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GP remuneration

Country: 
Australia
Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
(3)2004
Author(s): 
Marion Haas
Health Policy Issues: 
Access, Remuneration / Payment
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no no

Abstract

In March 2003, the Australian parliament approved changes to the structure of Medicare. The main changes introduced by the legislation are a reduction in the annual threshold level at which concession card holders or families become elegible for safety net benefits,$7.50 incentive for GPs to bulk-bill concession card holders and children under 16 in non-metropolitan areas and Tasmania and the introduction of a new MBSitem for the services of allied health professionals and dentists.

Purpose of health policy or idea

In March 2003, the Australian Government succeeeded in gaining agreement from 4 independent senators (non-aligned members of the upper house) for changes to the structure of Medicare, the tax-based health insurance system. The main changes introduced by the legislation are:

  • a reduction in the annual threshold level at which concession card holders or families become elegible for safety net benefits
  • $7.50 incentive for GPs to bulk-bill* concession card holders and children under 16 in non-metropolitan areas and Tasmania.
  • the introduction of a new Medicare Benefit Scheme (MBS) item for the services of allied health professionals delivered "for and on behalf of" GPs under a multidisciplinary care plan. It will cover up to 5 consultations with an allied health professional.
  • up to 3 dental consultations for dental conditions associated with chronic and complex conditions (eg heart disease, diabetes)
  • an additional 12 medical school places at James Cook University, Townsville
  • coordinated roll-out of the HealthConnect integrated medical records system in Tasmania and South Australia

  *bulk billing describes a system where the patient pays no up-front fees and the doctor accepts the Medicare rebate as his/her full fee.

Main points

Main objectives

The stated objectives of the changes are:

  •  to improved the Medicare system to help people cope with the costs of out-of-hospital care (eg MRI, CT scans, ultrasound and specialist consultations) which have never been widely bulk-billed.
  • to increase the rate at which GPs practising in non-metropolitan areas and Tasmania bulk bill consultations with concessions card holders and children under 16.
  • to improve the Enhanced Primary Care program (introduced in 1999) by enabling GPs to better manage patients with chronic and complex conditions via consultations with allied health professionals and dentists thus decreasing the amount of prescribed medicine and increasing the level of "holistic" care provided to patients.
  • to increase the number of medical students from rural backgrounds, thus increasing the numbers of doctors practising in non-metropolitan areas in Queensland.

Type of incentives

Annual thresholds for out-of-hospital costs $300 for concession card holders, $700 for others. In other words, concession card holders will pay the first $300 and others the first $700 of any out-of-hospital costs.

An additional $7.50 per consultation will be paid to GPs who bulk-bill for consultations with concession card holders and children under 16 AND who practice in non-metropolitan areas or Tasmania

New allied health MBS item will cover up to 5 consultations for people with chronic and complex conditions at $80 initially and $35 subsequently. The incentive here is also for GPs to develop Multidisciplinary Care Plans.

New MBS item for dental consultations associated with chronic and complex conditions with cover up to 3 dental consultations at $220 for the program of treatment). Such a program will also need to be associated with a Multidisciplinary Care Plan prepared by the patient's GP.

It will cost an additional $1.1 million to fund 12 additional medical school places at James Cook University.

Groups affected

general practitioners, concession card holders and families, people with chronic and complex conditions

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual controversial highly controversial
Structural or Systemic Impact marginal rather marginal fundamental
Public Visibility very low high very high
Transferability strongly system-dependent strongly system-dependent system-neutral

The overall thrust of this policy appears to be moving away from a universally available system towards one that emphasises the creation of a "safety net" for those in low socio-economic groups who have high health care needs and a "user pays" system for others. The fact that changes to the rebate and safety net thresholds have been selectively applied in this instance mean that future changes may be more acceptable to the population and that, as costs increase, the government will be under pressure to let the value of the safety net and rebates fall.

Political and economic background

The background to this issue has been described in previous surveys (see Surveys 1/2003 and 2/2003). The proposed legislation (described in Survey 2/2003) was rejected by the Senate and a Senate inquiry was held. The government released its revised policies and a second Senate inquiry was held. The overall message of the inquiries was that although many of the individual initiatives were worthwhile, the Senate was concerned that the direction in which Medicare was being steered was away from a system of universal insurance under which Australian residents had access to health care based on need, that is, irrespective of income, towards a welfare system where individuals take financial responsibility through co-payments and assistance is given to those who cannot afford to pay.

