Medical expenses a small part of total out of pocket costs for health care

AMA President, Dr Steve Hambleton, said today that out of pocket
expenses for health care is a serious and sensitive issue for
Australian families that deserves a factual and credible debate, not
rhetoric and misinformation.

“Out of pocket costs are a reality in health care, primarily because
the Medicare Benefits Schedule (MBS) fees, and therefore rebates, have
fallen well behind the true cost of providing quality health services
to the Australian community,” Dr Hambleton said.

“OECD data show that in countries where Governments make high
contributions to health expenditure – the Netherlands and the United
Kingdom, for example – the out of pocket costs are lower.

“But successive Australian Governments have failed to properly index
the MBS.  Because annual indexation of the MBS is lower than the CPI
and the Labour Price Index, the Government contribution for medical
services is reduced over time and patient gap payments grow.

“And private health insurers make their own decisions about the amount
of benefits they pay for medical services.

“Even taking this into account, the average out of pocket expenses for
medical services is $125 a year, which is 11.5 per cent of the $1082
average out of pocket expenses per person per year.

“This means that patients’ out of pocket costs for medical expenses
are just 2.2 per cent of the total $5502 average recurrent health
expenditure per person per year.

“This is low when compared to ‘other medications’ which accounts for
$357 – or 33 per cent – of the $1082 average out of pocket expenses
per person per year.

“Out of pocket expenses for dental services declined over the reported
period, but still accounted for $203 of the $1082 yearly average.

“It is clear that medical expenses are a small part of total out of
pocket expenses experienced by Australian patients, yet the Consumers
Health Forum (CHF) is today inferring that medical expenses are the
major cause.

“They are wrong.

“CHF CEO, Carol Bennett, claimed in her organisation’s magazine that
‘… the growing gap between Medicare schedule fees and what health
providers charge consumers is creating a two tier system in Australia
…’.

“Ms Bennett also wrote that ‘… our fee for service, throughput system
is clearly not delivering for consumers.  It is time we started
seriously considering alternatives that reward health outcomes, and
that focus more needs of consumers than the needs of those providing
services.’

“This is a blatant attack on doctors by the CHF, and follows criticism
from the CHF that the AMA was asked to present the first question of
the health debate on last week’s Q&A program on the ABC.

“We agree that out of pocket costs for overall health care are a
concern, and we acknowledge that some patients – especially those with
multiple, complex and chronic conditions – are doing it tough, but the
solution lies in fixing the system, not attacking the hardworking
professionals who provide quality health care.

“Patients understand that doctors have to meet all their costs,
including paying their staff, from the single fee they charge
patients.

“Going into an election, we need a mature policy debate around a
properly indexed MBS and improved safety nets that do not let people
fall into hardship because of their health conditions,” Dr Hambleton
said.

The facts:

88.5 per cent of privately insured medical services have no gap payment; and
80 per cent of unreferred GP consultations in 2011-12 were bulk billed
with no out of pocket costs for patients.