Speeches and Transcripts

Transcript - doorstop, Medicare freeze campaign

Transcript: Doorstop, Northbridge Medical Practice, Sydney, 15 May 2016

Subject:Launch of AMA campaign against the Medicare patient rebate freeze

#nomedicarefreeze


BRIAN OWLER:

Thanks for coming along everyone this morning. With me I have Dr Brian Morton, the Chair of AMA Council of General Practice, and Dr Stephen Parnis, the vice-president of the AMA. 

Today, we launch a campaign that will run during this election period that will concentrate on the freeze, the Medicare freeze, of course we've had the freeze for almost seven years. It was extended in the 2014 budget, extended back in the end of 2014 and in the last budget we've seen another extension of two years out to 2020. 

Now it is true that many practices have been absorbing the effects of the freeze. But the ongoing freeze has meant that we have reached a tipping point. Practices are realistically not going to be able to absorb the freeze any longer. 

As the costs go up for staff, as many practices with leases have their costs going up as well, then they have to start to pass these costs on to patients. Now as soon as a practice stops bulk billing, they lose the bulk billing incentive for general practice. 

That automatically means that the costs associated with switching to billing means that the patients are going to be out of pocket at least an extra $10, and in most cases, probably more likely to be $20. That is going to hurt, particularly those practices in areas with lower incomes, where there are more children, where there are concentrations of chronic disease because, at the end of the day, the GP in particular is going to have limited discretion in who they can bulk bill. 

Now primary care and general practice is the cornerstone of our excellent healthcare system. We say that over and over and yet we continue to take money out of general practice. If we want to continue the high standards of care, if we want to see our life expectancy increasing, if we want to look seriously at the efficiencies of our healthcare system, about people keeping people well, managing chronic disease, keeping them out of more expensive hospital care, then we've got to invest in quality general practice. 

Now this freeze not only affects general practice, it affects medical care right across the board. It affects specialist care as well, and it can impact on out of pocket expenses and will impact on decisions about when specialists, other specialists, decide to charge a gap. 

Now there are other issues as well about pathology and diagnostic imaging. We’ve seen the changes that were announced in MYEFO last year, we've had the announcement on Friday night during the debate and, as I've said, pathology have reached a deal but it's a very disappointing deal because all it does is really defer the loss or the cut to the bulk billing incentive by another three months. 

So it's a very disappointing start that we're off to in terms of health, in terms of the policies that are on the table. Now during this election, we'll be holding both major parties to account for their healthcare policies. 

We've yet to see Labor announce its healthcare policies, particularly in relation to the freeze, and we've been lobbying both sides of politics about this issue all the way through from 2014, certainly all the way through my time as AMA President. 

It's a really important issue, general practitioners right around the country are angry about this issue. The poster has been requested by many practices around the country and it will be distributed to those practices over the coming days. 

So I think if people are serious, if politicians are serious about this issue they're going to certainly be hearing from their constituents. The poster encourages patients to contact their local MP, to voice their concerns to their MP or to the election candidates and ask them to lobby within their own parties to lift the freeze and to start to invest in a better healthcare future for all Australians. Happy to take questions. 

QUESTION: 

When you talk about up to $20 extra, is that - so that's on top of the existing gap that people are paying?

BRIAN OWLER:

Well many practices of course bulk bill, but as soon as you transition away from bulk billing, it's not going to be one or two dollars because immediately practices lose the $6.15 bulk billing incentive in regional centres so that's over $9. And to actually make it work, you're at least looking at maybe $15-$20. Now many practices, once they start to switch to charging a fee I suspect the amount is going to be a lot more. Now this Medicare freeze not only punishes those patients that rely on bulk billing, the sickest, the poorest, the most vulnerable in our community, it also punishes those people that are already making a contribution to their healthcare. Those people who already pay an out of pocket expense, because for those patients the amount that they get back from the government, their Medicare rebate, will stay the same. And so as costs increase, and as the amount that practices will inevitably charge increases, then their out of pocket expenses will increase as well. 

QUESTION: 

So how common - do you think that GPs and practices that are continuing to bulk bill at the moment will inevitably have to move to a paying system for the patient? 

BRIAN OWLER:

Well some modelling is being done already and they're talking about a 30 per cent reduction in bulk billing rates, I think that's probably conservative.  

We've been contacted now by many practices and in fact, are already preparing material for practices to transition away from bulk billing to assist members in making those sorts of decisions in switching away from bulk billing, so we're yet to see what the effect is going to be.  

But as I said, I think we've reached a real tipping point. Most practices were absorbing the fee or the freeze rather, but now with this extension in the last budget out to 2020, another four years, there's no business, there's no small business that can rely, that relies on that sort of revenue that can sustain those sorts of freezes. So it's inevitable that GPs, if they want to maintain quality general practices, are going to have to pass those costs on to patients and their discretion, particularly in those practices that really serve areas of high needs.

Where there are a lot of sick people, where there are young families, where there are low incomes, those are the practices that are really going to have difficulties in terms of their viability, and have less discretion in terms of who they bulk bill. 

Now the other point to make is that it's not just talking about practices like this one, it's not talking about practices just in metropolitan Sydney, but it actually impacts on Indigenous healthcare as well. All of our Indigenous healthcare services rely on Medicare billing to actually generate revenue to run their practices. So this freeze is having a significant impact on Australia's ability to close the gap, to manage that massive burden of chronic disease that we see in our Indigenous population and if we are serious about correcting this blight on our nation, if we are serious about closing the gap then we need to see more investment in Indigenous healthcare - and instead what we have is the Medicare freeze impacting on Australia's most vulnerable group. 

