tag:theconversation.com,2011:/id/topics/optional-co-payment-13982/articlesOptional co-payment – The Conversation2015-03-22T19:15:06Ztag: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>
<iframe src="https://d3602hfvnbc5pq.cloudfront.net/23iyK/4/" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="400"></iframe>
<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/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/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>
<hr>
<blockquote>
<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>
</blockquote>
<hr>
<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>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=2122&fit=crop&dpr=1 600w, https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=2122&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=2122&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=2666&fit=crop&dpr=1 754w, https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=2666&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/66833/original/image-20141210-6033-sx47yw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=2666&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
</figcaption>
</figure><img src="https://counter.theconversation.com/content/35322/count.gif" alt="The Conversation" width="1" height="1" />
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.tag:theconversation.com,2011:article/352642014-12-09T10:20:31Z2014-12-09T10:20:31ZCo-payment compromise puts extra burden on doctors<figure><img src="https://images.theconversation.com/files/66725/original/image-20141209-32136-1rqz4xf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Peter Dutton and Tony Abbott have presented a less controversial Medicare co-payment that should be easier to sell to the public.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>The government has stepped back from its A$7 proposed co-payment for visiting the GP but still aims to skin the Medicare cat, putting the onus on doctors to send a $5 price signal to non-concessional patients.</p>
<p>In a more politically savvy package than the blunt-edged budget announcement that had no hope of passing the Senate, the government has decided that eight million people, including pensioners and children, will be exempted from a co-payment with no change to their bulk-billing arrangements.</p>
<p>But the government is looking for almost the same savings as the original plan – $3.5 billion over the forward estimates compared with $3.6 billion in the budget, Tony Abbott told a news conference.</p>
<p>The doctors will carry a substantial burden in the compromises the government has made, including a long-term freeze on rebates and new arrangements for consultation times.</p>
<p>The new package should have a much stronger chance of surviving the Senate. With the carve-outs it is more consumer-friendly, and part of it will be done by regulation – which can be disallowed but where the government needs one fewer vote than required for legislation.</p>
<p>The wonder is that the Coalition did not land here a lot earlier.</p>
<p>This is the second <a href="https://theconversation.com/abbott-says-he-just-has-to-get-off-a-couple-of-barnacles-34665">“barnacle”</a> that Abbott has tackled this week. On Sunday he gave notice that his paid parental leave scheme will be cut back and some of the funds put into child care. Last week he abandoned proposed changes to Defence Force allowances.</p>
<p>The main elements in the revised Medicare plan are:</p>
<ul>
<li><p>Rebates for non-concessional patients will be cut by $5, with doctors having the “option” of charging a $5 co-payment;</p></li>
<li><p>Exemptions from the rebate cut/co-payment apply to pensioners, Commonwealth concession card holders, children under 16, eligible veterans, attendances at residential aged care facilities, and pathology and diagnostic imaging services;</p></li>
<li><p>To get the “standard” consultation rebate a doctor will have to spend at least ten minutes with a patient. Abbott said that at present the same rebate could be obtained for a six-minute consultation as for a 19-minute one; </p></li>
<li><p>Rebates for GPs, medical specialists, allied health professionals, nurse practitioners, midwives, optometrists and dental surgeons will be frozen until July 1, 2018.</p></li>
</ul>
<p>While politically the exemption of concessional patients makes the package less controversial and easier to sell to the public, it does remove for a large portion of the population the “price signal” the government wants to send.</p>
<p>Health Minister Peter Dutton said GPs could collect the $5 co-payment from non-concessional patients or wear the reduction in the rebate. Abbott stressed that charging the co-payment was at the doctor’s “discretion”.</p>
