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AMA works on alternative to Govt’s massive hit on patients

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The Federal Government’s wholesale changes to health care funding will dump an extra $10 billion of costs onto patients and put the system itself at enormous risk, the AMA has warned.

As the AMA presses ahead with work on an alternative co-payment model to present to the Government, it has released estimates showing that proposed changes to health spending contained in the May Budget would entail a huge shift in the funding burden onto patients.

In its submission to a Senate committee inquiry into patient out-of-pocket costs, the AMA said the planned $5 cut to Medicare rebates and scrapping of bulk billing incentives would cost patients $3.5 billion in its first three years, while freezing indexation of rebates would cost $1.4 billion, increasing Pharmaceutical Benefit Scheme co-payments and safety net thresholds would cost patients an extra $1.4 billion and the $7 co-payment would add about $1.4 billion to family health costs.

The AMA said that these changes, combined with an immediate $1.8 billion cut to public hospital funding and the dumping of the $16.4 billion Health Reform Agreement funding guarantee, were “driven by ideology” rather than evidence.

“They make no attempt to refine and shape the Australian health care system to position it to deal with future challenges,” the submission said. “Structural changes of this magnitude, without any long-term forecasting and analysis of their impact, subject the health of Australians and the Australian health care system to enormous risk.”

AMA’s alternate co-payment model

The AMA has warned the Federal Government that it will have to scrap Medicare rebate cuts and shield vulnerable patients from increased costs if the medical profession is to accept the introduction of a co-payment for GP, pathology and diagnostic imaging services.

President Associate Professor Brian Owler cautioned that it would not deliver savings of the magnitude anticipated in the Federal Budget.

Last month Prime Minister Tony Abbott asked the AMA to work with Health Minister Peter Dutton and the Health Department on an alternate form of the co-payment amid widespread hostility to its wholesale changes to health funding, including a $7 charge for GP, pathology and radiology services and a $5 cut to Medicare rebates. The plan in its current form faces defeat in the Senate.

A/Professor Owler, who met with Mr Dutton last Thursday as part of discussions on an alternate model, said the AMA supported the concept of a patient co-payment, but only if it was imposed in a way that protected vulnerable patients and did not take money out of primary care.

“The AMA cannot support a proposal that takes money out of primary health care,” he said. “That’s not a negotiable option.”

He said the AMA’s work on an alternative model was guided by three fundamental principles: that there be no Medicare rebate cuts; that vulnerable patients, including children, be protected; and that it include ways to improve the value patients place on GP services.

In a significant shift from his earlier no-compromise stance, following the meeting Mr Dutton indicated the Government was closely examining the AMA’s suggestions and had directed the Health Department to model the budgetary impacts of possible changes, including exempting pensioners and other vulnerable patients from the co-payment.

“They’ve made some suggestions that I want to go away and look at the modelling on and see what impact that would have on the system,” the Health Minister said. “If there are improvements to be made we’d be foolish not to listen to them.”

The peak grouping of GP organisations, United General Practice Australia, last week backed the AMA in its negotiations with the Government on the co-payment.

The AMA President told a Senate committee inquiry into patient out-of-pocket expenses that the Government’s proposed co-payment model was “poorly designed and inflexible. It will have unacceptable impacts for vulnerable patients and their doctors, and implications for health care policy.”

Out-of-pocket expenses

A/Professor Owler said the Federal Government’s proposed changes to health care amounted to an abrupt U-turn in the thrust of current policies, which encouraged medical practitioners to bulk bill.

He said that, as a result, the “vast majority” of health services were provided at no cost to the patient.

In fact, in the past decade, the proportion of health services involving out-of-pocket expenses has held steady or declined. At the same time, where such costs are imposed, they have increased.

“Importantly, less than 12 per cent of out-of-pocket costs are for medical services,” A/Professor Owler said. “This is contrary to the common misperception that all ‘out of pocket costs’ are for medical expenses.”

More than 81 per cent of GP services were bulk billed in 2012-13, and the AMA President warned that increasing the cost of accessing primary care would end up costing the nation more, as people put off seeing their doctor for relatively minor ailments that could eventually become far more expensive to treat.

Director of the Grattan Institute’s health program, Professor Stephen Duckett, told the Senate committee hearing that any savings to be drawn from the $7 co-payment would be quickly washed away if many of those who had intended to see their GP instead went to EDs for treatment, where each visit cost the public purse $290.

The Government has estimated that patients will forego one million GP services as a result of the co-payment, and Professor Duckett warned that “if more than one in three of these patients go to an emergency department there will be no saving to the Government”.

A/Professor Owler said that, rather than extracting money from primary care, the Government should be increasing its support for GPs.

“We’ve seen this competitive drive towards six minute medicine and what we need to do is actually reward GPs for spending the time with their patients, for managing their chronic diseases, and keeping them well and out of hospital,” he said. “GPs are the answer to the sustainability of the health care system, they are not the problem.”

Bulk billing a political battlefield

Mr Dutton has claimed that one of the biggest threats to the country’s system of universal health care has been the growth in bulk billing, which he said the co-payment was intended to address.

“The biggest change to the original intention of Medicare since its inception is not the introduction of a co-pay, [but] the steady growth in bulk billed services…which is undermining the sustainability of the system,” the Minister said in an opinion piece in the Sunday Tasmanian on 27 July.

“A scheme that was designed to protect those who were unable to support themselves had become, in some cases, a tool with which GPs could gain market share and poach patients from the surgery or clinic down the road.”

But Opposition leader Bill Shorten pledged Labor would “fight to the death” to protect Medicare and bulk billing.

“[Medicare is] the rock upon which we built modern Australia,” Mr Shorten told the NSW Labor Conference late last month. “It is madness for Australia to go down the American road, just when Americans are finally making a long, exhausting U-turn.

“Medicare doesn’t just keep Australians healthy. It makes us more productive and its boosts participation.”

Adrian Rollins