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Changing lanes – making the leap from bulk billing

In 1999 my practice partner and I came to the difficult realisation that continuing to bulk bill everyone was no longer financially sustainable. Three years earlier we had taken over a practice in Bassendean from two very senior clinicians who had bulk billed everyone. Unsurprisingly, this had created an expectation among many patients that this was the way it should always be.

05 Nov 2012

In 1999 my practice partner and I came to the difficult realisation that continuing to bulk bill everyone was no longer financially sustainable.

Three years earlier we had taken over a practice in Bassendean from two very senior clinicians who had bulk billed everyone. Unsurprisingly, this had created an expectation among many patients that this was the way it should always be.

But this was unsustainable for a host of reasons that likely resonate with most practitioners:

  • practice costs were rising (as they continue to do) by between 4 and 6 per cent a year.

At the time, we had purchased new premises and had undertaken a massive fit-out, complete with a new IT system, updated plant and equipment and more staff - including a full-time practice nurse (this was before the Practice Incentives Program began). For the practice, it was full steam ahead;

  • workload issues: the complexity of conditions our patients were presenting with meant that realistically we could only see four patients an hour. It is simply impossible to deal with multiple co-morbidities or presentations in 10 minutes;
  • government rebates: The growing inadequacy of the Medicare rebate meant that we as GPs were increasingly subsidising the health care of our patients. There were many patients who had a capacity to pay, even if a little. Consumers have to pay everywhere else in life including at the chemist and supermarkets. Nowhere else in life do people get regular, massive discounting at point of delivery for a regular, repeated service – not at Coles, petrol stations or other utility services. It is the government’s role to subsidise health care not general practitioners;
  • morale: The increasingly inadequate bulk bill rate added to the feeling that the service we were offering was undervalued, which was demoralising and would build resentment; and
  • self-respect: It had begun to gall me no end as patients wielding concession cards arrived in their Mercedes to get their medicines and vaccinations for an extended Asian trip. I admit I lost a few layers of enamel gnashing my teeth over that, one Saturday morning.

 I could go on. But more importantly, what did we, and what can you, do about it? What must change? And what plans and steps can you, and should you, take?

The first thing to do is to value yourself, first and foremost – your thinking has to change.

Acknowledge that unless bulk billing rates decline, the Government has no evidence that the current rebate is inadequate in covering the cost of service.

You will discover that as you increase private billing, you will maintain - or likely increase - your income, without having to work as hard as you currently do.      

Remember, when demand is so strong, it is a seller’s market.

People will allow you to bulk bill them as long as you let them be bulk billed.

What we found is that people will stay if they value you. They will adapt.

So, how do you make the change?

Here are suggested steps for how to get there including, importantly, the “who” and the “when”.

Your staff are pivotal, and so is practice communication. Have planning meetings.

  • Set a date, for example 1 November, when the MBS is adjusted annually. And stick to it;
  • you must publicise your change in fee structure widely in the practice. Be clear. Staff members are essential for sticking to the agreed fee by “the practice” as a whole. Your staff must advise patients verbally, distribute information sheets and put information in Practice Information Sheets as part of Informed Consent;
  • hold regular practice discussions and meetings to make sure there is universal agreement. No one breaks ranks – except in exceptional circumstances;
  • have clear billing tiers. For instance, specify private fee WITH a predictable gap over the Medicare Rebate for each item of Level A, B, C, and D.
  • effectively, you need to move to means testing at point of service. In this case:
    • full “private” patients may, for instance, pay the new agreed practice fee for any level of consultation or service;
    •  categorise those patients who you wish to NOT bulk bill as “discounted” patients. Advise them of the discount to “make them feel valued”. For instance, your staff could say: “The doctor’s charge is usually $xx, but he has discounted the fee by $yy”;
    • you may well elect to continue to bulk bill pensioners and HCC holders if you wish (especially if you get the larger 10991 Bulk Bill incentive payment), or charge a known predictable gap over the Item No with the 10990/10991 added on; eg $50 for a Item 23 (the patient will be only about $10 or so out of pocket).

Ultimately, the secret is the effective use of your staff. And for those practices that are computerised (which most are), the use of IT is essential. For instance, use Medicare On-Line or Tyro to ensure patients have their rebate “almost all back within 36 hours”. They will barely miss it and be grateful for the quality service, the after-care and attention to detail.

Dr Steve Wilson is the Chair of the AMA (WA) Council of General Practice.


Published: 05 Nov 2012