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Specialist patients up for thousands as rebate freeze bites

Patients undergoing heart surgery and other specialist treatments face a major hike in out-of-pocket expenses in the next three years that could leave them thousands of dollars poorer if the Federal Government persists with its Medicare rebate freeze, an AMA analysis has found.

Figures prepared by the AMA show the freeze will save the Government almost $2 billion by mid-2018, with more than half of this coming from medical specialists, their patients and health insurers as the value of the Medicare rebate declines and the cost of providing care rises.

The Government has kept the rebate freeze, first announced in last year’s Budget, as a device to encourage the AMA and other medical groups to assist in identifying efficiencies and savings through the Medicare Benefits Schedule review initiated last month.

Health Minister Sussan Ley has described the freeze as a regrettable necessity, though indicating that, “as an article of good faith, I am open to a future review of the current indexation pause as work progresses to identify waste and inefficiencies in the system”.

But the AMA analysis shows it will come at an enormous cost to patients, as the Government dumps a bigger share of health care cost onto households and practitioners.

The AMA estimates the freeze will have caused a $127 million shortfall in Medicare funding this year alone, rising to almost $364 million next financial year, $604.1 million in 2016-17, and almost $850 million in 2017-18. Even without any increase in the number of services provided, the rebate freeze will cumulatively rip $1.94 billion out of the system over four years.

Its effect in general practice has been likened to a “co-payment by stealth”, after University of Sydney research suggested GPs may have to charge non-concession patients more than $8 a visit to make up for the money withheld from the system as a result of the rebate freeze.

AMA President Associate Professor Brian Owler said patients would bear the brunt of the funding shortfall.

“We know that doctors’ costs are going to keep rising. The costs for their practice staff is going to keep rising. The costs to lease their premises and to provide quality practice as a GP or a specialist is going to keep rising,” A/Professor Owler said. “If the rebates don’t rise, those costs have to be passed on in out-of-pocket expenses – we will see less bulk-billing, and there is the possibility of seeing a co-payment by stealth, as has been alluded to by some.”

The AMA President said the effect on patients in need of specialist care would be even more profound, warning that, “the out-of-pocket expenses for specialists are going to be most severely hit”.

Under current arrangements, the Medicare rebate only covers a proportion of the cost of specialist care, and private health funds commit to covering an extra 25 per cent of the MBS fee, plus a loading on top of that for doctors who participate in “gap cover” schemes.

In the past, the health funds have indexed their cover in tandem with increases in the Medicare rebate – and have on occasion increased their cover even when rebates have been held flat.

But A/Professor Owler is among those fearful that insurers will be reluctant increase their cover without any lift in the rebate. If this occurs, many specialists may opt-out of gap cover schemes, which would mean private health cover would revert to the bare minimum 25 per cent of the Medicare rebate, with patients left to pick up the tab.

“I think there is a real issue for private health insurers,” he said. “If they choose to index independently of the MBS, they are going to have to pass on higher private health insurance premiums to people, or, if they choose not to index, there is a real chance that out-of-pocket expenses for specialist costs are going to rise significantly.”

The AMA has prepared resources for doctors and patients to help explain the Medicare rebate indexation freeze and its impact, including a patient guide and clinical examples. The resources are available at: article/medicare-indexation-freeze-support-materials-…

Adrian Rollins