The cost of freezing general practice

Area of Science:

• Health economics
• General practice policy analysis
• Medical economics

Background:

• Australian government proposed two policies affecting general practitioners (GPs): a Medicare schedule fee indexation freeze and a $5 rebate reduction (since retracted).
• These policies aimed to influence GP income and patient copayments.

Purpose of the Study:

• To assess the financial impact of proposed Australian government policies on general practitioners' (GPs) income.
• To determine the necessary copayment amount for GPs to recover income lost due to these policies.

Main Methods:

• Analysis of data from the Bettering the Evaluation and Care of Health (BEACH) program, a national study of GP activity in Australia.
• Utilized data from April 2013 to March 2014 on direct patient-GP encounters eligible for Medicare Benefits Schedule or Department of Veterans' Affairs general practice consultation items.
• Calculated reductions in GP rebate income and the corresponding copayment required to address these losses.

Main Results:

• The retracted $5 rebate reduction would have decreased GP income by $219.53 per 100 consultations, requiring a $4.81 copayment.
• The Medicare fee freeze alone was projected to cost GPs $384.32 per 100 consultations (in 2017-18 dollars), necessitating an $8.43 copayment.
• Combined policies would have resulted in an estimated $603.85 loss per 100 encounters (11.2% reduction), with copayments rising to $12-$15 by 2017-18.

Conclusions:

• Both proposed policies combined would have required GPs to charge significantly higher copayments than the initially suggested $5 for non-concessional patients.
• The Medicare fee freeze's financial impact is substantial and increases over time, projected to be nearly double the retracted rebate reduction by 2017-18.
• The ongoing Medicare fee freeze may compel GPs, particularly those currently bulk-billing, to introduce copayments for economic reasons.