Issue 17 / 19 May 2014

STRONG, “thoughtful” leadership from stakeholders such as GPs and specialists can ensure the $7 Medicare copayment for GP visits is not a fait accompli and does not make it through the Senate, say health policy experts in the wake of the federal Budget.

Professor Geoffrey Dobb, AMA vice-president, said copayments would “change the culture of Australian health care to a huge degree”.

“It is the end of universal health care when even the poorest people and children are liable for up to 10 copayments a year”, Professor Dobb told MJA InSight.

He said it was the AMA’s job to help minimise the adverse impacts and unintended consequences of the federal Budget’s health measures, “particularly in terms of the impact on services for poorer people and children”.

The AMA would work with the federal government to look at the model of general practice in Australia and how it could be improved, he said.

Professor Stephen Duckett, professor of health policy at La Trobe University and director of the health program at the Grattan Institute, told MJA InSight the copayment on visits to the GP was simply “bad policy”.

“It’s not at all clear that [the copayment] will go through the Senate”, Professor Duckett said. “There is already a Senate committee looking at out-of-pocket expenses and it is very important that they get the right sort of evidence.

“We already know that a copayment on GP visits will reduce utilisation and we know that patients are already deferring their visits to GPs because they cannot afford them. This will only exacerbate that situation.”

Adjunct Associate Professor Lesley Russell, from the University of Sydney’s Menzies Centre for Health Policy, said what concerned her was that evidence had already been provided to politicians and it had “changed nothing”.

“What is needed is strong, thoughtful leadership from the stakeholders, particularly doctors”, Professor Russell told MJA InSight. “They are the ones with the commitment to the patients, and they are the ones who see the bottom line. They see the consequences.”

Professor Russell coauthored an article in this week’s MJA asking what the Australian health care system could learn from the US. The authors wrote that there were positive aspects of the US health system that could be emulated in Australia, including trials of new models of health care to organise, deliver and pay for health care services so quality of care was rewarded over quantity of services, and physician engagement in reforms, such as trialling and implementing new payment models that are not fee-for-service. (1)

Professor Russell told MJA InSight there was one particular model of primary care in Australia that was working well — Aboriginal Community Controlled Health Organisations (ACCHOs).

“ACCHOs are community-based health providers [controlled locally]”, she said. “That’s what we should be doing more of [in non-Indigenous communities].”

Steve Milgate, executive director of the Australian Doctors Fund, said his organisation was “pleased” to see copayments being invested in a medical research fund. (2)

He said that as long as the safety net was available for disadvantaged patients, there was no problem with the $7 copayment.

“Many AMA members already charge a fee which involves a gap payment”, Mr Milgate told MJA InSight. “So copayments are already strongly supported by the medical profession.”

Mr Milgate said that Medicare “must be sustainable”.

However, Professor Jeffrey Richardson, foundation director of the Centre for Health Economics at Monash University in Melbourne, said that the claim that Australian health care was unsustainable was “unambiguously false”.

“As a percentage of gross domestic product, we spend 6.6% on health care — that’s the 10th lowest in the OECD”, Professor Richardson told MJA InSight.

“Our health bill is pretty typical for the Western world and it is sustainable”, he said.

Copayments would force patients to defer care until they needed a specialist or hospital emergency department (ED), Professor Richardson said.

“Specialists in this country are 2.5 times as expensive as GPs. And it’s unlikely that hospital EDs will charge a copayment because of the administrative burden. It puts hospitals in an invidious position.

“The problem has been that the government does not raise enough revenue. There are many good ways of increasing revenue that do not rely on [sick and poor people].

“You won’t get efficiencies from sick patients. They’re not in a position to judge what they need and what they don’t.”

1. MJA 2014; 200: 526-528
2. Australian Financial Review 2014; Online 13 May


How would you describe the health aspects of the federal Budget?
  • A major blow (74%, 201 Votes)
  • Unfortunate but necessary (14%, 38 Votes)
  • Sensible (12%, 33 Votes)

Total Voters: 272

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18 thoughts on “Copayment debate needs leadership

  1. Horst Herb says:

    It never ceases to amaze me why people like Prof Russell study the US in order to achieve improvements here in Australia – Australia being a country that to date achieved a vastly better outcome at a fraction of the cost of the US system.

    While there is doubtlessly something to be learned of  in any system, it seems a reasonable asumption that we should first and foremost look at the few system that do better than ours for ideas on how to improve the already good towards the even better.

    This pathologic myopic fcus on “only the USA, always the USA” just created the seeding grounds for the current government’s absurd ideas on privatizing health – which good international evidence demonstrates amply as not working, as delivering inferior outcome at higher cost than public or other no-for-profit health systems.

