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What if Medicare was limited to primary care physicians who bulk billed? These kinds of reforms are possible


Australia’s health system is under great pressure. The Labor government has inherited a system of falling bulk billing rates for GP visits. These dropped from almost 90% of all GP visits billed in bulk in December 2021 to just over 80% a year later.

Significant labor shortages remain in rural and remote Australia, despite a series of stimulus programs to improve access to healthcare. In 2021–22 approx 3.5% of the adults did not go to the GP because of the costswith higher percentages of missed care outside metropolitan areas.

Policymakers may have relied on ineffective financial incentives because they believed they could not take stronger actions, such as restricting physicians’ access to discounts in oversupplied areas. However, as we argue in the Revision of federal lawAre these restrictions exaggerated?

This means it would be possible to radically change the Medicare system. One option is to limit access to Medicare to primary care physicians who agree to bulk bill all patients, while those who don’t can rely only on cash payments.

A new Medicare agenda should address the issues of fraud, geographic inequality, and decline in bulk billing. This can be done by conceptualizing access to Medicare rebates by practitioners as a privilege, not a right.

Read more: GPs move away from bulk billing. What does this mean for affordable family medical care?

Why were policy makers restricted?

Health policy in Australia has been constrained for decades by supposed constitutional constraints, which have been finished talking by the medical profession to prevent policies they oppose.

After the Second World War, the Chifley Labor government embarked on a series of social security reforms. Legislation for one element of the reform – a pharmaceutical benefit scheme – was suspended by the Supreme Court because there was no relevant head of power in the constitution.

In response, the government proposed amending the constitution to give it broad social security powers. This proposal received bipartisan support and was passed by referendum in 1946. As a result, a new subsection (xxiiiA) was added to Section 51 of the Constitution, giving the Commonwealth powers to legislate on:

To provide maternity benefits, widow’s pensions, bequests for children, unemployment, pharmaceutical, sickness and hospital benefits, medical and dental services (but not to authorize any form of civic duty), student benefits and family allowances.

The restriction on civic duty in parentheses was included after a change from the Liberal Party. This was motivated by a desire to prevent the creation of a scheme such as the United Kingdom’s National Health Service, which required all general practitioners to work under contract with the government and hospital specialists to be salaried employees.

The supposed constitutional constraint seemed to shape the Labor Party’s thinking about what might be constitutionally possible when designing Medibank, the precursor to Medicare. Despite some members of the caucus supporting a salaried hospital system, this was not pursued.

Current workforce incentives do not fill the gaps.

But in 1980 And 2009, the Supreme Court narrowed the meaning of civil conscription. This meant that the subsection was no longer limiting government power as it once had.

Physicians now work in a variety of settings, not all of which rely entirely on Medicare revenue. So the link between access to Medicare rebates and the ability to work as a doctor is broken. The government can now extend the restrictions it imposes on billing rights without it being considered civil service.

Read more: Labor has a huge health agenda ahead. What policy can we expect?

A bold way to restructure Medicare

It’s time for a complete rethink of how Medicare payment plans are designed and regulated, free from the supposed constitutional constraints.

The recent Independent review of Medicare integrity and compliance emphasized that:

the current state of Medicare, and some of the challenges (…) are a result of previous attempts to apply discrete and Band-Aid solutions to individual problems over time and a lack of systems thinking and attention.

The plaster approach no longer works. A fundamental rethink of Medicare is required, moving away from practitioners’ relatively unrestricted and unrestricted access to reimbursements for service.

Read more: 6 reasons why it’s so hard to go to the doctor

Currently, all specialists — including primary care physicians — can apply for a Medicare provider number, which allows them to receive a discount on their services with few restrictions.

Instead of an “all-comers” approach, a new basis for Medicare could be one where practices sign up for Medicare and agree to comply with Medicare contractual terms, such as an agreement to bulk bill all patients , participation in the training of future health professionals and in quality improvement programs. , and that practices are multidisciplinary. Again, fair compensation should support all of this.

Participating practices may be paid on a variety of bases, including the number and type of patients enrolled, the number of patient visits (enrolled or not), and other payments.

Payment rates should be considered fair by both government and practice.

The doctors arms crossed
At this time, all specialists can request a Medicare provider number.
Pexels/Karolina Grabowska

A participation base for Medicare, moving away from an unrestricted approach, coupled with adequate workforce planning, could also be used to encourage recent graduates to work in locations and specialties that are scarce due to access to specialty discounts at locations with oversupply.

This would also make it easier to manage fraud and overservice through contractual controls, rather than cumbersome administrative processes.

A ‘participating caregiver’ approach would transform the patient experience. Most importantly, the bulk billing lottery would end: practices with a Medicare board would bulk bill all patients, not just some.

There should also be a new deal for doctors, with fair compensation – not at the whim of the government – to end the political freeze on fees under the previous government.

Australia’s Medicare fabric has a lot of holes

While Medicare has served Australia well, it is beginning to fray at the edges with reductions in bulk billing and supplier satisfaction, and geographic shortages.

The old incentive structures have failed to address these issues and new approaches must now be considered, previously considered impossible in part due to perceived constitutional constraints.

What we have shown is that the policy agenda is more open than previously assumed. The time is right to consider these options.

Read more: How do you fix the GP practice? More GPs will not be enough. Here’s what to do

This article was co-authored by Emma Campbell, a former Grattan Institute intern and current LLB/BPPE student at the Australian National University.

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