What the Dutch can teach us about private health insurance

The Dutch healthcare system has received international praise. This year the Netherlands are again topping the chart of the Euro Health Consumer Index. What makes the system so good? To get some answers, I caught up with old friends from the Netherlands.

Dutch philosophy

The country’s philosophy is to cut costs and stimulate quality by introducing regulated competition. The Dutch have attempted to create a system that ensures universal health care, offers transparency and choice for consumers, and avoids risk selection. GPs play a key role coordinating care and preventing unnecessary use of hospitals.

‎Dr Pieter van den Hombergh, GP trainer and a former senior policy adviser at the Dutch Association of General Practitioners (LHV), is full of praise:

“In 2006, the country switched to a regulated market-oriented healthcare system: Insurers got purchasing power and the Government withdrew from healthcare, but set strict regulations for insurers and providers.”

Dr Jettie Bont is a GP and former board member of the Dutch Association of General Practitioners. “The Dutch health system is accessible to anyone, rich or poor, old or young,” she says. “Patients don’t have to pay a co-payment or excess payment to see their GP and we’re making sure it stays this way.”

How does it work?

The 6 key elements of Dutch healthcare:

1. Health insurance funds are not allowed to deny coverage because of illness, age or gender. A risk-equalisation system compensates health funds for accepting high-risk individuals.

2. Healthcare covered by the compulsory basic health insurance package is the same for every insurance provider. Basic cover includes GPs, medical specialists, hospital care, basic dental care, most prescriptions, and ambulance. Additional insurance packages can be purchased.

3. All Dutch citizens and residents contribute via a flat-rate premium set by competing funds – in 2014 the average premium was €1120 ($1626) – and an income-dependent payroll tax contribution. The Government covers premiums up to the age of 18, and people who earn less than a specific amount are entitled to a tax credit.

4. People are free to choose their insurance fund and have the option to change once a year. People are free to choose their GP, but must be registered with a nominated family doctor.

5. Doctor’s fees are set, there is no co-payment or excess payment for GP-care (except for travel vaccinations). Dutch GPs are paid via an annual lump sum per patient (capitation) as well as fee-for-service payments.

6. To help consumers, the Dutch Government collects and publishes price, quality and consumer satisfaction records of insurers and providers.

What are the strengths?

According to the authors of the latest Euro Health Consumer Index report, the Netherlands has the best healthcare system in Europe. The authors feel one of its strengths is consumer participation: “The Netherlands probably has the best and most structured arrangement for patient organisation participation in healthcare decision and policymaking in Europe.”

Other positives mentioned in the report are the availability of 24/7 GP care, and the fact that ‘financing agencies and healthcare amateurs such as politicians and bureaucrats’ are not directly responsible for operative healthcare decisions. The Dutch national health budget is €71.3 billion, of which €63.8 billion is funded by insurance premiums. Various levels of Government contribute €7.5 billion.

Euro Health Consumer Index (EHCI) 2014
The Euro Health Consumer Index (EHCI) 2014 compares healthcare in 36 European countries and looks at the following domains: Patient rights and information, accessibility (waiting times), outcomes, range and reach of services, prevention, and pharmaceuticals. Image: EHCI 2014 report.

Van den Hombergh: “General Practice revenue has increased since 2006 and as a result GPs were able to invest in premises, staff and infrastructure, including ICT and communication equipment. Their personal income increased as well.”

“Along with the change to market-oriented financing the total budget for general practice rose from €1.92 billion in 2006 to €2.37 billion in 2010, an increase of 14%. In 2011 all insurers invested another 10%. Before 2006 the macro budget for general practice had been constant.”

“More group practices appeared; solo practices dropped between 2006 and 2012 from 46% to 39%. The availability of nurse practitioners for chronic disease management rose from a few percent to over 90%, managing diabetes, heart & lung disease and mental health. Diagnostic and therapeutic activities were incentivised: About €50 ($73) per service for minor surgery, spirometry, ECG, joint injections etc.”

Incentives and penalties

Until 2006 GPs received capitation payments for their public patients (about two-thirds of their patients), and fees per consultation for their private patients (about one-third), but this two-tiered system is now history. 

“GPs are paid by insurers according to a mixed payment scheme: Partial capitation plus fee-for-service for basic care.

Van den Hombergh: “Regulated competition between healthcare providers and between health insurers was introduced for specialist care, but family medicine provided in general practices was exempted from this competition. GPs are now paid by insurers according to a mixed payment scheme: Partial capitation plus fee-for-service for basic care.”

