Labor Gave Medicare Its Biggest Boost In 40 Years. Will It Make Anything Cheaper?

Australia’s public health system is one of the best in the world – something governments love to boast.

We ranked first in the OECD for equitable healthcare in 2021, and there are few countries where healthcare, from hospital visits to life-saving surgery, x-rays, allied health treatments, chemotherapy, medications and GP consultations, can all be accessed for free.

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But successive neoliberal policies have steadily eroded the good thing we have going here, and lethargic wages and income support payments have widened the gap between affordable and unaffordable healthcare.

The 2023-24 Federal Budget included what treasurer Jim Chalmers talked up as an historic $5.7 billion investment in Medicare – the biggest since its inception in 1984.

“Families are being forced into a lose-lose choice, between getting the help they need or paying their bills … it means more problems go undiagnosed or untreated,” he said in May.

“All of this will help take pressure off our public hospitals and emergency departments, still feeling the strain of a once-in-a-century pandemic.”

The biggest chunk of cash injection is $3.5 billion to address declining bulk-billing rates by increasing the financial incentives general practitioners get per bulk-billed appointment.

But the incentives are only for patients who are children under 16, pensioners or concession card holders. And the incentives might still be too low to change doctors’ minds about how much they charge. After all, GPs are private businesses.

And as the cost of living swells, the government says it doesn’t want to see Australians let essentials like healthcare fall further to the wayside. So will this investment help?

“A significant proportion of Australians have not been able to afford to go to a GP because of cost,” Professor Stephen Duckett, chair of the board of directors of Eastern Melbourne Primary Health Network told VICE.

“If it’s dropping down, it’s much less certain you’re going to be bulk-billed. And this is when people begin to say, ‘Oh, do I really need to go to the doctor even though I’m feeling sick?’”

Duckett was a member of the Strengthening Medicare Taskforce for several years, so he has watched bulk-billing rates slip.

The bulk-billing “incentive” payment is extra money paid to GPs by the government on top of the Medicare rebate. It’s meant to financially motivate them to charge concession card holders, pensioners and children less per consultation. It was introduced in 2004 and recognised the more vulnerable people in society – in both health and financial terms – needed more help.

The vast majority of GP appointments in Australia are still bulk-billed, but that number has fallen steeply and suddenly in the last 18 months.

About 90 per cent of all appointments were bulk-billed in early 2022, but that fell below 80 per cent in 2023. But that may still sound surprisingly high, especially if you live in the inner suburbs of a major capital city. This is because another dire issue is uneven distribution.

In inner-city and low-income areas bulk-billing rates are as low as 50 per cent. In Canberra, the worst-off region, only 37.6 per cent of GP appointments are bulk-billed.

To try and turn these statistics around, the government will triple all incentive payments as of July 1, which vary depending on the region.

GPs will get a $20.65 bonus if they work in a city – up from just $7 per appointment – and $39.65 bonus in remote rural areas if they bulk-bill.

This will be complemented by a 4 per cent indexation increase to the Medicare rebate, taking the government contribution for a standard consultation to $41.10.

This means, for the roughly one third of Australians who report always paying a GP gap fee, the average out-of-pocket charge will be about $42.

But will these budgetary efforts actually increase bulk-billing rates for those who need it most?

“When services have an out-of-pocket fee, the average out-of-pocket is pushing $50,” Duckett said.

“So, obviously, the closer the bulk billing itself is to that $50, the more likely doctors are going to change their behaviour back to bulk billing.”

If we do the maths, the combined subsidies of the $41.10 rebate plus the $20.65 incentive are technically more than enough to cover the full cost of the appointment.

But because GPs are private businesses – and depending on where they are based and the kinds of services and facilities they offer – the prices they need and want to charge vary, and may not be sufficiently affected by an extra few rebate dollars.

In inner-city areas, where the cost of doing business is higher, Duckett said it’s likely many practices won’t be persuaded.

“Certainly, I think there’ll be a pickup in bulk billing in rural areas but it is much harder to predict what is happening in metro,” he said.

“I’ve heard mixed stories that some practices are changing back to offering more bulk billing, but I’ve also heard that some practices are saying, look, we’ve made the change [away from bulk billing], we’re sticking with the change.”

Duckett also said one of the critical flaws of the Medicare system is that it rewards short consultations over long consultations, and it’s far easier to get bulk-billed appointments at a clinic with multiple GPs than with the same doctor every time, which leads to poorer care.

“Unfortunately, the way the government has designed the Medicare schedule, the rebate per minute is much higher for a five-minute consultation than for a 15-minute consultation,” he said.

“And that means you can only deal with one problem at a time and you cannot seriously develop a rapport, or the GP can’t really look for changes over time. So the structure of the fee schedule isn’t working the way it ought to.”