively – additional to the regular indexation. So far, this proposal has been blocked in the Senate, but associated savings are included in the May 2016 budget. </p>
<p>While it would seem that the A$0.80 increase for concessional patients is small, our <a href="http://sydney.edu.au/medicine/fmrc/beach/bytes/BEACH-Byte-2014-003.pdf">modelling from 2014</a> shows this increase would be larger in dollar terms for concessional patients. Nearly all medications prescribed for concessional patients face this increase, whereas only a fraction of medications prescribed to general patients cost more than the current threshold, so far fewer medications would incur an additional cost. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=263&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=263&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=263&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=331&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=331&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125268/original/image-20160606-11611-ri0cts.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=331&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>An average 45- to 64-year-old would pay an additional A$12.99 a year if they were a general patient and A$16.59 if a concessional patient. </p>
<p>The patients most impacted by the PBS co-payment increase will be aged pensioners, who on average would see their co-payment for medications increase by A$29.65 a year.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=276&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=276&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=276&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=347&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=347&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125263/original/image-20160606-11600-15ap30y.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=347&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>These estimates are conservative as they only include the number of instances where a script is written and do not include any repeats scripts provided on these occasions.</p>
<p>Labor has announced <a href="http://www.abc.net.au/news/2016-05-22/election-2016-shorten-to-make-pbs-promise-in-sydney-seat-of-reid/7435076">it will not introduce this increase</a>, but will allow the regular threshold indexation (which both parties support).</p><img src="https://counter.theconversation.com/content/59080/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Harrison has volunteered for the Greens.</span></em></p><p class="fine-print"><em><span>Helena Britt receives funding from DoH, multiple pharmaceuitical companies and Government instrumentalilites, all with research contracts with the University of Sydney, which allow complete intellectual freedom in publication of results from the BEACH program.
I am an Honorary Member of the RACGP.</span></em></p><p class="fine-print"><em><span>Clare Bayram 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>By 2020, the average GP will have lost A$109,000 in income due to the rebate freeze. To make up for this lost income, GPs will need to charge an A$11.40 co-payment per consultation.Christopher Harrison, Senior Research Analyst, Family Medicine Research Centre, Sydney School of Public Health, University of SydneyClare Bayram, Research Fellow, Family Medicine Research Centre, Sydney School of Public Health, University of SydneyHelena Britt, Associate professor, Director of the Family Medicine Research Centre, Sydney School of Public Health, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/596612016-05-20T02:01:17Z2016-05-20T02:01:17ZConfused about the Medicare rebate freeze? Here’s what you need to know<p>The Australian Labor Party <a href="http://www.abc.net.au/news/2016-05-19/labor-to-unveil-$12b-medicare-rebate-freeze-rollback/7426958">announced</a> yesterday that it will lift the Medicare rebate freeze if elected to office in the July federal election. We know health issues feature strongly in <a href="http://www.abc.net.au/news/2016-05-13/election-2016-policy-big-issues/7387588">election debates</a>, but what does this proposal actually mean for most of us? </p>
<h2>How Medicare works</h2>
<p>Medicare is our public health insurance system and funds a range of services such GP visits, blood tests, x-rays and consultations with other medical specialists. </p>
<p>The <a href="http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/Home">Medicare Benefits Schedule</a> (MBS) lists the services the Australian government will provide a Medicare rebate for. Medicare rebates do not cover the full cost of medical services and are typically paid as a percentage of the Medicare schedule fee. </p>
<p>GPs who bulk bill agree to charge the Medicare schedule fee and are directly reimbursed by government. </p>
<p>Those who don’t bulk bill are free to set their own prices for services. Patients pay for their treatment and receive a rebate from Medicare. There is often a gap between what patients pay for services and the amount that Medicare reimburses (A$37 for a GP consultation, for example). This gap is known as an out-of-pocket expense, as the patient is required to make up the difference out of his or her own pocket. </p>
<p>Under an indexing process, the Medicare Benefits Schedule fees are raised according to the Department of Finance’s <a href="http://www.healthandlife.com.au/wp-content/uploads/2015/10/Out-in-the-cold_-MBS-freeze-hits-today.pdf">Wage Cost Index</a>, a combination of indices relating to wage levels and the <a href="http://www.treasury.nt.gov.au/Economy/EconomicBriefs/Pages/ConsumerPriceIndex.aspx">Consumer Price Index</a>. </p>
<p>Organisations such as the Australian Medical Association (AMA) have long argued this process is insufficient and Medicare schedule fees have not kept up with <a href="https://ama.com.au/system/tdf/documents/Guide%20for%20Patients%20on%20How%20the%20Health%20Care%20System%20Funds%20Medical%20Care_7.pdf?file=1&type=node&id=40914">“real”</a> increases in costs to medical practitioners of delivering services. The rebate freeze compounds this financial challenge by continuing to keep prices at what the AMA and others argue are <a href="https://ama.com.au/system/tdf/documents/Guide%20for%20Patients%20on%20How%20the%20Health%20Care%20System%20Funds%20Medical%20Care_7.pdf?file=1&type=node&id=40914">“unsustainable levels”</a>. </p>
<h2>Where did the freeze come from?</h2>
<p>Although the Coalition is largely associated with this issue, Labor first introduced the Medicare rebate freeze in 2013 as a “temporary” measure, as part of a A$664 million budget savings plan. The AMA, the Coalition and others <a href="http://www.abc.net.au/news/2013-10-16/medicare-rebate-freeze-row-as-patients-face-increasing-costs/5026996">loudly criticised</a> the then government for the freeze. </p>
<p>On being elected to office, the Coalition put forward a number of proposals to reform the payment of health services and deal with rapidly rising health costs. Health expenditure had grown <a href="https://theconversation.com/tough-choices-how-to-rein-in-australias-rising-health-bill-13658">74% over the past decade</a> and was considered unsustainable in the long term. Primary care and medical services costs (including Medicare) had grown by more than 60%, representing an <a href="https://theconversation.com/tough-choices-how-to-rein-in-australias-rising-health-bill-13658">A$11 billion increase</a>.</p>
<p>The Coalition government proposed a number of ill-fated reforms including: </p>
<ul>
<li>a A$7 co-payment for GP, pathology and imaging services that would offset a A$5 reduction in Medicare rebates</li>
<li>a ten-minute minimum for standard GP consultations</li>
<li>a A$5 reduction in the Medicare rebate for “common GP consultations”.<br></li>
</ul>
<p>The retraction of all these proposals led Prime Minister Tony Abbott to declare co-payments <a href="http://www.abc.net.au/news/2015-03-03/tony-abbott-declares-gp-co-payment-dead,-buried-and-cremated/6275912">“dead, buried and cremated”</a>.</p>
<p>What did manage to stick was a continuation of the indexation freeze, initially for four years starting in July 2014 and further extended in the <a href="https://theconversation.com/federal-budget-2016-health-experts-react-58638">recent federal budget</a> to 2020. It has been estimated this will save <a href="https://ama.com.au/nomedicarefreeze">A$2.8 billion</a> from the health bill over the six years. </p>
<h2>Impact of the freeze</h2>
<p>The extended freeze means GPs and other medical specialists will be reimbursed the same amount for delivering health services in 2020 as they were in 2014. Doctors will pay more for their practices, staff, medical products, utilities and just about anything else that goes into running a medical practice. But the amount paid for medical services will remain static.</p>
<p>At the time the Coalition extended the freeze in 2014, <a href="https://theconversation.com/high-cost-of-gp-rebate-freeze-may-see-co-payments-rise-from-the-dead-38786">research</a> showed this move would have a greater impact on GP income over the initial four-year freeze than the proposed $A5 reduction in the GP rebate would have produced. In other words, failing to lift the reimbursement amount would ultimately prove more detrimental to GP funding than actually reducing the rebate amount. </p>
<p>Opponents to these changes argue this leaves medical services underfunded and may ultimately mean that additional payments will be passed on to patients. AMA president Brian Owler estimates the extended freeze will lead to each GP visit costing <a href="https://theconversation.com/shorten-government-would-end-freeze-on-medicare-rebates-59655">A$20 more</a> for patients. Some commentators referred to this as the introduction of the co-payment by the <a>“back door”</a>. </p>
<p>Some argued it could reduce the number of bulk-billing practices. Yet levels have risen steadily since 2013 to an all-time high of <a href="http://www.australiandoctor.com.au/news/news-review/why-are-gps-still-bulk-billing-at-record-levels">84.3%</a>. </p>
<p>What about costs passed on to patients? The AMA estimates suggest that at present the Medicare rebate (A$37) covers only about 50% of the <a href="http://www.afr.com/news/politics/election/federal-election-2016-bill-shorten-attacks-medicare-freeze-as-backdoor-tax-20160515-govfi2">recommended consulting fee</a>. This means that either medical practitioners cover the remainder of the costs themselves or pass this on to patients.</p>
<p>The impact of the extended freeze goes beyond simply reducing the gross income of GPs, or patients having to pay more for their health services. There are profound implications for equity. The effects of these types of policies are typically regressive in that the impact is often greatest on the <a>most disadvantaged</a> within our community. </p>
<p>Australia already has a large gap between the quality and timeliness of the public and private health systems. Changes such as this could potentially exacerbate this gap, by reducing the number of bulk-billing practices. This has the potential to create a two-tier system, where those who can pay receive the best care and those who can’t pay delay or avoid treatment, which ultimately exacerbates their condition. </p>
<p>The Coalition expects GPs and medical professionals to pass on costs to the patient, thereby sending <a href="https://theconversation.com/gp-co-payments-why-price-signals-for-health-dont-work-28857">“price signals”</a> about health services, with the aim of reducing the numbers of “unnecessary” consultations. However, the international evidence shows that increased co-payments for patients may <a href="https://www.mja.com.au/journal/2014/200/7/copayments-general-practice-visits">save a little money</a> in the short term, but can ultimately increase <a href="http://www.abc.net.au/am/content/2016/s4465085.htm">the number of people accessing hospitals</a> and other acute services, which are more expensive to run. </p>
<h2>Labor’s bid to end the freeze</h2>
<p>Labor’s announcement that it will end the freeze and restore indexation from January 1, 2017, has been costed at A$2.4 billion by 2019-20 and A$12.2 billion over a decade. </p>
<p>The AMA and other medical professional groups that have argued against these measures have welcomed this announcement. And Labor will no doubt be pleased to have such powerful interest groups on side (for now at least). But critics will ask where this money will be found in the budget and what will need to give in return. </p>
<p>Ultimately, just unfreezing the Medicare rebate will not make Australian health services more sustainable in the long term. There is an urgent need to reconsider how we incentivise and reimburse medical practitioners for the services they deliver and how we invest in preventive measures to avoid people becoming sick in the first place. </p>
<p>At a time when we see significant increases in levels of chronic and complex diseases, we need a health system that is designed to serve these issues and not simply episodic periods of illness. Without a broader mandate for change within the health system it is unlikely that this promise alone will lead to better health services for all of our community.</p><img src="https://counter.theconversation.com/content/59661/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Helen Dickinson receives funding from Federal Department of Health </span></em></p>Labor will lift the rebate freeze from 2017, while under the Coalition, GPs will be paid the same amount for delivering health services in 2020 as they were in 2014. So what does this mean for patients?Helen Dickinson, Associate Professor, Public Governance, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/534162016-01-27T13:40:06Z2016-01-27T13:40:06ZFive reasons you shouldn’t pay to see a GP<figure><img src="https://images.theconversation.com/files/108620/original/image-20160119-29756-1kmhccd.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">That'll do nicely</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/cat.mhtml?lang=en&language=en&ref_site=photo&search_source=search_form&version=llv1&anyorall=all&safesearch=1&use_local_boost=1&autocomplete_id=&searchterm=paying%20a%20doctor&show_color_wheel=1&orient=&commercial_ok=&media_type=images&search_cat=&searchtermx=&photographer_name=&people_gender=&people_age=&people_ethnicity=&people_number=&color=&page=1&inline=275328188">www.shutterstock.com</a></span></figcaption></figure><p>Earlier this month the British Medical Journal published a <a href="http://www.bmj.com/content/352/bmj.h6800">head-to-head</a> on the issue of whether people in the UK should pay to see a GP. On the face of it, levying a small fee or “co-payment” makes sense. Demand for GP consultations is likely to <a href="http://www.practicemanagement.org.uk/uploads/uk-chs-primarycare.pdf">double over the next 20 years</a>, <a href="http://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/nhs-budget">health costs are spiralling</a>, fees are backed by high-profile figures including a <a href="http://www.theguardian.com/society/2014/mar/31/nhs-users-pay-membership-charge">former health secretary</a>, and fees might deter the small number of repeat attenders who account for <a href="http://bmcfampract.biomedcentral.com/articles/10.1186/1471-2296-13-39">a disproportionate burden</a> of consultations, prescriptions and referrals.</p>
<p>But hold your horses. There are five compelling reasons why this seemingly innocuous measure is a bad idea.</p>
<h2>1. It doesn’t make economic sense</h2>
<p>Fees are often introduced to act as <a href="https://theconversation.com/gp-co-payments-why-price-signals-for-health-dont-work-28857">“price signals”</a>. Attaching a price to GP consultations is supposed to prompt consumers to consider whether the “product” is really worth the cost, hopefully leading to fewer inappropriate consultations. </p>
<p>Price signalling works beautifully with <a href="https://www.gov.uk/government/publications/single-use-plastic-carrier-bags-why-were-introducing-the-charge/carrier-bags-why-theres-a-5p-charge">plastic bags</a> . The 5p charge doesn’t really cost that much but <a href="http://www.neweconomics.org/blog/entry/what-we-can-learn-from-the-success-of-plastic-bag-levies">“nudges”</a> shoppers into using the service only when they really need it. The issue is that <a href="http://www.medscape.com/viewarticle/414406_3">health isn’t like a plastic bag</a>. Whereas consumers are able to judge the value of a carrier bag and whether they really need it or not, it is very difficult for a layperson to evaluate the value of a medical consultation. </p>
<p>This “<a href="http://www.economicsonline.co.uk/Market_failures/Information_failure.html">information asymmetry</a>”, where the provider knows more about the product than the consumer (think used car sales) makes price signalling inappropriate. Is £10 worth it to get this lump looked at? Only a doctor can tell you. If people can’t judge the quality of what they are paying for, those who can’t afford the fee stop seeing their doctor, regardless of whether they need to or not.</p>
<h2>2. It won’t save money</h2>
<p>While fees are often proposed in order to help raise money, they can result in higher costs for the health system. Administering fees <a href="http://ftp.iza.org/dp2290.pdf">cost Germany £260m a year</a> and resulted in 120 hours of <a href="http://ftp.iza.org/dp2290.pdf">extra work</a> for every health centre. Where patients delay seeking medical care because of fees, GPs can’t provide early preventive advice and the underlying condition can worsen, resulting in higher treatment costs further down the line. <a href="https://theconversation.com/why-cutting-spending-on-public-health-is-a-false-economy-51159">Prevention is hugely more cost effective</a> than treatment, and catching cancers and serious illness early results in happier, healthier patients, along with lower costs for the NHS. </p>
<p>Fees can lead to inappropriate use of other NHS services, such as <a href="http://www.bbc.co.uk/news/health-30679949">struggling emergency departments</a>. At <a href="http://www.pssru.ac.uk/project-pages/unit-costs/2015/index.php?file=community-based-health-care-staff">£44 a consultation</a>, GPs provide surprisingly good value for money. A ten minute GP consultation is <a href="http://www.choosewellmanchester.org.uk/at-hospital/what-it-costs/">three times cheaper</a> than assessing the same problem in A&E.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/108627/original/image-20160119-29758-rdkzio.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">More expensive than visiting a GP.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/dl2_lim.mhtml?src=csl_recent_image-1&image_format=jpg&size=medium&chosen_subscription=1&method=download&id=250250398&from_redirect=1">Kay Roxby/www.shutterstock.com</a></span>
</figcaption>
</figure>
<h2>3. They don’t reduce demand</h2>
<p>Neither introducing nor removing GP fees has had a significant <a href="http://www.ncbi.nlm.nih.gov/pubmed/19756797">impact on demand in Germany</a>, <a href="http://www.bmj.com/content/352/bmj.h6800">Ireland</a>, or <a href="http://www.victoria.ac.nz/sog/researchcentres/health-services-research-centre/docs/reports/Patient-Fees-Sept-2.pdf">New Zealand</a>. </p>
<p><a href="http://www.bmj.com/content/352/bmj.h6800">Proponents</a> have argued that fees might reduce missed appointments, as seen with <a href="http://www.bbc.co.uk/news/magazine-29132172">table booking</a> in the restaurant industry. This effectively creates new slots for doctors to see more patients, but there’s no evidence to suggest that fees work in this way for consultations and <a href="http://www.pulsetoday.co.uk/your-practice/practice-topics/access/large-majority-of-gps-vote-against-charging-patients-for-appointments/20006772.fullarticle">the vast majority</a> of GPs don’t want to introduce fees.</p>
<p>It would be disingenuous to suggest that fees have absolutely no effect on demand. Small fees do seem to deter some people. Unfortunately, those most likely to forgo medical attention are <a href="http://www.bmj.com/content/352/bmj.h6800">vulnerable as well as low-income groups</a>. </p>
<h2>4. It will hurt the poor</h2>
<p>My biggest objection to fees is that they would exacerbate Britain’s <a href="http://www.noo.org.uk/NOO_about_obesity/inequalities">widening health inequalities</a>. Overall, low-paid people tend to experience <a href="http://www.instituteofhealthequity.org/projects/fair-society-healthy-lives-the-marmot-review/fair-society-healthy-lives-full-report">much worse health</a> than the affluent. A flat-rate fee will be a larger proportion of disposable income for someone on a low-income so fees would be <a href="https://apps.irs.gov/app/understandingTaxes/student/whys_thm03_les02.jsp">regressive</a>.</p>
<p>It is both illogical and unjust to introduce fees that present a proportionally larger disincentive to the group of people with the worst health. Low-income groups will be hurt financially and physically as a result. <a href="http://www.commonwealthfund.org/%7E/media/Files/Publications/Fund%20Report/2013/Nov/1717_Thomson_intl_profiles_hlt_care_sys_2013_v2.pdf">Countries can introduce caps</a>, reimbursements and exceptions to mitigate disparities, but this all adds complexity and increases administration costs. <a href="http://bjgp.org/content/54/509/899.short">Research has also shown</a> that relying on market forces to balance supply and demand for medical care reduces the number of health professionals working in deprived areas.</p>
<h2>5. Co-payments are a great leap backward</h2>
<p>Internationally, other countries want what the UK has. The NHS consistently <a href="http://www.oecd.org/els/health-systems/Health-at-a-Glance-2013.pdf">outperforms</a> other health systems in countries spending much <a href="http://www.kingsfund.org.uk/projects/nhs-in-a-nutshell/health-care-spending-compared">higher proportions of GDP on health</a>. Provision of care to all on the basis of clinical need rather than ability to pay is a justifiable source of national pride, if not a crowning achievement of British public policy. </p>