In particular, the Senate was concerned that the two safety nets proposed would create winners and losers, that the two categories chosen by the government for applying the lower threshold and those chosen for receiving the bulk-billing incentive were a poor measure of need. Under the proposed system, working people on low incomes, those with chronic conditions who do not qualify for concession card status and those without dependent children may all be discriminated against. In addition, the levels set by the safety net create an incentive for doctors and other services to raise their co-payment levels to reach this threshold, potentially presenting some patients people with high out-of-pocket costs. The inquiries concluded that the solution was the restoration of a public health insurance scheme through the increased availability of bulk-billing. The inquiry concluded that this would be best achieved through increasing the rebate payment to all bulk-billed services.

Following the release of the report into the proposed legislation, the government began actively negotiating with four independent Senators, who hold the balance of power in the Senate. Both sides appeared to compromise and the resulting legislation, while delivering some changes to the original "MedicarePlus" proposals, seems to fulfill many of the Government's objectives, although it did not address all the concerns voiced by the Senate inquiries. However, due to the agreement reached by the government with the independent Senators, the legislation has now been passed by the Senate and the change to Medicare will be introduced progressively from July 1, 2004.

The Government was under pressure to complete its political agenda in terms of the health system as a federal election is due later in 2004.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no yes yes no no

Origins of health policy idea

The ideas have been generated by the government and the independent senators and formally set out in the legislation. The legislation is the first major change to the structure of Medicare since it was introduced in 1984. The main stated purpose of the legislation is to increase access to services provided by bulk-billing GPs, allied health professionals and dentists. Secondary purposes are to increase the medical and nursing workforce and to enhance the "holistic" nature of health care.

Financial incentives are the main tool being used to achieve the purpose. The independent Senators played an important role in the formulation of the final details of the legislation. They, in turn, would have been influenced by lobby groups such as the Australian Medical Association and other organisations representing doctors and other health professionals, groups representing health consumers and other bodies such as the Australian Councils of Social Service.

The main actors were the Federal Minister for Health (Tony Abbott) and the four Senators (Harradine and Murphy (Tasmania), Lees (South Australia) and Harris (Queensland).

The government was pledged to complete its reform agenda in health as a federal election is scheduled for the end of 2004.

Approach of idea

The approach of the idea is described as:
amended: This legislation replaces the original proposed in 2003.

Stakeholder positions

The opposition parties (Labor and Democrat) parties remain opposed to the legislation as do other left-leaning political groups. The AMA has expressed cautious support but would still prefer across the board increases in Medicare patient rebates - in other words, an increase in the fee-for-service payment received by all doctors.

Other groups have opposed the legislation including the Doctors Reform Society, the National Medicare Alliance and the Australian Councils of Social Services.

The position of the independent senators would have been influenced both by the results of the senate inquiry into Medicare and by lobby groups such as the Australian Medical Association and other organisations representing doctors and health professionals, groups representing health consumers and other bodies such as the Australian Councils of Social Service and (to some extent) the Consumers Health Forum.

The government led the way in bringing the ideas forward and in negotiating with the independent Senators. The alliance thus formed was instrumental in ensuring that the legislation was passed. 

Influences in policy making and legislation

The legislation has now been passed by both houses of the Australian parliament and it will come into law from July 1, 2004. The changes to the detail of the legislation have been substantial although the overall thrust of its ideas remains the same. The way in which the legislation was modified indicates the relative power of the independent senators who hold the balance of power in the Senate, the upper house. The Senate is the "State's house" as equal numbers of senators are elected from each State. Thus, the State of origin of each of the Senators has been singled out to receive specific benefits.

  • The $7.50 incentive for bulk-billed GP consultations will cover non-metrolpolitan and Tasmania (Senators Harradine and Murphy).
  • The additional 12 medical school places are funded at James Cook University (Queensland, Senator Harris)
  • The HealthConnect medical records system will be rolled out first in South Australia (Senator Lees) and Tasmaina (Senators Harradine and Murphy).

Legislative outcome

success

Adoption and implementation

Now that the legislation has been passed and comes into law in July, 2004, the Australian Department of Health and Ageing is responsible for seeing that it is implemented. The Department would have been involved in the legislative process in the sense that officers of the Department can be asked to provide recommendations about changes which would be consistent with the government's policy on Medicare, information about the nature and impact of proposed changes and to assist the Minister in answering questions about the proposed changes.

The success of any implementation in terms of its effects on providers' and consumers's behaviour awaits evaluation which in turn will rely on the data becoming available.

