5 reasons why the Medicare rebate freeze is bad policy

When I tweeted about the Medicare freeze last week, someone asked “Care to explain other than meaning you get less money?”

I thought it was a really good question as it highlights the complexity of the issue. Most people seem to think that it’s all about doctors’ income – but it isn’t. The Medicare rebate is also about the money patients get back from Medicare.

As we speak, around Australia GP practices are adjusting their fees as a result of the government policy. Our practice increased the fee of a basic consultation with five dollars for people without a concession card. Other practices have decided to charge a once-off $30 payment to previously bulkbilled patients.

I expect that if the freeze is not lifted these amounts will have to go up again soon.

Greedy doctors?

Everything gets more expensive over the years, including the cost of running a medical practice – think for example about rent and employing receptionists and nurses. If GP practices would not up fees, their Medicare rebate income would drop with 7.1% by 2017-2018!

Over the years more and more services will require an out-of pocket payment by patients, including pensioners and healthcare card holders. Rural doctors expect that bulkbilling in the bush will soon be a thing of the past.

But the freeze has also affected urban areas. That’s why the the RACGP and AMA have labelled the government policy a ‘copayment by stealth’.

Five arguments

The freeze is bad policy and should be reversed for five reasons:

1. Many practices will stop bulkbilling. This means higher out-of-pocket costs for patients. As a result fewer people will visit the doctor in the early stages of a disease. This will often make treatment later on more difficult, more stressful and more expensive.

2. The policy disproportionately affects disadvantaged people who cannot afford a copayment. Research shows that increased out-of-pocket costs stop people from going to the doctor.

3. The freeze undermines important Australian values such as equity of access and therefore encourages a two-tier health system.

Some argue that a copayment would cut unnecessary use of medical services. But higher out-of-pocket-costs will not weed out unnecessary visits. Many of my colleagues know that often their sickest patients will not seek medical care if it becomes more expensive.

4. Research indicates that areas with poor access to GP services have higher hospital costs. It is likely that more people will visit places where healthcare is free, such as already overloaded public hospitals and emergency departments. Dr Google will become more popular too!

5. Practices continuing to bulkbill will have to change their business model: doctors need to see more patients per hour, or practices will have to hire less staff which will affect service. Some practices will close their doors – such as Dr Adrian Jones, a Redfern GP who decided to close his practice as the margins were getting too small.

Is the freeze a necessary policy?

Medicare is not unsustainable. This is a false argument by the government. In fact, Federal Health Minister Susan Ley admitted at the national AMA conference: “The Government is not claiming we’re in a healthcare funding crisis.”

Australian healthcare performs well in comparison to other countries. The increase in health expenditure in general practice has been slow, and in line with overall economic growth and GDP.

Freezing the patient Medicare rebate will not make healthcare more efficient or reduce waste in the system.

Medicare freeze

Health is defence – Universal care vs ‘user pays’

Guest post

Gold Coast GP Dr Andrew Rees submitted this thought-provoking guest post about universal health care vs a ‘user pays’ system.

For some decades now, we Australians have been living in a country where basic health services have been provided with heavy government subsidies or in many cases have been provided at no direct cost to patients.

Now the Australian Liberal government wants to change the system so that it is more predominantly ‘user pays’. Despite ample evidence that such a system is more expensive and inefficient than our present approach, and that the care delivered is no better, there is a desire to adopt what has been demonstrated to work poorly elsewhere in the vain hope that it will work well here.

I understand that there are those who believe that universal health care or anything approximating it is a ‘Socialist’ idea. Preventing disease and treating the sick and injured might, however, be regarded as a way of protecting the community from harm. Indeed, we have other institutions established by the government to protect our community. The civil authorities include the fire, ambulance and police services. The Army, Navy and Air Force provide military defence. Customs and Border Protection also play a role.

So, some might say, “Why do I have to pay for the Air Force? If I had a constitutional right to bear arms (we don’t), then I could just buy my own jet fighter and go and shoot up any bad guys. Socialists have forced this on us, surely. Bunch of Commies making us pay for armed forces. Police, too. Nobody ever broke into my house. Why should I have to pay taxes so the police can investigate your burglary? You got burgled – you pay for it!”

The reason that we, as a society, tend not to think this way (although I am sure that there are some who do) is that there is recognition that some services are best provided on a universally available and publicly funded basis.

In fact, Section 51 of the Australian Constitution provides Federal Parliament certain powers including ‘to make laws for the peace, order, and good government of the Commonwealth with respect to (for example) “… the naval and military defence of the Commonwealth …” and a little later on “… pharmaceutical, sickness and hospital benefits, medical and dental services” …’

It seems to me, therefore, that those who framed the Australian Constitution recognised that providing ready access to health services was a way of protecting the nation as a whole. Sick people are less productive than the well. Infectious diseases spread easily without treatment and where appropriate, vaccines and quarantine. That individuals owe a debt of care to other members of a society is not a new thought:

“No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend’s or of thine own were: any man’s death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bells tolls; it tolls for thee. (John Donne)

The Australian Government has a Constitutional obligation to protect the Commonwealth. Attacking and weakening the health system whether delivered in the doctor’s office or in a State run (ultimately Federally funded) hospital suggests a lack of resolve on the part of Government to discharge this duty. A person who mounted such a spirited attack against his or her own defence force in a time of war would probably be regarded to have committed treason.