<p><a href="http://www.undp.org/content/bhutan/en/home/presscenter/articles/2015/08/04/193-un-member-countries-agree-on-sdg-agenda.html">Signatories</a> of the 2015 <a href="http://www.un.org/sustainabledevelopment/health/">Sustainable Development Goals</a> recently pledged to meet a wider range of ambitious development targets including the attainment of <a href="http://www.who.int/mediacentre/factsheets/fs395/en/">universal health coverage</a>. This lofty aspiration – providing quality essential services for all while protecting patients from financial costs – is a living breathing reality in the UK. Introducing fees may appear to intuitively help with mounting financial and demographic pressures. However, they won’t work, and something much more important is at stake.</p><img src="https://counter.theconversation.com/content/53416/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Luke Allen 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>Other countries have introduced ‘co-payments’ and the results aren’t great.Luke Allen, Researcher, Global Health Policy, University of OxfordLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/522652015-12-28T20:06:51Z2015-12-28T20:06:51Z2015, the year that was: Health + Medicine<figure><img src="https://images.theconversation.com/files/106429/original/image-20151217-32587-19ls94z.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A snapshot of 2015: health reviews, Health Check series, thalidomide series, Medicare versus private health insurance. </span> <span class="attribution"><span class="source">AAP; Shutterstock; Julian Smith/; Dave Hunt/AAP</span></span></figcaption></figure><p>This was the year of the health review – on <a href="https://theconversation.com/mental-health-changes-should-be-judged-on-outcomes-not-promises-51303">mental health care</a>, the response to <a href="https://theconversation.com/au/topics/ice">ice</a>, Medicare, private health insurance, the pharmacy industry … and the list goes on. </p>
<p>But while little new policy was announced in 2015, debates continued about where the health system should be headed.</p>
<h2>Keeping a lid on rising health costs</h2>
<p>After 17 months on life support, the GP co-payment <a href="https://theconversation.com/medicare-co-payment-timeline-38302">finally died</a> and was “burned and cremated” in March. Just as well; while the co-payment mark II was reduced to A$5, non-concession patients may have ended end up paying a A$30 more, according to <a href="https://theconversation.com/5-medicare-rebate-cut-could-cost-patients-up-to-40-more-37118">Grattan Institute analysis</a>. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=398&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=398&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=398&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=500&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=500&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105917/original/image-20151215-23182-tmkcyk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=500&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">We don’t have a co-payment but Australians are still likely to pay more for GP visits because of the rebate freeze.</span>
<span class="attribution"><a class="source" href="http://http://www.shutterstock.com/">Rido/Shutterstock</a></span>
</figcaption>
</figure>
<p>The Coalition tried to justify its failed GP co-payment as an attempt to rein in consumers, who were driving the increase in Medicare costs. But it turns out <a href="https://theconversation.com/government-policy-not-consumer-behaviour-is-driving-rising-medicare-costs-51604">government policy</a> was mostly to blame. </p>
<p>As Stephen Duckett wrote in November:</p>
<blockquote>
<p>The co-payment proposal sank like a lead balloon partly because it was seen as inefficient and unfair, but also because the public didn’t have any ownership of the “problem” the changes sought to address.</p>
</blockquote>
<p>However, the freeze on GP fees remains, some of which may be passed on to consumers. </p>
<p>An <a href="https://theconversation.com/high-cost-of-gp-rebate-freeze-may-see-co-payments-rise-from-the-dead-38786">analysis</a> by the University of Sydney’s BEACH researchers shows that freezing GP earnings until 2017-18 equates to a 7.1% cut in real terms. Assuming this cut is passed on to non-concesssional patients, each visit would cost around A$8 more. </p>
<p>Most experts agree the key to a more sustainable health system is to better coordinate the care of the sick and elderly who use a disproportionate amount of health care. <a href="https://theconversation.com/time-for-policy-rethink-as-frequent-gp-attenders-account-for-41-of-costs-38966">Just 12.5% of the population</a> account for 41% of costs, and older people are using <a href="https://theconversation.com/can-medicare-sustain-the-health-of-our-ageing-population-49579">more and more health services</a>. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=409&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=409&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=409&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=514&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=514&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105912/original/image-20151215-23193-ehsure.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=514&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A small group of patients use almost half of the primary health resources.</span>
<span class="attribution"><a class="source" href="https://theconversation.com/costly-and-harmful-we-need-to-tame-the-tsunami-of-too-much-medicine-48239">lauren rushing/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>Paying doctors a fixed sum to care for a patient for the entire year, rather than a fee for each visit or service, is one solution, <a href="https://theconversation.com/new-funding-models-are-a-long-term-alternative-to-medicare-co-payments-35382">Peter Sivey wrote</a>. </p>
<p>Another is to better target the tests and treatments that are given, and to tame the tsunami of too much medicine, <a href="https://theconversation.com/costly-and-harmful-we-need-to-tame-the-tsunami-of-too-much-medicine-48239">Ray Moynihan explained</a>. The current review of the Medicare schedule presents an opportunity to do just this.</p>
<p>Another key review currently underway is investigating the private health insurance industry. Premiums increased by an average of 6.2% in April, well above CPI and annual health inflation. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=646&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=646&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=646&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=812&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=812&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105890/original/image-20151214-23210-sl6sze.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=812&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Private health insurance rebate increases vs CPI and health inflation.</span>
<span class="attribution"><a class="source" href="https://theconversation.com/infographic-a-snapshot-of-private-health-insurance-in-australia-39237">The Conversation</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>In response to this rise, we published a <a href="https://theconversation.com/au/topics/private-health-insurance-in-australia">six-part series</a> and <a href="https://theconversation.com/infographic-a-snapshot-of-private-health-insurance-in-australia-39237">infographic</a> investigating why half of Australians have private health insurance, how the carrot and stick <a href="https://theconversation.com/private-health-insurance-carrot-and-stick-reforms-have-failed-heres-why-38501">private health insurance reforms</a> have failed and the <a href="https://theconversation.com/the-debate-were-yet-to-have-about-private-health-insurance-39249">options for reform</a>. </p>
<p>We’ll bring you more next year when the private health insurance review is complete. </p>
<h2>The thalidomide tragedy</h2>
<p>This month we ran a <a href="https://theconversation.com/au/topics/thalidomide-series">13-part series on thalidomide</a>, the drug that caused thousands of miscarriages in the late 1950s and early ‘60s and left more than 10,000 children severely disabled. </p>
<p>We explored the <a href="https://theconversation.com/nazis-lies-and-spying-private-detectives-how-thalidomides-maker-avoided-justice-51730">history of the scandal</a>: how the drug was <a href="https://theconversation.com/remind-me-again-what-is-thalidomide-and-how-did-it-cause-so-much-harm-46847">developed and marketed</a>, how the <a href="https://theconversation.com/why-did-thalidomides-makers-ignore-warnings-about-their-drug-47092">manufacturer ignored warnings</a> it was causing harm, and whether something similar <a href="https://theconversation.com/could-thalidomide-happen-again-46813">could happen today</a>. </p>
<p>Our <a href="https://theconversation.com/timeline-key-events-in-the-history-of-thalidomide-50970">timeline</a> and at-a-glance <a href="https://theconversation.com/infographic-a-snapshot-of-the-thalidomide-tragedy-50968">infographic</a> provided a snapshot of how it unfolded. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=859&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=859&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=859&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1079&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1079&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105900/original/image-20151214-23172-b2sh3d.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1079&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://theconversation.com/infographic-a-snapshot-of-the-thalidomide-tragedy-50968">The Conversation – part of our thalidomide infographic.</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Then we heard from the victims who are still <a href="https://theconversation.com/why-thalidomide-survivors-have-such-a-tough-time-getting-compensation-47164">struggling to gain</a> compensation and are <a href="https://theconversation.com/society-is-also-to-blame-for-thalidomiders-worsening-health-47562">experiencing</a> a new range of ageing-related conditions, exacerbated by their disability. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=480&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=480&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=480&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=603&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=603&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105911/original/image-20151215-23186-1a0hikn.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=603&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Starting near the end of World War II and continuing until the 1970s, the US government sponsored radiation experiments on human subjects.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File%3AExercise_Desert_Rock_I_(Buster-Jangle_Dog)_002.jpg">Exercise Desert Rock I Buster Jangle Dog. By Federal Government of the United States [Public domain]</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Finally, we looked at the impact of the tragedy on <a href="https://theconversation.com/regulations-have-improved-since-thalidomide-but-drug-scares-are-still-possible-48661">regulation</a>, <a href="https://theconversation.com/thalidomide-taught-us-to-use-medications-with-care-during-pregnancy-not-to-stop-using-them-51862">women’s fear</a> about taking medicines during pregnancy, and how thalidomide is <a href="https://theconversation.com/thalidomide-the-drug-with-a-dark-side-but-an-enigmatic-future-50330">used today</a> to treat conditions such as leprosy and bone cancer. </p>
<p>This followed our broader historical series in June on <a href="https://theconversation.com/au/topics/on-human-experiments">human experimentation</a>, which explored the chequered history of wartime experiments and how these wrongs shaped medical ethics. </p>
<h2>Other key series and packages</h2>
<p>We <a href="https://theconversation.com/explainer-what-is-pain-and-what-is-happening-when-we-feel-it-49040">think of pain</a> as something that strikes certain parts of our body when something is damaged, but it’s much more complicated than that. Our ten-part series on pain examined the <a href="https://theconversation.com/pain-drain-the-economic-and-social-costs-of-chronic-pain-49666">economic and social costs</a> of <a href="https://theconversation.com/how-different-cultures-experience-and-talk-about-pain-49046">chronic</a> pain, how we experience and <a href="https://theconversation.com/the-right-words-matter-when-talking-about-pain-50450">talk about</a> pain, and the <a href="https://theconversation.com/genders-experience-pain-differently-and-women-have-it-more-49428">gender</a>, cultural and <a href="https://theconversation.com/what-dictates-how-much-pain-you-feel-after-injury-48985">psychological</a> differences at play. </p>
<p>Our weekly consumer <a href="https://theconversation.com/au/topics/health-check">Health Check</a> series continued and generated popular discussion on food comas, whether your brain can be “full”, and why some people feel the cold more than others. </p>
<p>Our in-depth packages examined how <a href="https://theconversation.com/au/topics/chemical-messengers">hormones affect</a> our mood, sleep and satiety; and the issues surrounding IVF and donor conception, including a reader-expert <a href="https://theconversation.com/your-questions-answered-on-donor-conception-and-ivf-45715">Your Questions Answered forum</a>.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/105909/original/image-20151215-23166-vyyl9r.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Our experts in law, embryology, sociology and psychology answered your questions on IVF and donor conception.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/34547181@N00/12034531933/">Philippe Put/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>We also canvassed some controversial but innovative options for tobacco control: <a href="https://theconversation.com/whats-next-for-tobacco-control-a-smoke-free-generation-42248">prohibit the sale</a> of tobacco to people born after 2000, make cigarettes <a href="https://theconversation.com/next-step-for-tobacco-control-make-cigarettes-less-palatable-42549">less palatable</a>, target <a href="https://theconversation.com/weve-reduced-demand-for-cigarettes-next-step-is-to-target-the-supply-42360">the supply</a>
and introduce a <a href="https://theconversation.com/making-smoking-history-the-case-for-a-smokers-licence-42362">smoker’s licence</a>. </p>
<h2>Special mentions</h2>
<p>The Conversation welcomed two new health columnists in 2015: Simon Chapman, whose <a href="https://theconversation.com/columns/simon-chapman-ao-1831">Smoke Signals column</a> provided some much-needed plain speaking on tobacco, e-cigarettes, wind farms and the scientific method; and Jayne Lucke, whose <a href="https://theconversation.com/columns/jayne-lucke-8193">Facts of Life column</a> reflects on sex, health and society.</p>
<p>Thanks to all our authors and <a href="https://theconversation.com/au/columns">columnists</a> Michael Vagg, Ian Musgrave, Andrew Whitehouse, Alessandro Demaio, Steve Ellen, Simon Chapman and Jaye Lucke. </p>
<p>And of course, thank you to our regular readers. Have a happy and healthy new year.</p>
<p><em>– Fron Jackson-Webb, Alexandra Hansen and Sasha Petrova</em></p>
<hr>
<p><strong>Health + Medicines’s most popular stories for 2015:</strong> <br>
1. <a href="https://theconversation.com/health-check-the-science-of-hangry-or-why-some-people-get-grumpy-when-theyre-hungry-37229">Health Check: the science of 'hangry’, or why some people get grumpy when they’re hungry</a> <br>
2. <a href="https://theconversation.com/happy-news-masturbation-actually-has-health-benefits-16539">Happy news! Masturbation actually has health benefits</a> <br>
3. <a href="https://theconversation.com/psychopaths-versus-sociopaths-what-is-the-difference-45047">Psychopaths versus sociopaths: what is the difference?</a> <br>
4. <a href="https://theconversation.com/health-check-why-does-hair-change-colour-and-turn-grey-37966">Health Check: why does hair change colour and turn grey?</a> <br>
5. <a href="https://theconversation.com/health-check-why-mosquitoes-seem-to-bite-some-people-more-36425">Health Check: why mosquitoes seem to bite some people more</a> <br>
6. <a href="https://theconversation.com/orthorexia-nervosa-when-righteous-eating-becomes-an-obsession-36484">Orthorexia nervosa: when righteous eating becomes an obsession</a> <br>
7. <a href="https://theconversation.com/in-pursuit-of-happiness-why-some-pain-helps-us-feel-pleasure-37478">In pursuit of happiness: why some pain helps us feel pleasure</a> <br>
8. <a href="https://theconversation.com/mondays-medical-myth-you-cant-mix-antibiotics-with-alcohol-4407">Monday’s medical myth: you can’t mix antibiotics with alcohol</a> <br>
9. <a href="https://theconversation.com/health-check-why-do-some-people-feel-the-cold-more-than-others-37805">Health Check: why do some people feel the cold more than others?</a> <br>
10. <a href="https://theconversation.com/health-check-heres-what-you-need-to-know-about-protein-supplements-45766">Health Check: here’s what you need to know about protein supplements</a></p><img src="https://counter.theconversation.com/content/52265/count.gif" alt="The Conversation" width="1" height="1" />
This was the year of the health review – mental health care, Medicare, private health insurance, the pharmacy industry … and the list goes on. But how much movement was there on policy?Fron Jackson-Webb, Deputy Editor and Senior Health EditorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/516042015-12-02T05:28:58Z2015-12-02T05:28:58ZGovernment policy, not consumer behaviour, is driving rising Medicare costs<figure><img src="https://images.theconversation.com/files/103980/original/image-20151202-30804-1100paf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A significant proportion of the growth in Medicare costs has been driven by government policies such as items for new services and larger rebates. </span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-159748715/stock-photo-close-up-of-a-doctor-checking-blood-pressure-of-a-patient.html?src=4njE667OEJsNJfoD8p9dsA-1-4">Rido/Shutterstock</a></span></figcaption></figure><p>Announcing the ill-fated 2014 budget initiative to introduce a consumer co-payment for general practice visits, the <a href="http://www.health.gov.au/internet/budget/publishing.nsf/content/budget2014-hmedia02.htm">then health minister, Peter Dutton, lamented</a> that annual Commonwealth health costs had increased from A$8 billion to A$19 billion over a decade. He described the increase as “unsustainable” and used it to justify the budget’s bitter pill.</p>
<p>The implication of his announcement was that consumers were driving the increase in costs and that action to change consumer behaviour was necessary to rein them in.</p>
<p>The growth numbers were presented as part of the government’s then mantra of a “debt and deficit disaster”, and massaged to create maximum shock and awe. The minister’s numbers did not adjust either for population growth or inflation.</p>
<p>Nonetheless, a more legitimate set of growth numbers would still show Medicare Benefits Schedule (MBS) payments growing at an annual rate of 2.3% in real per-head terms, faster than growth in government expenditure overall (1.8%).</p>
<p>But this still leaves open the question of whether consumer behaviour is driving rising costs or whether there may be other causes.</p>
<p>A <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Budget_Office/research_reports/Medicare_Benefits_Schedule">report</a> released last week by the Parliamentary Budget Office shows that government policy has driven a significant proportion of the growth in MBS costs. In fact, of the A$325 real increase in MBS spending per head since 1993-94, all but A$74 has been the result of explicit government decisions. </p>
<p>MBS spending per head is the product of the rebate for each MBS item and the per head use of those items. Both elements of this calculation have been tinkered with as part of policy change over the last two decades. </p>
<p>Governments have increased rebates for some items faster than inflation. This has been done, for example, to encourage an increased rate of bulk billing. New item numbers have also been added as part of major policy reviews. </p>
<p>(Each MBS service involves one or more item numbers and an associated description. For example, an ordinary consultation with a general practitioner is <a href="https://theconversation.com/gp-co-payment-2-0-a-triple-whammy-for-patients-35334">item number 24</a>.)</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=655&fit=crop&dpr=1 600w, https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=655&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=655&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=823&fit=crop&dpr=1 754w, https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=823&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/104022/original/image-20151202-14437-u7n4qh.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=823&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
</figcaption>
</figure>
<p>The single largest cost impact (A$51 per head) came from changes to diagnostic imaging items, including new items for magnetic resonance imaging (MRI). But implementation of policies to expand <a href="http://www.anao.gov.au/%7E/media/Uploads/Documents/1999%2000_audit_report_42.pdf">magnetic resonance imaging</a> and reform diagnostic imaging items <a href="http://www.anao.gov.au/%7E/media/Files/Audit%20Reports/2014%202015/Report%2012/AuditReport_2014-2015_12.PDF">more generally</a> has been poor. </p>
<p>It is questionable whether consumers are getting value for money from this investment. Also, <a href="https://theconversation.com/getting-doctors-to-reduce-diagnostic-testing-is-hard-but-we-should-keep-trying-42312">some diagnostic imaging tests</a> appear to be overused.</p>
