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General Practitioners' remuneration

Country: 
Australia
Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
(4)2004
Author(s): 
Marion Haas
Health Policy Issues: 
Political Context, Funding / Pooling, Access, Remuneration / Payment
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no yes no no no no yes
Featured in half-yearly report: Health Policy Developments Issue 4

Abstract

Bulk billing by GPs is a major issue in Australian health policy (see previous surveys). Bulk billing means that the GP bills the government directly, receives 85% of the scheduled fee, the patient pays nothing. If the GP does not bulk bill, the patient pays the bill and receives 85% of the scheduled fee. GPs are free to set their fees. Following the conservative win in the election on Oct 9, "Medicare Plus" will be implemented.

Recent developments

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Characteristics of this policy

Degree of Innovation traditional rather traditional 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
current current   previous previous

It is likely that the overall effect of this policy will be inflationary (due to the impact of the safety net). It is also likely to increase doctors' incomes but seems unlikely to change the rate of bulk billing and therefore may in turn reduce the universality of Medicare (that is, decrease equity of access). This may have a negative effect on emergency departments of public hospitals which already struggle to deal with primary care type patients.

Purpose and process analysis

Current Process Stages

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

Initiators of idea/main actors

  • Political Parties: National elections were held in Australia on October 9, 2004. Following the win by the conservative coalition, the latest policy

Stakeholder positions

In April 2003, the Australian government introduced a proposed policy "A Fairer Medicare" (see previous survey). However, as they did not have the majority in the upper house (Senate), the enabling legislation was not passed and the proposals were referred to a Senate Select Committee. Following its report, in November 2003, a new policy "Medicare Plus" was introduced which has since been modified slightly in the recent election campaign. As the government was returned with an increased majority in the election on October 9, we can expect this policy to be implemented. The opposition Labor Party developed a counter proposal to "A Fairer Medicare" and expanded on this in its election policy. Oposition also came from consumer groups and other commentators on the grounds that A Fairer Medicare would remove the universality of Medicare. The medical profession also criticsed it for not providing enough additional funds to ensure the financial viability and high quality of general practice. Some doctors were also critical of the requirement to bulk bill concession card holders, arguing that the decision as to who should be bulk billed should be a matter between doctor and patient.

However, the Australian Medical Association was generally supportive of the general thrust of the policy, including the changes proposed as part of the election policy.

Actors and positions

Description of actors and their positions
Political Parties
Liberal/National Coalitionvery supportivevery supportive strongly opposed
Labor Partyvery supportivestrongly opposed strongly opposed
Minority parties in Senatevery supportivestrongly opposed strongly opposed
current current   previous previous

Influences in policy making and legislation

The original proposal (A Fairer Medicare) now called "Medicare Plus" has been modified as follows:

  • the Medicare rebate has been increased to 100% of the scheduled fee. Where the service is bulk billed, this amount will be paid to the doctor.
  • the location specific incentives are removed
  • direct billing of the patient contribution is removed
  • insurance coverage for out-of-pocket expenses removed
  • introduced a safety net for co-payments: 80% of OOP copsts above $500 in one year for familes with a concession card or those receiving a child payment; 80% of OOP costs above $1000 for all other families or individuals

The reason that these changes were made is due to the power of the minor parties in the Senate and the ability of the Senate to inquire into the positive and negative aspects of the proposals. Both the Prime Minister and the Minister for Health have been actively engaged in the negotiations around the original and new proposals.

Actors and influence

Description of actors and their influence

Political Parties
Liberal/National Coalitionvery strongvery strong none
Labor Partyvery strongweak none
Minority parties in Senatevery strongstrong none
current current   previous previous
Liberal/National CoalitionLabor PartyMinority parties in Senate

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

Although the new proposal has been implemented, some aspects will not come into force until July 2005. GPs are affected by all aspects of the policy and the incomes of other doctors are also affected by the safety net proposals (see other survey in this round). Generally, GPs and other doctors are expected to benefit in terms of their incomes. As the the incentives to bulk bill have may not have been strengthened and the impact of the safety net is likely to be an increase in co-payments, people with lower incomes may face a disincentive to visit the doctor. This in turn may increase the pressure on hospital emergency departments.

Monitoring and evaluation

No formal evaluation is proposed (although the big win by the conservative parties in the recent election could be taken to be an endorsement of the policy). There are no mechanisms to review the implementation or outcome. In recent times, the government has been reluctant to release detailed bulk-billing rates (ie by local area) so it may be difficult for independent commentators to evaluate the outcomes of these policies. Some recent figures indicate that the impact of the safety net policy has been to increase the co-payments charged by doctors (obstetricians) and there are some indications that the government may move to limit this.

Expected outcome

There is no evidence that increasing the rebate for all GP services will encourage bulk billing. (The Labor Party (opposition), in its election manifesto promised to provide incentives of between $7500 and $22500 to GPs who bulk billed between 70% and 80% of their patients. This may have led to an increase in the rate of bulk billing in some areas.)

The policy is likely to increase costs (especially in relation to the safety net) and has been costed by the government at $1.801billion over four years.

It may have a negative impact on equity of access if it reduces the universality of Medicare.

Increases in incomes for GPs may encourage retention and may enhance quality of care.

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
current current   previous previous

Although an increase in income may encourage GPs to stay in the profession and to continue to develop their skills, this does not represent the main thrust of this policy.

As the rate of bulk billing may not increase, this policy may lead to a less equitable system. That is, ability to pay rather than health need may determine utilisation of GP services. As previous policies designed to encourage GPs to practice in rural or less attractive metropolitan areas have not been evaluated, it is not possible to say whether they will balance out the impact of lower rates of bulk billing.

Commentators have highlighted the inflationary impact of the safety net proposals. Given their recent win in the national elections, it is possible that the government will re-introduce policies aimed at direct billing the patient contribution and provision to insurance coverage of out-of-pocket expenses. This would be likely to increase costs further.

References

Sources of Information

www6.health.gov.au/internet/wcms/publishing.nsf/Content/health-medicare-policy_history-2003-qa.htm

Liberal and National Parties of Australia. 100% Medicare: Making GP services more affordable than ever before. Election 2004 Policy.

Latham Mark, Gillard Julia. Labor's New Deal to Save Medicare. Campaign 2004. www.alp.com

Author/s and/or contributors to this survey

Marion Haas

Suggested citation for this online article

Marion Haas. "General Practitioners' remuneration". Health Policy Monitor, October 2004. Available at http://www.hpm.org/survey/au/a4/4