However, because the enemies those health professionals protect the community from are more insidious – such as smoking, heart disease, cancer, and infectious diseases – there is a perception that this kind of attack on the health system and its practitioners is somehow acceptable.

If we accept that in ill-health we share a common foe, then as Thomas Hobbes’ states:

“Whatsoever therefore is consequent to a time of war, where every man is enemy to every man, the same consequent to the time wherein men live without other security than what their own strength and their own invention shall furnish them withal. In such condition there is no place for industry, because the fruit thereof is uncertain: and consequently no culture of the earth; no navigation, nor use of the commodities that may be imported by sea; no commodious building; no instruments of moving and removing such things as require much force; no knowledge of the face of the earth; no account of time; no arts; no letters; no society; and which is worst of all, continual fear, and danger of violent death; and the life of man, solitary, poor, nasty, brutish, and short. (Hobbes, Leviathan)

No doubt, the Liberal Government would reason that they are not attacking or endangering the system, but rather they are going to make it better. However, they have no evidence that their approach is likely to have any success. Rather, evidence from the US is that using a ‘user pays,’ predominantly commercial health fund system leads to burgeoning expenses and substantially decreased access for the majority of the community.

Under the US health system, Health Management Organisations (HMOs) may perversely interfere with the ability of appropriately trained physicians and surgeons to provide the most appropriate care because of a commercial requirement to maximise financial returns for the HMO.

Bacterium or bullet, cancer or cannon shell, tuberculosis or terror attack – the community is still worse off because of the suffering of the individual. Whether one dies from influenza or an improvised explosive device, one is still dead. Leaving citizens to fend for themselves and fund their own care will certainly reduce the number of attendances in the short term.

However, the real cost of a change to a predominantly ‘user pays’ system will be far greater. What kind of life is it that we seek for the members of our community? Neighbourly, prosperous, pleasant, lovely and long: or solitary, poor, nasty, brutish, and short?

Dr Andrew Rees

Disclaimer and disclosure notice.

Some common sense thoughts on health reform

When I arrived last night for a meeting with Federal MP Mal Brough, I had to work my way through TV camera crews to get to my chair.

But contrary to what everyone thought, Brough didn’t come to challenge the prime-minister. The meeting with local hospital doctors, GPs and staff was about health reform and the Medicare rebate – and what he had to say was remarkable.

I was expecting the usual: Budget crisis, rising Medicare costs, price signals etc. But this was a different message coming from a liberal MP.

Brough first showed some figures comparing (combined commonwealth and state) hospital expenditure versus GP Medicare rebates: $39.9 billion vs $5.9 billion per year. He demonstrated that hospital costs are rapidly rising but GP Medicare rebates remain more or less static.

His 3 core messages:

1. This must be a debate on improving the health of the nation, not a debate on cost cutting or cost shifting

2. A co-payment or price point should not be the starting point of this discussion

3. There are tremendous efficiencies to be had in hospital, specialist services and aged care if Primary Health provision is enhanced and is the heart of the nation’s health system.

Health organisations are hammering this message: If you want to keep patients out of our expensive hospitals, strengthen general practice – don’t take money out of the industry.

Brough underlined this by showing AIHW data indicating that over one-third of emergency department presentations were for potentially avoidable GP-type presentations (see image). A GP co-payment will almost certainly drive more traffic to the hospital EDs.

Mal Brough’s suggestion: Scrap it.

The Dutton promise

The Dutton promise
Image: peterdutton.com.au

The quotes below are taken from a speech by the Hon Peter Dutton MP, addressed to the Royal Australian College of General Practitioners’ Conference in Hobart, 2011.

“Today I want to announce a priority of the first Abbott Government will be to re-build general practice. To restore respect to general practice after four years of Labor’s attempts to undermine our country’s 23,000 general practitioners.”

“So today I want to start a debate again, this time around general practice. The Government does need to be goaded into further support of GP’s and to rethink their attacks on general practice. The fundamental pillar of our health system is our doctor and in particular our GP. I said this in my very first speech in this portfolio. With the might of Government we should be working to build on this strength, not to be pulling it down.”

“As the most common health system interaction for patients, providing nearly 120 million services each year, general practice is ideally placed to address the future burden facing our health system from demographic changes and chronic disease. The management of lifestyle and chronic disease is going to require all hands on deck. We all know that we need to do more successive interventions before patients reach hospitals if we are to have any chance of alleviating the growing burden on our health system.”

“Building up remuneration, addressing scope of practice, supporting training and genuinely strengthening general practice must be the first steps we take to making general practice the first choice for our graduates.”

“Governments should work with general practice to ensure the right resources are being provided in the most productive ways, without increasing the bureaucratic burden, without stifling innovation or becoming a competitor in the provision of services.”