“GPs receive ancillary payments, mainly on a fee-for-service basis, for additional or special services such as care for people with chronic diseases. They are compensated on an hourly basis for care during out-of-office-hours. The incentives were negotiated with the profession and were closely aligned to professional values, which limited the risk of perverse consequences.”

“In 2008, the Dutch Association of General Practitioners accepted new benchmarks on availability and accessibility. Insurers offered €4 ($5.81) for each patient when the KPIs were met. Practices should minimally be open six hours a day, five days a week and address emergency calls by a medically trained person within 30 seconds. The GP had to visit the emergency patients within 15 minutes. It was incentivised but also checked by the Dutch Health Care Inspection and failure to meet the standard was financially penalised: Practices with more than 2500 patients could miss out on over €10,000 ($14,514). In the end, only three practices did not meet the target.”

Bont: “A combination of capitation and fee-for-service in a 40/60 or 60/40 ratio incentivises effective and efficient care. A consultation should have a financial stimulus, but not too much, and at the same time the prerequisites should be there to deliver optimal care.”

“Mandatory patient registration works well and helps GPs to coordinate care. GPs are paid to do this via an annual registration fee per patient. We have our own quality assurance system and our own national general practice guidelines.”

What are the weaknesses?

Australian politicians claim that Australian health care is too costly (9.1% of GDP), but the Dutch system is even more expensive: 11.8% of GDP is spent on health (note that the US devote 16.9% to the health sector).

Dr Marith Rebel-Volp is a GP and Member of the Dutch House of Representatives. She says: “GP-care is cheap. The total health budget is €71.3 billion and General Practice costs only €2.67 billion. At the same time GPs are dealing with the majority of health problems and act as gate keepers to more expensive parts of the health system. However, long-term chronic care is expensive and one of the reasons the system is being criticised is its costs.”

“Insurers can set the benchmarks and, as collective bargaining by GPs is not allowed, this is a problem.

The Dutch Association of General Practitioners is concerned that health insurance funds are becoming too powerful, limiting choices of doctors and patients. A survey showed that most GPs are unable to negotiate or discuss their individual contracts with insurers.

Rebel-Volp shares this concern: “Although General Practice has a relative protected position within the healthcare system, there is friction between insurers and GPs. Insurers can set the benchmarks and, as collective bargaining by GPs is not allowed, this is a problem. GPs feel pressured to sign on the dotted line. Recently, a parliamentary motion was accepted which called for re-introducing collective bargaining – this is an interesting development.”

Bont: “Compared to many other countries Dutch GPs are in a strong position, but our workload has increased. Sometimes the expectations are unrealistic. For example, GPs will be required to manage people with serious mental health conditions like ADHD, and we have to hire mental health workers, but I don’t have the physical space to accommodate more staff in the practice.”

“Another result of the current system is the focus on KPIs. I often don’t have time to look at my patient during a consultation as we have to register so many details for the health funds.”

Private health funds require ongoing scrutiny by watchdogs. Last year the Dutch Healthcare Authority (NZa) had to intervene to make sure insurers offered the basic package to everyone without discrimination. The mission of the Healthcare Authority is to guard quality, efficiency, market transparency, freedom of choice, access to healthcare.

“The senate blocked proposed legislation changes which would have opened the door to risk-selection by insurers,” Rebel-Volp says. Although risk selection by insurers is not allowed by law for the basic health insurance package, this doesn’t apply to complementary packages. Insurers will try to push people to take out more expensive insurance products, for example by making it harder for certain patient groups to obtain the basic package online or directing people to the expensive packages on their websites.

Rebel-Volp: “Another issue is the level of the excess payment. This is high and many GPs feel patients are avoiding specialist care as a result. Currently the Health Minister has proposed a new plan in which a lower excess payment is an option if patients choose insurer-preferred, contracted specialist care.”

Vertical integration of care, where health insurers provide health services, is a topic of political debate in the Netherlands. Although it is cost-effective, risks are loss of quality, consumer choice and professional autonomy. Doctors and consumers often argue that insurers should not interfere in the patient-doctor relationship to avoid managed care situations as seen in the US. At the moment the Dutch Health Minister and the majority of the House of Representatives do not support vertical integration.

