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Six dollar co-payment to see a doctor: a GP’s view

Co-payments are an unfair tool for reducing health costs. Alex E. Proimos

As a GP, when I prescribe a drug, I need to know its likely benefits and risks, and I need to base my decision-making on the best available evidence. I’d like to think the same principle applies to the world of policy, but a recent proposal leaves me scratching my head.

The Australian Centre for Health Research, funded by the private health sector, proposes that we could save Medicare money by collecting co-payments from patients at GP visits. Rather than seeing a GP and receiving care without cost (being “bulk billed”), which now happens at just over 80% of relevant GP visits, patients would pay A$6.

The theory is that this would reduce avoidable demand for GPs’ time, reduce over-servicing, and get people to think twice about going to the GP. This thinking seems anchored in the idea of “moral hazard”: that people will wastefully overuse what is free to them and costly to taxpayers. I think this’d be true of free beer, but is it true of health care?

I’m a GP, not a health economist or policy expert, but the proposal sounded dubious to me, so I turned to the evidence. The short version of what I found is this: Are co-payments likely to reduce GP visits? Yes. Are they likely to deter only “unnecessary” GP visits? No.

Might they have adverse consequences for public health? Yes. Will these adverse consequences be felt by everyone? No, they’ll be felt more by those who are sicker and poorer.

Co-payments: the evidence

The most famous study on the effect of co-payments in health care is the RAND experiment, which randomly assigned several thousand patients to different levels of co-payments for their health care. It did show that medical expenditure was reduced, and without adverse consequences for the average participant in the study.

But for those with poor vision, or poorer people with high blood pressure, outcomes were worse with co-payments, with the latter group being predicted to be at higher risk of dying. That study took place in the 1970s, and excluded older patients. I’m not sure how applicable it is to Australia today.

When drug prices rise, patients are less likely to take them. Image from

We have more recent evidence. A systematic review of the economic literature found that co-payments reduced medication use as well as doctor visits. While this might sound like a good thing for the health budget, it might be bad for public health as well as the budget if patients miss out on necessary care.

This concern was justified in a recent study of nearly 900,000 people in the United States: co-payment increases were followed by a reduction in GP visits but also by significant increases in hospitalisation. These effects were biggest in those with lower income, less education and with pre-existing illness. The authors concluded that co-payments “may have adverse health consequences and may increase total spending on health care”.

Co-payments have also been associated with less use of important mental health services, less flu vaccination, and less screening for heart disease and breast cancer. For medications, it is often important ones that are foregone when co-payments for drugs increase; use of drugs to prevent heart disease, asthma, and other important conditions drop.

A recent Australian government survey found that about 8% of people are delaying or avoiding visiting their GP due to costs. This is despite about 80% of consultations being bulk billed.

What might happen to this figure after introducing co-payments? The proposed $6 payments are admittedly smaller than those in the research above, but they seem a step in the wrong direction.

Are there really lots of unnecessary visits?

In my work as a GP, I sometimes see visits that might be deemed unnecessary, but these are a minority of visits.

According to modern Australian data, the most common problems managed by GPs are high blood pressure, immunisations, “check-ups”, respiratory tract infections, depression, arthritis, diabetes, high cholesterol, and back pain.

Many of these problems are or involve issues of national health priority. And even those coughs and sore throats that might be better managed at home, rather than by a doctor, are important to the person presenting with them.

I tackle these presentations by trying to empower my patients to manage things themselves next time. I also try to avoid prescribing antibiotics in order to demedicalise the illness and reduce future unnecessary visits. This approach is better than co-payments.

GPs sometimes see patients who don’t need to be there, but this is a minority. DIBP Images

I don’t pretend that all GP visits are effective or ideal; recent evidence suggests that Australians get “appropriate” guideline-concordant care at only 57% of health system encounters. But it’s hard to see how reducing visits to GPs will help to close these evidence-practice gaps.

Better ways to fix the health budget

If we have to reduce our health budget costs, there is plenty of juicier low-hanging fruit to pick. Negotiating lower prices for many commonly-used medicines, on par with what other countries pay, could reportedly save A$1.3 billion annually – much more than the projected savings from this co-payment proposal.

And rethinking the A$5 billion private health insurance rebate could save billions, and be a more equitable reform than co-payments.

We could also save money by reducing the use of expensive interventions of limited worth, and by better involving our patients in decision-making about their health.

Not everyone with stable heart disease will want an expensive tube (“stent”) to open up a narrow heart artery if they are told that they can get an equivalent preventive effect from the right medicines.

Not everyone will want keyhole surgery for their knee arthritis if told that it is no more effective than placebo surgery. But not everyone is told.

Similar arguments could be made about some preventive medicines in general practice. If you had to take a tablet every day for five years just to have a one in 50 chance of avoiding a heart attack, would you? You might, or you might not. You should be offered a role in this decision.

Co-payments are an inelegant and unfair tool for reducing health costs. They could cause harm to some of the most vulnerable members of society. There are better ways to improve health care and balance the budget.

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