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GP Co-Payment: Policy Analysis

Even Tony Abbott and Joe Hockey seem confused about their Great. Big. New. Tax on doctor’s visits, as announced in their horror budget two weeks ago. It’s still not clear exactly how this policy will be applied and who it will be applied to. While the government who introduced the tax go back to the drawing board to try to work out how it actually works, I thought it might be useful to do some policy analysis of my own, by interviewing my brother-in-law. I know this is a radical idea and one Abbott and his government clearly haven’t considered, but let’s throw in some facts from an expert. My brother-in-law can provide these facts in an expert manner since he is a GP:

Peter Dutton has said he decided the government should introduce the Medicare co-payment while visiting his doctor. Dutton explained that people should contribute to visits to a GP because this would make the health care system more financially sustainable. This doesn’t strike me as a consultative policy analysis process. If Dutton had chosen to investigate the effect of this policy in a more consultative way, who should he have spoken to?

Changes to the Medicare architecture should be undertaken through liaison between the Department of Health, the AMA [Australian Medical Association], the College of General Practice and State Health Departments.

As a practicing GP, what is your opinion of the Abbott government’s proposed Medicare $7 GP co-payment policy?

The proposed Medicare co-payment and its associated changes to Medicare have the potential to be very destructive to patient care for a couple of reasons.

Firstly, it will deter people from discussing minor symptoms that they have with their GP, which often are a warning sign of more serious illness.  This can lead to patients presenting with more advanced or severe disease, which may ultimately present a higher cost burden for the government.

Secondly, the capacity for general practices to be flexible in their billing to patients with limited financial resources is significantly reduced under the proposed changes.

Thirdly, hospital emergency departments will see a major increase in the volume of people with minor ailments presenting for care. Already, approximately 30% of patients presenting to an emergency department are non-urgent or semi-urgent conditions that could be managed in a GP setting. I suspect this proportion will increase significantly after the introduction of the co-payment.

Finally, the co-payment may influence doctors to manage their patients in a less-than-ideal manner, as GP’s may try to protect their patient from additional fees. For example, the GP may not undertake a planned review of an infected wound the next day to see if the antibiotics are helping.  Or the GP may defer referring the patient for pathology tests that might have picked up the serious electrolyte abnormality. There is a significant potential for the quality of care to deteriorate.

What influence will the $7 Medicare GP co-payment have on the total price GPs will need to charge their patients rather than bulk-billing? Will there be an administration fee charged on top of the $7 fee?

This will vary depending on the way the practice currently bills.  Some practices charge all patients a fee with a gap. The proposed Medicare changes will reduce the amount that patients get as a rebate and they will therefore have a larger gap (however, the co-payment per-se won’t be paid).

It is practices that bulk-bill patients who will see the most impact. For example, a general practitioner that chooses to bulk-bill a pensioner for a standard consult will have a 24% decrease in their income for that patient, and if they charge the co-payment without an additional fee on top, then their income will drop by 11%.

For example, here is the current situation where a standard consult for a pensioner is conducted:

Medicare Rebate ($36.30) + bulk-billing incentive ($6.60) = $42.90

And here are the proposed changes:

If no co-payment is charged then total income for consult is:

Medicare rebate ($31.30) = $31.30

If co-payment is charged:

Medicare rebate ($31.30) and low-gap incentive ($6.60) and co-payment ($2.00) = $39.90

As a general practitioner who runs a small business, these reductions in income have the potential to make the business unviable. My practice is considering its options but it is likely that we will simply have to charge concessional patients a gap of approximately $11 to maintain business viability (this will essentially keep our income stable). We are exploring other options such as reducing the duration of consults from 15 minutes to 12 minutes or reducing the number of supporting staff, but these options all have a negative impact on patient care.

What types of patients will this co-payment affect the most? Do you expect certain types of patients to visit their doctor less often?

This will have the most impact on patients who have chronic illness. In particular; the elderly, those with mental illness, diabetes, high blood pressure and children with recurrent infections. The impact will depend on how the medical profession and medical practices change their fee structure after the changes are introduced. It is unclear whether the large bulk-billing organisations such as Primary Health Care will continue to bulk-bill or whether they will charge the co-payment. I suspect that the overall impact of these changes will be much more severe than expected as many general practices like mine will change from conducting ‘mixed-billing’ (bulk-billing concessional patients and charging gap for non-concessional patients) to conducting private (gap) billing for all patients.

What types of illnesses and conditions will people suffer from more severely if they don’t see their GP as often?

Chronic illnesses such as diabetes, hypertension, asthma, heart disease and those with mental illness are likely to be the hardest hit.