QUESTION:​[Inaudible question] 

BRIAN OWLER:​ 

Look, there has been some modelling to suggest it will be in order of $50,000 but I think- it's very difficult. It depends on the practice, their location, their model of practice, so- and it is very variable around the country. I think one of the criticisms that was levied, particularly in the co-payment debacle that we saw, back after 2014, was that it treated every practice as if it was the same. And in fact the populations that they service, the practice that they run, the through-put that they have, it varies tremendously around the country so it's very difficult to actually have an average figure for practices. But the impact is going to be significant. As you know, over seven years that small increment adds up to a very significant amount as it compounds away, and so it's inevitable that practices won't be able to absorb the freeze, they have to pass this cost on to patients so what we have is really a co-payment by stealth. Now that's been a term that's been used a lot but I think it's a very accurate description of what we're actually seeing in terms of the Medicare rebate freeze. 

QUESTION:

So on average do you have a percentage increase that patients will pay under this extended rebate freeze?

BRIAN OWLER:

No, because what happens is, while the indexation is only a few per cent per year, that compounds away, but once you actually transition away from bulk billing, you lose this bulk billing incentive. So in terms of talking about the percentage increase that they might pay in terms of an extra amount, I think you'll see that the amount actually jumps. Now for those practices that are already billing, I mean most patients- most people understand, it's about two to 2.5 per cent to increase in staff costs. 

Most practices I imagine, like this one, have leases with landlords, that are locked in over three or four years, or five year periods, and that has automatic indexation of the lease in those agreements, often at three or four per cent per year. So that's not an unusual commercial arrangement. 

And so all those costs are going on to the practice, and they have to be met somehow. So if the freeze is maintained I think you are looking at increases in the order of that percentage at least. 

QUESTION:

When this first came in there was a lot of talking about people turn up to a hospital emergency departments, instead of using GPs and the local medical practice. Is there any evidence that that's happened, and could that increase?

BRIAN OWLER:

Well, we've seen the demand on our emergency departments already increasing at a rate of about four per cent per year. In fact the patients that are turning up to our emergency departments are actually not GP type patients, they're sicker patients, they're patients in the highest triage category. 

What we're seeing is- the biggest challenge that faces developed nations around the world, we're being very successful in increasing life expectancy, but when people live longer, they do so with more complex and chronic disease. So those patients, it doesn't take very much in terms of an illnessto tip an organ system over the edge, tip in fact multiple organ systems over the edges and so that's when you see sick patients entering our emergency departments, and that's the importance of actually having access to general practice, having the ability to go to a GP when they need to. 

So, if you have a financial barrier in the general practice primary care setting, we know that - there's very good evidence, it's been very well studied - that there are many people who will defer going to a GP, or just not go at all. And that's the importance of primary care. Now those people that defer their treatment are then much more likely to end up in an emergency department, end up sicker, particularly those patients that have multiple chronic diseases. 

QUESTION: 

Have you seen evidence of that yet? 

BRIAN OWLER:

Well, as I said, the number of patients that we've seen presenting to emergency departments has been increasing, and they are the higher triage categories, but I think what we've been seeing so far is GPs trying to absorb the freeze that's been there, but the real tipping point has now been reached. 

And the reaction of GPs, in contacting the AMA, and I'm sure contacting the colleges and other groups as well, is that they now see that there is no future in trying to absorb the freeze. They have to now pass the costs on to patients. We have reached that tipping point.

QUESTION:  

And what would it costs to reverse this? How much did the Government save in the budget with this extended rebate freeze and what would it cost to reverse it?

BRIAN OWLER: 

Well, the freeze was estimated- the extension of the freeze in the budget was $925 million, so almost a billion dollars out of health with the extension of the freeze. Now it's probably over $2 billion if we were to try and reverse the freeze now, probably closer to three, because you've got to remember, once you have the freeze, the longer it goes for, those savings actually extend out over time, because it compounds away. So if you were to reverse the freeze today, you'd probably be looking at closer to $3 billion to reverse it. 

QUESTION: 

So realistically, what hope do you give of this campaign working? 

BRIAN OWLER:  

Well, I think it will highlight the issue. I think people need to understand what this issue means. Now, if it's unsuccessful, I think at least the AMA, and general practitioners, doctors right around the country, have done their upmost to try and maintain and preserve the health care system that we have.

Now, if after the election the Government is returned, or the Government changes, and there's no changes to the Medicare freeze, then it will be clear that we have run a campaign, we have tried to do our best to preserve general practice, to preserve investment in general practice, and I think you then will have GPs making that switch, and at least we will have done our very best as an AMA to protect general practice, but to also protect the poorest, the sickest and the most vulnerable in the Australian community. 

QUESTION: 

Are we moving closer, do you think, to an American-type system, where a good health care is out of the reach of many?

BRIAN OWLER:

Well, that unfortunately is the direction we seem to be going. And one of the things that we've had in this country is universal health care and equity of access. 

During my two years as AMA president, I've talked over and over again about the foundations of our health care system. 

We get great results for an average spend, and I think part of that success story has been its universality and particularly equity of access in the primary care setting.

It doesn't matter what your income is, it doesn't matter who you are, you can go and see your GP and you will be treated on the basis of your need. 

Now, if we move away from that, if we have people not being able to afford to take children to their doctor, or go to their doctor when they're sick, I think we start to see a two-tier health system develop and just like in the US a whole range of people that are forgotten, that are left behind without coverage. 

That's not the Australia that we want to see. It's not the route that we want to go down. We want to make sure, particularly when it comes to general practice and primary health care, that all Australians have equity of access and there is a universal, a truly universal health system that exists in this country. 

15 May 2016

CONTACT:​John Flannery ​​02 6270 5477 / 0419 494 761

​Kirsty Waterford​​ 02 6270 5464 / 0427 209 753

 

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