The Australian Medical Association Limited and state AMA entities comply with the Privacy Act 1988. Please refer to the AMA Privacy Policy to understand our commitment to you and information on how we store and protect your data.



03 Nov 2015

Doctors and health organisations have demanded that fee-for-service must be retained as part of any overhaul of doctor payment arrangements amid concerns that other models of remuneration could create perverse incentives that would undermine patient health.

In a fillip for advocates who argue for a change in the way doctors are paid, a self-selected online survey of 995 individuals and organisations conducted by the Federal Government’s Primary Health Care Advisory Group found general support for a blended payment model that incorporated elements of fee-for-service, capitated payments and pay-for-performance.

But those surveyed cautioned that great care would need to be taken in designing a new payments system so as to avoid pitfalls and perverse incentives, such as the potential for doctors to focus only on activities that were rewarded, to cherry pick healthier patients rather than taking on those with chronic and complex conditions, to encounter greater red tape, and to subject practitioners to inappropriate criteria.

“There is support for a blended payment mechanism which recognises and caters for different complexities and levels of care needed,” the Group said in a communique reporting on the results of the survey.

“Within such an approach, there should be elements of care provision…where fee-for-service would remain an effective option. Payment mechanisms should also support ongoing engagement across the sector and disciplines to deliver better outcomes.

“Care should be taken as to not create perverse incentives, and concerns were raised about the risk of cherry-picking of patients in an enrolment model,” the communique said.

Earlier this year, the Advisory Group – chaired by immediate-past AMA President Dr Steve Hambleton – issued a discussion paper that canvassed a range of reforms to primary care, including methods of remuneration.

The Group said that while the fee-for-service model worked well in the majority of instances, it did not provide incentives for the efficient management of patients who required ongoing care.

Instead, it suggested alternatives included capitated payments, where GPs, health teams, practices or a Primary Health Network receive a set amount to provide specified services over a given period of time; or pay-for-performance, where remuneration is tied to the achievement of particular care outcomes; or some combination of all three.

The discussion paper also suggested changes to how care was organised and managed, including the creation of medical homes, GP-led team-based care, improved use of technology and upgraded techniques to monitor and evaluate care.

Not just fees

Regarding the creation of a health care home model of care, the survey showed strong support for the voluntary enrolment of patients with chronic and complex health conditions, though this was qualified subject to clarification of the mechanisms used to enrol patients, and the impact of enrolment, particularly on the patient’s ability to choose their doctor.

On the use of technology, the survey found there was, according to the Advisory Group, “general support” for the MyHealth Record system and the opt-out model of enrolment – something the Government is yet to settle upon.

The survey showed there was also general acceptance of reporting patient outcomes and general health status at the aggregate level, though any reporting system would need to take into account the different ‘starting points’ of patients, the effect of their own behaviour on treatment outcomes and the limits on improvement arising from social, economic and lifestyle factors.

The AMA has supported discussion about alternative remuneration models, including arrangements that would appropriately fund patient-centred and GP-led comprehensive, quality and coordinated care.

AMA Council of General Practice Chair Dr Brian Morton said recently that the Department of Veterans’ Affairs’ Coordinated Veterans’ Care program provided a one possible model.

“This program supports GPs and the general practice team to proactively manage and coordinate primary and community care for Gold Card holders most at risk of an avoidable hospitalisation,” Dr Morton said.

Last year Dr Hambleton, while still AMA President, said that although there were shortcomings with the fee-for-service system, the risks of performance payment arrangements could not be ignored.

Dr Hambleton said there was already an imbalance in the existing rebate system that rewarded high patient turnover rather than extended consultations and team-based care, and warned any pay-for-performance system would need safeguards to ensure the quality of care was enhanced rather than undermined.

At the time, he said it should be a supplement to fee-for-service payments, align with clinical practice, be indexed, encourage appropriate clinical and preventive health care services and minimise administrative burden.

Current AMA President Professor Brian Owler said any change to GP remuneration must include increased Government investment and resources.

Professor Owler said the ongoing freeze on Medicare rebates, in particular, was putting primary health providers under intense financial pressure.

The Primary Health Care Advisory Group is due to present its final report to the Government by the end of the year.

Adrian Rollins


Published: 03 Nov 2015