“BULK-billing rates have continued to rise.” It’s the oft-quoted remark to justify the adequacy of health financing and freezing of the Medicare rebate for patients who attend general practitioners.
Broadly interpreted as a measure of finance adequacy and affordability to general practice, questions are now being asked about whether it continues to be relevant as a health economic indicator.
GPs point to the changing landscape of Medicare Benefits Schedule (MBS) based primary care and the associated indicator, the “average out-of-pocket” expenses, to argue that the bulk-billing indicator is being misinterpreted and inappropriately used.
As an indicator of health funding, the bulk-billing rate came to prominence politically as an election issue in 2003–2004. Low and declining bulk-billing rates prompted the then Minister for Health Tony Abbott to increase Medicare rebates and to add bulk-billing incentives to bolster an affordability argument and floundering electoral prospects. Since that time, bulk-billing rates have continued to climb.
Once a sign of affordable access to primary health care, the high bulk-billing rate has now become a banner for the moral hazard. Too much of a free thing leads to greater demand and overuse of GP health care and high health costs.
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But is that true? The weakness in the bulk-billing rate starts with its calculation, which is based on services rather than at a patient level. That is, 83% of services are bulk billed – not 83% of patients are bulk billed.
Patients do not access Medicare equally. Data from the National Health Performance authority confirm that the top 12.5% of patients utilised 41% of Medicare out-of-hospital services.
The very high and frequent GP attenders are more likely to be older, have multiple chronic diseases and live in areas with the most socio-economic disadvantage. These 12.5% of patients are the ones who significantly account for much of the bulk-billing figures, which leaves the majority of the population with much lower rates of bulk billing.
To appreciate the full picture, the related economic indicators of affordability need to be considered, particularly the out-of-pocket expenses.
The out-of-pocket expense indicator is rarely raised or discussed at a political or community level, but has more than doubled in the last decade and now stands at approximately $32 per consultation. The impact of this cost is reflected by the Australian Bureau of Statistics patient experience indicators for the lack of affordability for GP services, and the increasing use of hospital accident and emergency services.
The rising level of patient costs casts doubt on the veracity of the bulk-bill indicator as a single measure of affordability. It strongly counters the moral hazard argument, indicating that there are already cost barriers to accessing general practice.
So what does a rising bulk-billing rate really mean?
Rising GP bulk-billing rates may simply be a reflection of broadened access to the MBS and a proliferation of health services which use the MBS as an addition to, rather than a basis for, funding.
Primary health care has changed significantly in recent years, and particularly in the last decade. Medicare has allowed and broadened MBS access to several non-government and state government organisations, which now include:
- the Royal Flying Doctor Service
- Aboriginal medical services
- bulk-billing clinics in public hospitals
- headspace clinics
- medical services for the homeless
- family planning clinics
- alcohol and drug services and centres
- academic (hospital-based) general practice units
- not-for-profit rehabilitation centres
- women’s health centres
- refugee health centres
These organisations use Medicare as an additional funding source to complement other federal, state or private finances. They are not dependent on the MBS to support their enterprises, and have less sensitivity to rebate changes for financial survival than many private general practices.
No-one is saying that these sources should not receive MBS funding – they are models which increase the bulk-billing rate, but by the same token, they are not small business general practices where real business cost pressures exist.
At the other end of the scale, consolidation of general practice into large, vertically integrated health corporates have become prominent in primary care based on the bulk-billing model. These models do not depend on general practice per se, but use high-throughput GP services as revenue raisers – that is, the ability to generate referrals to higher profit margin services like pathology, radiology and specialist services.
Finally, cooperative GP models, where an annual fee is paid, followed by yearly GP bulk billing are also becoming more common – a system which is being replicated in some nursing homes.
The key point with these models is that the additional patient costs are not detected by Medicare.
Hence, the bulk-billing indicator is misleading and “dirty” in that it does relate to the traditional view of general practice. It does not truly reflect either the adequacy of GP financing or the affordability for patients.
We are now in an era where there is a gross imbalance of health information tilted strongly in the government’s favour. The government restricts access to MBS data use, but readily forwards raw Medicare data which suits its purpose.
Quoting the raw bulk-billing rate in isolation as an indicator of affordability of general practice care is mischievous. It misrepresents the true costs of seeing a private GP and is being used to justify a political agenda.
The indicator is now beyond its usefulness date and its usage in isolation should be rejected.
Dr Evan Ackermann is a GP and chair of the RACGP Expert Committee on Quality Care.