Austaxpolicy blog

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Introducing a GP Copayment in Australia: Who Would Carry the Cost Burden?
14 March 2017, by Rosemary Elkins and Stefanie Schurer

Following the abandonment of a string of controversial copayment policy proposals (i.e., the ‘$7 copayment’ and its equally ill-fated successors), medical stakeholders have maintained strong and vocal opposition to the government’s recently extended Medicare rebate indexation freeze.

In total, Medicare rebates will be frozen for six years, meaning that bulk-billing doctors will receive the same reimbursement for servicing a patient in 2020 as they did in 2014, despite the rising cost of running a practice. For privately billed patients, it means the real value of their rebate will fall over time. Medical organisations, including the AMA and RACGP, suggest that the freeze is simply a copayment policy “by stealth.” They warn that it will undermine Australia’s bulk-billing system, bringing harm to both doctors and patients by forcing many more GPs to either start charging their patients out-of-pocket fees or otherwise absorb a large revenue cut over time.

Bulk-billing is common in Australia. In 2015-16, the average bulk-billing rate for non-referred GP services was at a record 85.1% (though this varies considerably by state). Two-thirds of patients were bulk-billed for 100% of their GP services; 89% were bulk-billed for at least one of their GP visits during the year, and 81% of patients were bulk-billed for 50% or more of their visits. This means that the majority of Australians who visited their GP in the past year paid no out-of-pocket fees for the majority of their visits. Patients who were not bulk-billed by their GP paid an average out-of-pocket fee of around $34 in 2015-16.

We don’t know how doctors, particularly those who bulk-bill all or most of their patients, will adjust their billing practices over time to cope with income losses generated by the rebate freeze. For individual practices, this will depend on factors such as location, competition, and patient mix; for example, practices that face stiff competition or those that service highly disadvantaged populations may be more reluctant to reduce the availability of bulk-billed services.

Read the full article at Austaxpolicy blog.

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