Pearls and Irritations

In a recent article in The Conversation, Professors Stephen Duckett and Fiona McDonald and Ms Emma Campbell suggest “restrict[ing] Medicare access to GPs who agree to bulk bill all patients, while allowing those who don’t bulk bill to rely solely on out-of-pocket payments”. While there is much to commend this proposal, it is not without risks that would need to be carefully managed.

The Conversation article follows an earlier article in the Federal Law Review where the authors argue that the proviso in section 51(xxiiiA) of the Constitution that laws on medical services cannot impose “civil conscription” has unnecessarily limited health policy options. They conclude that the High Court decisions in the 1980 GPS and 2009 Wong cases “affirm that the government can use Medicare as something of a bargaining chip, validly threatening to restrict access to the scheme unless medical practitioners abide by certain government-imposed regulations”.

This position is consistent with AGS advice in the mid-1990s that the Commonwealth could legislate to impose fee caps on services provided under Medicare.

Duckett et al propose that:

“a new basis for Medicare could be one where practices sign up to Medicare and agree to meet Medicare’s contractual conditions such as agreement to bulk bill all patients, participation in training future health professionals and in quality improvement programs, and that practices are multidisciplinary”.

Inherent in their proposal is a choice for patients to enrol with a particular practice. Remuneration could then be a mixture of risk-adjusted capitation payments for enrolled patients, attendance payments for both enrolled patients and walk-ins, and payments for other activities such as training.

The authors note that “fair remuneration” would need to underpin these arrangements, meaning remuneration rates would need to be set independently. No more indexation freezes to contribute to “budget repair”.

Practices that chose not to take part in these arrangements would be able to operate outside Medicare, billing patients for services which would not attract a Medicare rebate.

There are many potential benefits of such a scheme, not least that it would provide strong support for general practice bulk-billing. While many general practices currently provide multidisciplinary care, they do so despite the funding regime, not because of it. A regime which actively encouraged – if not mandated – practices to adopt such a model would do a lot to improve primary care outcomes.

Although the drop in bulk-billing for GP services has been the subject of a lot of recent public commentary, many patients face financial difficulties in accessing specialist consultations, for which bulk-billing – or even schedule fee adherence – is far less common. A scheme to pay specialists a reasonable Medicare benefit on condition they did not charge gap fees would remove a significant barrier to specialist care.

Leaving aside the difficulties in developing and implementing such a scheme, there are several risks that would need to be addressed.

The first is the risk that in many geographic areas doctors would simply not sign up. Recent releases of GP bulk-billing data (by electorate and by Primary Health Network) show the existence of bulk-billing deserts, unrelated to the socio-economic status of the region. Rapid changes in bulk-billing rates in particular regions suggest that doctor behaviour is the primary factor in the availability of bulk-billing.

If doctors in an area have found they can charge all patients an out-of-pocket of $50 for a standard GP consultation and still remain financially viable, they may well be prepared to charge $90 and forgo a Medicare benefit. While this may not be a problem in metropolitan areas – where other doctors might be ready to fill a gap – it is going to be hard to overcome in the regions.

However, a move away from a universal uniform patient benefit to a more flexible remuneration structure would allow geographic loadings or availability payments to attract practices to hard to serve areas. The government could even pursue direct contracting for services in these areas, perhaps collaborating with state governments to support new multi-purpose services.

The second risk is that many doctors in particular specialties would opt out of Medicare and choose to work entirely in the private sphere. Obstetricians who currently charge total out-of-pockets for antenatal care of five or more times the total Medicare rebate might view the loss of the Medicare rebate with equanimity. So might psychiatrists making a comfortable living charging $150 out-of-pockets to treat middle class neuroses, or procedural specialists charging two or three times the Medicare schedule fee for operations.

Of course, for operations carried out in hospital, the medical fees are often a relatively small part of the cost compared with the hospital and prostheses costs. While many patients could afford to pay the full fee charged by a surgeon, not so many could afford the entire cost of a hospital stay. The government could encourage ongoing participation in Medicare by procedural specialists by forbidding private health insurers from paying benefits in respect of operations carried out by non-participating doctors.

If a pool of non-participating doctors emerges, there is a medium-term risk that a future government would yield to importuning by the private health insurance sector and allow insurers to offer cover for non-Medicare services. That would be the first step to a two-tier health system, with Medicare becoming the poor person’s option.

“Conceptualising access to Medicare rebates by practitioners as a privilege, not a right’, as Duckett et al suggest, opens many opportunities for reform. However, taking advantage of these opportunities will require imagination and courage by Minister Mark Butler and his department. Don’t hold your breath.

For more on this topic, P&I recommends:

What if Medicare was restricted to GPs who bulk billed? This kind of reform is possible

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