I also expect that some diseases will be picked up later. For example, a woman with a minor breast symptom who delays having it checked and it ultimately is found to be a breast cancer.

Another example is that if a patient reports an unusual mole early and it is excised and found to be an early melanoma, there is very little risk of the cancer spreading and cure is usual. However, if the melanoma is diagnosed after spreading, it is generally regarded as incurable and the costs of newer chemotherapies for melanoma are astronomical in comparison.

What affect do you think the GP co-payments will have on the overall health of the community and on the health budget bottom line?

There is likely to be a negative effect on general health in the community. I suspect that we will see some diseases that have been declining in severity, such as heart attacks or advanced breast cancer, either plateau or even increase in frequency.

I suspect the health budget will largely be unchanged, as while there will be a reduced number of general practice consultations and pathology/imaging rebates, there will be an increase in the number of more advanced diseases. There will probably be some cost-shifting as the more advanced cancers and heart disease will be cared for through the hospital system, whereas there will be less costs coming from general practice.

Do you think it was responsible of the Abbott government to use the revenue from the GP co-payment to build a future fund to fund scientific health research?

Increased funding for research is sorely needed. If there is a co-payment then I would support its proceeds going to research, however, I believe this funding should go to non-corporate research such as through the CSIRO or universities.  I am concerned that corporate grants will be given for research by pharmaceutical companies that do not need government support.

The funding to the states for the provision of hospital care should also be increased if the co-payment is introduced as the further demand will outstrip already limited services in our public hospitals.

So there we have it. Not only some much needed facts, but clear analysis that shows the government haven’t thought through this policy. Either that, or they have and they don’t care about the detrimental impacts on our community. Sigh.

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25 comments

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  1. DanDark

    “If its not broken, it dosnt need fixing”
    Don’t break something,(medicare)
    so then you can put it back together again with cracks in it

    Humpty dumpty sat on he wall
    humpty dumpty was pushed off the wall
    humpty dumpty had a great all
    it took all the horses and all the men
    but they couldn’t put humpty back together again……

  2. DanDark

    Must apologise for my poor typing,
    Humpty had a great FALL

  3. Nuff Said

    What about nursing home residents who pay most of their pension to the facility? There’s a massive issue there for them.

  4. Jeff Marsh

    Policy research care of tea leave reading and Wikipedia!

  5. Jeff Marsh

    Reblogged this on I Want To Speak and commented:
    Another great post by Vic Rollison!

    (I did not contribute to this article)

  6. DanDark

    another scam alot of especially small business do is the old “mates rates”
    for eg,
    mate is car repairs/ spray painting
    so motor trimmer does a repair job, or even whole new interior
    so he can have his hobby, an old holden rejigged from 4 door to 2 door
    and sprayed, no money involved, hence no tax to ATO from either of them
    no record at all

    His printer mate comes in wants his chair reupholstered
    he does it, when printer mate comes back pays motor trimmer picks up job,
    no receipt given to printer mate
    as proof of incoming money from printer mate

    There are plenty of options for gov to stop these rorts
    Maybe they should be implementing measures against the old and rich,
    that are ripping the young, old and vunerable off in this country,
    its other way round than what our gov and murky Murdoch want the plebs to believe
    Heavy lifting, sharing the pain,,WTF,
    a lot of people have never done their fair of heavy lifting
    because they know how to get out of it
    and its not the young and working old and poor,

    Quote from motor trimmer 2 yrs ago
    “I will stop putting so much into my super from now on, because I wont live long enough
    to spend it all I don’t reckon”
    So what I got from that is, “I have used it as a tax haven for years, made a lot of money in mean time
    so I can just sit back pretty now until I retire early, live the good life after I retire
    and you little pleb will work until you die with nothing,
    ripping you and my own kids off all the way”

  7. KIdocs.org

    Dont forget it’s not just a copayment – there is also a $5 reduction in Medicare rebate which doctors will either need to absorb or pass on to patient in form of increased gaps

    Whilst the idea of a medical research futures fund is laudable, I am perplexed why the cuts are directed at GPs and their patients – not specialists

    There is plenty of wastage in the health system that could recoup costs – stop Public Hospital specialists from charging bulkbilled medicare rebates to the Feds for outpatient services (these should be provided by State funding, not double dipped from Federal medicare); reduce the medicare rebate for certain ophthalmological procedures, get rid of the tedious and expensive PBS Authority phone line

    …but instead small business owner GPs face a 24-35% drop in income OR charge more gaps OR churn through patients quicker and refer more often, with more likelihood of delayed presentation of disease and increased costs later on.

