My patients often ask: “Doctor, do you bulk bill?” and “Why do I have to pay a gap?”
Although there are certainly circumstances where I bulk bill, it has many risks. Lowering the quality of Australian Family Doctor services is one them. In this video I have tried to explain how it all works.
Since 1984 Medicare is the health insurance scheme from the Commonwealth Government, providing free treatment in public hospitals and subsidised treatment for other crucial health services such as the care by GP’s.
Medicare has set a list of fees it is willing to pay for medical services. The fees in the Medicare Benefit Schedule are not recommended fees, but merely what Medicare is prepared to contribute to a consultation or operation.
Unfortunately, as the picture below illustrates, the Medicare fees have not kept up with inflation and costs. While the cost of running a GP practice is going up every year (the upper line in the picture), Medicare has only slightly increased their fees over the years (the lower line in the picture).
The Government entirely funds public hospitals, but not GP practices. As a result, GP’s who own their practices need to cover the costs of running a business – just like electricians and hairdressers. Costs include for example paying rent, wages of receptionists, nurses and trainee doctors, and medical equipment.
GP’s who follow the Medicare fees are effectively taking a pay cut every year (the shaded area between the upper and lower line in the picture is getting bigger each year). Eventually GP’s would not be able to invest in their businesses, pay their staff and provide good care to their patients. This is the reason many GP’s charge more than the Medicare fees, and why the gap between the doctors’ fee and the rebate you get back from Medicare continues to rise.
Many doctors follow the list of suggested fees by the Australian Medical Association. Unlike the Medicare Benefit Schedule, this list has been updated annually to keep up with inflation and the costs of running a practice.
Bulk billing is where doctors accept the Medicare fee as payment of their services. But as said, these fees are decreasing in real terms each year. Bulk billing has a real risk that quality of care is affected. Asking a doctor to bulk bill has more consequences than people think. For that reason many GP’s are not bulk billing as a rule – although they can make exceptions based on circumstances such as financial hardship.