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$6 co-payment not what the doctor ordered

  • 24 February 2014

Health minister Peter Dutton has said he would like to ‘start a national conversation’ about how to meet Australia’s spiralling health costs. Many believe he is really saying that a $6 ‘co-payment’ fee for GP visits is on the table and likely to be announced in the Federal Budget in May.

Nobody denies that the government needs to do something to address rising costs. The $6 co-payment is a quick and easy temporary fix that would put off the day when the government has to tackle the vested interests that are arguably the major cause of the inefficiencies that have made our health care system prohibitively expensive.

Just one example of these vested interests is the pharmaceutical industry, which supplies 86% of the medicines that are available in Australia under the Pharmaceuticals Benefits Scheme. (PBS). A Grattan Institute study has demonstrated how the industry body Medicines Australia has been able to manipulate compliant governments to inflate prices to the extent that Australia is paying sixteen times more than the UK and New Zealand for seven key drugs.

Supporters of the $6 co-payment argue that 80 per cent of patients are bulk billed and make unnecessary visits to their GP because there is no financial disincentive. The problem is that the co-payment would also act as a disincentive to necessary visits, especially for the poor. Co-payments already account for 18 per cent of Australia’s total health funding, and a 2012 Australian Bureau of Statistics survey found that one in 15 sick Australians has put off seeing a doctor because it cost too much.

More than $100 billion of public money goes to fund health services each year. Clearly a significant proportion of the amount is not going to where it’s needed most. It’s up to governments to ensure certain groups cannot legitimately derive excessive remuneration for their provision of health care services while ill taxpayers are denied value for money. 

Experts argue that the system needs to be better organised to give more priority to preventative health, and to rein in waste and duplication. Why subsidise private health insurance when insurers such as Medibank Private are making annual profits as large as $185 million? How can we justify the existence of nine separate government health care bureaucracies in a country of 23 million people? It’s not fair to the Australian people to overlook these questions while giving priority to dubious easy solutions like the $6 co-payment.