Medicare minus

MedicarePlus, the federal government’s response to falling rates of GP bulk billing, passed through parliament in early March. In an attempt to give those on a low income a better deal, the new safety net pays 80 per cent of doctor’s bills, provides access to some dentistry and allied health services and offers differential incentives to encourage bulk billing in both cities and regions. Rather than easing the financial burden on average working families, closer examination reveals the policy leads to the creation of poverty traps.

Since 2001 the rates of bulk billing across the country have declined, but not uniformly. Such is the perverse nature of general practice that the highest rates of bulk billing and GPs per capita are in affluent suburbs. There is an ample supply of bulk billing GPs in those areas where people are most able to pay. Poorer communities and regional areas suffer the most on any barometer of affordability.

The fundamental problem with the decline in bulk billing rates lies with the Medical Benefits Schedule (MBS). Not only does it fail to keep pace with the real costs of medical practice, patients are only reimbursed to 85 per cent of the schedule fee. Patients are paying out of pocket fees regardless of their income. The strategy of a deliberately underpriced MBS to exert downward pressure and restrain doctor’s fees is failing. The upshot is that those on low incomes, including pensioners, are being charged to visit the GP rather than being bulk billed. Latest figures indicate that people are paying around $15 more on average for each visit to a GP.

The Government’s options were clear. Either re-invest substantially in the MBS so that most people will be bulk billed or pay very little for a GP service. Or, subsidise poorer people and those who most frequently use GPs. The Government chose the latter.

The decision was driven by expenditure concerns rather than sound public policy. The Government’s failure to keep Medicare in line with the costs of medical practice means that Medicare only covers some of the cost borne by individuals and will never provide full gap cover. For people with chronic illness and those living on, or around, average weekly earnings, this is significant.

There is ample research indicating that the introduction of fees discourages patients from accessing health care not only because of the cost, but the propensity of such costs to rise frequently. Consequently, many patients either delay access to, or select only that care they can afford, irrespective of need. From a public policy perspective, the negative impact of such outcomes far outweighs any short-term public expenditure benefits.

The MedicarePlus package provides a two-tiered cash relief measure for people who spend up to either $300 or $700 annually on medical bills, variant upon their income. This is a welfare measure, not a mechanism to ensure access to essential health services. Those on low incomes are cast in the invidious  position of determining whether or not they can afford access to health care.

That said the safety net structure is an improvement on the original $500 proposal placed before the Senate. At least low income families will now be assured of some cash relief after they spend $300 a year. Yet should they spend slightly less there is no cash relief. Nor is there any assistance if they spend just under $300 in the following year, or the one after that.

MedicarePlus institutionalises the notion that all people can expect to pay more for care before the government subsidy reduces the cost. This is a far cry from the spirit of Medicare and propels Australia’s primary health care system along the path of a user pays scheme.

Some commentators have long bemoaned the ‘middle class’ welfare provided by Medicare. They have called for reforms which shift costs more squarely on to households. They have their wish. Trouble arises however, when those very households struggle to keep pace with the rising costs of health care as real wages lag behind and employment remains tenuous, elusive or in many instances non-existent.

The flawed nature of this shift to ‘welfare health care’ is clear. Commonwealth figures indicate that up to 711,000 individuals and families pay more than $300 per year in ‘out of pocket’ medical fees. The MedicarePlus package at best assists around 450,000. In real terms many people on modest means are facing a more expensive health service. In the absence of increased public investment, the users of the system are being ‘taxed’ at the point of service.

Make no mistake, MedicarePlus does not guarantee even the unemployed a bulk billing service. It places a notional safety net in the void left by an inadequate MBS benefit. It signals that the public medical insurance scheme, Medicare, is being eroded and the Government has no intention of making Medicare benefits accurately reflect the cost of medical care. The prospect of higher fees for the majority of the community is real.

Francis Sullivan is the Chief Executive Officer of Catholic Health Australia.

 

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