<p>Policies designed to increase bulk billing accounted for an extra A$70 per head: increasing the GP rebate from 85% of the schedule fee to 100% accounted for A$42 per head; targeted increases in the rebate to increase bulk billing rates accounted for the rest. </p>
<h2>When did Medicare spending soar?</h2>
<p>In the decade to 2003-4, Medicare spending grew by A$53 per head. Just over half of that was attributable to the addition of new diagnostic imaging items to the schedule. In the next decade, spending grew at five times that rate – by A$272 per head. </p>
<p>Most of the growth was due to decisions taken when <a href="https://theconversation.com/medicares-best-friend-lessons-from-abbotts-days-as-health-minister-17893">Tony Abbott was health minister</a>, between 2003 and 2007. In fact, almost half (47%) of the growth in Medicare spending over the last two decades is the result of policy decisions taken when he was running the health portfolio. </p>
<p>The changes were introduced over the years for a mix of policy and political reasons. The decline in bulk billing was associated with public dissatisfaction with Medicare and was clearly having political impacts. This led to new bulk billing incentives and increases to the rebates for general practitioner fees.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=475&fit=crop&dpr=1 600w, https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=475&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=475&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=596&fit=crop&dpr=1 754w, https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=596&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/103989/original/image-20151202-14461-1bp5b4o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=596&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Policy changes meant GPs received larger rebates for seeing the same number of patients.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-4355401/stock-photo-female-doctor-and-assistant-filling-out-medical-cards.html?src=f8fyMSBnySC1F_VWTLRTpw-7-122">StockLite/Shutterstock</a></span>
</figcaption>
</figure>
<p>The increasing prevalence of chronic diseases, such as diabetes and heart disease, led to new assessment and care planning items. </p>
<p>A decline in the proportion of GPs providing after-hours care led to new items to redress that as well.</p>
<p>General practitioners got more rebate income (in real terms) for seeing the same number of patients, so it was actually changes initiated by government that led to the increase in spending.</p>
<h2>What does this mean for Medicare reform?</h2>
<p>Two main lessons can be drawn from the Parliamentary Budget Office report. </p>
<p>First, the government must be clear about what is driving growth in expenditure. The co-payment proposal sank like a lead balloon partly because it was seen as inefficient and unfair, but also because the public didn’t have any ownership of the “problem” the changes sought to address. </p>
<p><a href="https://theconversation.com/factcheck-does-the-average-australian-go-to-the-doctor-11-times-a-year-26242">The way the problem was initially presented was wrong</a>, causing confusion between Medicare services (which include diagnostic tests) and GP visits. The vast majority of the population, who have few visits, refused to accept that per-head use was going up. </p>
<p>Second, the report shows how much governments have relied on tinkering with the Medicare Benefits Schedule to drive system change in the last decade. “Here a new item, there a new item, everywhere a new item” became the Canberra policy song sheet. </p>
<p>Health Minister Sussan Ley wiped the slate clean when she was appointed in December, setting up a raft of reviews to look at everything from primary care to disinvestment. Importantly, reviews must consider whether the Medicare schedule is still “fit for purpose” in the context of the increase in chronic disease and the impact this is having on clinical practice. </p>
<p>It must be hoped new policies developed in response will be both more sophisticated and less profligate than we have seen over recent decades.</p><img src="https://counter.theconversation.com/content/51604/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett provided comments to the Parliamentary Budget Office on a draft of their Report</span></em></p>The Coalition tried to justify its failed GP co-payment as an attempt to rein in consumers, who were driving the increase in Medicare costs. Turns out government policy was mostly to blame.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/387862015-03-22T19:15:06Z2015-03-22T19:15:06ZHigh cost of GP rebate freeze may see co-payments rise from the dead<figure><img src="https://images.theconversation.com/files/75036/original/image-20150317-9211-yoxy6l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">New modelling shows the Medicare rebate freeze will leave GPs A$8.43 worse off per consultation</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/diacimages/5774894486">DIBP images/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Prime Minister Tony Abbott has <a href="http://www.smh.com.au/federal-politics/political-news/gp-copayment-fee-is-dead-buried-and-cremated-tony-abbott-20150303-13u3ec.html">declared</a> that GP co-payments are “dead, buried and cremated”. This contrasts with health minister Sussan Ley’s <a href="http://www.skynews.com.au/news/politics/national/2015/03/04/ley-rules-out-means-testing-bulk-billing.html">desire</a> to “reduce the number of bulk-billed consultations to people who can afford to pay something”. </p>
<p>So, what is likely to emerge from Ley’s Medicare reform consultations? </p>
<p>In a paper published today in the <a href="https://www.mja.com.au/journal/2015/202/6/cost-freezing-general-practice">Medical Journal of Australia</a>, our new modelling shows the freeze on Medicare fees paid to GPs will leave doctors A$8.43 worse off per consultation with non-concessional patients by 2017-18. That’s a bigger shortfall than the now-abandoned A$5 rebate cut – and is likely to prompt many GPs to start charging a co-payment. </p>
<p>Currently, legislative restraints mean that GPs are only able to charge the government directly for patient care (bulk-billing) if they do not charge the patient a co-payment.</p>
<p>However, Ley has suggested that the government would consider legislative change that would <a href="http://www.news.com.au/lifestyle/health/lazarus-or-zombie-the-gp-fee-is-rising-from-the-dead/story-fneuz9ev-1227248137618">remove this restriction</a>. This would mean that GPs could bulk-bill the scheduled fee and also charge a co-payment. </p>
<p>With GPs facing greater economic pressure and the health minister considering legislative changes to make it easier for GP to charge them, GP co-payments, like Lazarus, may rise again from the dead.</p>
<h2>First, a quick recap</h2>
<p>The first of the recent co-payment policies was revealed in the 2014-15 Federal budget. It proposed a A$7 patient co-payment for GP, pathology and imaging services to offset a A$5 reduction in the associated Medicare rebates. The financial impact of the original co-payment proposals was <a href="https://theconversation.com/co-payment-will-hit-harder-than-expected-sydney-university-study-finds-28871">greatest</a> for Commonwealth Concession card patients.</p>
<p>Facing strong opposition, the government withdrew the A$7 co-payment policy in December 2014, and replaced it with three new policies. The first, a ten-minute minimum for standard GP consultations (the “A$20 co-payment”) was retracted in January. </p>
<p>The second, a A$5 reduction in the Medicare rebate for “common GP consultations” for non-concessional patients was retracted in March. It was this retraction that led Prime Minister Abbott to state co-payments were “dead, buried and cremated”.</p>
<p>However, the third policy announced in December remains on the table. It is a continuation of the indexation freeze for all Medicare schedule fees until July 2018. While not a direct cut to GPs’ income, over time GPs would earn relatively less while their costs would increase. </p>
<h2>The cost of the ‘freeze’</h2>
<p>In our modelling for MJA, we used data from the University of Sydney’s <a href="ses.library.usyd.edu.au/bitstream/2123/11882/4/9781743324226_ONLINE.pdf">Bettering the Evaluation and Care of Health</a> (BEACH) study to estimate the amount of rebate claimable through Medicare per 100 GP consultations. BEACH is a continuous cross-sectional, national study of the content of GP-patient encounters in Australia.</p>
<p>More than half (54.4%) of GP consultations were with concessional patients (those under 16 years of age or those holding a health care card) while 45.6% were with non-concessional patients.</p>
<p>We calculated that in 2014-15, an average bulk-billing GP would earn A$4,998.28 from Medicare rebates per 100 consultations. </p>
<p>For GPs to maintain rebate income equivalent to 2014-15, the Medicare scheduled fees would have to increase in line with CPI. So assuming an annual CPI increase of 2.5%, by 2017-18 these fees would need to increase by 7.7% – A$384.32 per 100 consultations. </p>
<p>By freezing fees until 2017-18, the government is cutting the GPs’ gross earnings by 7.1% in relative terms. Assuming concessional patients are all bulk-billed, this A$384.32 decrease equates to A$8.43 per non-concessional patient consultation.</p>
<p>In comparison, the (now retracted) A$5 reduction in rebate for most consultations with non-concessional patients would have amounted to a loss of A$219.53 per 100 consultations, or A$4.81 per consultation with a non-concessional patient.</p>
<p><br></p>
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<h2>Making up the shortfall</h2>
<p>While public discussion has focused on the now retracted A$5 reduction, the freeze will have a greater impact: A$8.43 per non-concessional patient consultation by 2017-18, nearly double the amount of the rebate reduction. </p>
<p>The 7.1% reduction in GP rebate income by 2017-18 from the freeze may economically force GPs who currently bulk-bill to charge a co-payment to their non-concessional patients. As Grattan Institute health economist Professor Stephen Duckett <a href="http://www.abc.net.au/news/2015-03-05/duckett-we-still-have-a-gp-co-payment-by-stealth/6282094">notes</a>, this is a “co-payment policy by stealth”.</p>
<p>Our estimates are conservative. The A$8.43 figure would be the minimum charge needed to make up for the GPs lost income. We did not account for: administrative costs in implementing new billing systems; increased bad debt; the previous freeze of fees; and lost income when a GP chooses to bulk-bill non-concessional patients facing financial hardship. </p>
<p>It is therefore likely that GPs who opt to charge a co-payment, will charge more than our estimates. Further, after abandoning bulk-billing, some GPs may take the opportunity to charge more than that required to merely recoup their rebate loss. </p>
<p>Statements by health minister Ley and the ongoing effect of the index freeze suggest we’re likely to see GP co-payments in the near future.</p><img src="https://counter.theconversation.com/content/38786/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Christopher Harrison is a Greens volunteer.</span></em></p><p class="fine-print"><em><span>Graeme Miller is co-chief investigator of the BEACH program. In 2013-14 BEACH was funded by a competitive grant from the Commonwealth Department of Health, and through University of Sydney research agreements with Astra Zeneca Pty Ltd, Novaritis Pharmaceuticals Australia Ptry ltd, and CSL Biotherapies Pty Ltd.</span></em></p><p class="fine-print"><em><span>Helena Britt is co-chief investigator of the BEACH program. In 2013-14 BEACH was funded by a competitive grant from the Commonwealth Department of Health, and through University of Sydney research agreements with AstraZeneca Pty Ltd (Australia), Novartis Pharmaceuticals Australia Pty Ltd, bioCSL (Australia) Pty Ltd, and Merck, Sharp and Dohme (Australia) Pty Ltd. </span></em></p><p class="fine-print"><em><span>Clare Bayram 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>With GPs facing greater economic pressure and the health minister considering legislative change to make it easier for GP to charge them, GP co-payments, like Lazarus, may rise again from the dead.Christopher Harrison, Senior Research Analyst, Family Medicine Research Centre, Sydney School of Public Health, University of SydneyClare Bayram, Research Fellow, Family Medicine Research Centre, Sydney School of Public Health, University of SydneyGraeme Miller, Associate Professor of General Practice, University of SydneyHelena Britt, Associate professor, Director of the Family Medicine Research Centre, Sydney School of Public Health, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/389662015-03-18T19:43:43Z2015-03-18T19:43:43ZTime for policy rethink as frequent GP attenders account for 41% of costs<figure><img src="https://images.theconversation.com/files/75205/original/image-20150318-2476-s1uppb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Very high GP attenders cost Medicare an average of A$3,202 in 2012-13, compared to an Australian average of A$690.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-134706641/stock-photo-multiethnic-people-waiting-for-the-doctor-in-hospital-lobby.html?src=gQE7LY_2KOVxUR-2THj_mQ-1-6">Tyler Olson/Shutterstock</a></span></figcaption></figure><p>The Commonwealth government’s big idea for primary health care in the past year was to charge everyone who visits the GP a <a href="https://theconversation.com/federal-budget-2014-health-experts-react-26577">A$7 co-payment</a>. The idea had many problems – it could have led to a blowout in <a href="https://theconversation.com/gp-co-payment-would-increase-emergency-department-wait-times-28658">emergency department demand</a>; it was <a href="https://theconversation.com/higher-health-co-payments-will-hit-the-most-vulnerable-29590">inequitable</a>; and it <a href="https://theconversation.com/gp-co-payments-why-price-signals-for-health-dont-work-28857">may not have worked</a> anyway. It has finally been <a href="https://theconversation.com/medicare-co-payment-a-case-study-in-policy-implosion-38311">abandoned</a>.</p>
<p>The failed policy betrayed a simplistic belief that all patients are basically the same. The government thought all patients should make a co-payment and all would respond to it in the same way. Eventually, the government decided to exempt some people, but even then, patients were only divided into two categories.</p>
<p>A new report from the <a href="http://www.nhpa.gov.au/internet/nhpa/publishing.nsf">National Health Performance Authority</a>, released today, shows that all patients are not equal. It divides GP users into six groups:</p>
<ul>
<li>Very high attenders, who had 20 or more visits to a GP in 2012-13</li>
<li>Frequent attenders (12 to 19 visits)</li>
<li>Above-average attenders (six to 11 visits)</li>
<li>Occasional GP attenders (four to five visits)</li>
<li>Low GP attenders (one to three visits)</li>
<li>People who did not attend a GP at all in 2012-13.</li>
</ul>
<p>The very high attender group comprises just 3.8% of the population but consumed 17.7% of Medicare out-of-hospital expenditure (see the graph below). </p>
<p>On average, each of these very high GP attenders accounted for A$3,202 of non-hospital Medicare expenditure in 2012-13, compared to an Australian average of A$690. </p>
<p>By grouping together the very high and frequent attenders, we see that 12.5% of the population were responsible for 41% of Medicare out-of-hospital expenditure.</p>
<p><strong>Frequent and very high users account for 41% of the costs</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=345&fit=crop&dpr=1 600w, https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=345&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=345&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=433&fit=crop&dpr=1 754w, https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=433&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/75190/original/image-20150318-12148-pxkesu.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=433&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">GP visits are non-referred Medicare-funded patient-doctor encounters. Data are for 2012-13.</span>
<span class="attribution"><a class="source" href="http://www.nhpa.gov.au/internet/nhpa/publishing.nsf">National Health Performance Authority</a></span>
</figcaption>
</figure>
<p>As well as being responsible for a large share of total costs, people who visit the GP more often are more likely to live in the most disadvantaged areas, and to report being in poor health.</p>
<p>A conventional measure of quality is <a href="http://hsr.sagepub.com/content/11/4/248.abstract">care continuity</a> – that a patient sees the same doctor regularly rather than shopping around. Very high GP-attenders saw an average of 4.8 GPs in 2012-13. More than one-third of them (36%) saw five or more GPs.</p>
<p>Seeing so many different GPs can lead to duplicated tests and treatments, which might help to explain why the frequent GP visitors got so many tests and referrals to specialists. On average, referrals to specialists, x-rays and pathology tests by these people were almost 50% higher than their spending on GPs. Frequent GP visitors spent A$906 on GPs per head, and A$1356 on other services.</p>
<h2>What does this mean for health policy?</h2>
<p>The National Health Performance Authority report clearly shows why one-size-fits-all thinking in health care policy development isn’t good enough. </p>
<p>People who see the GP most often tend to have more health problems than low-attenders and a greater level of disadvantage. But the original A$7 co-payment policy applied the same set of incentives to both groups. The A$5 rebate reduction was barely more nuanced.</p>
<p>The next generation of health policies should respond to complexity and diversity, not pretend it doesn’t exist. Does the system work for all kinds of patients? Which patients are getting costly care that doesn’t benefit them? By asking these questions, we can uncover how to improve the quality of care while also saving money.</p>
<p>People who see the GP every two weeks probably need better co-ordination of their care. They might also need a different team of health care workers helping them. </p>
<p>For many frequent GP visitors, the traditional model of paying doctors a fixed fee per visit is <a href="https://theconversation.com/new-funding-models-are-a-long-term-alternative-to-medicare-co-payments-35382">probably wrong</a>. Instead, part of a GP’s payment should be for helping a patient draw on the right mix of appropriate, effective and efficient care. That might include support to manage their own care better, getting regular advice from a pharmacist or nurse at short notice, maybe online, and seeing the GP less often.</p>
<p>Differentiating among types of patients can lead to better policy. So can distinguishing among types of providers. </p>
<p>Previous Grattan Institute work has found that some hospitals have <a href="http://grattan.edu.au/report/controlling-costly-care-a-billion-dollar-hospital-opportunity/">extreme, unjustified costs</a>. Despite this, little is done to rein in these costs – hospitals that run a deficit are often treated much the same as those that manage their costs well. The funding and management of hospitals remains fairly one-size-fits all, despite huge variations in efficiency.</p>
<p>Our upcoming work will show that different hospitals also vary widely in whether or not they provide ineffective treatments. Once again, we can do a lot more to distinguish the best hospitals from those that have serious problems and to manage them differently.</p>
<p>The National Health Performance Authority report is a reminder that we have more information than ever about patients, just as we do about providers and treatments. We should make the most of it by looking at how these patients, providers and treatments differ and what that means for policy.</p><img src="https://counter.theconversation.com/content/38966/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett 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>As well as being responsible for a large share of total costs, people who visit the GP more often are more likely to live in the most disadvantaged areas, and to report being in poor health.Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/383752015-03-05T19:26:40Z2015-03-05T19:26:40ZHow likely are doctors to charge more due to the rebate freeze?<p>The Coalition government has ditched its deeply unpopular plan to have people visiting doctors pay A$5, but has retained the Medicare rebate freeze for both general practitioners and specialists. Doctors groups have warned that the measure will mean patients will have to pay more for medical services.</p>
<p>The Medicare rebate – currently A$37.05 for a standard GP visit – is the money the government provides doctors for each medical consultation. But GPs and specialists can choose to charge patients additional fees, as there are no rules about what they can and cannot charge. Bulk-billing GPs, for example, claim the A$37.05 straight from Medicare on their patients’ behalf. But if a GP doesn’t bulk bill and charges, say A$70, then patients can claim back A$37.05 from Medicare themselves and are A$32.95 out of pocket. </p>
<p>The rebate freeze was actually introduced by the last Labor government, and initially took effect from November 2013 to July 2014. And it was <a href="http://amavic.com.au/icms_docs/187873_Freeze_on_Medicare_rebates.pdf">extended</a> for two years by the current government. At the time, the Australian Medical Association (AMA) <a href="http://www.abc.net.au/news/2013-10-16/medicare-rebate-freeze-row-as-patients-face-increasing-costs/5026996">recommended</a> doctors increase their fees by almost 3%.</p>
<p>The same prospect has been raised by the Royal Australian College of General Practitioners vice-president, <a href="http://www.smh.com.au/federal-politics/political-news/gp-copayment-fee-is-dead-buried-and-cremated-tony-abbott-20150303-13u3ec.html">Morton Rawlin, who said</a> extending the freeze will, among other things, “force GPs to pass on increasing out-of-pocket costs to patients”.</p>