    If they absolutely want to focus on worse performing health systems than ours in their studies, why not pick one that at least does it at a fraction of what we spend? Like Cuba for example, which delivers an outcome very close to the US outcome, but at an absolute shoestring budget? 

    This is not to say that I want the Cuban system implemented here, but it is an example that illustrates that health care delivery is not a matter of money nor co-payments nor any privatisation. It is a matter of experts in the field designing a well running and sustainable system, that delivers the best possible outcome within the resource constraints given at any time. Medicare used to come pretty close to that ideal, and if there were escalating costs (which I am not convinced that they are), one could focus on those areas where we are clearly spending too much on international comparison – like medications.

  2. David Cox says:

    I consider the proposed copayment is not well thought out and imposes another layer of bureaucracy (red tape) which this government promised to cut. If a copayment of any sort is to be imposed, that should be a matter between doctor and patient, and should go in the doctor’s pocket, not the government’s.Addressing the question of overuse of Medicare is important, but this will not do that, in my opinion.The Medical Research Fund is an excellent idea, but there are other and better ways to do this. 

  3. Department of Health Victoria Clinicians Health Channel says:

    We should be encouraging GP consultations rather than the often unecessary or inappropiate and far more expensive  to the system ED or specialist attendences

  4. Ed Wilson says:

    We have at least two generations of Australians who believe that they are entitled to any test at any time for any reason and without any cost to them. An analysis of demand for testing suggests that the walking worried well are consuming Medicare dollars and on tests that suggest only wellness checking. There is no inhibition in our current system and no feedback on cost or value.

    A co-payment will inhibit some attendances and certainly some elective testing, but is the target right? As an attempt to inhibit demand it may have a short-term impact, but it does not address the real issues in General Practice, Pathology and Diagnostic Imaging.

    As a society we must fund those attendances and diagnostic referrals that are of clinical value and develop a position on preventative healthcare including the application, delivery and payment for non-acute diagnostics. Australia sets international records for the take-up of new technology. Now, without inhibition, we appear to be doing the same under Medicare, but at public cost.

    The problem of excesses under Medicare is a Federal issue! The funding of hospitals is the liability of the states! It appears that the popularity of “free” services by the comparatively well exhausts the Commonwealth’s willingness to underpin the states’ requirements for providing services to the comparatively sick. Roll on constitutional reform. Let health sectors and even health services compete for dollars based on clinical rather than socio-political value!

    Our clinical insights must join and influence their imperatives.

  5. Charles Fisher says:

    I remain unconvinced as to whether introduction of the co-payment will result in a real reduction in health spending for Australian but I am convinced almost certainly will result in a real reduction in health.

    More practically, I am unclear to whom the co-payment will be made – the doctor or Medicare? Furthermore, Medicare has spent a lot of time and effort getting practitioners to bulk-bill and indeed many practices are now cash-free so there will now be additional costs for practices to now collect revenue on behalf of the government.

    There are two other curious concepts: firstly the concept that a person with no demonstrable income, eg, a child or non-working spouse is required to pay in order to receive medical care. Patently someone else will be doing the paying, ie, it is not really a co-payment for the patient, it is a tax for someone else. Secondly, the Commisssion of Audit’s report explicitly forbade reducing the fee to be charged in order to forgo the co-payment. Again an interesting concept: ie, forbidding doctors to reduce their fees. I wonder what the ACCC would say.

    If we must have some such system then the best way for it to work would be to link Medicare cards with the ATO and adjust income tax to be paid at year’s end to include any co-payments calculated on the basis of medical attendances during the preceding year. If the person doesn’t pay tax then no co-payments could or would be charged.

    I don’t understand how practices will be able to determine when the co-payment limit has been reached.

    A long way to go and I suspect this plan is already dead in the water.

  6. Philip Dawson says:

    Stephen Duckett says a copayment is bad policy. it is designed to provide a “market signal” to reduce “overutilization”, two assumptions that generally dont work in medicine. To penalize the poor who often have chronic illnesses (that’s why a lot of them are poor, too unwell to work) is bad policy, it will discourage them from regular monitoring and maintenance of their chronic condition, resulting in more (expensive) emergency presentations and hospital visits. Why no copayment (read reduction in rebate) for (more expensive) speicalist consults?

    Medicare is an insurer. if a private insurance company unilaterlly reduced the benefits without reducing the premium customers would change insurers. with a monopoly enforced by government we have no choice. this is hardly classical conservative policy!

    To fix the budget woes and save money witout htting the poor or stifling business investment hit those areas where there is plenty of fat to trim. If there is waste in public hospitals (and by all accounts there is) the way to trim it is by negotiation with states and health bureaucracy not cutting funding. GPs, Patology and Radiology are in general lean operations.

