Election snake oil "cure" for Medicare

Bob Briton

At the same time that Australians were being bombarded with $20 
million-worth of "Strengthening Medicare" ads in the mainstream 
media, Coalition pollies were sitting on election time plans to 
gazump Labor's response to the health crisis facing the country. 
While Howard & Co previously insisted that the "Medicare Plus" 
package had perfected the popular national health scheme with a 
range of "safety nets", the latest announcement seeks to further 
exploit growing public concern over the shrinking number of bulk-
billing doctors.

The Libs latest tweak at Medicare has a lot in common with their 
previous efforts. Like the $3.3 billion "Strengthening Medicare" 
package before it, the recently announced $1.8 billion to be 
spent over the next four years would have little or no effect on 
declining bulk-billing rates in country areas. The latest package 
again sets out to put money in the pocket of practitioners by 
making it easier for them to increase their fees. The Government 
is taking practical steps to win the support of GPs — who they 
used to count as natural allies — and hoodwink battling 
Australians that it will be cheaper or even free to visit the 
doctor.

The Howard/Abbott scheme would increase the Medicare rebate by 
$4.50 from the current $25.70 to $30.20, which is also the 
scheduled fee for a standard consultation. If the patient is 
bulk-billed, the increase will be paid to the doctor. If not, the 
amount will assist the patient in paying the doctor's bill.

The claim that the rebate is to be boosted to 100 per cent of the 
scheduled fee will lead many to believe that a visit to the GP 
will not involve a charge.

However, in the same doctor's surgery that Howard chose to make 
his carefully crafted announcement, a standard consultation costs 
$52. The gap between this fee and rebate from Medicare is $26.30. 
That is, the patient is $26.30 out of pocket for the standard 
consultation.

If the rebate were increased to the scheduled fee of $30.20, the 
gap would be $21.80. Nobody would expect that doctor to forego 
that $21.80 in order to bulk-bill patients. At best it would 
reduce the patient's out-of-pocket costs by $4.50. Many doctors 
might see it as an opportunity to soften the blow of a further 
fee increase.

Professor Jane Hall, director of the Centre for Health Economics 
said that the Howard plan would only affect bulk-billing rates in 
rare cases "at the margins". Professor John Deeble, the architect 
of the original Medicare scheme, agrees.

The problem at the core of the bulk-billing question is that the 
Medicare rebate and the schedule of fees have not kept pace with 
increased costs incurred by GPs over the past 20 years. It has 
been calculated that a standard visit would be set at between $40 
and $50 had those indices kept pace with inflation. Neither of 
the major parties is showing any sign of tackling the question of 
proper indexation of the Medicare rebate and scheduled fees.

Fees will rise

Professor Deeble expects fees to rise under the Coalition plan. 
So does the Doctors Reform Society. So does GP and former Liberal 
adviser Paul Fitzgerald: "If these [extra] fees are not indexed, 
then of course doctors' fees will rise over time and they will 
eat up the difference", he told The Australian Financial Review 
last week.

In the same article an indication was given as to the real 
beneficiaries of the Howard Medicare package. Shares in two major 
companies owning large medical practices rose by healthy margins 
after the announcement. Shares in Primary Health Care — which 
runs 21 medical consultancies — rose 33c overnight to $6.35. 
Independent Practitioner Network shares stacked on 3c to close at 
$9.18 last Thursday.

The same tactic of "fixing" Medicare by benefiting the big 
players in the health industry was applied with the 
"Strengthening Medicare" package first announced late last year. 
In that case, among other measures, a "safety net" was supposedly 
put under patients requiring relatively frequent services from a 
range of specialists like radiologists. If a patient pays more 
than $300 in any year for these services, the Government agreed 
to pay 80 per cent of all subsequent charges for doctors' 
services.

The costs are uncapped. Specialists could charge thousands of 
dollars in the biggest open-ended rort ever and taxpayers would 
foot the bill. It is a recipe to destroy Medicare — costs will 
blow out and provide the government with the excuse to means test 
Medicare.

Warnings that this was a recipe for fee increases were ignored by 
Howard et al, who knew what they were doing all along. It is the 
same old story with their latest plan to "rescue" bulk-billing. 
The Coalition has no qualms about spending large wads of public 
money when it suits its purposes.

Labor focus on bulk-billing

Labor's policy is strongly focussed on bulk-billing. It also 
promises to increase the Medicare rebate to 100 per cent of the 
scheduled fee but only for bulk-billed GP visits. Recognising 
that the scheduled fee is not set at a realistic level, Labor has 
vowed to pay additional sums to GPs meeting bulk-billing targets. 
The payments, ranging from $7500 to $22,500 per annum, are for 
doctors who bulk bill between 70 and 80 per cent of their 
patients. The incentives increase according to whether the GP is 
in practice in the metropolitan area, in an outer metropolitan or 
major regional centre or a rural/remote setting.

All up, the Labor changes mean that the Medicare rebate increases 
by $6.30 per patient for a doctor in a big city, $7.80 for one in 
the suburbs or a regional centre and $9.60 for a GP in a rural 
practice if the targets are met. Again it is unlikely that big 
changes in the number of doctors bulk-billing their patients will 
flow from the ALP policy, either.

Neither of the major parties wants to tap the funds currently 
committed to the 30 per cent Private Health Insurance Rebate. The 
cost of the PHIR has been put conservatively at around $2.5 
billion per annum, and will rise in future years. The diversion 
of these funds to raise the Medicare rebate to appropriate levels 
would fix the bulk-billing problem and leave money over to 
address some of the other problems facing our public health 
system. That course of action, however, would require the 
political will to tackle the power of big business and finance 
capital.