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Patients to pay for extended rebate freeze

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Main points

  • Medicare rebate freeze extended to 2020
  • Health Care Homes trial gets $21.3 million
  • $21.2 million cut to Practice Incentives Program

Bulk billing rates will tumble and patients will increasingly be charged to see their GP following the Federal Government’s decision to extend its controversial Medicare rebate freeze through to 2020, AMA President Professor Brian Owler has warned.

Professor Owler said the move, which the Government estimates will save it $925.3 million over the next four years, undermined the value of Medicare and would increasingly push the burden of health care off the shoulders of Government and on to doctors and their patients.

The Medicare rebate was first frozen by the previous Labor Government in 2013, and the following year the Abbott Government extended it until 2018. The latest decision means that it will be almost seven years by the time there is an increase.

Professor Owler said GPs had so far absorbed the cost, holding up bulk billing rates, but he cautioned that this could not continue.

“The rent for the rooms, the costs of providing equipment, the costs of providing staff – all those costs rise year on year,” he said. “GPs have absorbed it. They’ve absorbed the rebate freeze.”

But, Professor Owler added, this was “just something that cannot continue”.

He said the prospect of an additional two years without an increase would cause many doctors and medical practices to conclude that they could no longer afford to carry the cost.

“I think we’re going to see people…start to say, ‘We can’t sustain it anymore, we can’t absorb these rebate freezes, we’re going to have to start to charge our patients’,” Professor Owler said. “We’re going to start to see that tipping point reached where Medicare patients now are going to start to be charged, and bulk billing rates are going to fall.”

Health Minister Sussan Ley said the decision to extend the rebate freeze for a further two years had been taken “in recognition of the current fiscal environment”.

But Ms Ley sought to reassure doctors by floating the possibility that the rebate freeze could be reviewed depending on the identification of improvements and efficiencies through its Healthier Medicare reform package, which aims to improve the care of patients with chronic and complex health problems.

Under the reform, dubbed Health Care Homes, chronically patients will nominate their preferred GP, who will then receive bundled payments to provide their care, while continuing to be paid fee-for-service for other patients.

The care model has been developed based on the recommendations of the Primary Health Care Advisory Group, and the Government envisages that the bundled payment model will give doctors the time and flexibility to develop care plans tailored to the needs of each patient.

In the Budget, the Government has allocated $21.3 million for a trial of up to 200 Health Care Homes involving around 65,000 patients with chronic and complex conditions.

But this is largely offset by a $21.2 million cut to the Practice Incentives Program (PIP).

The Health Department has announced the PIP system will be “streamlined and simplified” to reduce the regulatory burden on practices while ensuring incentives were better targeted.

“Redesigning the incentives will focus on quality improvement across the range of GP incentives, and will draw on best practice examples and feedback from across the sector,” the Department said.


Adrian Rollins