2014-07-18
Brett Montgomery
There's a lot to despair about in this budget, but the measure that is closest to my heart, and the one I'm best qualified to write about, is the proposal for a $7 co-payment for many health system encounters, including GP visits, blood tests and Xrays. I try to base my own practice on good evidence, but this proposal seems to be written in defiance of our evidence on the topic. I'll discuss this evidence later. First though, what is actually proposed in the budget, and how is this a change from the status quo?
How Medicare works now
Currently, almost all GPs work in small businesses, where they can charge whatever fee they like for their services. But the government, via Medicare, only pays a certain amount towards any given type of service. This amount is called the Medicare “rebate”. So, for a standard (less than 20-minute) GP consultation, the government will chip in about $36. If the GP charges more than that amount, the patient must pay all of the fee, after which Medicare will refund $36. The difference between the GP's fee and the $36 is the “out-of-pocket” charge.
If a GP decides to accept just the $36 as payment, then the patient can opt to pay nothing, and have Medicare send the $36 directly to the doctor. This is known as bulk bulling.
Another detail is the bulk billing incentive payment. When GPs bulk bill children under 16, or people with concession cards, such as pensioners or people on Newstart, they are paid an extra amount, between about $6 and $9, depending on where they work. This is not paid when GPs bulk bill non-concessional adults. So when GPs bulk bill a standard consultation, the government presently pays between about $36 and $45, depending on the patient's age, socio-economic status and location.
At present, just over 80% of visits to GPs in Australia are bulk-billed. People are often surprised at this figure when I quote it, but it is the official Medicare statistic. The proportion is a little less in WA, but it's still over 70% here.
The co-payment budget measure
The budget proposal does several things. First, it reduces current GP, pathology and imaging rebates by $5. (by pathology and imaging I mean things like blood tests and X-rays.) Second, the co-payment encourages providers to charge a $7 fee to most patients seeing a GP, or getting blood tests or imaging. Third, the bulk-billing incentive payment is replaced with a “Low Gap incentive” payment, payable only if the $7 is charged but not if GPs charge more, and not if they waive the $7.
The government would like GPs to see all this as a bit of a pay rise. When we charge the co-payment, we'll be better off by $2, having earned $5 less from government but $7 more from our patient than we do now. But if we waive the co-payment we'll lose the $5, plus the incentive payment of $6-$9, and bring in up to $14 less than we do now. To me, this seems to punish GPs' generosity, and is one of the cruellest aspects of the policy. This kind of income loss is likely to make widespread bulk billing financially impossible, as it follows many years of practice costs rising faster than Medicare rebates.
There are limits on these co-payments for concessional patients and children: after paying the co-payment ten times in a year, things will return to the current arrangement – at least until next year. But that's still a lot of money, especially for a large, low-income family.
Even if you are someone who does not normally get bulk-billed, you don't escape – you will get $5 less rebate, so your out-of-pocket cost will grow by $5 for every consultation, blood test and X-ray.
Why co-payments are bad policy
Green readers are likely familiar with the relevant Greens health policy principles. These include the importance of access to healthcare (including bulk billing), prevention of illness, primary care (including GPs), and universal health insurance based on progressive taxation. On Greens policy grounds, then, this co-payment idea is a nonstarter – it's more of a tax on illness than on income.
But it's heartening to note that it's not just the lefties who are opposing this proposal. The voices of outcry are diverse, from the left and the right, from doctors and health consumers and health economists – a spectrum of people who rarely agree on issues of health policy. They are united because the evidence suggests that co-payments will cause harm, especially to our most vulnerable fellow Australians. My head and my heart share in the outrage, as this policy ignores both evidence and ethics.
Of course, proponents of co- payment offer superficial, market- flavoured theories to justify their proposal: it will reduce avoidable demand for GPs' time, reduce over- servicing, and get people to think twice about going to the GP, they say. This thinking seems anchored in the idea of “moral hazard” – that people will wastefully overuse what is free to them and costly to taxpayers. I think this'd be true of free beer, but is it true of healthcare?
