You may have heard of “the Australia Tax”. The term comes from the apparent difference in the price of a seemingly identical product sold apparently cheaper in another country than the retail price in Australia. Computer software and Apple products are frequently mentioned as being subject to this tax and while it really isn’t that simple, the impression that you pay more because you live in Australia is certainly there.

The problem in the comparison of prices across two countries is in the detail. While on the face of it, the price of, say, Apple products is cheaper on their ‘domestic’ US site despite coming out of the same factory, Australian Consumer Law requires the full price, including taxes and fees, to be disclosed on advertising material – the same concept is not enforceable in the USA where sales taxes vary by location. The payment of tax by large multinationals is a topic for another day.

The Turnbull Government also imposes an Australia Tax – and this one is far less justifiable. The Abbott Coalition Government froze Medicare rebates as a part of the ‘budget repair’ measures introduced in the 2014 budget, Turnbull’ Coalition Government extended the freeze until 2020 in the recent Federal Budget.

The recommendation of the AMA (Australian Medical Association AKA the doctors union) is a standard consultation should cost around $80 (paywalled). The Medicare rebate for a ‘standard consultation with a General Practitioner’ is has been under $40 for the past two years and will be for the next four years. Clearly, this is a large gap. Before you say, so what – it’s for overpaid doctors – let’s have a look at the facts.

For their $40 or so that the Government has decreed is a fair price, the doctor has to discuss your condition with you, what results the treatment should provide and ongoing health care. At the same time they are supposed to screen you for a host of related conditions as well as assess your general health and wellbeing. While they work on seeing 4 or 6 people an hour, circumstances often conspire to ensure that doesn’t happen.

On top of that, the doctor has to maintain an office; usually involving the employment of a Receptionist to manage the appointments, potentially a nurse to administer treatment, attend professional development events (or lose their accreditation), keep the power, phone and water connected, as well as complying with a host of other rules and regulations generally relating to the operation of any business as well as the specific regulations surrounding medical businesses. So for the purposes of discussion how about we accept that two thirds of the cost of a doctor’s visit is swallowed in the on-costs listed above?

Regardless of the relentless claims by Turnbull and Morrison regarding ‘average’ incomes, the Australian median income (the ‘middle’ number in a series of numbers) is around $52,000 per annum. There are two uses for this value here.

The first is that doctors probably deserve to be recompensed for their years of study and practical experience, so say a doctor spends 5 hours a week on professional development (attending seminars, reading medical literature and so on) and 35 hours a week seeing people at 15 minute intervals, they would earn $5,600 should they charge everyone at $40 per consultation for the week (there is an additional payment made if a doctor chooses to bulk bill some patients so it has been discounted here). We have already assessed two thirds of the income is swallowed in the costs of running the business – so the doctor gets $1729 gross per week. Should the doctor work 48 week per annum (and takes the traditional 4 weeks leave), their gross annual income is $89,600 per annum. Given that a federal backbencher is paid $199,040 plus allowances for the ‘skills’ (usually no formal training except joining a political party and ‘playing the game’ will ensure success) required to enter Parliament expecting someone who has studied and trained for almost a decade to earn the right to practice a profession (not to mention the continual study required to keep the accreditation) to accept under half as much really isn’t equitable, is it?

The second use for the median salary/wage is that someone on the median wage already pays $780 per annum towards funding Medicare – through the Medicare levy collected with income tax. So we are already paying to go to the doctor. If you don’t use your contribution directly – celebrate as you are reasonably fit and healthy.

Doctors are finding it increasingly hard on a purely financial basis to bulk bill patients and financial pressures will only increase the number of practitioners that have to charge a fee greater than the ‘bulk bill’ rate’ to remain economically viable.

Abbott and Turnbull’s Coalition Governments are effectively making you and I pay twice for going to the doctor. We all pay the Medicare Levy. To make it worse, when Abbott tried to introduce the $7 co-payment on consultations with the doctor, a considerable amount of the resistance to the measure was based on facts generated by BEACH (Bettering the Evaluation and Care of Health program) managed by the University of Sydney but funded by the Federal Government. The resistance was successful; the co-payment was dropped.

Now with the rebate frozen, only those that can afford to pay over and above the inadequate rebate offered by the Government will be able to afford to see the doctor. This is the $7 co-payment all over again by stealth, only this time around, the Coalition Government is stopping the resistance before it starts – it has removed funding from BEACH. The Fairfax article, written by Jenna Price argues

‘Jobs and growth’ means nothing if you’re too crook to work.

Disclaimer – The writer is not a medical professional and does not work in the health industry.

What do you think?

Do you like paying twice for doctors visits?

Will the ALP re-introduce indexation for Medicare rebates?

 

This article by 2353NM was originally published on TPS Extra.