Doorstop - AMA President, Dr Kerryn Phelps, Sydney. Discussion: Recent statements made by the Prime Minister and the Treasurer on bulk billing

QUESTION: What's the AMA's reaction to the news that we could have a two-tier Medicare bulk billing system?

PHELPS: We currently do have a two-tier system where we have a number of clinics who privately bill, some clinics who bulk bill everybody, but those are in the minority and reducing, and we have quite a lot of clinics who have two-tiering within their own practices where they bulk bill some patients and they privately bill others.

What we've been seeing over recent years is a change in the balance of the numbers of people being bulk billed versus the numbers of people being privately billed and I think that the comments being made by the Prime Minister and the Treasurer over recent days are a timely reminder that the initial meaning of Medicare was not for everyone to get free health care because health care was never free. What it was about was a safety net for people who couldn't afford to pay private billing.

QUESTION: The Opposition, in fact, is claiming it was meant to be a universal system.

PHELPS: I think if you go back to the original Hansard records of 1983 with the Medicare legislation, you'll see that the comments around Medicare by the Labor Government at that time were that the doctors would always retain the discretion to bill privately and that they expected that bulk billing would be available to low income earners and pensioners.

QUESTION: Why the change now, two months ahead of the Budget?

PHELPS: I don't think there is a change now in terms of the intention of Medicare from its outset. I think what we're seeing now is a reaction to declining bulk billing rates and a reminder to the Australian public that Medicare and health care has never been free. Taxpayers have always paid for health care in this country and household budgets pay what Medicare doesn't.

QUESTION: What about from the consumers' point of view, being able to access health care without having to worry about the cost upfront, as it were?

PHELPS: There are some people in our community who can't afford to pay an upfront fee and those are the people who need Medicare as a safety net but if we're looking at the majority of Australians, people who are on average and above average incomes, they don't need that safety net.

QUESTION: They don't?

PHELPS: They can pay a private fee. At the moment the average co-payment is about $12 for a visit to the doctor over and above what Medicare pays and I think for people on average to higher incomes, that is not a problem.

The people who are on fixed and low incomes, people who are, for example, on pensions, who are on very low incomes, those are the people who might have to think twice before they see a doctor, particularly if they've got a number of kids or if they've got a chronic illness. Those are the people that Medicare needs to look after.

QUESTION: What about the people in the middle and upper income brackets who do have unwell relatives and they need to go to the doctor regularly, people with kids with asthma, people who have sick, elderly relatives, those sort of people?

PHELPS: I think we need to really now look at the detail in any plan that comes forward for Medicare as a safety net. Now, should that include people who qualify as having chronic illness who are on low and fixed incomes, who are on pensions. That is a decision that still has to be made by government. We haven't seen the details of any plan but we'd certainly be very interested in seeing that plan when that emerges.

QUESTION: Have you had any talks with the Government at all, at this stage?

PHELPS: The Government is well aware of our position on this. We've been saying for quite some time that bulk billing is declining, it's declining rapidly, it will continue to decline and that there needs to be a response that provides a safety net for the Australian people.

QUESTION: But have you had any discussions with the Government in the past few days?

PHELPS: In the past few days we've not had discussions with the Government. What we have been told is that as soon as there is a plan that they are prepared to show us that they will be having conversations with us about that and I think it's very important that they do because if there is a plan that involves an incentive payment, a practice incentive, more administration, more red tape, then doctors are just going to say no thanks, we'll just keep privately billing.

QUESTION: Do you think it will involve any kind of means testing and, if so, how would that work for the average city GP?

PHELPS: I think we need to work out what is meant by means testing. If that means do we somehow identify the people who are more in need of a safety net, then I don't think that they can actually get around the notion of a means test of some sort. If it means that they are going to fully fund Medicare so that everyone has access at the same level then there won't be any need for means testing. But if there is going to be some way of choosing between some people who will get more in the way of Medicare rebates and others who won't, then they have to be able to decide who those people are.

QUESTION: Dr Phelps, the fact that bulk billing is failing, is this a sign that Medicare has a problem or that the doctors charge too much?

PHELPS: There is absolutely no question where the problem lies and that is a deficient Medicare benefit schedule. We have shown, year after year after year, for the last couple of decades, the Medicare rebate has fallen further and further behind average weekly earnings and the consumer price index. It's fallen even further behind the cost of providing health services to the point now where the Medicare rebate is only worth about a half of the real cost of providing a consultation.

So the issue here is that doctors are not able to provide a heavily discounted service any more to all patients. What they have to do is to discount to an extent people who can't afford to pay the full fee but there are going to be people who have to pay the full fee.

QUESTION: In terms of that fee though, you said the average payment above and beyond the rebate is $12. Most doctors in Sydney and Melbourne are charging $45 to $50 and they're having to pay $20 to $30 out of their own pocket.

PHELPS: That's right because that's what the value of that service is and in order to be able to heavily discount people who are on pensions or who have chronic illness, doctors are charging a private fee for some patients and they are discounting other patients. They may not discount them right down to the bulk billing level because they'd be operating at a loss then.

QUESTION: You've been urging members to abandon Medicare bulk billing, haven't you? I mean, in a recent editorial in Australian Medicine you said that doctors suffering through bulk billing should place a value on their skills and services.

PHELPS: Those two things don't mean the same thing. What I've been saying is that it is time - do you want me to wait until the plane goes?