Conclusion

It is not surprising that the Netherlands is topping the international healthcare charts. Although their system is not perfect – and still a work in progress – the Dutch have solved some major issues such as access and equity. The Government has become the regulator and withdrew from the operational side of healthcare – this appears to have been very beneficial for the industry. On the flip side, the system is not cheap, private health funds need to be watched closely, and Dutch GPs have had to sacrifice at least some of their clinical autonomy.

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.

5 reasons why task substitution by pharmacists needs more thought

So there is a budget crisis. There’s also a new federal Health Minister. And, here it comes, community pharmacies are negotiating over a billion-dollar deal with the Government: The Community Pharmacy Agreement sets out the Government funding pharmacists receive for dispensing PBS medicines.

If it’s up to the Pharmacy Guild, pharmacists will be:

  • Filling repeat prescriptions to ‘free up doctors time’
  • Treating ‘easy’ minor ailments
  • Giving more vaccinations (e.g. a flu-shot for $25 with no Medicare rebate)
  • Doing ‘easy’ health checks, screening and preventive health services
  • Giving mental health support.

At first glance this improves access to health services and saves tax payers bucket loads of health dollars. Here are 5 reasons why role and task substitution by pharmacists needs more thought:

#1: Avoiding the doctor is probably not going to help

A repeat prescription or a vaccination is a valuable opportunity for a family doctor to screen for, and treat health issues before they escalate. This is one of the strengths of general practice. If people don’t come in because they get their cholesterol or blood pressure scripts from the pharmacist every 6 months, this system will come at a cost.

#2: We are treating people (not ailments)

People are more than the sum of their ailments. Over the years there have been many attempts to replace the doctor with algorithms, machines and computers, and they have all failed.

The human body and mind are complicated. As they say, if you think a professional is expensive, wait until you hire an amateur.

#3: Don’t put the cart before the horse

If it’s improved access or multi-disciplinary care we’re after, then strengthen general practice. Unfortunately the opposite is happening: Practice nurse support has been cancelled, and I won’t mention the Medicare rebate cuts and freeze.

#4: Disruption is not innovation

A common mistake is to assume that disruption is the same as innovation. Disruptive services – like those suggested by community pharmacists – may be simple or convenient, but the quality will be poorer.

A recent study showed that only 3 out of 32 fish oil supplements contain what the label says; I believe pharmacies should focus on evidence-based medication advice and quality control of over-the-counter drugs.

#5: Conflicts of interest

A question we should ask is: Can the person who is selling the drugs give independent health advice? Pharmacies face reduced profits because the Government has set lower prices for generic medications under the price disclosure arrangements.

Although it is understandable pharmacies are looking for other income streams, it is unlikely that the proposal by the Pharmacist Guild is a win-win solution. There is value in team work, but only if we work genuinly together.

Minister, please don’t ruin our holiday again

Before Christmas – just as I was about to pack my suitcase – Prime Minister Tony Abbott dropped a bomb.

Together with the Health Minister he announced that the Government had introduced a policy to stop 6-minute medicine – or ‘sausage machine medicine’ as he called it. As a result the Medicare rebate would be reduced in January by $20 for GP consultations of less than 10 minutes.

Battle won, but not the war

This cut to Medicare patient rebates was meant to deliver $1.3 billion in savings over four years. However, as a result of the backlash by GPs and health consumers, the proposal has now been scrapped.

The other 2 components of the Government’s revised co-payment plan are still on the table: $873 million saving from a $5 Medicare rebate cut, and $1.3 billion saving by a four-year freeze of Medicare fees for GPs, medical specialists, optometrists, and others.

Expect more fireworks in the coming months.

6-minute medicine

Was Abbott right about the sausage machine? Are bulk-billing doctors churning through patients in six-minute sessions?

Most GPs felt Abbott’s argument was a sham as the issue was never raised in the budget. The real agenda was obviously to save health dollars. The timing – just before the Christmas break – as well as the one month’s notice before the measure would kick in, added insult to injury.

Some said it was a case of attempted political suicide.

Research shows that the average GP consultation lasts 14 minutes, not six. Some consultations may only take 5 or 6 minutes, but that’s not necessarily a bad thing. Here’s an example:

Someone comes in with a painful wrist after a fall. An efficient, experienced GP can take a history, examine the wrist and, if needed, organise further investigations within 6 minutes. The GP-in-training may take 20 minutes to do the same, should she be paid more? Probably not.

