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23 Feb 2016

Pathology and diagnostic imaging providers have vowed to flex their political muscle as part of an election-year campaign to force the Federal Government to dump controversial cuts to bulk billing incentives.

In a stark warning to Government MPs, pathology and diagnostic imaging groups have vowed to mount a vigorous campaign over last December’s decision to save $650 million by axing the bulk billing incentive for pathology services and reducing it for diagnostic scans.

Emphasising their political impact, industry leaders said there were about 5000 pathology collection centres around the country that were used regularly by millions of Australians.

Sonic Healthcare Chief Executive Colin Goldschmidt told Fairfax Media that his company alone had around 2000 collection centres.

“We reach something like 1 million to 2 million patients per month through those collection centres,” Mr Goldschmidt said. “We have access to a lot of people.”

The Government’s cuts have particularly angered pathology providers, who have not had an increase in the Medicare rebate for their services in 17 years.

Primary Health Care Chief Executive Peter Gregg said the decision was “ludicrous” because it would force providers to begin charging a co-payment, which would in turn deter some patients – including those with chronic conditions such as diabetes – from being tested as regularly, resulting in more serious and expensive health problems later on.

Mr Gregg told The Australian pathology services could not absorb any more Government cuts without changing their business model, and said Primary, which operates 71 medical centres, more than 2000 collection centres and 168 radiology clinics, had begun trials of co-payments for some pathology and diagnostic imaging tests to gauge their effect on demand.

Mr Goldschmidt said Sonic currently bulk billed 98 per cent of its services and, although it had not yet moved to introduce more co-payments, “we are tending in that direction”.

But both executives insisted their preferred option was to block the bulk billing incentive cuts altogether.

The change was announced by the Government in its Mid Year Economic and Fiscal Outlook. Health Minister Sussan Ley argued the incentive, worth between $1.40 and $3.40, had done little to boost bulk billing rates, and had instead served to plump up the bottom line of providers like Primary and Sonic.

She said the companies could comfortably absorb the cut.

But AMA President Professor Brian Owler said the Government’s real intent was to introduce a co-payment “by stealth” by forcing pathology and diagnostic imaging providers charge out-of-pocket expenses for their services.

“It’s very clear that to be viable, that if these bulk billing incentives are taken away, then of course they’re going to have to pass those fees onto patients,” Professor Owler said. “That’s what this strategy is all about. It’s about the Government saying ‘no, we’re not paying any more; we’re going to make the provider charge you a fee’.”

The AMA President said the likely fee providers would have to charge would be considerably more than the incentive, because providers would have to introduce and operate billing systems, chase up bad debts, make provisions for losses and other additional tasks.

“They’ve got to actually introduce a whole new system to enable this to work, so of course they’re going to start to charge more. They’re not going to charge one of three dollars; it’s going to be much more than that,” he said.

Adding to the pressure on Government MPs, the ACTU has revealed it will mount campaign involving doorknocking and targeted advertising in Coalition marginal seats.

The campaign has been triggered by the cuts to bulk billing incentives and the Government’s plan to outsource the Medicare payments system to the private sector.

Adrian Rollins

Published: 23 Feb 2016