“So with one eye on the history and one eye on the future, I hope that we can work together to rebuild general practice, to again turn a job into a noble vocation.”

“Doctors and patients across our great country deserve nothing less.”

[ends]

9 reasons why GPs are being screwed by government

GPs screwed by government

The government’s revised co-payment plan is a dog’s breakfast. Here are 9 reasons why the proposal has angered Australian GPs.

#1

Prime-minister Abbott’s reference to sausage machine medicine is insulting. If the government is unhappy about the way some clinics churn through patients, they should do something about it, but not punish all Australian GPs – and patients.

Besides, it looks like the government didn’t do their homework properly: A recent report debunked the myth that GP care is ‘6-minute medicine’. The authors of the report: “If people feel they must ignore the wide range, and refer to the length of GP consultations in one phrase, it would be far more accurate to call it ‘14 minute medicine’.”

#2

The revised co-payment plan will not make healthcare more efficient or reduce waste in the system. It unfairly targets a part of healthcare that is operating in an efficient and effective way. RACGP president Dr Frank Jones: “If the Government is serious about this move, it is reasonable to ask the question: why not across all healthcare services?”

#3

Medicare is not unsustainable. This is a false argument by the government. The increase in health expenditure in general practice has been slow, and in line with overall economic growth and GDP. Professor Jeff Richardson, Centre for Health Economics at Monash University said this:

“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.

#4

Yes, research shows that increased out-of-pocket costs stop people from going to the doctor. This is not rocket science. Research also indicates that areas with the fewest GP services have higher hospital costs.

It’s not rocket science either to figure out that more patients will attend the free, but more expensive emergency departments of public hospitals, thus increasing overall health expenditure.

#5

Unfortunately, out-of-pocket-costs will not weed out unnecessary visits. The extra expense will also deter people with a serious illness from going to the doctor – especially people on a low-income.

#6

If the revised co-payment plan will cut the amount of visits to the doctor, a highly skilled, expensive medical workforce will be doing less work. The revised co-payment plan does not change the opportunity cost of medical care.

#7

The government wants GPs to work longer for less. Up to ten minutes of work now pays $37.05, but if the revised co-payment plan goes ahead, the government will only pay $11.95 – a drop of $25!

Note that $11.95 is not doctor’s income: After practice costs (staff wages, rent etc) and tax are deducted about $4 will be left for the GP to spend.

#8

Look at the chart and it is clear that the expected drop in revenue, in combination with ever-increasing costs, will make GP practices unsustainable – unless fees go up. The fees will need to cover the before mentioned $25, and will continue to rise each year as the rebate will not go up until at least 2018.

Medicare
The expectation: If the government’s alternative co-payment plan goes ahead, Medicare income will drop and not change until 2018, while the costs of running a medical service will continue to climb. Note: this is a forward estimation only, not based on empirical data.

#9

The revised co-payment plan may stop certain clinics from bulk billing, but it will not prevent these clinics from undercutting more comprehensive GP services. The gap fees of those clinics will likely still be much lower.

In summary: This plan will alienate GPs, shift costs instead of making real savings, and not improve care in any way – it will only make things worse.

In her open letter to Tony Abbott and Peter Dutton, Dr Sally Cockburn wrote:

“Your government is taking advantage of GP benevolence with your cut to Medicare rebates. We’re sick of being kicked around. While most of my colleagues are too busy looking after patients to play political games, this time I think you may have woken a sleeping giant.

Sally, you are right!

Follow me on Twitter: @EdwinKruys

Sources:

Co-payments, and why they’re not always appropriate

Co-payments, and why they're not always appropriate

A one-size-fits-all approach doesn’t work in my job. There are always plenty of valid reasons why a particular approach or treatment works for one person but not for another.

One-size-fits-all healthcare is bad medicine. Bulk billing everyone doesn’t make sense. It’s not necessary and doesn’t cover the costs. In the same way, charging a co-payment across the board doesn’t make sense either.

There are people out there doing it tough, such as Melbourne mother Kaye Stirland who wrote treasurer Joe Hockey a letter that went viral on social media. Kaye represents a group of people who cannot afford to pay $7 to see their GP.

The co-payment also puts healthcare providers in a difficult position. RACGP president Liz Marles said in Medical observer: “There will be times with patients we all see – mentally ill patients, young people, homeless people, people just doing it really tough – where GPs will have to waive that money. That will mean that GPs will not only lose that $5 but if they are a concession card holder you’re also losing the $6 bulk-billing incentive.”

I believe there’s nothing wrong with co-payments in general. In the end bulk billing is not sustainable if Medicare rebates don’t keep up with inflation and business costs (see this video).

AMA president Steve Hambleton was quoted by MO saying this: “If the minister says he thinks people should pay a co-payment if they can afford to do so, the AMA has no problem with that. (…) But we believe there are people who can’t afford to… We need to know what we’re going to do about low-income earners.”

Some vulnerable groups should be excluded from paying co-payments when they visit their healthcare providers. Co-payments are not always appropriate.