The Coalition government has ditched its deeply unpopular plan to have people visiting doctors pay A$5, but has retained the Medicare rebate freeze for both general practitioners and specialists. Doctors groups have warned that the measure will mean patients will have to pay more for medical services.
The Medicare rebate – currently A$37.05 for a standard GP visit – is the money the government provides doctors for each medical consultation. But GPs and specialists can choose to charge patients additional fees, as there are no rules about what they can and cannot charge. Bulk-billing GPs, for example, claim the A$37.05 straight from Medicare on their patients’ behalf. But if a GP doesn’t bulk bill and charges, say A$70, then patients can claim back A$37.05 from Medicare themselves and are A$32.95 out of pocket.
The rebate freeze was actually introduced by the last Labor government, and initially took effect from November 2013 to July 2014. And it was extended for two years by the current government. At the time, the Australian Medical Association (AMA) recommendeddoctors increase their fees by almost 3%.
The same prospect has been raised by the Royal Australian College of General Practitioners vice-president, Morton Rawlin, who said extending the freeze will, among other things, “force GPs to pass on increasing out-of-pocket costs to patients”.
A complex picture
But the data presents a different story. As Figure 1 below shows, bulk-billing rates for GP services have continued to increase since the rebate was first frozen in November 2013. But bulk-billing rates for Medicare as a whole, that is, once specialist and diagnostic services are also included, have levelled off and fallen slightly. This suggests the effect of the rebate freeze on bulk-billing rates is concentrated on specialist and diagnostic services.
Figure 1. Bulk-billing rates in Australia
![](https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/73779/width668/image-20150304-15291-b9j23f.jpg)
The lack of change in the bulk-billing rates since late 2013 may mean GPs accepted a reduction in their profits. Or they’ve been doing other things to maintain revenue or reduce costs, including changing the types of services they provide.
Still, the impact on bulk-billing rates is not the full story, and not the only way specialists and GPs can react to the freeze. Doctors are likely to start charging patients more because the costs of running a practice will continue to increase while Medicare rebates remain frozen.
The rate of increase in practice costs is not known, but is likely to be around the inflation rate of 2% to 3%. Generally, doctors adjust to these increasing costs through regular price rises and by keeping a lid on practice costs.