<p>By changing the timing arrangements in relation to the rebate, the new model would yield savings for the government through reducing the capacity of doctors to see patients very quickly while getting standard rebates.</p>
<p>Abbott said this was a quality control measure. “We all know about the phenomenon of six-minute medicine, sausage machine medicine – some clinics where patients are churned through. The standard rebate will only apply if the consultation goes for a reasonable time.”</p>
<p>The Prime Minister said the government had “very, very significantly improved” the original package; the expenditure review committee had been “chewing over” the revision for some weeks and it was ticked off by cabinet on Tuesday. The saving will still go into the proposed new medical research future fund.</p>
<p>The Australian Medical Association said the new model was a mixed bag. AMA president Brian Owler welcomed the exemption for vulnerable patients and for pathology and diagnostic imaging, but he criticised the freeze on the rebates and the $5 cut. “At a time when general practice is in need of significant new investment to cope with an ageing population and more people with chronic disease, today’s announcement represents a disinvestment in quality general practice,” he said.</p>
<p>While also welcoming aspects of the changes, the president of the Public Health Association of Australia, Heather Yeatman, said: “Our GPs are being forced to do the dirty work of the government. Either they lose $3 billion from their own pockets over the next three and a half years or drag it from the wallets of the bulk of their patients.”</p>
<p>The Consumers Health Forum said: “The government is turning GPs into its bagmen for the death of universal health care”.</p>
<p>The government is sticking to its original start date of July 1, 2015, for the rebate cut and the co-payment. The new consultation time requirements are to start on January 19.</p>
<p>The co-payment has been a strong issue for the opposition and Labor remained on the attack. Bill Shorten said there would be “still a tax on going to the doctor”.</p>
<p>Abbott had changed his talking points but not his wish to wreck Medicare, he said. The Prime Minister was bringing the GP tax through the backdoor when he could not get it through the front door. Shorten said Abbott wanted to turn the GP into a “Tony Abbott tax collector”.</p>
<p>The Greens were also critical. Health spokesman Richard Di Natale said the government was trying to slash payments to doctors “so that they are forced to do the government’s dirty work.</p>
<p>"The freeze on indexation will impact just as much as the $5 decrease by ripping hundreds of millions out of Medicare over the long term,” he said.</p>
<p>Operating via regulation after parliament had risen “is another desperate and sneaky attempt to subvert the will of the parliament”. The Greens would be moving a disallowance motion at the first available opportunity when parliament resumed next year.</p>
<p>Clive Palmer, leader of the Palmer United Party, said: “The co-payment is dead and this is a victory for the Palmer United Party”.</p>
<p>But PUP’s senator Glenn Lazurus tweeted: “Abbott Government dumps GP Co-payment for a GP Woe-payment. What a NASTY government!”</p>
<p>Independent senator Jacqui Lambie, an ex-PUP, said she needed to see the plan in detail and consult before taking a final stand but any proposal from Abbott “must be viewed with suspicion, given it’s proven he has no respect for the universal nature of Medicare”.</p>
<p>Independent senator Nick Xenophon said the government seemed “to be declaring war on GPs”.</p>
<p>But the strongest Liberal critic of the $7 co-payment, senator Ian Macdonald, who threatened to cross the floor on the measure, was happy. “Well done Tony,” he said in a statement.</p>
<p>“It is a sign of real leadership when a Prime Minister can acknowledge mistakes and take decisive action to correct them,” Macdonald said. “Coming on top of the redrawing the paid parental leave proposal, this announcement shows we have a government that listens and understands.”</p>
<p>But Macdonald added a sting in the tail. “It is also a demonstration of the importance of road testing new announcements with elected MPs who are always in touch with their electorates.”</p>
<p>That’s a message to which quite a few Coalition MPs would be saying, at least in the privacy of their offices, “hear hear”.</p><img src="https://counter.theconversation.com/content/35264/count.gif" alt="The Conversation" width="1" height="1" />
The government has stepped back from its A$7 proposed co-payment for visiting the GP but still aims to skin the Medicare cat, putting the onus on doctors to send a $5 price signal to non-concessional patients…Michelle Grattan, Professorial Fellow, University of CanberraLicensed as Creative Commons – attribution, no derivatives.