<h2>A complex picture</h2>
<p>But the data presents a different story. As Figure 1 below shows, bulk-billing rates for GP services have continued to increase since the rebate was first frozen in November 2013. But bulk-billing rates for Medicare as a whole, that is, once specialist and diagnostic services are also included, have levelled off and fallen slightly. This suggests the effect of the rebate freeze on bulk-billing rates is concentrated on specialist and diagnostic services.</p>
<p><a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">Figure 1. Bulk-billing rates in Australia
</a></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=425&fit=crop&dpr=1 754w, https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=425&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/73779/original/image-20150304-15291-b9j23f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=425&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Medicare Australia</span></span>
</figcaption>
</figure>
<p>The lack of change in the bulk-billing rates since late 2013 may mean GPs accepted a reduction in their profits. Or they’ve been doing other things to maintain revenue or reduce costs, including changing the types of services they provide. </p>
<p>Still, the impact on bulk-billing rates is not the full story, and not the only way specialists and GPs can react to the freeze. Doctors are likely to start charging patients more because the costs of running a practice will continue to increase while Medicare rebates remain frozen. </p>
<p>The rate of increase in practice costs is not known, but is likely to be around the inflation rate of 2% to 3%. Generally, doctors adjust to these increasing costs through regular price rises and by keeping a lid on practice costs. </p>
<p>A practice can reduce costs to maintain profit, encouraging more efficiencies in the ways they provide services. This could mean reducing the hours worked by practice nurses and administrative staff, which could have knock on effects to services provided. Companies that own a number of practices may reduce costs across their network by merging administrative functions or even closing surgeries, which could reduce access to health care in some areas.</p>
<h2>Special cases</h2>
<p>GPs may not increase fees or change bulk-billing if they think fewer patients will visit, which will further reduce revenue. There’s <a href="http://www.melbourneinstitute.com/downloads/working_paper_series/wp2013n23.pdf">evidence that competition</a> between GPs holds prices down, at least in metropolitan areas, which may explain why bulk-billing rates have continued to climb overall for all GPs. </p>
<p>But the extent of competition between specialists could be lower, which would explain why patients face an increased out-of-pocket cost for their services. As shown on the figure above, this seems to have occurred for specialists and diagnostic services since late 2013, and is likely to continue.</p>
<p>Finally, GPs may increase revenue by increasing the intensity of services provided so that patients return for follow up visits. This could increase quality of care in some cases where it is currently under provided, say for chronic diseases, such as diabetes. Or it could expose patients to unnecessary tests and investigations and increase the provision of “low value” or “frivolous” care. </p>
<p>How big these effects will be is difficult to say, and depends on gathering <a href="http://melbourneinstitute.com/downloads/policy_briefs_series/pb2015n01.pdf">new evidence</a> on the impact of such changes doctors’ behaviour. But it is likely to increase costs, at least to to Medicare.</p><img src="https://counter.theconversation.com/content/38375/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Scott is an NHMRC Principal Research Fellow </span></em></p>Doctors groups have warned the Coalition government’s plan to maintain the Medicare rebate freeze will means patients will have to pay more for medical services.Anthony Scott, Professorial Fellow & NHMRC Principal Research Fellow, Melbourne Institute of Applied Economic and Social Research, The University of MelbourneLicensed 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.tag:theconversation.com,2011:article/383022015-03-03T10:45:00Z2015-03-03T10:45:00ZMedicare co-payment timeline<p>After a couple of days of speculation and hints, Health Minister Sussan Ley has announced the government is dropping its plan to introduce a co-payment for visiting GPs. The policy, announced in last year’s budget, reflected the government’s determination to introduce a price signal for health care and went through several incarnations before its much-anticipated death.</p>
<p><em>To navigate the timeline below, hover your mouse on the right (and on the left to move back).</em></p>
<hr>
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Finally abandoned on March 3, 2015, the GP co-payment has been something of an albatross around the Coalition government’s neck. Here are some highlights from the 14-month old policy’s short life.Reema Rattan, Global Commissioning EditorFron Jackson-Webb, Deputy Editor and Senior Health EditorEmil Jeyaratnam, Data + Interactives Editor, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/366022015-02-09T19:18:38Z2015-02-09T19:18:38ZAbbott redux needs to revisit ‘sustainable’ health spending<p>The Abbott government “reset” yesterday provides a valuable opportunity to reconsider health policies based on the idea that Australia’s health system is unsustainable. But first it will need to embrace a new understanding of what a sustainable health-care sector actually is. </p>
<p>The idea of sustainability has spread from ecology to apply to most aspects of human endeavour. In the context of health care, it can mean many things. The English National Health Service (NHS), for instance, launched a <a href="http://www.sduhealth.org.uk/policy-strategy/what-is-sustainable-health.aspx">strategy for a sustainable health system</a> in 2014 with emphasis on reducing environmental damage and promoting healthy lifestyles. </p>
<p>But discussions about Medicare’s sustainability under the Abbott government have only concerned how much we spend on the health sector. </p>
<h2>Understanding sustainability</h2>
<p>One way to think about sustainability is to examine the amount of resources devoted to the sector under consideration and compare it with the nation’s overall capacity to pay. A commonly used measure is expenditure as a percentage of gross domestic product (GDP), or total economic activity. </p>
<p><a href="http://www.oecd.org/els/health-systems/health-data.htm">Latest OECD data</a> shows the health sector accounts for 9.1% of Australia’s economic activity. That’s below the OECD average of 9.3%, as well as being lower than other countries. The United States, for instance, devotes 16.9% of the national income to health. </p>
<p>Over time, this percentage has steadily increased in all countries. But between 2000 and 2011, the growth rate was <a href="http://stats.oecd.org/index.aspx?DataSetCode=HEALTH_STAT">substantially smaller in Australia</a> when compared to average OECD growth. </p>
<p>In fact, the <a href="http://www.aihw.gov.au/publication-detail/?id=60129547205">most recent local figures</a> show health spending growth has actually slowed to the lowest rate recorded since the mid-1980s. As <a href="https://theconversation.com/australias-unsustainable-health-spending-is-a-myth-26393">previously argued on this site</a>, there’s no real evidence that the Australian economy is unable to accommodate likely growth in health spending.</p>
<p>Sustainability could also be seen through a more narrow government perspective, by taking expenditure and total tax revenue into account. In 2012, <a href="http://www.aihw.gov.au/publication-detail/?id=60129548871">25.9% of tax revenue</a> was devoted to health care, whereas in 2002 this figure was only 20%. </p>
<p>At first glance, these figures present some cause for concern, particularly if this percentage is expected to continue rising. But government revenue is strongly linked to economic activity and there was considerable volatility around 2008 because of the global financial crisis. Tax collection plummeted and, as a result, health expenditure as a percentage of tax revenue peaked at 27.4% in 2009. As revenues picked up, this percentage declined. </p>
<p>An even narrower view of sustainability is to look at health expenditure as a percentage of revenue for different levels of government. The various <a href="http://archive.treasury.gov.au/igr/igr2010/report/pdf/IGR_2010.pdf">inter-generational reports</a>, for example, focus heavily on the federal government’s contribution to health spending. Abbott government policies about price signals appear to have adopted this narrow perspective. </p>
<p>Policies announced in the 2014 budget have attempted to shift health-care expenditure away from the Australian government’s ledger and onto patients and state governments. These policies include the impending $5 rebate cut for GP visits, for instance, as well as cuts to hospital funding. </p>
<p>But <a href="http://www.aihw.gov.au/publication-detail/?id=60129547205">recent experience shows</a> state and territory governments are coming under considerably more strain than the federal government. In 2012, 27% of state, territory and local government tax revenues were devoted to health (up from 17% in 2002), whereas the federal government contributed 25% of its tax revenue to health (up from 21.6% in 2002). </p>
<h2>The right kind of sustainable</h2>
<p>There are two sides to the sustainability coin. </p>
<p>The first is the tax revenue side. While governments cannot be held responsible for external factors such as the end of the mining boom, they do determine tax policy and have the power to compel tax payment. </p>
<p>The 2014 budget introduced a (temporary) 2% tax rise on incomes over $180,000, while the Howard government made a series of tax cuts during the resources boom. So, a great deal of the revenue side is clearly the direct result of government policy. </p>
<p>The second side of the coin is expenditure. Here, the Abbott government has proposed very blunt policy instruments that do not guarantee a fall in expenditure. Patients may respond to the co-payment for GP visits by seeking care elsewhere – for instance, the emergency department. </p>
<p>And providers may increase referrals to protect incomes, by inviting more patients to come back for repeat consultations, or by undertaking additional diagnostic tests that require pathology services – particularly when there are financial links between GPs and pathology providers.</p>
<p>There are other important demographic issues to consider. With Australia’s ageing population and the rise of chronic diseases, good access to general practice has become essential to prevent people from going down the path of ill health and high costs. </p>
<p>All governments have a duty to maximise the benefits of health-care funding to the population, as well as ensure there’s sufficient funding for other social priorities such as education, social welfare and defence. Let’s hope the Abbott government will now embrace a health-system perspective rather than a narrow view of what it means to have a sustainable health system.</p><img src="https://counter.theconversation.com/content/36602/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jane Hall receives funding from NHMRC and APHCRI.</span></em></p><p class="fine-print"><em><span>Kees Van Gool receives funding from NHMRC and APHCRI</span></em></p>The Abbott government “reset” yesterday provides a valuable opportunity to reconsider health policies based on the idea that Australia’s health system is unsustainable. But first it will need to embrace…Jane Hall, Professor of Health Economics and Director, Centre for Health Economics Research and Evaluation, University of Technology SydneyKees Van Gool, Health economist, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/308872015-02-05T03:58:13Z2015-02-05T03:58:13ZWhy the government would have us pay more for poorer health<figure><img src="https://images.theconversation.com/files/71034/original/image-20150204-14362-mxdfg4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Coalition government is on the wrong track of reform for delivering better health.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/alanenglish/5046379960">Alan English/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span></figcaption></figure><p>The Coalition government has been claiming that Australia’s public health system is unsustainable since the 2014 budget. But its plans for the health system actually reflect the underlying belief that user-pays health systems are better – despite evidence to the contrary. </p>
<p>Less than a year and a half into the Abbott government’s first term, we’re on our second health minister and the third iteration of some kind of plan to introduce a co-payment for seeing a doctor. Despite widespread and vocal opposition to its plans, the government remains <a href="http://www.theguardian.com/australia-news/commentisfree/2015/feb/04/abbotts-leadership-threatened-by-policy-blunders-in-absence-of-a-clear-rival">committed to introducing this price signal</a> into the public health system.</p>
<p>Underpinning this move is the government’s commitment to a user-pays health system. But there’s now a large body of evidence showing such systems not necessarily great for the nation’s health. Here are four common ideas about market-based health systems and why they are not true.</p>
<h2>Myth one: market forces increase efficiency</h2>
<p>The administrative costs of Australia’s public health system are considerably lower than that of the private health insurance sector. So while this cost for Medicare is <a href="http://johnmenadue.com/blog/?p=113">around 6% per year</a>, the 2012-13 private health insurers’ <a href="phiac.gov.au/wp-content/uploads/2013/12/2012-13-accessible-pdf.pdf">annual report</a> estimates that 15% to 18% of private health insurance premiums go towards administration. </p>
<p>Both these figures are similar to those in the United States, the country with the most expensive health-care system in the world. <a href="http://www.oecd.org/els/health-systems/oecd-health-statistics-2014-frequently-requested-data.htm">Figures from the OECD</a> estimate that, in 2011, the per capita health cost in the US was US$8,508 (A$10,912) per head or 17.7% of GDP, compared to Australia, where the figure was US$3,800 (A$4,875) per head or 8.9% of GDP. </p>
<p>But the US figure quoted above is effectively still an underestimate. The premiums for about half the Americans who have health insurance are paid by their employer; they are essentially a business deduction underwritten by the taxpayer. </p>
<p>The inefficiencies of the market-based system are also apparent when comparing costs for similar conditions. Health insurance industry figures from <a href="http://static1.squarespace.com/static/518a3cfee4b0a77d03a62c98/t/534fc9ebe4b05a88e5fbab70/1397737963288/2013+iFHP+FINAL+4+14+14.pdf?">a 2013 report</a> show the average total reimbursement for a private hospital appendectomy in the United States is A$17,770 (US$13,851), while the cost for the same procedure in Australia is A$5,467. </p>
<h2>Myth two: market forces increase quality</h2>
<p>There’s no lack of evidence showing the market forces operating par excellence in the United States offer inferior health care when compared with public health systems. OECD data comparing mortality rates in member countries between 1980 and 2005, for instance, show only Portugal has had a <a href="http://www.compareyourcountry.org/01/mortality/index.php?cr=oecd&lg=en">smaller fall in adult mortality rates</a> than the United States.</p>
<p>And although it spends the highest proportion of GDP on health internationally, <a href="http://www.compareyourcountry.org/health?cr=oecd&lg=en">the United States ranks</a> 19th in infant mortality, 43rd in female mortality and 36th for life expectancy.</p>
<p>This is not to say that US health care cannot be outstanding; it just comes at a price rendering it grossly inequitable. Consider <a href="http://www.ncbi.nlm.nih.gov/pubmed/18787459">this 2008 study of 121,092 Americans</a> admitted to hospital with bleeding from liver cirrhosis. It found likelihood of death was significantly higher for certain groups. </p>
<p>By contrast, a <a href="http://gut.bmj.com/content/early/2011/07/13/gutjnl-2011-300186">2011 English study</a> of gastric bleeding in 245,438 patients found that, once hospitalised, the risk of bleeding and mortality was independent of social class. So in England, an unemployed street sweeper with gastric bleeding faces a similar risk of death in hospital as a stockbroker. But the stockbroker would have a much better outcome in the United States. </p>
<p>It’s also important to remember that more care does not necessarily equate to better quality care. The <a href="http://resources.iom.edu/widgets/vsrt/healthcare-waste.html">Institute of Medicine recently estimated</a> the excessive annual cost of systemic waste in the US health-care system at US$765 billion. This is almost 30% of total health expenditures. </p>
<p>Over-servicing is a big problem in private health-care systems, where profits can create a perverse incentive to treat. Indeed, they potentially create a conflict with purely medical reasons for treatment. </p>
<p>A landmark 1970 analysis (not available online) comparing surgery and surgeons in the United States and in England and Wales showed that the former, with its fee-for-service system, had twice as many surgical procedures as the latter places, both of which have public health systems. A <a href="http://www.ncbi.nlm.nih.gov/pubmed/4748597">1973 analysis</a> found a similar doubling of discretionary surgical rates in fee-for-service Canada compared to the United Kingdom. </p>
<h2>Myth three: public health care is unaffordable</h2>
<p>A number of studies indicate that it is actually private health care that’s unaffordable. It’s <a href="http://www.nerdwallet.com/blog/health/2014/03/26/medical-bankruptcy/">estimated that almost two million people</a> in the United States declared bankruptcy due to medical bills or conditions in 2013. </p>
<p>That makes health care one of the biggest issues affecting bankruptcy in that country. Worse still, the majority of these bankruptcies were expected to affect people in the prime of their working lives, between the ages of 35 and 55. </p>
<p>Worse still, the problem may be snowballing: <a href="http://www.amjmed.com/article/S0002-9343%2809%2900404-5/abstract">a 2009 study</a> found medical reasons for bankruptcies had increased from 46.2% in 2001 to 69.1% in 2007. Most medical debtors were well educated, owned homes and had middle-class occupations, and 75% had health insurance.</p>
<p>Despite the Coalition government’s warnings to the contrary, health-care costs are not spiralling out of control. According to an <a href="http://www.aihw.gov.au/publication-detail/?id=60129548871">Australian Institute of Health and Welfare report</a> on health spending for 2012-13, growth in health expenditure was the lowest since the mid-1980s. </p>
<p>In fact, the average health expenditure per person fell from A$6,447 in 2011-12 to A$6,430 in 2012-13. This puts Australia’s health spending as a proportion of gross domestic product at 9.4% in 2012, just above the OECD average of 9.2% – and much lower than the cost of the US market-based system.</p>
<h2>Myth four: price signals work</h2>
<p>Indeed, the government’s commitment to price signals is itself rather problematic. Price signals temper consumption by making people consider whether what they are about to buy is worth the cost. This makes them <a href="https://theconversation.com/gp-co-payments-why-price-signals-for-health-dont-work-28857">ill-fitted to the health-care sector</a>, which is not an optional commodity subject to the same thinking that influences decisions to buy a television or a pizza.</p>
<p>The latest evidence about co-payments comes from the introduction of the <a href="http://en.wikipedia.org/wiki/Deficit_Reduction_Act_of_2005">2005 Deficit Reduction Act</a> in the United States, which allowed states to introduce emergency department co-payments for non-urgent visits. A <a href="http://archinte.jamanetwork.com/article.aspx?articleid=2091743">very recently published analysis</a> of figures from eight states that charged a co-payment and ten states that didn’t showed no difference in annual number of emergency department admissions, visits, or inpatient days. </p>
<p>Evidence to date is overwhelmingly against the privatisation of medicine. By pulling together in a public system, citizens get better value and the government gets better outcomes. </p>
<p>Along with education, health is a basic pillar of a just society. It represents government investment in the country’s social capital – its people. Failing to provide these adequately and equitably will reduce Australia’s productivity, competitiveness and, in the end, the sense of social cohesion that comes from equal access and equal opportunity.</p><img src="https://counter.theconversation.com/content/30887/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Attia receives funding from the National Health and Medical Research Council, the Australian Research Council, Hunter Medical Research Institute, and the HCF Foundation.</span></em></p><p class="fine-print"><em><span>John Duggan 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>The Coalition government has been claiming that Australia’s public health system is unsustainable since the 2014 budget. But its plans for the health system actually reflect the underlying belief that…John Attia, Professor of Medicine and Clinical Epidemiology, University of NewcastleJohn Duggan, Conjoint Professor, University of NewcastleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/371182015-02-04T19:02:10Z2015-02-04T19:02:10Z$5 Medicare rebate cut could cost patients up to $40 more<figure><img src="https://images.theconversation.com/files/71018/original/image-20150204-25520-s819s6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Non-concession patients may end up paying a A$30 to A$40 co-payment, not a A$5 one.