Abbott’s argument is of course not coming out of the blue: ‘6-minute medicine’ has a bad reputation because some business models of larger corporate GP clinics are purely profit-driven, and it is thought that this can lead to a high patient-turnover.

If Abbott has a problem with this practice, his Government should deal with those clinics, and not punish all GPs and their patients. But there’s more to it.

The real problem

The real problem is the increasing gap between the Medicare rebate and the costs of running a practice. While business expenses are going up every year, Medicare has only slightly increased the rebates over the years – barely covering inflation, and for the past 1.5 years the rebate has been frozen.

As a result, doctors need to see more patients per hour or work more hours, if they want to continue bulk billing. Another option is to retire (not recommended). Or they can choose to charge a gap fee or co-payment. This has happened before.

In 2003 bulk billing rates were at an all-time low of 66%. This didn’t make the Howard Government very popular, so the health-minister – Tony Abbott – had to increase the Medicare rebates. As a result, bulk billing went up again.

The solution

At the moment bulk billing rates are at an all-time high, about 85%. If the planned $5 rebate cut and freeze per the 1st of July 2015 go ahead, it is likely that less clinics can afford to bulk bill. History tends to repeat itself: If voters start to complain at a level of about 66% the Government may feel there is room to play – that is if they can get their proposals through the senate.

The new Health Minister Sussan Ley indicated after the backdown last week that she will continue to look for ways to make Medicare ‘sustainable’ and introduce a price signal by way of a co-payment. At the same time she wants to protect bulk billing and maintain and improve high quality healthcare.

I just hope that whatever the solution will be, private insurers are kept at a distance.

It’s good to hear that Minister Ley will talk to doctors – she seems genuine. Many GPs have already started the debate about ways to cut red-tape and increase efficiency in primary care. I’ve heard some excellent suggestions.

A bottom-up approach to health reform takes longer, but is more likely to succeed.

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:

The receptionist will call the wheelchair taxi for you now

Wheelchair
Image: Pixabay.com

“Doctor can I talk to you about something else?”

“No.”

“…what do you mean?”

“It’s not allowed. We have just finished your care plan. The government does not want me to see you for something else on the same day. They call it double dipping. Please come back tomorrow. The receptionist will call the wheelchair taxi for you now.”

Further reading: Budget 2013-14: Medicare Benefits Scheme – removing double billing

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.

 

How do you put up with this, doc? Red tape in medical practice

“How do you put up with this, doc?” She looked at me while I was on the phone. We were waiting for almost ten minutes.

Every time she comes in we go through the same ritual: I ring the PBS Authority hotline, we wait, sometimes for a couple of minutes, and sometimes longer – like today. I always get approval, and then print off the script for her. In the meantime other patients are waiting in the waiting room or trying to get an appointment.

According to the AMA thirty per cent of medical practitioners reported spending ten minutes a day or longer waiting for calls to be answered. So here we are: we have a shortage of doctors and we make them jump through bureaucratic hoops instead of seeing patients.

An estimated 25,000 patient consultations are lost every month while doctors are making phone calls to the PBS Authority hotline. At the same time various reviews have shown that this procedure is unnecessary and does not lead to any savings.

I was very pleased to see the Australian Medical Association submission to the National Commision of Audit earlier this month. The AMA states in the introduction:

Though there has been some recent progress in reducing regulatory burdens in a few areas of medical practice, the amount of regulatory burden and red tape remains excessively high without any real justification. Internal AMA research shows that a large number of GPs spend up to nine hours or more each week meeting their red tape obligations. Every hour a GP spends doing paperwork equates to around four patients who are denied access to their doctor.

The submission focuses on six areas:

  1. PBS phone authorisations.
  2. Medicare provider numbers
  3. Medicare payments
  4. Personally Controlled Electronic Health Records (PCEHR) registration for medical practices
  5. Centrelink and Department of Veterans’ Affairs documentation requirements
  6. Chronic Disease Management items under the MBS

Although there are lots of other areas that need improvement, this seems like a good start.

Everything you always wanted to know about bulk billing (Video)

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.

Doctor do you bulk bill?

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).

Bulk billing
The fees doctors charge are set at a level that enables them to look after patients properly. The cost of providing good medical care is rising (the upper line) but the Medicare fees are falling behind (the lower line). That is why you may find your doctor’s practice does not bulk bill as a rule. AWE: average weekly earnings. CPI: consumer price index. Source: Australian Medical Association.

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.