    There is al ot of fat to trim elsewhere. eg, negative gearing remains a factor making Australian housing amongst the most expensive in the world. free up land releases a bit, building blocks are unconscionably expensive compared to the rest of the world. Reduce the prison population but introducing more “restorative justice” where especially for people crimes the convited felon is ordered and made to pay back what they stole/damaged/ loss caused. These would all save lots.

  7. David Rowed says:

    If this is to be fixed we need to stop using expressions like “introduction of a co-payment” and call it for what it is — a reduction of GP rebates which are already generally accepted as too low for the complexity and responsibility of the work they now supposedly cover. The current talk of co-payment is misleading as it is not general, with many of us already charging ‘co-payments’ in the form of gaps — but where we judge them to be fair and appropriate for the level of service offset against the patient’s ability to pay which we at times effectively subsidise. This is a very efficient, low-cost microeconomic process with good care for patients which GPs have finely tuned. To rip this apart now with policy, which does not reflect an understanding of all the nuances of primary care, its complex administration and resourcing will severely damage general practice and hurt patients. It will most certainly backfire. I would hope the AMA and the RACGP will advocate so that good sense prevails to save general practice and the community from the pains of working through this at the coal face. For the meantime can we please talk of the GP rebate reduction.

  8. andrew orr says:

    Speaking as a full time GP principal of 30 plus years, in an urban , mixed biling practice, I am aware of the need to remain finacially viable in the face of increasing practice costs. Medicare rebates were never purported to reflect the cost of providing the survices we provide, so it remains crucial or me to charge realistic fees to patients. I have no problem with accepting reduced fees from those who are not in a position to meet fees and this has been most  GP’s position,which has been implemented by our accepting such patients to “assign THEIR benefit”at the time of consultation. This saw the origin of the term “bulk billing”. The concept of universal bulk billing has become confused with the concept of Universal Health Care, which has seen the demise of many smaller practices. It may be difficult to unscramble the omlet, but I think the current Federal Government $7 co-payment is not workable,on so many fronts, which have been canvassed.

    I would suggest a simple “solution”would be to allow “assigning of benefit” to be only open to those patients who genuinely “deserve” the GP to receive a reduced return for the service, namely,DVA veteran card holders, pension card holders. I do not thnk the profession should be expected to subsidise all and sundry, as that was never the principle of medicare in the first place. This billing restriction would allow the GP discretion of charging reduced fees, including down to the rebate amount, in individual cases and groups, e.g.,school aged children, Health Cardholders.

  9. Peter Barry says:

    If we accept that Pensioner and Healh Care cards define the genuinely needy, it seems reasonable to retain bulk billing at the current rate for all consultations by this group at the discretion of the doctor.   I am not so fussed by the $7 gap for others so long as we can waive this if we feel it is too much of an imposition in the patient’s circumstances, e.g. pathology result review, repeated visits per week for dressings, injections or similar.  

    The government implies that we can waive the $7(actually $13 with incentive) using our munificent $2 to make up for this.. ie take it out of our own pockets.   I can’t quite see how you can have a compulsory payment that the doctor can choose to waive, or is this discretion only for Pensioners and children?   If the discretion is there for all, there will be enormous pressure from patients who are used to paying nothing for us to bulk bill  their consultations.  It’s either compulsory or its not.   Please explain!

    There is incredible overordering of pathology and I am guilty of this myself.   I certainly to a lot of ‘just in case’ ordering as patients and the courts come down heavily on doctors who could have ordered a test that later proves to have been crucial.   All those unnecessary Vit D tests, coeliac tests (the current craze) etc are costing the system hundreds of millions of dollars.  Non adherance to guidelines for lipid use creates an unecessary expense.   There are many areas where considerable savings can be made. 

  10. David Lim says:

    I note that the $7 tax is also going to be applied to pathology and radiology services, but the description in the budget papers is incredibly vague, stating only that $7 will charged for a “blood test”.  As we would be aware, a blood test will usually include multiple tests – a cursory glance of the MBS reveals that there are separate medicare billing codes for individual items and sets of tests, although deciphering how this actually applies to a patient appears to be a convoluted exercise.  

    Under the proposed budget measure, if patients are going to be charged $7 for each individual test on a path slip, then this cost is going to add up rather quickly.  For example, a set of blood investigations for an annual assessment might include over 10 billing codes.  I would be interested if there someone better versed in pathology billing able to elaborate further.

  11. Dr Owen Lewis says:

    The co-payment is a pseudonym for cut in the Medicare Rebate. Am I going to refuse to treat people who have not brought their $7? I don’t think so. In the main clinic with admin staff I may be able to be a bit tougher. But when I see people at night or go to a remote clinic without admin staff, collecting the $7 will be too much of a nuisance. So I will probably give in and accept the lower rebate. I think this is what it is all about – cutting the Medicare rebate! We will have to make up from the non-payers from those who do pay fees. $40 gap from patient 1 minus $7 I owe Medicare for patient 2 = $33 I still have. It’s a dismal scenario but not worse than that for doctors in most parts of the world.


