GP Remuneration

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

One of the key features of the Australian health care system is that if GPs directly bill Medicare (termed bulk-billing) and accept 85% of the scheduled fee as full reimbursement, patients face no out-of-pocket charges. The rate of bulk-billing varies by location and is strongest where there is significant competition amongst GPs. In response to a falling rate of bulk billing the government has proposed a package of incentives for GPs to bulk bill concessional card holders.

Purpose of health policy or idea

The stated objectives of this policy are to increase the rate of bulk-billing for concessional card holders (eg poor, sick and elderly members of the population), thus enhancing access and affordability. Bulk billing is the term used to describe the practice whereby GPs bill Medicare (the Australian system of universal health insurance) directly, and accept 85% of the Medicare fee as full reimbursement for the consultation.

In April 2003, the Australian government announced a package of changes to Medicare called "A Fairer Medicare" which was described as "an integrated set of measures which will improve access to Medicare services and make services, provided through general practice in particular, more affordable". The main features of the package are:

• GP practices which choose to participate by agreeing to bulk-bill all concessional card holders will receive a monthly incentive payment, calculated using the number of visits made to the practice by concessional card holders.
• Practices in rural and remote areas will receive higher per visit payments than those in metropolitan areas. 
• The government will pay concessional card holders 80% of out-of-pocket costs for Medicare services (GP and specialist consultations, pathology and diagnostic imaging) once a threshold of $500 has been reached in a calendar year.
• Participating practices will be able to claim the Medicare rebate directly from the government and charge non-concessional patients a copayment only.
• Private Health Insurance Companies will be able to offer cover for the out-of-pocket costs over $1000 per calendar year for a wide range of Medicare funded out-of-hospital services .
• Funding will be made available for 234 additional places in medical schools, 150 new GP registrar positions and 457 fulltime equivalent nurses to work in general practice.

The intended outcomes of the policy are an increase in the rate of bulk-billing for concessional card holders and a decrease in out-of-pocket costs to this group of consumers.

It is also intended that the policy will lead to an increase in the number of GPs and nurses working in general practice, particularly in outer metropolitan and rural areas.

Main points

Main objectives

The stated objectives of this policy are to increase the rate of bulk-billing for concessional card holders (eg poor, sick and elderly members of the population), thus enhancing access and affordability.

Type of incentives

Incentives for GPs

• GP practices which choose to participate by agreeing to bulk-billing all concessional card holders will receive a monthly incentive payment, linked to the number of visits made to the practice by concessional card holders.
• Practices in rural and remote areas will receive higher payments
• Participating practices will be able to claim the Medicare rebate directly from the government and charge non-concessional patients a copayment only.
• The time taken to reimburse GPs will be reduced from 8 to 2 days
• GPs will receive funding to purchase equipment and for set-up costs for using an on-line system for payments.
• Funding will be made available for 234 additional places in medical schools, 150 new GP registrar positions and 457 fulltime equivalent nurses to work in general practice.

Incentives for patients

• The government will pay concessional card holders 80% of out-of-pocket costs for Medicare services such as GP and specialist visits, pathology and imaging, once a threshold of $500 has been reached in a calendar year.  
• Private Health Insurance Companies will be able to offer cover for a wide range of Medicare funded services once out-of-pocket costs for an individual or family are more than $1000 in a calendar year.
• Non-concessional patients in participating practices will only be charged the co-payment as their GPs will be able to receive the Medicare rebate directly from the government.

Groups affected

General Practitioners, Concessional card holders, Non card-holders

Innovationsgrad	traditionell		innovativ
Kontroversität	unumstritten		kontrovers
Strukturelle Wirkung	marginal		fundamental
Medienpräsenz	sehr gering		sehr hoch
Übertragbarkeit	sehr systemabhängig		systemneutral

Although the proposed changes are innovative in terms of changing incentives for GPs, they are controversial in terms of their expected impact on the affordability  and accessability of health care for Australians, even for concessional card-holders who are the main targets of the policy. The impact on the Australian health care system is potentially fundamental as GPs (practices) may choose not to participate, or may reduce the number of cardholders or the proportion of patients who are bulk-billed, thus increasing patient co-payments. Moreover, the proposal to allow private health insurance to cover co-payments increases the likelihood that controls on fee increases will be loosened, thus increasing overall health care costs and the burden of costs borne by patients.

