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$6 co-payment not what the doctor ordered


GP visiting hospital patient

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.

For their part, all those involved in the health care sector may look into their hearts and examine their motivation. What does the ‘care’ in health care mean to them? Are they more attracted by the substantial economic benefit (available to some but not all), or do they have a genuine vocation to care for their fellow human beings who have fallen ill? 

In his message for the World Day of the Sick earlier this month, Pope Francis seemed to propose the Good Samaritan as a role mode for health care providers. The Good Samaritan did not have personal financial gain on his mind when he opened his heart and bandaged the injured man on the road. Not even a co-payment.

Michael MullinsMichael Mullins is editor of Eureka Street. 

GP image by Shutterstock.

Topic tags: Michael Mullins, Peter Dutton, health care, PBS, bulk billing, Medicare, Medibank Private, health insurance



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Existing comments

The proposed $6 co-payment has nothing to do with containing 'spiralling health costs'. In the first place, it can be nothing but a stop-gap measure because it does not address the causes of the 'spiralling' and so will need to be ratcheted up as the spiralling continues. Secondly, it will only lead to a reduction in preventative measures by the poor and therefore result in poorer health outcomes among the poor, with consequential higher costs, medical, social, and personal. The proposed $6 co-payment is nothing but another step in the hard dry coalition's project of progressively dismantling our institutions of mutual responsibility (the common wealth) in favour of 'me, myself, and I' individualism. And those who are driving it claim to be Christians!

Ginger Meggs | 21 February 2014  

You are quite correct, Michael. If the ideologically based $6 co-payment is introduced it will neither improve either the health system nor service delivery within it. There are a number of very powerful self-interested lobby groups, such as Medicines Australia, which have a vital interest in maximising their profits at the expense of the system and its just and efficient operation. Health bureaucracy, as you point out, makes service delivery complicated. I hope our - still generally excellent and equitable - health system does not deteriorate due to this sort of slow death by 1000 cuts.

Edward F | 24 February 2014  

Many doctors already have their own co-payment, and this will further confuse billing, add to doctors' costs which some will pass on. More patients will crowd emergency rooms as a result.

Marjorie Edwards | 24 February 2014  

Dear Editor, If there is to be any productive discussion on health costs, co-payment has to be defined. A $6.00 co-payment means that the fee paid by Medicare for a patient to see the doctor will be reduced by $6.00. If the doctor bulk bills, medicare will pay the reduced amount and the patient will pay $6.00. That is, the maximum amount the patient will pay is $6.00 (80% of GP'S bulk bill). If the doctor does not bulk bill, the patient will pay an extra fee above the bulk-billing rebate (as happens now) plus an extra $6.00. If bulk billing were admissable only for the genuinely needy, the savings would be enormous and the needy would still pay nothing. This would free up considerable millions of dollars which would then be available for funding the seriously underfunded public hospital system on which the poor and needy depend for first class care. Medicare is a disaster and always has been and now fails to care adequately for the poor and needy in our hospitals at the expected standards.To save his little project Deeble now suggests doubling the levy. That is going to cost everyone who pays tax more. Better to apportion funds to those who need them rather than to everyone at large. No one seems to have noted that if a co-payment is introduced and the doctor continues to bulk bill that the doctor's income will fall by $6.00 for each patient he sees. Aren't the public lucky that Medicine is one of the three remaining true professions and that the doctors don't have a trade union. Medicine will not hold the sick to ransom. The trade unions already do.

john frawley | 24 February 2014  

The proposed co payment is further shift in from the original philosophy underpinning Medicare, access to health care based on need not ability to pay, to one where Medicare is now proposed as a safety net not dissimilar to Medicaid in the USA. I am intrigued at the perceived difference between private and public health - if I attend a private hospital and do not have to pay because of the level of private insurance I have, few people would propose that I had free treatment but that I was prudent to take out insurance. As a tax payer I pay a medicare levy which I think of as a public or national health insurance scheme based on my capacity to pay, therefore why then is my treatment considered to be free if I attend a doctor who bulk bills when through my Medicare levy I have paid "insurance"

Margaret Mary | 24 February 2014  

John Frawley wrote "If the doctor does not bulk bill, the patient will pay an extra fee above the bulk-billing rebate (as happens now) plus an extra $6.00." Why the "free" Medicare patients just pay the $6, and why would those who don't have bulk billing pay any extra? I already pay $28.50 now for a visit to my local GP>

David | 24 February 2014  

'No one seems to have noted that if a co-payment is introduced and the doctor continues to bulk bill that the doctor's income will fall by $6.00 for each patient he sees'? I don't understand that point John; would you clarify it for me please.