The measures taken to convince the Senators to approve the legislation are outlined above.

Monitoring and evaluation

No formal independent mechanism has been proposed for reviewing the process of implementation or impact of the changes outlined in the legislation. However, the Australian Department of Health and Ageing and the Health Insurance Commission will have access to information which will enable such a limited analyis of the impacts to be undertaken.

Expected outcome

Although it is likely that there will be a positive effect on the rate of bulk-billing in rural and remote areas of Australia and Tasmania, modelling suggests that this increase will be small. (see Survey 2/2003 for more detailed comment). Concentrating the incentive in rural and remote areas ignores the fact that many residents of metropolitan areas do not have access to GPs who bulk-bill. Doctors have argued that the changes make the system more complex and require GPs to perform additional administrative duties. In addition, the amount offered as an incentive to bulk-bill ($7.50) may be smaller than the co-payment being charged by some doctors, so that a switch to bulk-billing may reduce GPs' incomes.

Some concession card holders and families will benefit from the reduced safety net thresholds but poor individuals and families will still be required to pay $300 and $700 respectively and it will not affect those individuals with high health care needs and costs who do not qualify for a concession card (ie those earning more than $340 per week). Further, the Consumers Health Forum submission to the Senate Inquiry on Medicare opined that many consumers are not aware of the current Medicare safety net which suggests that a carefully planned information campaign will need to be mounted about the impact of changes on different groups within the population.

Very little detail is available about the new arrangements for improving access to services provided by allied health professionals and dentists for people with chronic and complex conditions. Initial reactions from the professions is that the rebate being offered will not cover the cost of consultations and that individuals would still face out-of-pocket costs. The need for GPs to prepare multidisciplinary care plans may deter some professionals from this work but, on the other hand, may provide an incentive for others to form provider networks to maximise coordinated care and income from this source. Rebates for the preparation and implementation of multidisciplinary care plans involving up to two allied health professionals have been in place since 1999. Although no data are available regarding their uptake, the AMA claims that this has been low due to the time consuming nature of the plans and the amount of administrative detail involved.

It is unclear what the outcome of the additional medical school places will be in terms of increased medical workforce for rural and remote areas as although medical graduates can be placed in rural/remote areas as part of their internship, they require some form of supervision in this placement (hence it connot be too remote) and cannot be forced to practice in non-metropolitan areas once they have recieved their Medicare provider number.

The HealthConnect integrated medical record system (when introduced in South Australia and if entended more widely) is likely to be beneficial overall in terms of reducing duplication and medical error but will require formal evaluation.

Impact of this policy

Quality of Health Care Services marginal rather marginal fundamental
Level of Equity system less equitable two system more equitable
Cost Efficiency very low low very high

Although some aspects of the policy are designed to impact on thr quality of care (the inclusion of allied health professionals/dentists as part of the multidisciplinary team and the intergrated health record rollout), their actual impact will depend on the uptake of the first and the success of the second, leading to national coverage for the updated health record system.

Under the policy, access to care may be improved for concession card holders and children under 16, although many GPs currently bulk-bill such groups. However, while concession card holders are certainly a predominantly low socio-economic group of high health care users, children under 16 come from all socio-economic strata. Single people and families without children or with children over 16 earning less than the concession card threshold may be faced with increased out-of-pocket costs as a result of the policy.

As the total cost of the policy is $2.85 billion and the extent to which its consequences will be positive is unclear, it may reduce the efficiency of the system.

References

Sources of Information

Australian Department of Health and Ageing. www.health.gov.au/medicareplus

Australian Senate. Medicare:healthcare or welfare. Senate Select Committee's first report.

Medicare Plus: the future for Medicare. Senate Select Committee's second report. www.aph.gov.au/Senate/committee/medicare_ctte/fairer_medicare/index.htm

Australian Medical Association. Revised Medicare Plus - Better safety net and access to dental care but more complexity on red tape. www.ama.com.au

Australian Councils of Social Services. Medicare Plus: low income singles miss out while millionaire families gain. www.coss.net.au/news/acoss/1051839839_7452_acoss.jsp

Consumers Health Forum of Australia. Submission to the Australian Senate Select Committee on Medicare. June 2003. www.chf.org.au/publications/

 

 

Author/s and/or contributors to this survey

Marion Haas

Suggested citation for this online article

Marion Haas. "GP remuneration". Health Policy Monitor, April 2004. Available at http://www.hpm.org/survey/au/a3/5