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Myths around doctor fees exploded

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Doctors have largely shielded their patients from increases in the cost of health care by absorbing cuts in Government and insurer rebates for medical services rather than passing them on to consumers, busting the greedy doctor myth, the AMA has said.

AMA President Associate Professor Brian Owler has told a Senate inquiry that the vast majority of health services are provided at no cost to patients, even though Government and private health fund contributions to the cost of care have become increasingly inadequate.

Seeking to explode myths around doctor fees and the cost of medical care, A/Professor Owler told the Senate Community Affairs References Committee the widespread view that all out-of-pocket costs were caused by doctors, and that greedy practitioners were pushing up their fees faster than other health costs, was false.

“The vast majority of health care provided in Australia is provided at no cost to the patient,” the AMA President told the inquiry, citing as evidence Medicare data showing 81.1 per cent of GP consultations in 2012-13 were bulk billed, while almost 90 per cent of in-hospital medical services were charged at the level of private health insurer benefits.

The AMA acknowledged that where patients are charged out-of-pocket costs, the fees they face are higher than a decade ago – the average charge for a GP visit climbed from $12.46 to $28.58 in the 10 years to 2012-13.

But A/Professor Owler said the data showed that patients were no more likely now than they were a decade ago to face out-of-pocket costs – in 2001-02, 17.5 of medical services involved out-of-pocket expenses, compared with 17.3 per cent in 2011-12.

He said this had only been achieved by doctors making up shortfalls in Government rebates and health insurer benefits themselves, rather than forcing their patients to make up the difference – a fact that has gone unacknowledged by governments and unnoticed by patients.

“The high rates of schedule fee observance by medical practitioners is rarely, if ever, acknowledged, let alone applauded, by Government or private health insurers,” the AMA’s submission to the inquiry said. “Instead, consumers are led to believe that schedules reflect appropriate fees, and out-of-pocket costs are blamed on ‘doctors charging too much’.”

The Association said health insurers had fuelled consumer misunderstanding by structuring policies that drive up out-of-pocket costs by precluding patient co-payments in order to qualify for no gap benefits, by only paying 25 per cent of the Medicare schedule fee, and by increasingly offering products that include out-of-pocket charges.

“These factors all contribute to the perception that there is a problem with out-of-pocket costs for medical services, when in fact they are decreasing as a percentage of services provided,” the AMA submission said.

By far the most common source of out-of-pocket costs for patients is medicines not covered by the PBS.

Figures compiled by the Australian Institute of Health and Welfare show that in 2011-12, patients spent more than $8 billion (32.5 per cent of  all out-of-pocket expenditure) on such medications, followed by $4.7 billion (19.1 per cent) for dental services and $2.9 billion (11.9 per cent) on medical care.

Not only do medicines and pharmaceuticals account for the lion’s share of patient out-of-pocket costs, they have been instrumental in its growth. According to the AIHW, their share of overall out-of-pocket spending more than doubled between the mid-1980s to 2011-12, from 19.5 to 39.3 per cent. During the same period, the share of such spending attributable to doctors, dentists and other health practitioners slumped from 64.1 per cent to less than 39 per cent.

In its report, the Senate committee warned that care should be exercised in comparing out-of-pocket costs between countries, but analysis suggests Australian patients face higher charges than those in most other developed countries.

Out-of-pocket costs as a proportion of total household spending reached 3.2 per cent in Australia in 2010, compared with an average across Organisation of Economic Cooperation and Development countries of 2.9 per cent. When out-of-pocket spending was considered in terms of GDP per capita, Australia ranked just second, behind Switzerland.

Professor Stephen Jan, of the George Institute for Global Health, said this was due in part to the fact that a significant number of medical services are not covered by Medicare or private health funds.

A/Professor Owler and others who appeared before the inquiry said evidence that out-of-pocket expenses helped deter people from seeking medical treatment underlined concerns that the Federal Government’s proposed $7 co-payment for GP, pathology and diagnostic imaging services would exacerbate health problems caused by deferred or foregone treatment, ultimately adding to the nation’s health bill.

In its submission, the AMA cited research showing 6 per cent of Australians had delayed or avoided seeing their doctor because of cost, and studies have found that when out-of-pocket expenses for prescription medicines go up, more patients stop taking them.

In an echo of AMA fears the Government’s co-payment model will hurt the sickest the hardest and ultimately cost the country even more, the Committee expressed concern that, even before the $7 co-payment was introduced, patients – particularly the vulnerable – were already deferring seeing their doctor or getting a prescription filled because of cost.

The AMA condemned a suite of health policy changes outlined in the Budget, including a $5 cut to GP rebates, increases to the PBS co-payment and watered down safety nets.

“These Budget measures are driven by ideology,” the Association said. “They make no attempt to refine and shape the health care system to position it to deal with future challenges.

“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.”

Adrian Rollins