Ginger Meggs | 24 February 2014  

David and Ginger Meggs. As a matter of backgroud, I am a retired Vascular and Transplantation surgeon who has lived in the pre-Medicare era and across the changes over the subsequent years and worked predominantly in major public university teaching hospitals and two days a week in private practice. I will try to explain things as clearly as possible. Medicare is a government insurance company which pays out for all Australians a rebate against their medical costs. The rebate varies for every available medical service on the insurance schedule of benefits (the so-called "schedule fee"). The premiums paid for this insurance come only from those who pay tax to the federal government. Those who do not pay tax are still insured and entitled to a rebate. Bulk billing means that the doctor accepts only the Medicare rebate in full payment of his fee. Thus the genuinely poor, disabled and unemployed pay nothing for health care in this country if they are bulk billed by the doctor. Now, say for instance, the doctor's bill is $100.00. The patient is entitled through Medicare (an insurance company) to, say, a $70.00 rebate. If bulk billed he doesn't pay the $30.00 difference. If a $6.00 co-payment is introduced the medicare rebate is reduced to $64 saving the government a lot of money now available for other spending in healthcare. The doctor still receives $70.00 made up of $64.00 from medicare and a $6.00 co-payment from the patient. Very few people in the country are unlikely to be able to pay $6.00 to see the doctor. If the doctor charges the legal, recommended fee of $100.00 dollars, that is , does not bulk bill (he is, incidently, not "overcharging") then, the patient will receive the $64.00 Medicare rebate but now will pay the $6.00 co-payment plus the $30.00 difference between the insurance rebate and the doctor's fee (the so-called "gap")- that is, not $30.00 but now $36.00 benefitting the non-bulkbilling doctor by $ 6.00 rather than the insurer. (Taking out insurance to cover the "gap" was explicitly forbidden under the original national health insurance legislation. In recent times , however, private health insurers have been permitted to provide limited private insurance covering the gap but only for in-hospital medical or surgical treatment- not for GP costs,and ,of course, for quite high premiums). Hope that helps! Thank you both for seeking clarification - many don't!!!!

john frawley | 25 February 2014  

OK, John, I think I get that. The doctor, whether he bulk-bills or not, will not lose money by the imposition of a co-payment. Rather, the co-payment will shift that amount ($6) of the cost from our tax-funded Medicare system to the patient, some of whom don't pay tax. It will also presumably discourage (though to what extent is arguable) poor patients from going to the doctor as often as they might otherwise do with (at least potentially) adverse outcomes. If it were not for this deterrent effect, then surely it would make more sense to just raise the extra money through an increased levy (or reduced rebate) for all or some taxpayers?

Ginger Meggs | 25 February 2014  

Yes, Ginger Meggs, You have indeed got it right! And yes it would provide more money to the health system if the levy were simply raised. But far more equitable perhaps would be to permit bulk-billing only of the genuinely poor, disadvantaged, disabled and those dependent only on a government pension. Such patients are already treated completely free in government hospitals but suffer from long waiting lists, inaccessibility in emergencies and other deficits simply because these free services in hospital are used by many others who could afford to at least pay some if not all of their hospitals costs. (I think you would be surprised Ginger Meggs if you knew just how many are treated for no cost to themselves in the public hospital system but who could afford to buy you and me many times over!) The rest of us should pay all or part of our health costs depending on our incomes balanced against our other necessary obligations. This would provide a sliding scale of costs depending on ability to pay without disadvantage. For instance, those who can afford private insurance can cover their costs. Such a system which was our system before Medicare ( when there were very few private hospitals) worked very well without the shambles we now see in the public sector but depended on means testing. To revert to any form of means testing would throw the ALP and trade unions into a state of mindless confusion and unintelligible, irrational, rambling rhetoric, but also,of course, would mean that the rich who become richer by avoiding or not paying their fair share would no longer get away with it. Thus, neither political party has the guts to really take the bull by the horns and deal with the health system in a meaningful way. Most doctors I know are quite happy to treat the poor and disadvantaged for nothing . That was the way it always was before Medicare. One of the bad things about Medicare was that it turned many doctors into greedy businessmen and produced people with medical degrees who wouldn't treat their own mothers for nothing if the government is reckless enough to pay them through bulk-billing. The problem with Medicare is that there are too many vested interests driven by greed rather than compassion for the sick. But then, Ginger Meggs, I am getting old and probably becoming a rambling old dinosaur!

john frawley | 25 February 2014  

John Frawley, thanks for enabling us to look back to a golden past of medical culture which seems light years away, and yet is just pre-Gough Whitlam, 1972-5. Ours is not the only country in which this is the case. Free-market presidential candidate Ron Paul in the U.S., an ob/gyn, espouses the same values, and speaks with similar enthusiasm of the olden days, when the poor were not charged anything for medical services. He himself carries on that tradition today. My mum and dad corroborated such stories from their own experience. (And in the 1990s my dear dad was not charged a cent for a huge operation by a surgeon of Asian extraction with a rather fearsome reputation, simply because our support for our dad resembled to him his Asian family values!) So, thankfully, despite the dead hand of creeping socialism, there are vestiges of altruism still in the medical profession. I know medicos from Australia who still holiday in places such as the Pacific Islands and do procedures gratis, unsung, for thousands otherwise unable to afford the expense of travel and accom. When in the UK, I discovered the magnificent Knights of Malta, who fund (inter alia) a maternity hospital in the West Bank which is totally free and open to all races and creeds, and used by same: its reputation for excellent service is such that the best medical colleges in the UK send their interns there.