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/comedynose/5755803052">Pete/Shutterstock</a></span></figcaption></figure><p>The Christmas-New Year silly season gave Australia three health policies. At the start of December, the policy from the <a href="https://theconversation.com/federal-budget-2014-health-experts-react-26577">2014 budget</a> was still on life support. But in mid-December, then-health minister Peter Dutton announced a <a href="https://theconversation.com/gp-co-payment-2-0-a-triple-whammy-for-patients-35334">new rebate reduction policy</a>. This survived less than a month. </p>
<p>In January, the new health minister, Sussan Ley, dumped the minimum time requirement for a level B consultation – the most common type of patient visit – and <a href="https://theconversation.com/early-signs-are-that-the-new-health-minister-doesnt-get-it-either-36943">promised to consult</a> on what should replace it. </p>
<p>Two other elements of the government’s revised co-payment policy remain: a A$5 cut to GP funding for each service a GP performs for patients who are over 15 and don’t have a concession card; and a freeze on Medicare rebates until 2018. </p>
<p>As I’ll argue today at the hearings of the <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Health/Health/Public_Hearings">Senate Select Committee on Health</a>, the cumulative impact of the freeze and the A$5 rebate reduction on general practices, and therefore on patients, will be substantial. Non-concession patients may end up paying a A$30 co-payment, not a A$5 one.</p>
<h2>Impact on general practices</h2>
<p>Data from University of Sydney <a href="http://ses.library.usyd.edu.au/bitstream/2123/11882/4/9781743324226_ONLINE.pdf">BEACH surveys</a> suggest that up to 57% of visits would be exempt from the reduced rebate because the patient has a Commonwealth Concession Card, Repatriation Card, or is a child up to the age of 15. </p>
<p>To account for other exclusions (15-year-olds, patients getting GP health plans and GP management plans) and to be conservative, let’s assume that two-thirds of patients are exempt from the A$5 funding cut.</p>
<p>The average practice (with an average distribution across the four consultation items, an average proportion of exempt patients and an average bulk billing model), would suffer about a 4% reduction in revenue across level <a href="https://theconversation.com/gp-co-payment-2-0-a-triple-whammy-for-patients-35334">A to D consultation items</a> (the overwhelming majority are level B; A is for simpler, shorter consults; C and D are for complex, longer consults). </p>
<p>The more significant impact is the second, slow-burn reduction: the freeze on all rebates. The table below shows the estimated impact on per patient revenue in general practice under this policy for the four common consultation items.</p>
<p>Assuming inflation of 2% a year, the low end of the <a href="http://www.rba.gov.au/inflation/inflation-target.html">Reserve Bank target</a> and <a href="http://www.rba.gov.au/inflation/measures-cpi.html">recent experience</a>, the cumulative impact on the freeze between now and June 2018 will be a further 6% cut in general practice revenue. </p>
<p><strong>Estimated average funding reduction per patient in 2018</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=279&fit=crop&dpr=1 600w, https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=279&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=279&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=351&fit=crop&dpr=1 754w, https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=351&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/70907/original/image-20150203-25557-8bm6p7.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=351&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Funding reductions for mid-2018 are relative to today (in real terms); analysis is restricted to level A-D consultations; assumes bulk billing will decrease and incentive payments will reduce from 84% to 67%.</span>
<span class="attribution"><span class="source">Grattan Institute</span></span>
</figcaption>
</figure>
<p>In total, if inflation runs at 2% and the A$5 rebate cut goes ahead with its 4% revenue impact, general practices will face effective, real reductions in rebates from these consultation items of just over 10%. Cuts of that magnitude will challenge the business model of most general practices. </p>
<p>The result is likely to be a move away from bulk billing. This is indeed the objective of the government’s policy.</p>
<h2>Impact on patients</h2>
<p>So, if a practice decides to reduce bulk billing, what fees will it charge?</p>
<p>For bulk-billing practices, the cost of introducing fee-collection processes, including potential cash handling, is not trivial and may be more than A$5 a consultation. The Australian Medical Association <a href="https://ama.com.au/media/proposed-co-payment-model-costly-red-tape-nightmare-medical-practices-%E2%80%93-independent-report">described</a> the initial co-payment proposal as a “costly red tape nightmare”. The A$5 scheme is likely to attract the same description.</p>
<p>A move away from bulk billing also means that the practice will lose the current bulk-billing incentive of A$6.15 or A$9.25 (depending on location and other factors). </p>
<p>In deciding their strategy, practices would need to consider not only the immediate impact of the A$5 rebate reduction, but also the slower but greater impact of the rebate freeze. If practices know that the value of the government rebate will erode over time, it would be prudent to set fees now that take this into account, especially as they have absorbed the impact of the <a href="http://www.abc.net.au/news/2013-10-16/medicare-rebate-freeze-row-as-patients-face-increasing-costs/5026996">existing freeze</a> initiated by the previous Labor government.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/71019/original/image-20150204-25544-1ls02lm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The rebate reductions and the freeze are likely to lead to reductions in bulk billing and increases in co-payments.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/10422334@N08/4130595143">Guy Mayer/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>The <a href="http://health.gov.au/internet/main/publishing.nsf/Content/Quarterly-Medicare-Statistics">average out-of-pocket payment</a>, when there is one, is A$31 at present. The combined impact of the freeze and the A$5 rebate reduction raises the risk that practices would move to the prevailing non-bulk-billed co-payment. </p>
<p>If practices decide to maintain bulk billing for some non-concessional patients subject to the A$5 rebate reduction, GPs may offset the reduction by increasing the co-payment for people who already pay one. The average co-payment for non-bulk-billed services could then increase significantly above its current level.</p>
<h2>Impact on patient demand</h2>
<p>Imposing a A$31 fee may reduce demand, as patients baulk at paying the fee, defer the visit until they have multiple problems, or go to a <a href="https://theconversation.com/gp-co-payment-would-increase-emergency-department-wait-times-28658">hospital emergency department</a> or pharmacy instead.</p>
<p>The impact of a reduction in daily demand on practices is unclear. Many practices can’t meet demand on any given day and already fill more appointments than they have available by making patients wait a day or two or longer for appointments. More than a quarter of people who visited a GP <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4839.0Main+Features32011-12">felt they had to wait</a> longer than was acceptable. </p>
<p>Some patients don’t wait and seek care elsewhere, from pharmacies or other GPs. But if demand drops as a result of co-payments, waits might reduce and patients who might otherwise have sought alternative treatment sources would see a GP. The overall impact might be no reduction in realised demand.</p>
<p>In summary, the rebate reductions and the freeze are likely to lead to reductions in bulk billing and increases in co-payments. This is as the government intends. But the increase in co-payments is likely to be significantly greater than the A$5 rebate reduction, probably in the range of A$30 to A$40 for a standard, level B visit.</p><img src="https://counter.theconversation.com/content/37118/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett's general practitioner charges him a $35 co-payment for a standard consultation.</span></em></p>The Christmas-New Year silly season gave Australia three health policies. At the start of December, the policy from the 2014 budget was still on life support. But in mid-December, then-health minister…Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/365082015-01-22T03:59:04Z2015-01-22T03:59:04ZWe need Medicare reform, but co-payment 3.0 is the wrong place to start<figure><img src="https://images.theconversation.com/files/69694/original/image-20150122-29909-1cx71vw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Medicare reform must focus on increasing value, not just cutting costs.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/worldbank/8575330872">World Bank Photo Collection/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>The primary care reform debate of the last 15 months got off on the wrong foot. It was <a href="http://www.cormorant.net.au/wordpress/wp-content/uploads/18-oct-2013-achr-gp-copayment-paper-final.pdf">framed</a> in terms of cutting government spending, with an overlay that consumers needed to bear the brunt of system reform. Although no one can deny the importance of money, nor the importance of consumers as being part of reform, the framing led policy makers down the path to perdition. </p>
<p>In response, both <a href="http://theconversation.com/co-payment-will-hit-working-poor-says-new-ama-chief-27150">policy experts</a> and <a href="http://theconversation.com/six-dollar-co-payment-to-see-a-doctor-a-gps-view-21915">medical professionals</a> denounced co-payments as inequitable and, <a href="http://theconversation.com/gp-co-payment-would-increase-emergency-department-wait-times-28658">potentially inefficient</a>. </p>
<p>A second frame was that Medicare was unsustainable. Again, this assumption was <a href="http://theconversation.com/australias-unsustainable-health-spending-is-a-myth-26393">challenged</a> and shown to be a myth.</p>
<p>Consider what the reaction of the public and the medical profession would have been if the frame was: how do we improve the quality of primary care? Or, what steps will keep growth in primary care spending in line with population growth while protecting access and quality?</p>
<p>Medicare reform must focus on increasing value, not just cutting costs. This means changing how things are done and what gets done, not just who pays for it. Policymakers can learn from patients about what is wrong with the system.</p>
<h2>Reduce duplication</h2>
<p>One area for savings is through reducing duplication. Extracting savings from duplication will be neither easy nor quick, but eliminating duplication can increase the speed of diagnosis and patient convenience while cutting costs.</p>
<p>In a <a href="http://www.commonwealthfund.org/publications/surveys/2013/2013-commonwealth-fund-international-health-policy-survey">2013 survey</a> of 1,500 Australians conducted by the New York-based Commonwealth Fund, 7.9% of respondents said that in the past two years their doctor had ordered a medical test that the patient felt was unnecessary because the test had already been done. </p>
<p>One in eight has experienced a situation where information, including test results, was not available at a consultation when required.</p>
<p>At present, a general practitioner or a specialist might order a pathology test not knowing that the same test was ordered by someone else a week before. But what if all pathology tests had to be ordered electronically and results uploaded to a secure site? </p>
<p>If a duplicate test was ordered, a real-time message could tell the doctor and ask for confirmation that another test was necessary. The technology to do this is <a href="http://www.albertanetcare.ca/InfoForAlbertans.htm">available now</a> and has been for a decade at least. What is required is getting that technology onto the desktops of clinicians.</p>
<p>Patients would be happier not having the inconvenience of having to present for multiple tests. Clinical care would be improved by quicker diagnosis. Savings to the taxpayer would automatically flow. A win-win-win situation.</p>
<h2>Get the right person doing the right task</h2>
<p>Previous <a href="http://grattan.edu.au/report/access-all-areas-new-solutions-for-gp-shortages-in-rural-australia/">Grattan Institute work</a> has shown that almost 20% of general practitioner visits were “less complex”. This means they only involve one problem, with only one or two medications prescribed. They don’t involve referrals to specialists or allied health services, ordering of tests and investigation, conducting procedures or providing other treatment.</p>
<p>A significant proportion of these visits could reasonably and safely be handled by other professionals: physician assistants, pharmacists and practice nurses. </p>
<p><a href="http://theconversation.com/good-news-for-rural-health-physician-assistants-join-the-workforce-35312">Physician assistants</a> could work under the direction of general practitioners to examine, diagnose and treat patients. Physician assistants are an established part of the health-care team in <a href="http://www.hwa.gov.au/sites/default/files/hwa-physician-assistant-report-volume2-literature-review-20120816.pdf">several countries</a> and their <a href="http://www.biomedcentral.com/1472-6963/13/223">patients report</a> high levels of satisfaction. Physician assistants aren’t widely employed in Australia because they are not authorised to write PBS-subsidised prescriptions or offer Medicare rebates for consultations.</p>
<p><a href="http://theconversation.com/pharmacists-under-prescribed-in-sickly-health-system-1185">Pharmacists</a> could work in collaboration with general practitioners to issue repeat prescriptions. Pharmacists have four years of drug <a href="https://theconversation.com/should-pharmacists-get-50-to-give-you-a-health-check-23187">training</a> and can safely dispense drugs and provide advice on medicines. Pharmacists in the United Kingdom, United States, Canada and New Zealand already deliver a wider range of primary care services and Australian pharmacists should follow suit. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/69696/original/image-20150122-29877-193ff1e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Non-doctor providers can safely perform a range of health services.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/christianacare/8189209594">Christiana Care/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-sa/4.0/">CC BY-NC-SA</a></span>
</figcaption>
</figure>
<p><a href="http://theconversation.com/the-nurse-will-see-you-now-sharing-patient-care-in-general-practice-12168">Practice nurses</a> could take a greater role in management of chronic illness. They could be responsible for monitoring patients and coaching them about how to manage their illness. </p>
<p>The expected annual remuneration for all these professions is up to two-thirds that of general practitioners. Developing models which involve a shift of care from general practitioners, freeing them up to perform the more complex care that fully uses their skills, would be a move in the right direction and would add to their work satisfaction. </p>
<p>Again, as well as improving the health system financial bottom line patients would get quicker access to care.</p>
<p>The challenge for policymakers will be ensuring that those other professionals are true substitutes and not additive. </p>
<h2>Next steps</h2>
<p>The two proposals outlined here are just the tip of a reform iceberg. Money is to be saved in improving prescribing and in improving referral pathways too. </p>
<p>None of the options described here will deliver savings within six months, but then again, neither did Co-payment Policy 1.0 or 2.0. All these changes are difficult. They require shifting a complex system, managing implementation and often taking on vested interests. </p>
<p>Making the system work better is hard, but the government is learning that not doing it, and passing the buck to patients, might be even harder.</p><img src="https://counter.theconversation.com/content/36508/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Duckett 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>The primary care reform debate of the last 15 months got off on the wrong foot. It was framed in terms of cutting government spending, with an overlay that consumers needed to bear the brunt of system…Stephen Duckett, Director, Health Program, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/363462015-01-20T19:25:36Z2015-01-20T19:25:36ZThe AMA and Medicare: a love-hate relationship<p>The Australian Medical Association (AMA) has emerged from the recent brouhaha over the Abbott government’s proposed Medicare reforms as both a winner in the protection of doctors’ incomes and an apparent champion of the affordability of health care for patients. </p>
<p>Medicare changes that were due to come into effect this week would have imposed a ten-minute minimum for regular (Level B) GP consultations, which currently attract a A$37.05 rebate. Consultations under ten minutes would have attracted a smaller rebate of A$16.95. GPs were faced with a choice: absorb the cuts or pass them on to patients. </p>
<p>The AMA <a href="http://www.smh.com.au/federal-politics/political-news/patients-face-new-20-fee-for-seeing-their-gp-20150112-12mpag.html">framed the change</a> as a A$20 cut to patient rebates for short visits and used data to dismiss government claims of “six-minute medicine”. </p>
<p>The proposals drew widespread public condemnation. When the opposition vowed to disallow the regulations implementing the cut when the Senate resumed in February, the government was left with little choice but to abandon the plan days before it was due to take effect. </p>
<p>It was an effective demonstration of the power and profile of the AMA, using a potent combination of evidence and scare tactics. </p>
<p>Now the real work begins for the new health minister, Sussan Ley, the cabinet and all the stakeholders in Medicare. The AMA is (rightly) guaranteed a place at the consultation table, but others are equally entitled to be there – including other professional medical groups, a wide range of primary care workers, pharmacists, aged care and mental health representatives and consumer and patient organisations. </p>
<p>Students of the history of Medicare are entitled to expect that in the upcoming negotiations the AMA will revert to standard practice, crowding out others and zealously safeguarding turf, <a href="https://theconversation.com/phase-out-gp-consultation-fees-for-a-better-medicare-13690">fee-for-service</a> and doctors’ incomes. </p>
<p>But the definition of a successful resolution to the current impasse does not lie solely with an agreement between the health minister and the AMA; the problems to be addressed are much broader than an adequate reimbursement for Medicare services provided through general practice. </p>
<p>The AMA has a tradition of opposing key health reforms, good and bad, dating back to the 1940s when the <a>Pharmaceutical Benefits Scheme</a> (PBS) was introduced. The AMA (then an offshoot of the British Medical Association) opposed the PBS with unrelenting vigour. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=402&fit=crop&dpr=1 600w, https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=402&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=402&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=505&fit=crop&dpr=1 754w, https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=505&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/69468/original/image-20150120-14495-wf1obq.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=505&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The then-BMA opposed socialised medicine and tried to block the PBS.</span>