Political and economic background

The stated aim of the policy proposal is to build on the government's committment to the universality of Medicare by making a range of medical services more affordable, particularly those delivered through general practice and by increasing the size of the medical workforce.

However, the immediate impetus for the policy was a fall in the rate of bulk-billing* which was portrayed by some commentators as a "crisis" which was unfairly disadvantaging those living in outer metropolitan or rural areas and those members of the population entitled to a health care concession card.

*note: the "rate of bulk-billing" is a key figure in the debate about Medicare, and is much cited by politicians, journalists, and campaigners on all sides of the debate.  Most usually, it is the proportion of all Medicare-rebated services that are directly billed to Medicare, at a national level (although rates for States, Territories or other smaller jurisdictions are sometimes reported).  It is not, in other words, the proportion of consultations that are bulk-billed, or the proportion of GPs who bulk-bill.  Also, the services of a wide range of other (non-GP) health professionals are included.  In the financial year 2001/02 the bulk-billing rate for GPs was 74.1%. 

Purpose and process analysis

Current Process Stages

	Idee	Pilotprojekt	Strategiepapier	Gesetzgebung	Umsetzung	Evaluation	Veränderung/Richtungswechsel
Implemented in this survey?

Origins of health policy idea

The ideas have been generated by the Government and formally set out in proposed legislation. It has been opposed by the Opposition and alternative measures have been floated. The Senate (the upper house in the Australian parliament) has conducted an inquiry (report due out late October 2003) and has received a number of submissions and commissioned a number of reports into the proposed policy.

The policy is aimed at amending the current Medicare legislation and represents the first major change to the structure of Medicare since it was first introduced in 1984.

Some commentators have claimed that the legislation represents the government's desire to undermine Medicare, the universal health insurance system, through the mechanism of privatisation.  This has been challenged on the grounds that private systems are more expensive than public ones and are more likely to result in uncontrolled health care costs (Gray 2003).

Others claim that Medicare requires re-engineering as the current system cannot cope with the challenges of new technology, ageing population and rising expectations. In particular, they want to see:

• Removal of better-off groups access to publicly financed services;
• Higher household responsibility for health care costs
• Keeping private health insurance affordable through maintenance of the universal tax-payer subsidy for the private sector, specifically through private health insurance, and probably at a higher rate than the current 30%;
• Growth in the scope of services covered by private health insurance but not accompanied by constraints on utilisation or choice of provider;
• Growth in the private hospital sector at the expense of the public sector;
• More consumer choice about treatment and providers, hand in hand with higher individual payments;
• Removal or reduction of no gap policies so as to maintain consumer co-payments;
• Increases in the age related penalty for health insurance premiums;
• Transferable Medicare entitlements, presumably a voucher for the rebate plus value of Medicare provided services which can be spent in the private sector;
• The development of medical savings accounts, presumably the earmarking of household savings to meet the health care costs of their elderly members (Access Economics, 2002).

Many of these suggestions appear to have been taken up by the governement in the proposed legislation. However, these suggestions have been attacked as arguments for the development of a multi-tiered health system in which the poor will be provided with publicly financed treatment, while all others will receive publicly financed subsidies for privately provided care which they can 'top up' according to their means. Such suggestions have been labelled inequitable and divisive in community terms. Thus, overall, the proposed legislation has been very controversial and has generated a great deal of debate and confusion.

Approach of idea

The approach of the idea is described as:
amended: Medicare legislation, 1984

Stakeholder positions

The Opposition parties in the parliament opposed the proposed changes. Provider groups have been divided over its effects on GPs' and patients' behaviour and thus the issues of access and affordability. The health care consumer's lobby has opposed it.

The legislation has been introduced to parliament but has been stalled because the Senate has voiced concerns about it. Subsequently, the Senate convened an inquiry and the Government has indicated that it may be willing to consider some modifications to the policy to enable it to pass through the Senate.

The former Minister for Health, Senator Kay Patterson, had initial leadership for the proposals but often, the Prime Minister, John Howard, commented on it. The new Minister, Tony Abbott, has taken over the leadership role since he was appointed in September 2003.

The opposition parties in the Senate combined to force an inquiry.

Influences in policy making and legislation

The original legislation proposed by the government has been scrutinised by a Senate inquiry to which any individual or organisation can make a submission. Submissions are also invited from experts and analyses of various aspects of the proposal can be commissioned. Hearings are held in every capital city of Australia and a report is prepared.

