Dr Hambleton, 6PR Interview, Budget and Medicare Benefit Scheme

Subject: Budget and Medicare Benefit Scheme

PAUL MURRAY:      It's been non-stop bad economic news for more than a week now, as the Gillard Government cleared the decks ahead of this afternoon's Federal Budget. Promised tax cuts have gone down the drain, a promised increase in family benefits vanished. Yesterday $3 billion got ripped out of the foreign aid budget, and it's become obvious that a spirited campaign within Labor itself to get a much-needed increase in the dole has failed. So you'd be forgiven for thinking that some good news was about to arrive now that all the nasties have become old news.

Well, not so. The bad news continues this morning with the disclosure on page one of The Australian newspaper that Medicare refunds for GPs' visits will be frozen in the Budget to help pay for the Gillard Government's DisabilityCare scheme. The Australian is reporting that the indexed Medicare payments to doctors will be capped at a maximum of $36 a visit. While that would save the Government money that it can use for the disability scheme, it may have some nasty consequences. Obviously the Government's intention is that doctors will absorb any further increases in their charges or else patients are going to face higher out of pocket expenses for each visit.

I'm joined now by the national president of the Australian Medical Association, Dr Steve Hambleton. Good morning Steve.

STEVE HAMBLETON:       Good morning.

PAUL MURRAY:      Steve, has the AMA been consulted about what The Australian says is - this change to the Medicare benefit scheme?

STEVE HAMBLETON:       No, we certainly haven't and in fact it's been a sort of a rumour that's growing in strength and of course now on the front page of the newspaper. It is very concerning. It comes one day after reported the highest bulk billing rates for general practice services in history, and to freeze the rebates at this point is inevitably going to wind that back.

PAUL MURRAY:      The suggestion in that story in The Australian today, is that the rebate would be frozen for four years. They're talking about a saving of $1.5 billion over four years. They would only get that if it was frozen for four years.

STEVE HAMBLETON:       Well, that's quite right and of course that means that every man, woman and child's access to medical services right across the country is going to be reduced, and I guess progressively reduced over time.

Look, we were - AMA was one of the first groups that came out immediately to support a rise in the Medicare levy to actually partly fund the NDIS. It's something we've been trying to deliver for a long time but we certainly had no intention of supporting a reduction in access to every patient in the country to their family doctor or their specialist.

PAUL MURRAY:      The rebate on a standard GP visit is what, $36.30 now?

STEVE HAMBLETON:       That's correct, yes.

PAUL MURRAY:      Okay, and it would clearly - from what The Australiansaying, it would be pegged at that for some stage. I went and had a look at what a privately-billed standard consult fee is at the moment. I went to the Medicare local GP clinic here in Perth, they're saying that their standard consult fee is $55.60. Is that about a fair price for a visit?

STEVE HAMBLETON:       Well, actually the AMA rate is a little more than that. So there's two issues here. One is the GPs across the board in the main are trying to keep their prices down and maximise access to their patients. In that practice you're talking about even if they're charging a gap, they're still trying to keep their fees down because the AMA rate's another $20 on top of that.

PAUL MURRAY:      Yeah, that suggests doctors are absorbing about $20 from what would be a fair price for a standard GP visit.

STEVE HAMBLETON:       Well, that's what we say and of course we want to maintain that quality care that we get from our family doctors, and one of those things is spending time with your doctor. So the longer you spend we know from the BEACH data that more conditions are covered and more services are delivered at the same time. And so this is a perverse driver to shorten consultations, which means you can't cover as many visits which means you really do get decreased access.

Now, GPs have responded to this pressure on price by actually gathering together and getting together in larger groups and decreasing overheads. But every year that - we have nursing wages that go up, staff wages that go up and rent that goes up and that's why the AMA rate - when we look at it we say well on average we think that this is what it costs to deliver a quality service. And if you can produce a more efficient service, we recognise that and GPs are free to charge what they want. But if the rebates of patients is reduced, inevitably that will grow gaps.

PAUL MURRAY:      Steve, the indexation of the Medicare benefits scheme rebate to doctors for a GP visit, how often is it indexed?

STEVE HAMBLETON:       It's usually indexed in November every year. I guess the AMA does the same thing. We look at the input costs to providing the services and adjust it in November of every year.

PAUL MURRAY:      And what sort of rise would you get in a fee each year?

STEVE HAMBLETON:       Well, the Government since 1975, since Medicare started has not increased the rebates as high as average wages or indeed inflation. So they've always lagged behind, and about a decade ago there were a number of years where either half of the inflation rate was added to the Medicare rebate or none at all.

PAUL MURRAY:      So I'm just trying to work out in dollar terms what doctors might be asked to absorb here over four years.

STEVE HAMBLETON:       Well, every year it's probably somewhere in the range of $2 or so - $1.50 to $2 a visit. So over four years it's about $8. You would expect that the Medicare rebates might go up.

