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GP co-payments: a triple fail for the Commission of Audit

For general patients, the minimum co-payment would be A$15. Shutterstock

The Commission of Audit’s proposals about GP co-payments are just that, proposals. They are not government policy, nor should they be.

Some aspects of the Commission’s recommendations are good. But the centrepiece is a fundamental change to Medicare. All Australians are covered by Medicare, with about half having top-up private insurance. Until now, Medicare has been a universal health scheme with bulk billing available to all Australians, equally.

If the Commission of Audit’s recommendations are adopted, universal access to bulk billing will be abolished, replaced by a government-mandated co-payment of A$5 for concession card holders (up to 15 visits, then A$2.50). For general patients, the minimum co-payment will be A$15, then A$7.50 after 15 visits.

The current average GP co-payment is A$28. If previously bulk-billing GPs have to introduce billing systems, why would they stop at the government-mandated minimum? The proposed A$5 co-payment may become, in reality, five times that.

Less access, lower quality and less efficiency

There are three big goals in health care policy: access (including equitable access), quality and efficiency. This proposal wins the reverse trifecta and is wrong on all three. It will hurt the poor, disrupt continuity of care and reduce system efficiency.

A recent review of the international evidence on the co-payments found they do reduce the use of health care and hence expenditure. That reduction will impact adversely on vulnerable groups. The review found:

The empirical evidence likewise indicates that vulnerable groups, including individuals with low income and in particular need of care, reduce their use relatively more than the remaining population in consequence of co-payment.

This highlights the need for protecting particularly vulnerable groups from the consequences of co-payment, e.g. by making the co-payment income dependent or exempting groups in particular need of the services in question.

The strategy of exempting certain groups from co-payment suffers from the weakness that it may result in rather arbitrary dividing lines.

Today, 10-15% of people defer going to a doctor because of cost. Abolishing bulk billing and introducing a compulsory co-payment will increase that proportion.

As health minister, Tony Abbott increased the GP rebate to encourage bulk billing for pensioners and families. The Commission of Audit recommendations would reverse that and impact on pensioners and low-income families struggling to make do.

The proposals fail on quality too. People who baulk at paying the GP co-payment may seek care in hospital emergency departments, disrupting continuity of care. Health could also suffer if the GP co-payment makes it is harder for the patient (or their parent) to pay for treatments, such as medications.

Finally, this aspect of the Commission of Audit’s report fails on efficiency grounds. Patients are not good judges of what visits are necessary – GPs have years of training to make diagnoses, patients don’t.

If necessary visits are deferred, long-term costs to the health system may increase. The review of co-payments also found that preventive interventions fell, such as flu vaccinations. Again, this could mean higher costs in the future.

Emergency department co-payments

With higher patient costs, some people might go to a public hospital emergency department instead of their GP. Currently, hospitals can’t charge fees for ED visits, but the Commission recommends a change here too.

Fees in emergency departments would be a significant and surprising policy shift. It would create red tape and demand complex choices in an already high-pressure environment.

The Commission recommends that triage category four and five patients face a co-payment, implicitly assuming that triage category some-how equates to necessity or that the ED visit is a GP substitute.

Care in emergency departments is much more expensive than in GP clinics. Tyler Olson

Triage categorisation should not be used that way. What about a patient who has been referred by a GP? Or what if they are subsequently admitted to hospital?

If just one in four patients chose to go to a hospital emergency department, the Commonwealth will save no money because of the much higher costs of emergency department care; costs that the Commonwealth government now shares.

The systematic review of the effects of co-payments mentioned above concluded:

… the results of the empirical literature indicate that introducing co-payment for new types of health care services or extending existing schemes involves some important economic and political trade-offs.

It is thus important for the responsible policymakers to be clear about what they wish to obtain by introducing co-payment and how to counter the possible side effects.

It is not clear that a co-payment will reduce spending (its ostensible goal) nor that the policy fig leaf of a 15 visit discounted fee will counter the inevitable side effects. The government should not pick up this dangerous suggestion in the forthcoming budget.

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