Government admits it cannot afford to pay for Medicare

Dr Phelps said today's announcements represent a seismic shift in Medicare philosophy: Medicare is no longer the lynchpin in covering out-of-hospital medical expenses in Australia - it has shifted to being a partial contributor. Targeted funding for particular groups is replacing the universal approach.

"Unfortunately there has not been a seismic shift in funding," Dr Phelps said.

"Out of an annual Federal Health Budget of around $30 billion, this package amounts to less than $250 million a year.

"The initiatives to improve access to general practice total $381.5 million over four years, which translates across-the-board to an increase of just $1 per consultation for GPs. When the Relative Value Study (RVS) puts the real cost of the shortfall at $25, there is little overall incentive to revive general practice.

"Individual GPs are going to have to make some very important economic decisions about their practices based on one very simple question: will this package restore my practice to commercial viability?

"Some practices will sign up to this package out of desperation and determination not to let their patients down.

"Some patients will notice no difference if they are bulk billed or privately billed.

"Patients without health care concession cards will find their GP will be increasingly reluctant to continue to bulk bill them.

"The safety net will be welcomed by card holders whose GPs do not bulk bill. Also, the private health insurance option has the potential to assist many families.

"The people most at risk out of this package will be individuals and families without concession cards who have chronic illness or a number of kids prone to illness - the working poor.

"These people will fall through the cracks - unless their doctors continue to support them."

Dr Phelps said the package has failed to address the fundamental problems affecting the attractiveness of general practice as a medical specialty.

"While we welcome the increases in medical school places and more training places for GP registrars, it may well be a case of too little, too late. The 'bonding' of medical school places is a draconian measure from a bygone era that will deter young doctors from general practice.

"There were only 600 applicants for GP training places last year. The inadequacies of this package will further devalue the specialty among students and young doctors."

Dr Phelps said the $3 increase to doctors under the Local Medical Officers (LMO) scheme for veterans is inadequate. The AMA had lobbied for a $5 increase.

"The increase may keep doctors in the scheme, but is unlikely to attract back the many who have left," Dr Phelps said.

"There should have been a $5 increase out of respect for our veterans and their special health needs."

Dr Phelps said the package locks in the declining trend in the real value of the Medicare rebate and, over time, will shift a greater share of the health burden onto doctors and their patients.

"While the AMA welcomes a return by Government to the important domestic health policy debate, it is a shame that the substance of this Medicare package does not measure up to the full extent of the problems," Dr Phelps said.

CONTACT: John Flannery (02) 6270 5477 / (0419) 494 761

Judith Tokley (02) 6270 5471 / (0408) 824 306