<span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-242820400/stock-photo-operation-at-provident-hospital-chicago-illinois-in-showing-increased-use-of-antiseptic.html?src=dVcPYQBy5NwU4QfItBVyjA-1-11">Everett Historical/Shutterstock</a></span>
</figcaption>
</figure>
<p>Robert Menzies, then leader of the opposition, agreed to support the government’s case. But the price for this, extracted by the BMA, was a referendum question to <a href="http://www.jstor.org/discover/10.2307/40111513?sid=21105657425573&uid=3737536&uid=2&uid=4">change the constitution</a> to prohibit any form of civil conscription, thus effectively making socialised medicine forever impossible. </p>
<p>Similarly, the AMA met the introduction of <a href="http://www.aams.org.au/contents.php?subdir=library/history/funding_prof_med_au/&filename=index">Medibank and later Medicare</a> with ferocious opposition, although it was not alone – many in the medical professions, the General Practitioners’ Society and the private health funds were also against these reforms. Opponents argued that the system constituted a socialist takeover of medicine that would limit their incomes and the freedom of Australian citizens. </p>
<p>Fortunately, the AMA eventually agreed that perhaps there were some benefits to publicly subsidised health care. No AMA spokesperson today would advocate the abolition of these programs. And in fairness, on the other side, <a href="http://www.theage.com.au/articles/2003/12/31/1072546587433.html?from=storyrhs">cabinet documents</a> released some years ago revealed that the Whitlam government had its own – largely irrational – fears that doctors would treat Medibank as a licence to print money, by over-servicing patients, knowing the government would foot the bill.</p>
<p>These confrontations occurred decades ago, but they highlight deep-rooted suspicions on the part of both the AMA and government about each other’s value systems that still linger, mostly hidden, but emerging regularly. Last week, the AMA described the proposed reimbursement changes for level B consultations as “an assault on general practice”, while Liberal Party backbencher Andrew Laming called for a crackdown on “cowboy doctors”. </p>
<p>It is increasingly clear that Tony Abbott and his government are not the “<a href="http://www.abc.net.au/news/2014-02-20/tony-abbott-says-coalition-medicare-best-friend/5272376">best friend that Medicare has ever had</a>” and the Coalition’s preferred position would be a Fraser-government-style retreat on publicly funded health care, leaving Medicare as an increasingly ragged safety net for the poor. So there are no great expectations for real reforms to emerge from the promised consultations, despite the strong case for change.</p>
<p>In recently published articles with colleagues <a href="https://www.scribd.com/doc/252087121/05-01-2015-Tackling-OOP-Costs">Jennifer Doggett</a> and <a href="https://www.mja.com.au/insight/2015/1/lesley-russell-stephen-leeder-rough-road">Stephen Leeder</a>, I have outlined the need to focus on delivering increased value and quality in health care, how growing out-of-pocket costs are arguably leading to increased hospital costs, and the need for more teamwork and connected and coordinated care. </p>
<p>Reforms are needed to address these and other problems, including:</p>
<ul>
<li>years lost needlessly to disability</li>
<li>growing health disparities in some population groups</li>
<li>a health workforce that does not reflect current and future needs in its make-up and distribution</li>
<li>outdated reimbursement methods</li>
<li>a failure to direct spending to ensure improved long-term health outcomes and economic sustainability. </li>
</ul>
<p>Will the AMA be an effective protagonist for these issues in the upcoming discussions and negotiations? </p>
<p>On the one hand the AMA has an <a href="https://ama.com.au/advocacy/position-statements">outstanding record</a> as an advocate for issues as important and varied as the social determinants of health, climate change, asylum seekers’ health, problem gambling, violence against women and rural health. Most years over the past decade have seen the production of an <a href="https://ama.com.au/advocacy/indigenous-health">Indigenous health report card</a> and the AMA has used its resources to highlight the need to close the gap on Indigenous disadvantage and to encourage Indigenous doctors. </p>
<p>On the other hand, the AMA has generally opposed Medicare reforms at their introduction, regardless of political parenthood. AMA panned <a href="https://ama.com.au/media/fairer-medicare-package-not-answer">Fairer Medicare</a>, <a href="https://ama.com.au/media/medicare-plus-positive-second-best-option">Medicare Plus</a>, <a href="https://ama.com.au/media/gp-super-clinics-not-so-super-ama">GP Super Clinics</a>, <a href="https://ama.com.au/ausmed/govt-told-think-gp-medicare-locals">Medicare Locals</a> and <a href="https://ama.com.au/ausmed/governments-diabetes-plan-gps-say-no-thanks">coordinated care for diabetes</a>. Its support for bulk billing has been lacklustre at best, although the AMA has <a href="https://ama.com.au/submission/submissions-out-pocket-costs-australian-healthcare">spoken out</a> about the impact of out-of-pocket costs.</p>
<p>The AMA has campaigned aggressively around <a href="https://ama.com.au/media/doctors-fight-back-soaring-indemnity-costs">medical indemnity costs</a>, <a href="https://ama.com.au/ausmed/governments-diabetes-plan-gps-say-no-thanks">managed care programs</a>, <a href="https://ama.com.au/media/ama-applauds-decision-scrap-cap">Scrap the Cap</a> on work-related self-education expenses for professionals, <a href="https://ama.com.au/media/ama-calls-commonsense-prevail-cataract-surgery-senate-standoff">reduced reimbursements</a> for cataract surgery, the <a href="https://ama.com.au/media/ama-questions-safety-pharmacy-vaccinations">provision of immunisation</a> and other services in pharmacies, and the ability of <a href="https://ama.com.au/media/optometry-board-puts-glaucoma-patients-care-risk">optometrists to manage</a> glaucoma patients. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/69474/original/image-20150120-22679-11eadm3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">An astute minister will consult widely to ensure all doctors’ voices are heard.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/proimos/6869336880">Alex Proimos/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc/4.0/">CC BY-NC</a></span>
</figcaption>
</figure>
<p>Basically the AMA is very good at doing what most unions do: protecting members’ income and interests. In health policy terms this boils down to two basics: <a href="https://ama.com.au/media/ama-speech-ama-president-aprof-brian-owler-private-healthcare-australia">fee-for-service as the gold standard</a> for reimbursement and aggressive turf protection as non-medical health professional boards look to <a href="https://ama.com.au/media/ama-takes-strong-stance-non-medical-prescribingple.com/">expand their scope of practice</a>. </p>
<p>Given the growing recognition that fee-for-service encourages volume over value and that primary health care is about more than general practice, there will eventually be showdowns on these issues, even if they are not on the table this time around. </p>
<p>It is important to realise that there are <a href="http://blogs.crikey.com.au/croakey/2010/04/07/the-ama-says-its-the-chief-health-policy-advisor-really/?wpmp_switcher=mobilhttp://example.com/">many Australian doctors</a> who do not see their interests as well represented by the AMA (only about 40% of Australian doctors are AMA members), so an astute health minister will consult more widely to ensure that all doctors’ voices are heard, along with those of other health professionals and – most importantly – the patients. </p>
<p>The AMA is just one of the keys to unlocking an effective resolution to the current health and budget impasse.</p><img src="https://counter.theconversation.com/content/36346/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lesley Russell 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>The Australian Medical Association (AMA) has emerged from the recent brouhaha over the Abbott government’s proposed Medicare reforms as both a winner in the protection of doctors’ incomes and an apparent…Lesley Russell, Adjunct Associate Professor, Menzies Centre for Health Policy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353822015-01-20T19:25:23Z2015-01-20T19:25:23ZNew funding models are a long-term alternative to Medicare co-payments<p>The Abbott government is struggling with its Medicare co-payment reform, <a href="http://www.abc.net.au/news/2015-01-15/medicare-government-shelves-propsosed-rebate-cut-changes/6018990">scrapping the latest version</a> for a period of consultation, starting this week. The government claims it wants to make Medicare sustainable by controlling costs. However the proposed reforms are piecemeal and inequitable, antagonising Medicare’s stakeholders without addressing underlying problems.</p>
<p>To recap, the <a href="https://theconversation.com/gp-co-payment-2-0-a-triple-whammy-for-patients-35334">revised Medicare co-payment policy</a> as of December 9, 2014 was to reduce Medicare rebates by A$5 and encourage GPs to recoup this from patients; freeze the indexation of Medicare rebates for all doctors; and perhaps most controversially, impose a ten-minute minimum duration for level B appointments. This would have meant a A$20 rebate cut for short visits but the government <a href="https://theconversation.com/autopsy-of-a-dead-policy-government-shelves-impending-medicare-change-36295">scrapped this part</a> of the plan. </p>
<p>Introducing demand restraints such as co-payments points to a lack of faith in the principles of universal health care and the <a href="https://theconversation.com/medicare-spending-on-general-practice-is-value-for-money-33948">preventive benefits</a> of primary care. Hence they prompt outrage from the public and doctors alike who see the “slippery slope” to further increased co-payments, and reduction in government funding for public health care.</p>
<p>A blueprint for Medicare reform must include cost control, but also support quality and equity. Crucially, it must also be accompanied by adequate piloting and evaluation strategies to find out what works best in Australia. <a href="http://theconversation.com/phase-out-gp-consultation-fees-for-a-better-medicare-13690">My suggestion</a> is to phase in a system based on capitation with some pay-for-performance and residual fee-for-service elements.</p>
<h2>What is capitation?</h2>
<p>Capitation is a system which pays doctors an annual fee for each patient they have enrolled in their practice. The payment is in return for the GP “looking after” that patient for the whole year. So GPs do not receive more money for seeing their patients more often, and indeed will benefit from lower costs themselves if patient’s health improves and they require less care in the future.</p>
<p>Capitation has been the primary funding method for general practice in the United Kingdom for <a href="http://www.historyextra.com/feature/nhs-what-can-we-learn-history">more than 100 years</a>. More recent examples of capitation implementation come from North America: from the growth of managed care in the United States, where capitation has been widely used, to <a href="http://www.cmaj.ca/content/181/10/668.short">the province of Ontario</a> in Canada, where a voluntary capitation system <a href="http://www.cmaj.ca/content/181/10/668.short">was introduced in 2007</a>.</p>
<p>Evidence from Ontario, Canada is particularly relevant to Medicare in Australia, because voluntary capitation was recently phased in from an existing fee-for-service system. The model has been termed “mixed capitation” as it allows GPs to charge small fees in addition to capitation payments for enrolled patients, plus full fee-for-service for non-enrolled patients up to a cap. </p>
<p>This is how the transition to capitation could be implemented in Australia.</p>
<h2>What does capitation achieve?</h2>
<p>Early evaluations are cautiously optimistic. A <a href="http://onlinelibrary.wiley.com/doi/10.1111/caje.12003/full">recent study</a> shows the mixed capitation payment method reduced the number of services (consultations) GPs provided by around 6% per day, while increasing their likelihood of meeting preventive care quality targets by 7%. </p>
<p><a href="http://www.sciencedirect.com/science/article/pii/S0168851013002698">Another study</a> by the same authors finds no evidence that GPs using the capitation model “cost-shifted” by avoiding enrolling high-cost patients, a potential concern in capitation. This evidence and others has led <a href="http://www.cdhowe.org/pdf/Commentary_365.pdf">experts to recommend</a> mixed capitation schemes to reduce costs and support quality.</p>
<p>An added advantage of capitation systems is that because patients are enrolled with GP practices they work well with pay-for-performance schemes. <a href="https://theconversation.com/should-doctors-be-paid-to-keep-patients-healthy-3298">Pay-for-performance</a> is when doctors are paid “bonuses” when they meet quality targets for patient care. </p>
<p>Pay-for-performance arrangements now play a large role in the funding of primary care in the United Kingdom and United States. Australia is lagging behind.</p>
<h2>Towards a mixed funding system</h2>
<p>Capitation and pay-for-performance arrangements are not completely new to Australia. The <a href="http://www.biomedcentral.com/1471-2458/13/1212">Diabetes Care Project</a> randomised 50 GP practices to receive capitation and pay-for-performance payments for their diabetes patients (alongside other interventions). Practices received up-front payments and performance bonuses for achievements on indicators such as patient HbA1c level (indicating good blood sugar control). </p>
<p>The trial finished in 2014 and the evaluation has yet to be published. The results of this trial could be a valuable input into designing capitation and pay-for performance schemes in Australia.</p>
<p>So how can an ambitious reform of GP payment schemes proceed in Australia? </p>
<p>Reform could be incremental and gradual, offering capitation initially as a voluntary incentive for enrolling patients, alongside existing Medicare “fee-for-service” incentives. </p>
<p>Phasing in the new funding arrangements by states would provide excellent opportunities for evaluating aspects of the reform such as different ratios of capitation, fee-for-service or pay-for-performance in the funding mix.</p>
<p>This proposal would not be designed to provide a “quick fix” to health-care costs in the short term. Costs may even be higher in the first years of introducing new payment schemes than they would otherwise be with the status quo, as incentives are offered to doctors to adapt to change. Health care policy should aim over the time-horizon of our lifespans, not just the budget forward estimates.</p><img src="https://counter.theconversation.com/content/35382/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Sivey has received funding from the Australian Research Council, the National Health and Medical Research Council and Health Workforce Australia.</span></em></p>The Abbott government is struggling with its Medicare co-payment reform, scrapping the latest version for a period of consultation, starting this week. The government claims it wants to make Medicare sustainable…Peter Sivey, Senior Lecturer, School of Economics, La Trobe UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/362952015-01-15T05:59:22Z2015-01-15T05:59:22ZAutopsy of a dead policy: government shelves impending Medicare change<p>The <a href="http://www.theguardian.com/australia-news/2015/jan/15/medicare-rebate-changes-scrapped-by-government?CMP=EMCNEWEML6619I2">government has backed down</a> from its plan to cut Medicare rebates to doctors, which was to start on Monday, January 19, after several days of public pressure. For those not au fait with the world of health reform and policy, the issue may have seemed to pass by in something of a flash. And a close look shows the fight the proposed policy caused wasn’t, after all, worth it for the government.</p>
<p>After being unable to pass the <a href="https://theconversation.com/federal-budget-2014-health-experts-react-26577">changes to Medicare described in the 2014 budget</a>, the Coalition government put forward a new proposal in December 2014. It had <a href="http://www.humanservices.gov.au/corporate/publications-and-resources/budget/1415/measures/health-matters-and-health-professionals/34-90188">many of the same features</a>, but importantly, reductions in government support for Medicare items to big areas of spending, such as diagnostics and pathology, no longer applied. They also didn’t apply to a variety of high-need groups, including those with concession cards, children under 16, or people in aged-care facilities. </p>
<p>Nonetheless, the proposed changes were substantial. </p>
<h2>New policy set</h2>
<p>The first change, which has just been cancelled by the health minister Sussan Ley, would have meant a proportion of Level A consultations would have been reclassified as Level B.* </p>
<p>Level A consultations are currently rebated $16.95 and Level B are rebated $37.05. Those Level B consultations under ten minutes would have been reclassified as Level A. So, if a general practitioner wanted to earn the same amount of money for these consultations, they’d have had to increase what the patient would pay (the co-payment) by A$20.10 (the difference between A$16.95 and A$37.05).</p>
<p>The second proposed aspect of the policy, which appears to have been left untouched, is that, as of July 2015, the Medicare benefit for all GP services provided to non-concessional patients will be reduced by A$5. While this reduction is smaller than the A$20 cut that was to be introduced in January, it applies to a much larger set of consultations so has the potential for a much bigger impact on GP activity (and on population health). </p>
<p>Finally, all Medicare rebates are to be frozen until July 2018. </p>
<p>Initially, the Australian Medical Association (AMA) declared the total package to be a “<a href="https://ama.com.au/media/government%E2%80%99s-new-co-payment-model-%E2%80%98mixed-bag%E2%80%99">mixed bag</a>”, but it has since <a href="http://www.abc.net.au/news/2015-01-07/gps-lobby-mps-patients-ahead-of-looming-rebate-cut/6004394">come out strongly against the proposal</a>. And it appears to have triumphed.</p>
<h2>Was it worth it after all?</h2>
<p>A close look at the financial implication of the dropped policy of cutting rebates for certain Level B consultations raises questions about whether it was worthwhile starting a fight about.</p>
<p>To understand the policy’s cost implications, it’s vital to step back and look at Medicare as a whole. Total Medicare spending for 2013-14 was A$19.282 billion (almost A$1,000 per Australia). Of this, professional attendances consisted of A$8.732 billion (45% of the total). And of this second figure, A$4.584 billion was for general practice (23.8% of total Medicare expenditure). </p>
<p>Level A consultations are one item within this subgroup, and are currently described by Medicare as a:</p>
<blockquote>
<p>Professional attendance for an obvious problem characterised by the straightforward nature of the task that requires a short patient history and, if required, limited examination and management.</p>
</blockquote>
<p>In 2013-14, the total Medicare benefit paid on this item was A$46.7 million, which is substantial, but not relative to the total for general practice. In fact, it is only 1% of that total – and under 0.25% of total Medicare expenditure. The question is how many of the Level B consultations would be added to this group if the policy had been actioned. </p>
<h2>The death of six-minute medicine?</h2>