QUESTION: Time to wait for the plane to go.

PHELPS: Those are two different issues. The first one is that doctors who are going out backwards financially are not going to be able to continue to bulk bill so they must apply appropriate business principles to stay in practice and that means looking at their costs, valuing their services and charging accordingly. If that means that they privately bill some or all of their patients then that is what it means. That is not an incentive to stop bulk billing, that is an incentive to stay in practice.

QUESTION: That's an incentive to have higher fees.

PHELPS: Higher fees is necessary to cover costs. I mean, there are doctors who have, because of their goodwill to the community, because of their social conscience, have actually been suffering themselves financially and having marginal, if any, income from their practices just to be able to keep their doors open, to be able to look after their patients.

Now, we have a workforce crisis in general practice, we either have the doctors who are working in general practice making a reasonable income and covering their costs or we don't and you can't expect doctors to provide the premises, the practice staff, the goods and equipment, the computerisation, the accreditation, the superannuation and everything else that they have to pay for out of that fee. If that fee is a 50% discount, they just can't do it.

QUESTION: How much of the decline in bulk billing has got to do with the increasing ratio between doctors and patients, as the Government is saying?

PHELPS: I think that there is no question that there is a workforce shortage amongst general practitioners and we need to very carefully and strategically look at the numbers of doctors that we need now and into the future.

What we are going to have to do is to have a look at - the point that I should make is that it's not always in the areas where there is an oversupply of doctors where you see high rates of bulk billing. In fact, quite often you have areas with high numbers of disadvantaged patients with low numbers of doctors where you have high levels of bulk billing because the doctors don't want to have to charge patients they perceive can't afford their services. So it doesn't follow market principles in that way.

QUESTION: Won't this just push the strain onto public hospitals? I mean, people who are on middle incomes with two or three children, they're just going to go to public hospitals.

PHELPS: Some people will choose to spend their time waiting in public hospital casualty departments but I don't think that's an appropriate response to this.

What I think is happening now is that the Australian public are being asked to prioritise. They're being asked to look at what they are prepared to pay in terms of health care in order to have a general practitioner to look after the health care of their families.

QUESTION: But you acknowledge that it will push it onto the public hospital system?

PHELPS: I think that there may be some people on marginal incomes who can't find a doctor to bulk bill them because they are not perceived to be low income and not perceived to be pensioners or on concession cards or there's not a doctor who bulk bills in that area. That is the reality of the situation.

QUESTION: Shouldn't some of the rebates go into the public hospital system away from the private doctors?

PHELPS: I think that you don't rob Peter to pay Paul. We have a system where we have a number of elements of the medical system which are under strain. You don't take money away from one part of the system that's under strain to try to prop up another part of the system that's under strain.

The Treasurer's comments in recent weeks that there will be no new money for health in this Budget is completely unacceptable given that we have areas of strain within the health system that need to be addressed.

Now, one of those areas that needs to be addressed is the Medicare benefit schedule, particularly providing a safety net for people on low incomes.

Now, that's the area that needs to be focused upon but I think the days of every Australian expecting to go to the doctor and pay nothing out of their pocket are now well and truly gone.

QUESTION: For years the AMA has been encouraging people to go to the doctor, especially men, elderly men. Won't this discourage people who are on middle and higher incomes from going to the doctor if they know they have to cough up the money to start with?

PHELPS: People who are on middle and higher incomes access all sorts of services and pay for them. If they value preventive care and if they value their health care, then they will see that as a priority and go and see their doctor and I believe that that will continue to be the case, if you're talking about people on middle and high incomes.

I don't believe that a gap of an average of $12 is going to stop someone from going to have a health check that could save their life.

QUESTION: But it's a matter of paying for the doctor upfront first and then claiming it back from Medicare later. That may take days, even weeks for people to do that. It's the initial cost, isn't it?

PHELPS: This is why the AMA has been arguing for some time for co-payment where the whole fee doesn't necessarily have to be paid upfront. What this means is that the patient would be able to electronically claim from Medicare at the doctor's surgery and the co-payment or the amount above that Medicare rebate would be what they pay out-of-pocket.

QUESTION: What's stopping that from happening now?

PHELPS: The Medicare legislation is stopping that from happening now and I think it's something that could easily be revisited but what it means is an acknowledgment that universal bulk billing will not continue and I believe that we have heard that message from the Prime Minister and the Treasurer in the last two days.

QUESTION: What do you argue should be the Medicare rebate?

PHELPS: The AMA was involved in a joint AMA and government study a few years ago called the Relative Value Study. Now, using that economic modelling and just taking one item number which is the standard Level B consultation, that fee should be around about $50. Now, if the Medicare rebate is 85% of that then that's where the Medicare rebate should be, to put an appropriate value on general practice services.

Now, neither the Government nor the Opposition have indicated - neither the Government nor the Opposition have indicated that they are willing to fully fund the Medicare benefit schedule for general practice and so what we are faced with now is people having to pay an increased co-payment to make up the difference between the Medicare rebate of $25 and the real value of that service which is $50.

QUESTION: What's the next step?

PHELPS: We'll be talking to the Government over the coming weeks and as soon as they have a plan that they're prepared to show to us we'll give them some feedback as to whether doctors are prepared to accept it.

One thing I will say is that any plan that is produced by the Government that doesn't have the support of the medical profession is doomed to fail.

Thank you all.

Ends