When I turned to the evidence on this topic, what I found, in short, was this. Are co-payments likely to reduce GP visits? Yes. Are they likely to deter only “unnecessary” GP visits? No. Might they have adverse consequences for public health? Yes. Will these adverse consequences be felt by everyone? No, they'll be felt more by those who are sicker and poorer.
Co-payments: the evidence
The most famous study on the effect of co-payments in healthcare was the RAND experiment, from the USA in the 1970s, which randomly assigned several thousand people to different levels of co-payments for their healthcare. It found that with steeper co-payments medical expenditure was reduced, without adverse consequences for the average participant in the study. But for those with poor vision, or poorer people with high blood pressure, outcomes were worse with co-payments, with the latter group being predicted to be at higher risk of dying.
We have newer evidence. A recent systematic review of the economic evidence found that co-payments reduced medication use, as well as doctor visits. Superficially, this might sound like a good thing for the budget, but it could be bad for public health if patients miss out on necessary care, and ultimately is a false economy.
This concern was justified in a recent study of nearly 900,000 people in the United States: co-payment increases were followed by a reduction in GP visits but also by significant increases in hospitalisation. These effects were biggest in those with lower income, less education and pre-existing illness.
The authors concluded that co- payments 'may have adverse health consequences and may increase total spending on healthcare'.
Co-payments have also been associated with less use of important mental health services, less flu vaccination, and less screening for heart disease and breast cancer. For medications, it is often important ones that are foregone when co-payments for drugs increase – use of drugs to prevent heart disease, asthma, and other important conditions drop.
A recent Australian government survey found that about 8% of people are delaying or avoiding visiting their GP due to costs. This is despite about 80% of consultations being bulk-billed. What might happen to this figure after introducing co-payments?
Are there really lots of unnecessary visits?
As a GP I sometimes see visits that might be deemed unnecessary, but they are a minority. According to modern Australian data, the most common problems managed by GPs are high blood pressure, immunisations, “check-ups”, respiratory tract infections, depression, arthritis, diabetes, high cholesterol, and back pain. Many of these problems are or involve issues of national health priority. Even those coughs and sore throats that might be better managed at home, rather than by a doctor, are important to the person presenting with them. I tackle these presentations by trying to empower my patients to manage things themselves next time. I also try to avoid prescribing antibiotics in order to demedicalise the illness and reduce future unnecessary visits. This approach is better than co-payments.
I don't pretend that all GP visits are effective or ideal – recent evidence suggests that Australians get “appropriate” guideline-concordant care at only 57% of health system encounters. But it's hard to see how reducing visits to GPs will help to close these evidence-practice gaps.
Better ways to fix the health budget
If we have to reduce our health budget costs – and this is arguable – there are better options. Negotiating lower prices for many commonly-used medicines, on par with what other countries pay, could reportedly save $1.3 billion annually — much more than the projected savings from this co-payment proposal. Rethinking the $5 billion-plus spent annually on private health insurance rebates could save billions, and be a more equitable reform than co-payments (Greens policy has been supportive of this change for years). Or we could raise taxation generally, moving Australia in the direction of many other OECD nations.
Doctors could also help save health dollars by reducing the use of expensive interventions of limited worth, and by improving their shared decision-making with patients. Being open with patients about the pros and cons of medical decisions, rather than erring on the side of treatment, would be respectful, and could also sometimes save money.
The co-payment proposal is potentially hazardous both to the health of our most vulnerable and to our collective social conscience. Thankfully, there is a real chance of stopping this deeply unfair proposal from getting through the senate, and Greens Senators will of course be amongst the opposing voices.
Brett Montgomery is a Fremantle Greens member, a Doctors Reform Society member, a GP in East Fremantle and an associate professor at UWA. Competing interest statement: The introduction of co-payments might change the way Brett is paid in his clinical work.The original version of this article, with links to relevant references, is at The Conversation.