<p>The government claimed that one aim of the proposed change in payment for short consultations was to reduce the prevalence of so-called “six-minute medicine” in which doctors churn through patients to maximise total payment. Reducing the payment for shorter consultations currently considered as Level B could mean doctors see patients for longer, and take a broader medical history. They would, perhaps, address multiple issues in one consultation, among other things. </p>
<p>But <a href="http://sydney.edu.au/medicine/fmrc/beach/bytes/BEACH-Byte-2014-002.pdf">recent data from the BEACH study</a>, which collects information about general practice activity, looking at almost 35,000 GP consultations shows doctor visits that go for less than ten minutes represent only 26.1% of GP consultations, some of which will already be classified as Level A. </p>
<p>You can draw a couple of conclusions from this. </p>
<p>The figure is higher than that reported in the Medicare data, suggesting that the assigning of each GP visit to different consultation levels is imprecise. My guess is that many general practitioners assign most visits to Level B irrespective of length. So, both Level A, and levels C and D, which are longer consultations, are under-reported. </p>
<p>Supporting this supposition, the distribution of claims in the Medicare data has a much more pronounced peak at Level B (83% of the total) than the BEACH data does for consultations between ten and 20 minutes (58%). </p>
<p>The second thing to note is that, under either the BEACH data or the Medicare claim data, the prevalence of short consultations is fairly low. In the BEACH data, for instance, less than 10% of consultations are completed in under six minutes. Many of these visits would presumably not be improved by extending them to ten minutes because they’re for procedural issues, such as reissuing prescriptions. The shorter consultation is adequate for these purposes.</p>
<h2>What now for Medicare?</h2>
<p>The AMA may have won this round of the fight by causing the health minister to backtrack on the change that was to come into force on January 19, but other aspects of the policy remain. Indeed, the more substantial issue is the across-the-board reduction to benefits for GP consultations by A$5 and the freezing of rebates until 2018. Both apply to a large pool of services. </p>
<p>The AMA has stated this represents a <a href="http://www.smh.com.au/federal-politics/political-news/senate-spells-doom-for-tony-abbotts-plan-to-slash-medicare-rebates-20150114-12o328.html">A$1.3 billion cut to primary care</a>, but I could not replicate this figure. Still, it’s fair to say the slated change represents a substantial decline in government financial support for the sector in real terms. And it may impact a variety of areas, including bulk-billing rates, emergency attendances at hospital, retention of doctors in primary care, and ultimately the health of the community. </p>
<p>Implementing changes to Medicare has proven arduous for the Coalition government, and it’s likely to continue to pose a challenge during the remainder of its parliamentary term.</p>
<p><em><strong>CORRECTION:</strong> This article originally said rebates for Level A consultations would fall from $37.05 to $16.95 under the government’s proposed change. The policy would actually have meant the proportion of Level B consultations under ten minutes in duration would be reclassified as Level A consultations, reducing the rebate by $20.10. The text has been amended to rectify the error.</em></p><img src="https://counter.theconversation.com/content/36295/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard Norman receives funding from the ARC and the NHMRC.</span></em></p>The government has backed down from its plan to cut Medicare rebates to doctors, which was to start on Monday, January 19, after several days of public pressure. For those not au fait with the world of…Richard Norman, Senior Research Fellow in Health Economics, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/356092014-12-29T21:27:47Z2014-12-29T21:27:47Z2014, the year that was: Health + Medicine<figure><img src="https://images.theconversation.com/files/67459/original/image-20141217-19725-w9ji2v.jpg?ixlib=rb-1.1.0&rect=2%2C4%2C1334%2C850&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Key issues in 2014: HIV progress, Ebola, Medicare co-payment and consumer health.</span> <span class="attribution"><span class="source">Flickr/Brian Talbot; EPA/Ahmed Jallanzo; AAP/David Hunt; www.rowenawaack.com</span></span></figcaption></figure><p>2014 was dominated by discussions about better ways of <a href="https://theconversation.com/au/topics/paying-for-health">paying for health care</a>. But for all the talk, little progress was made. </p>
<p>The year began with former Howard government adviser <a href="https://theconversation.com/save-now-spend-later-why-co-payments-for-gp-visits-are-a-bad-idea-25823">Terry Barnes’ proposal</a> to introduce a A$6 co-payment for bulk-billed visits to the GP. This, he said, would save money by reducing unnecessary visits to the doctor. The <a href="https://theconversation.com/commission-of-audits-health-hit-list-experts-respond-26179">Commission of Audit</a> swallowed the proposal and spat out a A$15 version (A$5 for concession card holders) ahead of the May budget. </p>
<p>The government <a href="https://theconversation.com/federal-budget-2014-health-experts-react-26577">initially settled</a> on a A$7 co-payment for all GP visits and follow-up pathology and imaging. This was widely criticised for its potential to hurt the most vulnerable Australians who, according to research by the Grattan Institute, already paid <a href="https://theconversation.com/higher-health-co-payments-will-hit-the-most-vulnerable-29590">more than their fair share</a> of out-of-pocket health costs. </p>
<p><a href="https://theconversation.com/gp-co-payment-would-increase-emergency-department-wait-times-28658">Modelling</a> for The Conversation also showed the introduction of a GP co-payment could see average emergency department visits increase by between six minutes and three hours, as more patients opt for free hospital care rather than paying to see their local GP. </p>
<p>The impetus for the co-payment was concern that the nation’s health expenditure was rapidly spiralling out of control. But as data released in September <a href="https://theconversation.com/health-spending-growth-at-30-year-low-31983">revealed</a>, Australia’s recent growth in health expenditure was the lowest since the mid-1980s. Per person spending fell from A$6,447 in 2011-12 to A$6,430 in 2012-13. </p>
<p>After seven months of <a href="https://theconversation.com/back-to-the-future-with-coalition-attacks-on-medicare-bulk-billing-35311">trying to convince</a> the crossbench Senators of the scheme’s merit, the government announced a <a href="https://theconversation.com/gp-co-payment-2-0-a-triple-whammy-for-patients-35334">compromise</a> earlier this month: cutting GP rebates by $5 and freezing the rates until 2018. As Michelle Grattan wrote, this <a href="https://theconversation.com/co-payment-compromise-puts-extra-burden-on-doctors-35264">puts the onus on doctors</a> to send a A$5 price signal to non-concessional patients. </p>
<p>In other key health news, Melbourne’s July AIDS2014 conference put HIV and AIDs back in the spotlight. Reema Rattan led <a href="https://theconversation.com/au/topics/aids2014">our coverage</a>, which included an <a href="https://theconversation.com/in-conversation-with-professor-francoise-barre-sinoussi-29451">In Conversation</a> with Professor Rob Moodie and Nobel Laureate Françoise Barré-Sinoussi and interviews about HIV and the law with <a href="https://theconversation.com/the-law-can-be-an-awful-nuisance-in-the-area-of-hiv-aids-michael-kirby-29543">the Honourable Michael Kirby</a> and <a href="https://theconversation.com/discretionary-policing-has-a-role-controlling-hiv-report-29486">Professor Nick Crofts</a>. </p>
<p>Edwina Wright outlined the <a href="https://theconversation.com/five-promising-steps-forward-in-hiv-science-28652">five promising steps forward</a> in HIV science, including treatment as prevention, pre-exposure prophylaxis (giving antiretrovial drugs to people at risk of HIV to stop them contracting the disease) and new medications for people with both HIV and hepatitis C infections. </p>
<p>While a <a href="https://theconversation.com/we-need-a-cure-for-hiv-but-theres-still-a-long-way-to-go-29330">cure for HIV</a> is a fair way off, there is reason for hope, wrote AIDS2014 co-chair Sharon Lewin. In August, <a href="https://theconversation.com/shock-and-kill-approach-cures-mice-of-hiv-in-world-first-30528">scientists showed</a> mice could be “cured” of HIV using a combination of four drugs to flush out and kill hidden HIV-infected cells. </p>
<p>AIDS2014 also addressed the human cost of the disease, with Australian experts focusing on <a href="https://theconversation.com/know-the-epidemic-responding-to-hiv-in-three-key-communities-29216">three key groups</a>: sex workers, people who inject drugs and men who have sex with men. While we’ve come a long way to reduce HIV in Australia, wrote Marion Pitts, there’s <a href="https://theconversation.com/hiv-in-australia-weve-come-a-long-way-but-theres-more-to-do-28386">still more to do</a> to reduce the spread of the disease and remove the stigma against people living with HIV. </p>
<p>Internationally, we’re no longer in an era of emergency response, but that doesn’t mean rich countries can stop funding HIV. Instead, <a href="https://theconversation.com/too-soon-for-rich-countries-to-stop-hiv-funding-in-poor-ones-28717">David Wilson and Breadon Donald argue</a>, developing countries still need donor assistance to strengthen their health system so they can treat HIV as a chronic disease. </p>
<p>This year Ebola also focused the world’s attention on the challenges of health care in West Africa. The <a href="https://theconversation.com/explainer-what-is-ebola-virus-25071">disease spreads</a> through bodily fluids – blood, vomit and feces – so it should, theoretically, have been easy to contain. </p>
<p>But under-resourced health systems and a <a href="https://theconversation.com/in-conversation-with-nigel-crisp-ebola-response-and-lessons-from-african-health-leaders-35159">slow international response</a> led to the worst Ebola outbreak in history, claiming more than 6,800 lives so far, including many <a href="https://theconversation.com/how-are-nurses-becoming-infected-with-ebola-32873">health workers</a>. </p>
<p>In our coverage of almost 100 articles spanning the US, UK and Australian sites, we bought you the basics on Ebola: <a href="https://theconversation.com/explainer-what-is-ebola-virus-25071">what it is</a> and <a href="https://theconversation.com/what-happens-to-your-body-if-you-get-ebola-28116">how it affects the body</a>; what <a href="https://theconversation.com/how-ebola-started-spread-and-spiralled-out-of-control-32137">went wrong</a> in the Ebola respnse; <a href="https://theconversation.com/high-hopes-rest-on-800-vials-of-experimental-ebola-vaccine-shipped-from-canada-33201">vaccine development</a>; as well as stories on how authorities can <a href="https://theconversation.com/listen-up-health-officials-heres-how-to-reduce-ebolanoia-33637">reduce “Ebolanoia”</a>, why <a href="https://theconversation.com/do-our-genes-determine-whether-we-survive-ebola-33658">some people survive</a> Ebola and others don’t, and how the outbreak has affected <a href="https://theconversation.com/ebolas-other-victims-how-the-outbreak-affects-those-left-behind-33191">those left behind</a>.</p>
<p>Other highlights for the year include series on <a href="https://theconversation.com/au/topics/testing-alternative-therapies">testing alternative therapies</a>, <a href="https://theconversation.com/au/topics/international-health-systems">international health systems</a>, <a href="https://theconversation.com/au/topics/biology-and-blame">biology and blame</a>, <a href="https://theconversation.com/au/topics/domestic-violence-in-australia">domestic violence in Australia</a>, <a href="https://theconversation.com/au/topics/child-protection-in-australia">child protection in Australia</a> and our popular ongoing series <a href="https://theconversation.com/au/topics/health-check">Health Check</a>. </p>
<p>Finally, this year we also welcomed new a columnist, psychiatrist <a href="https://theconversation.com/enlisting-psychology-in-the-fight-against-terrorism-35560">Steve Ellen</a>, whose <a href="https://theconversation.com/columns/steven-ellen-111766">Life on the Couch</a> column shines a psychological light on people, culture and society. Next month public health veteran <a href="https://theconversation.com/profiles/simon-chapman-ao-1831">Simon Chapman</a> will also join the ranks, with some <a href="https://theconversation.com/au/columns">plain speaking about public health</a>. </p>
<p>Thanks to all columnists and authors, and of course, to our regular readers. Have a happy and healthy new year. </p>
<hr>
<p><em><strong>Health + Medicine’s most popular stories for 2014:</strong></em></p>
<p><strong>1.</strong> <a href="https://theconversation.com/health-check-five-supplements-that-may-help-with-depression-28889">Health Check: five supplements that may help with depression</a> <br>
<strong>2.</strong> <a href="https://theconversation.com/six-foods-that-increase-or-decrease-your-risk-of-cancer-28270">Six foods that increase or decrease your risk of cancer</a> <br>
<strong>3.</strong> <a href="https://theconversation.com/old-dope-new-tricks-the-new-science-of-medical-cannabis-30828">Old dope, new tricks: the new science of medical cannabis</a> <br>
<strong>4.</strong> <a href="https://theconversation.com/shock-and-kill-approach-cures-mice-of-hiv-in-world-first-30528">‘Shock and kill’ approach cures mice of HIV in world first</a> <br>
<strong>5.</strong> <a href="https://theconversation.com/brains-genes-and-chemical-imbalances-how-explanations-of-mental-illness-affect-stigma-28324">Brains, genes and chemical imbalances: how explanations of mental illness affect stigma</a> <br>
<strong>6.</strong> <a href="https://theconversation.com/health-check-what-you-need-to-know-about-ear-wax-31302">Health Check: what you need to know about ear wax</a> <br>
<strong>7.</strong> <a href="https://theconversation.com/health-check-five-must-have-foods-for-your-shopping-trolley-25265">Health Check: five must-have foods for your shopping trolley</a> <br>
<strong>8.</strong> <a href="https://theconversation.com/how-the-bacteria-in-our-gut-affect-our-cravings-for-food-33141">How the bacteria in our gut affects our cravings for food</a> <br>
<strong>9.</strong> <a href="https://theconversation.com/health-check-five-foods-to-always-avoid-at-the-supermarket-27107">Health Check: five foods to always avoid at the supermarket</a> <br>
<strong>10.</strong> <a href="https://theconversation.com/explainer-how-much-sleep-do-we-need-29759">Explainer: how much sleep do we need?</a></p><img src="https://counter.theconversation.com/content/35609/count.gif" alt="The Conversation" width="1" height="1" />
2014 was dominated by discussions about better ways of paying for health care. But for all the talk, little progress was made. The year began with former Howard government adviser Terry Barnes’ proposal…Fron Jackson-Webb, Deputy Editor and Senior Health EditorLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353342014-12-10T19:42:36Z2014-12-10T19:42:36ZGP co-payment 2.0: a triple whammy for patients<figure><img src="https://images.theconversation.com/files/66850/original/image-20141210-6033-1ipepgj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The big losers will be ordinary patients.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-173814836/stock-photo-coprology-test.html?src=pp-same_model-173817368-98-GPQpuTsu9RpVg9Ze2Pg-6">Image Point Fr/Shutterstock</a></span></figcaption></figure><p>In the May budget, the Commonwealth government proposed a A$7 co-payment for GP services and tests done outside a hospital. After seven months of fierce criticism, the government <a href="http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2014-dutton111.htm">abandoned those plans</a> on Tuesday. The budget proposals have been replaced by three separate initiatives which will reduce Medicare direct spending by roughly the same amount as the budget initiative. </p>
<p>As with the $7 co-payment proposal, these savings will initially be directed into the Medical Research Future Fund.</p>
<p>The first change has grabbed all the headlines. It is to <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/strongmedicare_factsheet_patients">reduce</a> by $5 the rebate for general practice visits for most people. This excludes pensioners, concession card holders and people under 16. The government is <a href="http://www.abc.net.au/7.30/content/2014/s4145569.htm">encouraging GPs</a> to recoup the $5 rebate cut from patients.</p>
<p>The second change is to freeze the <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/strongmedicare_factsheet_doctors">indexation of rebates</a> for all medical practitioners. As the rebate drifts further away from the cost that GPs incur in running their practice, GPs are likely to increase their charges to cover their costs. </p>
<p>As a result, all patients (including pensioners and health care card holders) are likely to face increased out-of-pocket costs. The problem is likely to be worst in areas where access to care is lowest, where patients are <a href="http://grattan.edu.au/report/access-all-areas-new-solutions-for-gp-shortages-in-rural-australia/">already more likely</a> to pay out of pocket costs.</p>
<p>The third change is to the funding rules for GP consultations. Currently there are four levels of rebates for GP consultations:</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=361&fit=crop&dpr=1 600w, https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=361&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=361&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=454&fit=crop&dpr=1 754w, https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=454&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/66846/original/image-20141210-6039-1vtdrgk.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=454&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.mbsonline.gov.au/internet/mbsonline/publishing.nsf/Content/the-mbs">Medicare Benefits Schedule</a></span>
</figcaption>
</figure>
<p>The vast bulk of consultations are level B, up to 20 minutes. Under the rules announced yesterday there is a new minimum length for level B consultations of 10 minutes, shorter consultations will now be considered level As.</p>
<p>This change will dramatically reduce the rebate for those <a href="http://www.health.gov.au/internet/main/publishing.nsf/Content/strongmedicare_factsheet_doctors">shorter consultations</a>, from $37.05 to $11.95 for concession card holders and $16.95 for general patients. Again it is highly likely that GPs will pass on $20+ gap to patients. The $5 co-payment has quickly morphed into a $25 one. </p>
<h2>Higher patient payments</h2>
<p>At first blush it may seem that the government has listened to complaints and fixed the problems that torpedoed its initial proposal. Originally, the co-payments applied to all patients, including concession-card holders, such as pensioners and people without a job. GPs would be forced to collect the $7, which seemed unworkable. </p>
<p>But the comparison shouldn’t be with what the budget suggested. Instead, the watered-down co-pay plan should be judged by the impact it will have on patients, on GPs, and on the budget bottom line.</p>
<p>At budget time every year, the temptation has been to increase patient co-payments a little bit to reduce spending. This obscures the fact that for many people health care fees are already too high. The fees have crept up continually under successive governments. Partly as a result, Australia relies more on direct fees to pay for health care than most similar countries.</p>
<p>There is <a href="http://link.springer.com/article/10.1007/s10198-013-0526-8">strong evidence</a> from around the world that co-payments stop people from getting health care. That means less spending immediately, but those gains are offset when people skip visits they need. It costs patients, the health system and the broader economy <a href="http://theconversation.com/higher-health-co-payments-will-hit-the-most-vulnerable-29590">much more</a> if people get sicker.</p>