    It’s penny wise, pound foolish policy and will do a lot of harm to patients, small business (GP) retention & recruitment as well as cause a widening gap between “haves” and “have nots”. We’ve seen how this plays out in other countries – it ain’t pretty.

  8. Kaye Lee

    Has anyone given a thought to pharmacists?

    They are already being asked to administer home medication reviews, webster packs, diabetes and blood pressure management, methadone programs – all of which require copious paperwork. The BAS is a nightmare because some drugs are GST taxed and some aren’t with different conditions for wholesale, retail and method of purchase (script or over the counter). Pharmacies bear the cost of this having to submit monthly BAS because the government owes them a refund every month.

    Chemists are already regarded as the poor man’s doctor with customers feeling much more able to discuss their ailments and medications at length, regardless of how many customers are waiting. The chemist charges nothing for this and has no system for charging or receiving remuneration for consultations beyond those programs mentioned above.

    How many more people will flood to chemists now? Will the chemist be forced to charge consultation fees? How will the co-payment be paid and remitted as chemists aren’t hooked up to medicare beyond submitting weekly claims for scripts? Will this mean whole new computer software and a mountain more paperwork along with countless unpaid hours diagnosing people’s ailments? What of the pressure this presents when chemists are not trained in diagnosis?

  9. Terry2

    Peter Dutton seems very confused about his co-payment scheme which, if nothing else, will impose a significant administration workload for GP surgeries.

    Dutton seems to have backed away from the over-servicing argument which is, after all a matter for GP’s to address on a one-on-one basis with patients and by virtue of the fact that the $5 ($2 kept by the doctors as a collection fee) is going to a medical research fund, it also seems that Medicare is not, after all in a parlous financial and unsustainable state.

    This is a government that is most reluctant to accept any constructive input but, here goes:

    As the existing Medicare Levy is already going up by 0.5% to pay for Disability Care, why not another 0.5% (i.e. one percent overall) to fund the Research Scheme. the major advantage of this is that you get more money and relieve the GP’s of unnecessary and burdensome red-tape. You also collect the money through an established collection system and you have no need for a co-payment.

    If the government are worried that this would be seen as a broken promise well, it’s a bit late for that isn’t it ?

  10. DanDark

    Yes Kaye
    What about the cues, at chemists getting medical advice
    many people all ready do that, we don’t already have enough local doctors
    in smaller country towns, so first port of call for help, diagnosis is already the chemist
    Its been happening in town where I live for years,

    another instance of sheer neglect already of our health services
    the boss of ambo station, even had to fight for 4 wheel drive ambo
    as the other 2 rigs were always getting bogged, or couldn’t get into paddock,
    so ambos have to walk 2ks to injured patient, and carry them back 2ks to rig
    They had to fight for bull bars, cos they kept damaging the rigs hitting the kangaroos
    that are prolific on our roads
    How I know this, because I used to work at our local Ambo Station

  11. Winifred Jeavons

    Has this government thought through ANY of the budget proposals? Just the savage attack on uni students and unemployed youth will have massive long term impacts including some very nasty surprises. They. expect workers to travel long distances, but raise travel costs; alternatively to move where there may well be no housing or very expensive .Typical conservative myopia.

  12. Nuff Said

    Will this mean whole new computer software and a mountain more paperwork along with countless unpaid hours diagnosing people’s ailments? What of the pressure this presents when chemists are not trained in diagnosis?

    Pharmacists don’t diagnose, ever. They treat symptoms. The points about increased admin are well made.

  13. Kaye Lee

    Gee I am glad we have the MSM to keep us informed

    Headline in the Herald a few hours ago

    “Joe Hockey signals GP fee could be up for negotiation”

    Read more: http://www.smh.com.au/federal-politics/political-news/joe-hockey-signals-gp-fee-could-be-up-for-negotiation-20140525-zrnhl.html#ixzz32hmpECHW

    Headline in the Australian a few hours ago

    “Senate stoush looms as Joe Hockey refuses to compromise on $7 GP co-payment ”

    http://www.theaustralian.com.au/national-affairs/senate-stoush-looms-as-joe-hockey-refuses-to-compromise-on-7-gp-co-payment/story-fn59niix-1226930684581

  14. vivienne29

    The establishment of the Medical Research Future Fund is all very well. BUT, this was never mentioned pre-election by anyone anywhere. It’s come out of the blue. Apart from the disgusting $7 co-payment, I have identified over $10 Billion of health matters which have been abolished or reduced which have not gone to ‘repair the budget’ – they have all been directed into the MRFF. They’ve pinched $1 Billion from Labor’s Health and Hospital Future Fund and plonked it in the MRFF and plonked the balance of Labor’s fund into consolidated revenue. The MRFF is to fund some dementia research which is listed in the Budget. Now the question is why all this pain and horror necessary when it actually all goes into the MRFF and not the budget ’emergency’. When did Abbott campaign on the dire necessity for dementia research?