PAUL MURRAY:      Okay, so the question here is do doctors have the ability to absorb that?

STEVE HAMBLETON:       Well, I think frankly they don't. I think that that's why we know that when it's happened before that there will be a increase in the gap that patients pay. I mean, we do now know that we've got bulk billing rates at the highest level, which guarantees access to GPs. That will turn around and it got down as low as 60 per cent when this sort of approach was taken before. And you know, we have to say we support the NDIS, we supported the increase in Medicare levy which means every single person who pays tax pays more and those earning more pay more to NDIS. But to take rebates away from every man, woman and child in the country just seems robbing Peter to pay Paul.

PAUL MURRAY:      Eight dollars over four years. What sort of pressure is that going to put on bulk billing clinics?

STEVE HAMBLETON:       Well, it will put enormous pressure on. You know, we've said it before you either - you've got three choices. You either go faster, you either withdraw the service altogether or you maintain the quality of service and you charge a fair fee and I sadly think that's the most likely outcome that doctors will actually maintain quality but that must mean the fees will rise, therefore the gaps will rise and those rebates won't be sufficient.

PAUL MURRAY:      So you'll see some bulk billing clinics just turn up their toes and say sorry, we're going to have to charge a fee here?

STEVE HAMBLETON:       Well, we can no longer offer the services at that bulk bill rate, so they will almost certainly need to charge some sort of gap, yes.

PAUL MURRAY:      There's a real irony here, isn't it, that we're all going to be paying extra on our Medicare levy, but we're actually going to end up maybe paying a bigger gap or losing our bulk billing clinic in our own area?

STEVE HAMBLETON:       Well, that's absolutely certain. I think certainly if it doesn't happen in the first year, progressively the cost of providing that quality service and the income to actually facilitate that will change, and services that GPs are offering may contact as well. I mean, we have three nurses on at my surgery at any one time, and we've got a large number of doctors in an official environment, but the nurses may end up not working there. It may actually be medical assistants, not nurses. It - there will be, has to be, cost cutting measures if the income is reduced.

PAUL MURRAY:      Just one last thing here, there is also a suggestion on the story in The Australian today of another nasty potentially, in terms of Medicare, which I didn't understand. It says at one stage that it's understood the Government wants doctors to absorb the extra cost of the rebates and will also target high-use Medicare categories. What does that mean?

STEVE HAMBLETON:       Well, I do... I'm not quite sure what they mean. I mean, if a service is being offered that's providing quality and the patient's getting some benefit, I don't understand why government want to - would want to interfere with that, but certainly the other strong suggestion we've had is the Government will look at areas that - where they're spending a lot of money, and the implication is they think that's wrong.

Sometimes when you look at these areas, you actually realise despite the fact that we're spending a fair bit of money in this area, we should be spending more, and it just seems that our target should be quality care for patients. It shouldn't be looking at opportunities for saving money, because spending money now, in a quality sense, will save money later. Helping GPs do their job, keep people out of hospital, help them with their diabetes and their chronic disease, is a good investment and it saves money from the future. And cutting back money in primary healthcare is simply going to shift costs in a few years to the secondary system, and we know how much pressure our hospitals are under now.

PAUL MURRAY:      Yeah. I just wonder whether this way of funding the DisabilityCare program is, effectively, robbing Peter to pay Paul again.

STEVE HAMBLETON:       Well, I think it certainly is. Look, the Productivity Commission said this should be coming out of general revenue, it should be a broad base. That's why the AMA came out straight away and said, look, the increase in Medicare levy is a way of increasing revenue.

Everyone in Australia either knows somebody with a disability or has someone in the family with a disability. We know it's a large problem. We want to support that. We want the right funding systems to be in place to support it, but we don't want to actually unwind the benefits of our quality health system and access to quality services at the same time.

PAUL MURRAY:      Good to talk to you. Thanks Steve.

STEVE HAMBLETON:       Thank you very much.

PAUL MURRAY:      Steve Hambleton, national president of the AMA. Bit of a pattern emerging here. They're planning to - you might remember, they're planning to fund Gonski by ripping money out of the universities, so they rip money out of the university education to boost up the funding in primary and secondary education. That was robbing Peter to pay Paul.

Here we see another way that they intend to fund the National Disability Insurance Scheme is to actually lump extra costs onto the medical scheme, onto the GP scheme, and of course, if it does mean higher out-of-pocket charges to people visiting their GP, people won't appreciate that much, given that they're already going to be paying 1.5 percentage points - sorry, 0.5 percentage point higher on their Medicare levy then, of course, people won't also appreciate it if the local bulk billing GP clinic says we can't afford to bulk bill anymore, our costs are going up, and the amount that we get back is being capped here at $36. We can't afford to do that anymore.

So this does appear to be a revenue-strapped government that's preparing to shift its costs all around the place.

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