<p>The consequences are serious. Already 5% of people <a href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/4839.0">report</a> that they avoid doctor visits because of the cost, these changes will exacerbate that.</p>
<h2>Longer appointments</h2>
<p>The current payment scales encourage shorter consultations in each payment band.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=583&fit=crop&dpr=1 600w, https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=583&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=583&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=733&fit=crop&dpr=1 754w, https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=733&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/66849/original/image-20141210-6060-1kjbg33.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=733&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Grattan Institute/Medicare Benefits Schedule 2014</span></span>
</figcaption>
</figure>
<p>Currently, shorter level B consultations can lead to GP revenue of up to $9 a minute (see the notes under the chart for more detail on these figures). The government pays around $2 a minute for a level B visit that lasts 20 minutes. </p>
<p>With the new minimum length for level B visits, the potential hourly rates for the different types of consultations are much more even, essentially reducing the incentive for “6-minute medicine”. </p>
<p>The reality is that <a href="http://sydney.edu.au/medicine/fmrc/beach/bytes/BEACH-Byte-2014-002.pdf">most consultations</a> take much longer than that – the average is closer to 15 minutes and the median only a few minutes shorter – so this policy initiative may be “solving” a problem which isn’t there.</p>
<p>Discouraging turnstile medicine has previously been seen as a good policy. With increasing complexity of patients and more patients having multiple chronic conditions, longer consultations are probably appropriate to ensure more thorough assessments and management by GPs.</p>
<p>But Tuesday’s changes transformed a good idea into a bad one.</p>
<p>Previously, implementation of policies to encourage longer consultations was proposed on a cost-neutral basis. Now it is as a budget savings measure, much of the cost of will be borne by patients. What might have been able to be promoted as quality-enhancing will now almost certainly be access-reducing and probably quality-reducing as well if patients miss out on needed care.</p>
<p>The changes announced yesterday are much more complex than the simple $5 headline number. They save the Commonwealth government roughly the same amount as the budget proposals. This means that collectively, consumers, GPs, or both, will be out of pocket to the same extent as was proposed in the budget. </p>
<p>The distribution, though, will be different. Assuming GPs pass on the cuts, the big losers will be ordinary patients. Pensioners and concession card holders are protected from only one of the three changes, so they may face increased costs because of the indexation pause and the level B definition changes.</p>
<p>The rebate reductions are due to come into effect on July 1, 2015. But the level B definition changes are to be snuck in by regulation to apply from January 1, 2015. Because the Senate can disallow regulations, the government delayed the changes until a few days after the Senate rose for its Christmas break.</p>
<p>The big question is whether these changes will survive the Senate when it resumes on February 9. It will be an interesting summer.</p><img src="https://counter.theconversation.com/content/35334/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>In the May budget, the Commonwealth government proposed a A$7 co-payment for GP services and tests done outside a hospital. After seven months of fierce criticism, the government abandoned those plans…Stephen Duckett, Director, Health Program, Grattan InstitutePeter Breadon, Health Fellow, Grattan InstituteLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353292014-12-10T19:42:17Z2014-12-10T19:42:17ZSix things you should know about the co-payment scheme<p>The Federal government’s <a href="https://theconversation.com/back-to-the-future-with-coalition-attacks-on-medicare-bulk-billing-35311">attempt to impose a $5 co-payment on GP services</a> by regulation raises the same issues as its previous failed attempt to impose a $7 co-payment through legislation. </p>
<p>The <a href="https://theconversation.com/medicare-co-payment-what-the-changes-mean-for-you-35322">consequences of the new policy for patients</a> are self-evident. But some additional points that are less well-known yet nevertheless important need to be highlighted.</p>
<p>First, the “savings” will be largely illusory. A reduction in the rebate will save the government money, but unless this reduces service use, it only means that patients will pay more, or doctors will be paid less for the same amount of work. In other words, it will shift the cost to patients or doctors, not reduce the use of real resources. </p>
<p>Second, no real reduction in the cost of Medicare will be achieved unless some patients reduce their use of doctor services. Almost all of these patients will be relatively less well off because the co-payment will not deter the wealthy. In other words, whatever savings are made will be at the expense of the poor.</p>
<p>Third, if there’s an overall net reduction in the use of doctor services, it will mean that the fixed stock of doctors will have less work (not that there will be fewer doctors). The economic (opportunity) cost of medical care – the skilled workforce that is not available to work elsewhere in the economy – will remain unchanged.</p>
<p>Fourth, an unknown proportion of general practitioners may continue to bulk bill patients and accept the lower rebate. But, in 2011, the income of Australian general practitioners relative to average wages was the lowest in the <a href="http://dx.doi.org/10.1787/888932917028">16 countries compared by the OECD</a> after Estonia and Hungary. </p>
<p>A more equitable target for government policy would be specialist incomes, which were the fourth highest in the same comparison.</p>
<p>Fifth, the “unsustainability” of Medicare – the ostensible reason for change – is <a href="https://theconversation.com/australias-unsustainable-health-spending-is-a-myth-26393">false</a>. While health spending is rising (at this point in time more slowly than at any time since records were available), spending is rising more in many other areas. People now spend more of their income on electronic goods, for instance, and travel or entertainment. This means they are spending a smaller percentage of their income elsewhere. </p>
<p>The point here is that the economy is flexible. There is no obstacle to spending more on health, if this is what we want. Of course, we want value for money. But the barrier to access created by co-payments does not achieve this. </p>
<p>Economic growth also allows increased expenditure in one area without reductions elsewhere. As GDP grows the pie of total income also grows. This means that we could increase the amount of money spent on health without decreasing expenditure elsewhere. Even if GDP grows more slowly than health spending, the absolute (not percentage) increase in GDP will most likely still be greater than the absolute increase in health expenditures. </p>
<p>Finally, the claim that government expenditure on Medicare is unsustainable is also untrue. Because of Australia’s substantial private health sector, public spending on health as a percentage of GDP is among the lowest in the OECD. Only Chile, Estonia, Hungary, Israel, Mexico, Poland and the Slovak Republic channel less of their GDP into health via the government. </p>
<p>The government’s budgetary problems are primarily a result of low taxes in Australia, which, as a percentage of GDP, are the fourth lowest of the 34 countries in the OECD database. The alternative to penalising low-income patients and (relatively) low-income general practitioners is to repair the tax base and raise total revenues to a level more comparable with the amounts collected by most western countries.</p><img src="https://counter.theconversation.com/content/35329/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Richardson receives funding from the National Health and Medical Research Council. He is a member of the Australian Greens.</span></em></p>The Federal government’s attempt to impose a $5 co-payment on GP services by regulation raises the same issues as its previous failed attempt to impose a $7 co-payment through legislation. The consequences…Jeff Richardson, Professor and Foundation Director, Centre for Health Economics, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353222014-12-10T05:30:21Z2014-12-10T05:30:21ZMedicare co-payment: what the changes mean for you<figure><img src="https://images.theconversation.com/files/66839/original/image-20141210-6030-jxb0yy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If you don't have a concession card and are usually bulk billed, you may face a A$5 co-payment, or more.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-173815067/stock-photo-temperature-woman.html?src=pp-photo-173817368-98-GPQpuTsu9RpVg9Ze2Pg-1">Image Point Fr/Shutterstock</a></span></figcaption></figure><p>The Abbott government has scrapped its controversial A$7 co-payment plan and replaced it with a A$5 cut to GP rebates for patients over 16 without a concession card, and other rebate changes.</p>
<p>The revised plan comes after seven months of <a href="https://theconversation.com/back-to-the-future-with-coalition-attacks-on-medicare-bulk-billing-35311">failed negotiations</a> with crossbenchers and widespread concern a co-payment would reduce vulnerable patients’ access to care and drive people to already overburdened emergency departments. </p>
<p>Doctors may choose to pass the A$5 cut on to patients or they may charge more. GPs are currently able to set their own fees, with many using the AMA guide, which recommends a fee of A$73 for a standard consultation of up to 20 minutes. </p>
<p>Rebates for children, pensioners, veterans, aged care residents and other concession card holders will remain the same. Rebates for all health checks, mental health plans, chronic disease management plans will also remain the same. There will be no policy changes for blood tests and diagnostic imaging. </p>
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<p><strong>Related coverage:</strong> <a href="https://theconversation.com/back-to-the-future-with-coalition-attacks-on-medicare-bulk-billing-35311">Back to the future with Coalition attacks on Medicare bulk billing</a></p>
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<p>From July 1 2015, if you don’t have a concession card and are usually bulk billed, you may face a A$5 co-payment, or more. </p>
<p>If you’re not usually bulk billed, your GP may also set a new fee. This may be passed on to you when you visit your Medicare office to claim your rebate. In this case, you will receive A$32.05 rather than A$37.05 for a ten to 20 minute consultation. </p>
<p>The indexation of GP rebates has been frozen until July 2018 so GPs are likely to increase their fees over the next three years to recoup some of this lost income.</p>
<p>If your GP visits are usually quick, you may find your GP spends more time with you from January 16 2015. The government will introduce a ten-minute minimum time for level B consultations, which make up the bulk of GP visits. </p>
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The Abbott government has scrapped its controversial A$7 co-payment plan and replaced it with a A$5 cut to GP rebates for patients over 16 without a concession card, and other rebate changes. The revised…Fron Jackson-Webb, Deputy Editor and Senior Health EditorEmil Jeyaratnam, Data + Interactives Editor, The ConversationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/353112014-12-10T02:30:46Z2014-12-10T02:30:46ZBack to the future with Coalition attacks on Medicare bulk billing<p>In the government’s latest “scraping away the barnacles” of unpopular and blocked policies, prime minister Tony Abbott and health minister Peter Dutton have announced they’re abandoning the plan to have doctors charge a $7 co-payment for consultations. Facing a massive backlash from both the medical profession and the public, the budget measure was facing almost certain defeat in the Senate.</p>
<p>Abbott and Dutton have outlined an “optional” co-payment, which makes doctors responsible for charging it. It reduces the rebate doctors receive for treating patients by $5 and freezes it until July 2018. General practitioners can pass on this cut by charging patients who do not have health-care (concession) cards and are aged over 16. </p>
<p>Both versions of the co-payment policy are just the latest stoush in long battle over bulk billing, which lies at the centre of Medicare, and the scope of universal health coverage in Australia. Bulk billing – where general practitioners bill Medicare directly without charging patients upfront fees – has, in fact, played an unusually prominent role in Australian health policy conflicts. </p>
<p>“Free” access to the gatekeeper role of general practice enraged conservative critics of Medicare from the start. At the same time, defenders of Medicare treat it as a line in the sand; any attack on bulk billing is equated with an assault on Australia’s public health system.</p>
<h2>A doomed policy</h2>
<p>The original policy, announced in the <a href="http://www.budget.gov.au/2014-15/content/glossy/health/download/Health.pdf">May budget</a>, was complicated and poorly explained. Here’s a brief summary of what it entailed. </p>
<p>From July 1, 2015, previously bulk-billed patients would pay $7 towards the cost of standard medical consultations and out-of-hospital pathology and imaging services. Some patients – including children under 16 and health-care card holders (low-income earners and pensioners) – would be exempt from the co-payment after their first ten visits in a calender year. </p>
<p>In effect, the structure of bulk billing would remain intact. Doctors could still bill Medicare directly, but their patients would have to pay the $7 co-payment. If they charged the full amount, general practitioners would receive an additional $2 in the rebate from the government. The other $5 raised by the co-payment would go into a Medical Research Future Fund, which would start disbursing the interest it garnered after it had collected $20 billion.</p>
<p>The policy was <a href="https://www.mja.com.au/journal/2014/200/7/copayments-general-practice-visits">attacked from all sides</a>. Defenders of Medicare saw it as another round in the Coalition’s attempts to undermine universal coverage. And the Australian Medical Association (AMA) – long ambivalent about bulk billing – criticised the complexity of the arrangements, and demanded the exclusion of vulnerable people. </p>
<p>Australia already has one of the <a href="http://www.publish.csiro.au/paper/AH14087.htm">largest and most complex set of co-payments</a> for medical services in the developed world. Proponents of a “price signal” for health seemed ignorant of the bewildering array of price signals already faced by anyone with a serious and continuing illness. </p>
<p>And no one, including the government, has proffered any modelling to justify the claim that a co-payment would make the system more efficient, rather than just add to the existing obstacle course. </p>
<p>Even the medical research community seemed either bemused and embarrassed by the linking of the co-payment to a new Medical Research Future Fund. This move, which seemed calculated to divide medical groups, confused the government’s message that the measure was part of its program of “budget repair”. </p>
<p>It was hard to find anyone with a good word to say about the policy. And its doom in the Senate seemed certain. </p>
<p>An official report released in September showing federal government spending on health <a href="http://www.aihw.gov.au/publication-detail/?id=60129548871">has been declining</a> – and will fall further with cuts in transfers to state hospital systems – made the justification for the change look even more fragile.</p>
<h2>Back to the future</h2>
<p>So how is the new policy likely to be received? The AMA has always been comfortable with co-payments, but not with cuts in the rebate. Its national president, Brian Owler, has described the announcement as a “<a href="https://ama.com.au/media/government%E2%80%99s-new-co-payment-model-%E2%80%98mixed-bag%E2%80%99">mixed bag</a>”. </p>
<p>The “optional” co-payment ends the administrative nightmare of charging concessional patients for just their first ten visits. It also removes proposed co-payments on pathology and other diagnostic tests.</p>
<p>But it remains a cost shift from the government to individuals, with doctors squeezed in the middle. It may have severe effects on the viability of practices in poorer areas where general practitioners may not feel they have the option of passing on the rebate cut. </p>
<p>The odd thing about this saga is that <a href="https://www.newsouthbooks.com.au/books/the-making-of-medicare/">we have been here before</a>. In 1996, the Howard government froze GP rebates. Over the next three years, this squeezed doctors’ incomes, which fell almost 20% in relation to average weekly earnings. </p>
<p>One result was a slow abandonment of bulk billing, not out of ideological hostility, but to maintain practice incomes. Bulk billing had been at a high of 80.6% of services in 1996, but fell to 68.5% in 2003-04. The shift was even greater in areas with fewer general practitioners, especially in remote and rural places.</p>
<p>A political backlash developed; the government faced hostile criticism from doctors, the AMA, and patients. The response was “A Fairer Medicare”, launched in April 2003. It brought in new subsidies for bulk billing in rural and remote areas and incentives for bulk billing health-care card holders. </p>
<p>Opponents argued it was nothing of the sort; health-care card holders were only a minority of those in need, and the policy continued to push general practitioners out of bulk billing. The Senate, controlled by Labor and the Greens, blocked “A Fairer Medicare”.</p>
<p>With a federal election looming, John Howard appointed Tony Abbott as the new Minister for Health, gave him an open cheque book and a mandate to remove bulk billing as an electoral issue. </p>
<p>“Medicare Plus” restored the level of all general practitioner rebates, with extra incentives (which remain in place) to bulk bill children and pensioners. The restoration led to a return of bulk billing. And by 2006, it was back to 78% of services. Tony Abbott used these bulk billing figures to proclaim himself “Medicare’s greatest friend”.</p>
<p>Will the latest changes meet the fate of “A Fairer Medicare”? The Abbott government’s changes will be introduced by regulation, avoiding an immediate Parliamentary vote. But they can be reversed by a Senate vote when Parliament reconvenes in early 2015. </p>
<p>The exclusion of some low-income groups and children may make the new policy more palatable to the cross-benchers who will decide its fate. But the freeze of the rebate and long-term pressure to abandon bulk billing mean neither general practitioners nor many of their patients will be appeased.</p><img src="https://counter.theconversation.com/content/35311/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jim Gillespie receives research funding from NHMRC and WentWest/ Western Sydney Partners in Recovery.</span></em></p>In the government’s latest “scraping away the barnacles” of unpopular and blocked policies, prime minister Tony Abbott and health minister Peter Dutton have announced they’re abandoning the plan to have…Jim Gillespie, Deputy Director, Menzies Centre for Health Policy & Associate Professor in Health Policy, University of SydneyLicensed as Creative Commons – attribution, no derivatives.