HH | 26 February 2014  

What would happen if the Medicare levy was increased by 2.5% - would not this increase the revenue needed and it would be an equitable means of taking action to solve the problem. Also spending more money on the preventive action would cut costs in the future.

Nick Agocs | 28 February 2014  

HH's 'golden past of medical culture' is just another of his many myths, religious, economic, and cultural. The most distasteful part of it is that he wants to take us back to the days when the poor had to rely on 'charity' from their 'betters' rather than being able to assert their right to treatment as members of humanity. I'm reminded of Jane Austen's Emma who - 'was very compassionate; and [for whom] the distresses of the poor were as sure of relief from her personal attention and kindness, her counsel and her patience, as from her purse. She understood their ways, could allow for their ignorance and their temptations, had no romantic expectations of extraordinary virtue from those for whom education had done so very little; entered into their troubles with ready sympathy, and always gave her assistance with as much intelligence as good will. ‘These are the sights, [she said to] Harriet, to do one good. How trifling they make everything else appear! I feel now as if I could think of nothing but these poor creatures all the rest of the day; and yet, who can say how soon it may all vanish from my mind’.

Ginger Meggs | 01 March 2014  

I didn't know that "Australia is paying sixteen times more than the UK and New Zealand for seven key drugs". This is something that needs to be sorted out!

Michael | 01 March 2014  

Thanks, GM - it's not for the first time that those attempting to refute the historical or economic facts I put forward have had to resort to fiction.

HH | 02 March 2014  

There is more truth in fiction than you might allow. But, as I said, the most distasteful part of your position is that you want to take us back to the days when the poor had to rely on 'charity' from their 'betters' rather than being able to assert their right to treatment as members of humanity. There's no fiction in that.

Ginger Meggs | 03 March 2014  

Its only $6, it should be closerto $200. Medicine is not a right, its business and a luxury we afford. Doctors are not do gooders, they do not aspire to slave labor servicing lower rungs of society. Have checked how much lawyers, accountants, bankers and other professional groups charge for exercising their IP. Expecting health providers do just accept a life of slavery servicing losers is ridiculous.

BB | 04 March 2014  

GM, allow me to find distasteful in return the prospect of your Jacobinist world wherein, it seems, what is owed to one another in justice must be supplied in toto by serried ranks of public servants implementing regulations, with no room for family and community ties, charities and voluntary activity. Dante wrote it was Love that "moves the Sun, and the other stars". I suspect he was thinking of human society as well, and I suspect he was right, even if he was just a poet.

HH | 06 March 2014  

This debate is really focused on permanent residents but what about temporary ones who have health insurance that is compulsory. You can see how overseas health insurance starts at just under $80 for visitors http://www.457visacompared.com.au/overseas-visitor-health-insurance/ The we expect visitors to pay for education and many other things we take for granted and now the GP will costs more ontop of this insurance. Clearly we need to divide fees to those that can afford it and receive plenty of entitlements within Australia already, not those who are vulnerable or paying over their fair share such as subclass 457 visa holders.

Justin Grossbard | 07 March 2014  

Everyone forgets the $6.00 is a starting fee, do people realy believe it will stay at $6.00. This is a starting amount and will increase , its a suckers amount to start it off so a majority of people agree to it because its only $6.00.

David | 23 March 2014  

The introduction of a co payment will be crippling for large families who are already struggling to balance the books each fortnight. I am a permanently injured former soldier with a wife and four children . We have no spare money. The men who sit on very fat wallets can't understand the fuss over $6. That $6 is very quickly $36 if we all come down with the wog. That is our meat allowance for the fortnight. Those living the rock star lifestyle in Canberra would think nothing of spending $36 on a bottle of wine for dinner.

Ian Petch | 23 April 2014  

Our doctor has first come first serve therefore long waits at times which already make you consider if you need to visit. My low-immune child informs 'got chest infection' visit doctor even though I can't see symptoms, medication needed. My husband gets sick he won't go until really bad and needs umpteen visits and more medication than if treated early. For me skin check caught BCC that looked like a tiny red dot if it wasn't caught early would have required an operation not simple treatment. Ie saved the medical system by early treatment. Had strong headache, saw pharmacist trying to avoid doctor, said go to the doctor. Have high blood pressure and now medication. Given that we live in Queensland my husband's pay has been frozen for unknown years and now he has been transferred at the cost of over $150 pfn (Thanks LNP!!), family of 6 the financial pressure is already growing without this, I hate to think how this will affect people with even tighter budgets than ours. How many people will delay going to the doctor until absolutely necessary and thereby placing undue pressure on the health system?

Early treatment saves money | 24 April 2014  

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