MEDICARE’S IDENTITY CRISIS
Bulk-billing in Australia is poised on a scalpel’s edge.
Why? It is a matter of the simple economics of running a small business.
Back in 1984 when Medicare was introduced, the rebate for a bulk-billed service by a GP covered 71% of the recommended fee at the time.
Many doctors signed up at that stage, agreeing to take a smaller fee in exchange for simpler administration by billing the government direct…and in bulk. Remember that these were the days before electronic transfer of funds, when processing of cheques took up to a week and every transaction needed to be physically recorded with paper and pen.
At the beginning, bulk billing was stupendously popular with everyone… patients, government and many doctors.
The rebate was only ever intended as a subsidy for patients, but over the years this has morphed into an expectation that health care is “free” and that the government pays bulk-billing doctors generously for their services on the patient’s behalf.
This has been little more than a national scale “pea-and-thimble” trick. It is a complete illusion that Australia has a “free” health care system or that the rebate is “generous”.
Anything that is “free” to a consumer has to be paid for by someone, somehow.
There is a Medicare levy on taxpayers, sure, but that doesn’t go close to paying for the cost of running the health system.
Other taxes also contribute to Medicare and the public hospital system and the Pharmaceutical Benefits Scheme. But even that doesn’t cover the cost of health care.
So Medicare is also facing something of an identity crisis. It is certainly not a “universal health funding scheme” as it does not universally fund the value of medical services.
Over the decades since the introduction of Medicare, the rebate for seeing a doctor has fallen further and further behind the rising costs of running a practice and is now way behind where it should be if the Medicare Benefits Schedule had kept up with inflation and labour costs over that time.
Patients who have been “bulk-billed” by their GP have been blissfully unaware that when a doctor bulk bills them, they are providing a substantial discount. Using the most frequent item number as an example, the Medicare rebate for a standard consultation of around 15 minutes is only $36.30. This is the amount the government reimburses the patient if you have been privately billed, and it is the amount paid on your behalf to the doctor if you are bulk billed. This is compared with the AMA recommended fee of $73 (which has been indexed to inflation). Now more than ever before it is the doctor who is subsidizing the patient’s health care costs and making up for Medicare’s shortfalls.
The last straw was the announcement by Labor in the 2013 Budget that Medicare rebates would be frozen (as opposed to just chilled) for the next year in an effort to save over $664.3million. That $664.3 million is now being shouldered by GPs as they yet again absorb increased salaries, practice maintenance costs, equipment and supplies costs, computer costs, insurances and more.
Into the future there are some options.
We have already seen a trend to fewer long consultations by GPs. General practitioners spending even less time on each consultation is counter-productive and would affect the quality of care, particularly for people with more complex health care needs.
The option of the $6 patient copayment is one that was apparently raised by the Commission of Audit. According to reports, concession card holders would be exempt from the copayment and families would have 12 visits a year before being asked for a copayment. That will mean, of course, that if the government does not feel like increasing the rebate to keep pace with future practice cost increases, it will simply increase the patient co-payment.
The reaction to the $6 copayment surely cannot be about the $6. That’s the equivalent of the cost of a cappuccino or a road toll.
This is more about the symbolic end of the illusion of “free” healthcare.
The copayment is not the only option.
Another option is for taxes from general revenue to be increased and for the Medicare Benefits Schedule to bring rebates into line with where they should have been, and then increase with inflation into the future. Considering the current Budget deficit, don’t hold you breath on that one.
Option three is glaringly obvious. Doctors give up on bulk billing, charge a fee and the government of the time will just have to figure out what it wants Medicare to be.
In the time since 1984, general practice has become a specialty with several more years of study and supervised practice beyond university and hospital training, and greater responsibilities for managing chronic and complex health care conditions. Medicare has steadfastly failed to recognize this, discouraging the longer consultations that are needed to manage more complex cases and squeezing bulk-billing general practices financially.
This debate on the future of Medicare and bulk billing has been brewing for many years. It is time to get it out in the open.
If Australians value high quality primary health care, then as a nation we need to invest in it. How we do that will determine the future of healthcare in this country.