The government has backed down from its plan to cut Medicare rebates to doctors, which was to start on Monday, January 19, after several days of public pressure. For those not au fait with the world of health reform and policy, the issue may have seemed to pass by in something of a flash. And a close look shows the fight the proposed policy caused wasn’t, after all, worth it for the government.
After being unable to pass the changes to Medicare described in the 2014 budget, the Coalition government put forward a new proposal in December 2014. It had many of the same features, but importantly, reductions in government support for Medicare items to big areas of spending, such as diagnostics and pathology, no longer applied. They also didn’t apply to a variety of high-need groups, including those with concession cards, children under 16, or people in aged-care facilities.
Nonetheless, the proposed changes were substantial.
New policy set
The first change, which has just been cancelled by the health minister Sussan Ley, would have meant a proportion of Level A consultations would have been reclassified as Level B.*
Level A consultations are currently rebated $16.95 and Level B are rebated $37.05. Those Level B consultations under ten minutes would have been reclassified as Level A. So, if a general practitioner wanted to earn the same amount of money for these consultations, they’d have had to increase what the patient would pay (the co-payment) by A$20.10 (the difference between A$16.95 and A$37.05).
The second proposed aspect of the policy, which appears to have been left untouched, is that, as of July 2015, the Medicare benefit for all GP services provided to non-concessional patients will be reduced by A$5. While this reduction is smaller than the A$20 cut that was to be introduced in January, it applies to a much larger set of consultations so has the potential for a much bigger impact on GP activity (and on population health).
Finally, all Medicare rebates are to be frozen until July 2018.
Initially, the Australian Medical Association (AMA) declared the total package to be a “mixed bag”, but it has since come out strongly against the proposal. And it appears to have triumphed.
Was it worth it after all?
A close look at the financial implication of the dropped policy of cutting rebates for certain Level B consultations raises questions about whether it was worthwhile starting a fight about.
To understand the policy’s cost implications, it’s vital to step back and look at Medicare as a whole. Total Medicare spending for 2013-14 was A$19.282 billion (almost A$1,000 per Australia). Of this, professional attendances consisted of A$8.732 billion (45% of the total). And of this second figure, A$4.584 billion was for general practice (23.8% of total Medicare expenditure).
Level A consultations are one item within this subgroup, and are currently described by Medicare as a:
Professional attendance for an obvious problem characterised by the straightforward nature of the task that requires a short patient history and, if required, limited examination and management.
In 2013-14, the total Medicare benefit paid on this item was A$46.7 million, which is substantial, but not relative to the total for general practice. In fact, it is only 1% of that total – and under 0.25% of total Medicare expenditure. The question is how many of the Level B consultations would be added to this group if the policy had been actioned.