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Practices dumping bulk billing as Medicare rebate freeze bites

Practices dumping bulk billing as Medicare rebate freeze bites - Featured Image

Pensioners and the chronically ill are being charged up to $30 to see their GP as cash-strapped medical practices squeezed by the Federal Government’s Medicare rebate freeze are being forced to abandon bulk billing and begin charging even their most disadvantaged patients.

In a development that bears out warnings from AMA President Professor Brian Owler that the four-year rebate freeze for GP services amounted to the introduction of a GP co-payment “by stealth”, numerous doctors and practice managers have contacted the AMA to report how they had been forced to increase patient charges – and in at least one case, shut down – because of a growing shortfall in the Government’s contribution to the cost of care.

Among them is Tasmanian GP Emil Djakic, whose practice – in Ulverstone and Penguin – has just introduced a $30 charge for the hundreds of patients who had previously been bulk billed.

Dr Djakic said it was a difficult decision given the tough financial circumstances of many of his patients, but the practice’s own financial position made it unavoidable.

He said that absorbing the full impact of the Medicare rebate freeze would have cost the practice $60,000 a year – $240,000 if it remains in place for four years – which would have undermined its viability.

“In our practice, we have charged those who are better off to help provide services at a discount for those less well off,” Dr Djakic said. “But we have now reached an inflexion point, triggered by the rebate freeze, where it is increasingly unaffordable.”

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The practice, which has a 10 full-time equivalent GP workforce, has been bulk billing about 75 per cent of patients. Under changes that came into effect from 1 July, every patient will be charged a $30 fee for the first consultation of the financial year. Any subsequent charges are at the discretion of the individual practitioner, though Dr Djakic said staff were asked to be mindful of the growing gap between the value of the rebate and practice costs in deciding whether or not to ask for a contribution.

Dr Djakic said the practice was bracing for an increase in defaulted payments, but added that so far patients had been surprisingly receptive to the change.

He said the lack of widespread outrage showed the Federal Government had been “incredibly deft” in introducing this latest version of a GP co-payment.

“Just from the viewpoint of a political exercise in shifting costs onto the patient from the Government, it has been very elegant,” Dr Djakic said.

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While some practices are increasing patient charges, others are succumbing to the accumulated financial strain caused by the ever-diminishing value of the Medicare rebate.

In Redfern, doctors operating a small practice that has served the community for 34 years have made the painful decision to shut down.

Dr Marie Healy, who for the past 11 years has worked at the practice owned and operated by Dr Adrian Jones, said rising running costs, inadequate Medicare rebates and the inability of a high proportion of patients to pay a gap fee had over time made the practice’s financial position increasingly perilous.

“Yes, Redfern house prices are very high, but there is still a lot of disadvantage here,” Dr Healy said. “We have a lot of patients who are concessional, are elderly, who have chronic diseases, who have diabetes and who are on multiple meds.”

Dr Healy said she bulk billed around two-thirds of her patients because they could not otherwise afford the care they need, and the Federal Government’s original plan to impose a $7 patient co-payment had sent many “into a tizz and caused a high level of anxiety”.

She said two years ago the practice introduced a gap fee for non-concession patients, concession patients seeking a second opinion, and patients who needed a mental health plan, and it increased the charge on 1 July.

Last year, to further trim costs, it dropped out of the practice accreditation system because it was “too costly”.

But Dr Healy said that, with such a high proportion of patients on concession cards who were simply unable to pay, the extra revenue from gaps fees proved to be insufficient to keep the doors open.

The accumulated financial pressure from years of increasingly inadequate Medicare rebates meant that when the rebate freeze came into effect, it was the proverbial straw that broke the camel’s back, she said.

“Adrian Jones is a very conscientious and ethical doctor who is always doing stuff free for patients – visiting an elderly patient at home because they can’t come in, filling out forms for them – but it all hits the bottom line, and we just can’t keep doing it.”

Other practices have indicated they can no longer afford to bulk bill patients and have, or soon will, begin charging patients – including full pensioners – a fee.

Related: AMA: How to pay for Health

In addition to abandoning bulk billing, many are also looking to cut costs and make savings, including by trimming work hours, deferring equipment and facility upgrades and purchases, and reducing services.

The Government expects the Medicare rebate freeze will save it $1.3 billion by mid-2018, but Professor Owler said that cost was simply being dumped onto patients and doctors.

“This funding shortfall has to be met by patients and practices,” he said. “While the rebates have remained unchanged, the costs of providing quality medical services, such as wages for practice staff, rent, electricity, technology, and insurance are increasing every year. Medical practices cannot absorb these increasing costs for four years in a row and remain viable.”

Dr Healy said she felt the rebate freeze was part of a general assault by the Federal Government on primary health care that was particularly difficult to stomach when it had recently concluded an $18.9 billion, five-year deal with the pharmacy sector.

The AMA President warned the freeze would also have a significant effect on private health insurance, including forcing up premiums.

“Some private health insurers have indexed their schedules of medical benefits, which means they are covering the Government’s shortfall, but others will not index their medical benefits until the Government lifts the freeze,” he said. “This will put upward pressure on the costs of medical services and private health insurance premiums.”