Many potential modifications to the original proposal have been proposed and the Government has indicated that it may be prepared to consider some of these in the interests of having the legislation passed.

Adoption and implementation

The Senate's support will be crucial in having the legislation passed - thus the Opposition parties and those who hold the balance of power in the Senate are influential here.

Once the legislation is passed, the Federal Department of Health and Ageing will have the major responsibility for putting it into action. If the policy is implemented without major changes, the Health Insurance Commission, which oversees the reporting requirements regarding doctors' activity and their reimbursement will need to make changes to some of its systems.

However, it remains to be seen how the changed incentives will affect GPs', other providers' and consumers' behaviour overall.

Monitoring and evaluation

As yet, no mechanism or funding have been proposed to enable the changes to be evaluated. However, the objectives as set out will enable an evaluation to be undertaken.

Review mechanisms

keine Angaben

Expected outcome

Although there are multiple aspects to the proposal, the main issue is the GP access incentive payment which represents almost 60% of the estimated cost of the package over 4 years. Thus, the impact of the proposal on affordability and equity depends on how GPs respond to the changed incentives introduced by the package (and whole practices must choose to adopt the package). This, in turn depends on the way they currently charge patients and their location. GPs may decide whether to participate in the scheme by comparing their current income level with the highest possible income option arising from participation. Savage (2003) has analysed the likely effects on payment incentives for GPs, assuming that GPs adopt a 2-stage decision making process - first, which charging option will maximise their income if they choose to participate, and second, how does this income compare with their current income. The analysis suggests that the package will have little impact on the rate of bulk-billing of GP visits by concession card holders. The incentive payments are likely to have no positive impact on cardholders in metropolitan areas (75% of visits) and a small positive effect in rural and remote areas where cardholders are charged above the Medicare fee (2.3% visits).

Impact of this policy

Qualität	kaum Einfluss		starker Einfluss
Gerechtigkeit	System weniger gerecht		System gerechter
Kosteneffizienz	sehr gering		sehr hoch

It is not possible to say what the effect of the proposed policy on health care quality might be and it is likely that the major effect will be on equity of access. Although it is likely that there will be a small positive effect on the rate of bulk-billing in rural and remote areas where cardholders are currently charged above the Medicare rebate fee, the unknown (and potentially far greater) impact may fall on cardholders and non-cardholders who are currently bulk-billed. Rather than increasing the Medicare rebate, which would have an equal impact on all taxpayers, the proposed changes will fund salary increases for GPs largely through out-of-pocket costs to both cardholders and non-cardholders. Removal of controls on fee increases means that the overall cost of the health care system is likely to increase without any concurrent improvement in effectiveness, thus not improving the overall efficiency of the system.

References

Sources of Information

www.health.gov.au/fairermedicare

Savage, E. Equity, payment incentives and cost control in Medicare: An assessment of the government's proposals. Accepted for publication, Health Sociology Review.

Australian Institute for Primary Care. An analysis of the potential inflationary effects on health care costs for consumers associated with the Goivernment's "A Fairer Medicare" and Opposition proposal.

Gwen Gray. Undermining Medicare: steadily, relentlessly, effectively. Australian Policy Online. www.apo.org.au/webboard/items/00283.shtml Accessed 5/5/2003.

Elliot A. The decline in bulk-billing: explanations and implications. Current Issues Brief no.3-2003-2003. www.aph.gov.au/library/pubs/CIB/2002-03/03CIB03.htm Accessed  28/4/2003

Access Economics. Striking a balance: access and affordability in Australian health care. Report for the Australian government, 2002.

Australian Consumers' Association. Submission to the Senate Committee on Medicare. June 2003. (submission number 72) downloadable from the Senate Select Committee on Medicare's website: http://www.aph.gov.au/Senate/committee/medicare_ctte/

Reform formerly reported in

General Practitioners Remuneration Process Stages: Idee

Author/s and/or contributors to this survey

Marion Haas, Rob Anderson, Jane Hall, Elizabeth Savage

Empfohlene Zitierweise für diesen Online-Artikel:

Marion Haas, Rob Anderson, Jane Hall, Elizabeth Savage. "GP Remuneration". Health Policy Monitor, October 2003. Available at http://www.hpm.org/survey/au/a2/6