  15. vivienne29

    PS: Dementia funding is $40 million a year for each of the coming four years. That $160 Million to spent out of a fund which already has over $11 BILLION earmarked for it over the same period.

  16. David Cameron

    Has anyone explained how the GP Receptionists & Account staff will know when a patient has achieved the 10 consults to then qualify for the “safety net” ?
    Depending on which LNP person is asked & when they are asked it seems pensioners & kids <16, might get the 10 visit deal, but under 25's will be paid the smaller Youth Allowance not Job Start, and < 30's are supposed to be breatharians for 6 months before they can get any benefit,
    Hang on, didn't Tony say last week that everybody will only have to pay for their first 10 consults ??
    Are pathology & imaging included in the 10 consults ? or do they have their own quotas ?
    Some people could churn through their 10 bills in a few days, weeks, certainly less than a month, how will their $70 help significantly with the costs of their health care ? while some other healthy people might only have to have 2 or 3 services in 12 months, so they don't cost the system much & they won't be contributing much either ?
    the system can't cope with keeping a real time count of the number & dates of scripts written for S8 drugs now, imagine what a mess it will be if the Medicare number is supposed to keep record of the progress to the 10 count ??
    What if a patient is not eligible, so pays for 10 or more consults, then becomes eligible for a concession card ? eg they have a birthday and can now get the age pension ?
    Imagine the mess if A & E try or are told they must charge a co-payment too ? Won't weekends there be fun, AND some people are talking of taking away penalty rates for late hours shifts & weekend work !
    It's all so muddy, I think I might need to go see my Dr

  17. Mick Quinlivan

    heard Mr Dutton spoke to his dog after he spoke to his doctor….. the dog raised no objections so he thought all was ok

  18. Catherine

    I think this whole policy is a type of ethnic cleansing. Make it hard for people to get the proper care who cannot speak English well, are pensioners, single mothers and children. Just make it hard as it comes across as those people are burdens on the economy so get slowly rid of them. As I worked in a hospital and good care is the reason democratic and good governments exist. One of their responsibilities. This governments agenda is too dark for me. As no health professional would advocate a system like the Abbott government wants to implement as a good for the whole nation.

  19. jane

    It’s a pig’s breakfast alright and won’t improve. Another Liars thought bubble dreamt up at the weekly rort committee meeting.

    As to whether they’ve given any thought as to how this pig’s breakfast will be administered and the effect on the chronically ill and less well endowed financially.

    Administration will be exacerbated by that other brilliant thought bubble to sack 16,500 public servants and I’d say that they really don’t care what sort of mess results.

    The clean up will be left for Labor as usual, and they and their barrackers will snipe from the sidelines about the terrible state of the healthcare system.

  20. rossleighbrisbane

    What if the patient needs a double consultation? Is that one or two $7 charges? Could someone out that to Abbott and co and watch the answers change?

  21. Terry2

    I see that Abbott has ruled out any negotiation with the Senate over the Medicare co-payment ; what on earth is going on with these guys ?

    Almost every informed comment I have read, including the AMA, have said that this levy is not the way to go. I’m always one to to look for a middle way in any dispute and I find it intolerable that the government are refusing, like a spoiled child, to come to the table with an open mind : adults in charge, I don’t think so.

    I go back to my comment,above, that a .5% increase in the Medicare Levy would be far more sensible and avoid the red tape that will be encountered by GP’s in collecting coins from pensioners.

    It’s time that this government realize that they are public servants and we expect much better from them.

  22. Terry2

    I should have put some numbers to my comment:

    An increase in the Medicare Levy of one half of one percent (0.5%) will generate $33 billion over ten years – budget estimates for the Disability Care scheme – so let’s say $3 billion a year.

    The $7 co-payment will, according to budget papers, collect $3.5 billion over four years, less than one billions a year.

  23. DocHoliday

    Pathology is a useful example as it is often bulk billed for all patients. A blood collector generally works solo collecting blood and getting the patient to sign the medicare slip. The Path Company can afford to bulk bill because their overheads are so low, cash-flow is secure and they don’t need to worry about bad debts. Once a copayment is introduced and they need to add administrative staff there will be no incentive to bulk bill and they will privately bill all patients at whatever price the “market” will tolerate. The cost of Pathology to individual patients could go up much more than the copayment and healthcare costs for all Australians could increase substantially.

  24. Pingback: What Abbott Taught Us « The Australian Independent Media Network

  25. Pingback: What Abbott Taught Us | Victoria Rollison

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