  12. Stephen Brabazon says:

    In particular, I am concerned that the co-payment will be the “straw that breaks the camels back” for many doctors caring for nursing home (NH) patients. Many doctors no longer see NH patients due to the time required and poor payment. This could well push many more doctors into ceasing to services to NH’s.

    Also, when I am called to see a sick NH patient, I will sometimes order blood and imaging tests first then review the patient with the results. This means the patient can be entirely managed in the NH. If co-payments come in for imaging, blood testing etc, it will clearly be cheaper (and easier for me) to just send them to hospital to get sorted out! (They will only be charged a total of $7.00!!)

    Both of the above issues will end up straining our already starined aged care services. 



  13. Amanda Wright says:

    I am most concerned that the Medical Research Funds will merely be donated to private companies. It seems highly likely that pharmacetical companies will be amongst the biggest recipients.

  14. TIM Bailey says:

    I’m interested in feedback about this possible solution to the co-payment. Firstly, a lot of the preceding debate is not helpful, as even the government doesn’t know how the copayment will be collected, who from, what are the exceptions etc. However, perhaps we should have to collect a compulsory co-payment (cost of less than half a pack of cigarettes) from everyone, and refund it to those who we feel either need it, or deserve it due to the neccessity of their consultation (eg they were actually unwell)? As a conceptual example, an after hours visit to a person who is having an AMI gets refunded, an in-hours consult at the surgery for a sniffly nose doesn’t. This leaves the decision to be made at the coal face (by those who are in the best situation to make it), but also uses the payment as a gesture of kindness to those who are in need of it. It avoids the situation where the doctor is seen as having an ‘option’ not to charge. The only option is to be kind (afterwards). Leave admin costs out of the equation, just focus on the concept. Thoughts anyone?

  15. hodgetas says:

    Does anyone realise that underneath all the hype the real truth is that the government is reducing the medicare rebate on all items by $5.00

    We Doctors should become more militant and everyone refuse to process our point of service claims for Medicare and if this is unsuccessful Stop all Bulk billing

    Imagine the chaos that would hit Medicare / it would grind to a halt in a couple of days as it has been wound back and would be unable to cope with the processing

    it worked last time and resulted in the Bulk Billing Incentive

    Come on we have 14 months to do it!!





    The emperor in the room is also naked.

    SO SO SAD.

    A doctor is somebody who MUST NOT BE PAID by a patient.

    This is an inalienable right, and the taxpayer must pay and pay and pay for everything any patient wants.

    The taxpayer must pay for every service any doctor wishes to provide to anyone and everyone.

    Doctors must not feel the blowtorch of financial reality when they order that vital test.


    That ladies who value their hair dresser enough to pay them…do not value their doctor enough to even pay A FRACTION towards their care.


    That a bloke who blows $100 on booze and fags, would not give a cent toward the care from his loyal hard working doctor.

    Tattoo artists, locksmiths, naturopaths, personal trainers, fortune tellers….are all worth paying – but not a doctor.

    Every kid finds the money to have a mobile phone AND pay for the internet access, because one cannot live without facebook!


    Now dear readers, before your bleeding hearts exsanguinate….let’s agree:  WE ALL WANT TO HELP THE POOR AND DISADVANTAGED.

    So let us have a health system designed to do just that.

    MEDICARE TAKES MONEY FROM THE POOR to subsidise those who can and should be caring for themselves.

    FREE HEALTHCARE is the most expensive of all!!  Medicare has always been a doomed socialist social experiment.


    This miserable $7 co-payment (and its safety net) has highlighted the horrible wretched truth of how pathetic our profession has become.




  17. Richard Gordon says:

    What is all this about a Medicare co-payment funded Medical Research fund? The Govt says it will save up a pool of 20 Billion dollars and then (when this is accumulated) use the interest, approx 1 Billion dollars per year, to fund research.

    If there are 30,000 GPs in Australia and they each see an average of 5,000 patients /yr and $5 saved from each consultation goes to the Medical Research fund then there is an annual contributuon of 750,000,000. Where does the 20,000,000,000 come from. By my calculations that is 20,000/750 = 26.66 yrs before the fund reaches its target and can start using the interest to fund research.

    Please correct these figures if I am wrong.

    R Gordon

  18. Department of Health Victoria Clinicians Health Channel says:

    I feel that copayment is designed to end medicare !!  it is not just $7  for doctors visit but also for pathology etc and would encourage  GPs, Specialists   &  Pathology providers  to  avoid bulkbilling   How unfortunate!!!  It will soon be American heathcare   It should be stopped

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