Mediscare campaign is no friend of doctors

The Turnbull government’s heralding of the latest bulk billing figures says a lot about the parlous state of the health debate. But politicians claiming to be Medicare’s ‘best friend’ are not true friends of GPs — nor of sustainable healthcare for Australians.

The figures show that 85.1% of GP visits were bulk billed nationally — a rise of 0.8% in the last financial year.

Predictably, Health Minister Sussan Ley has said this proves the Coalition is committed to “investing in affordable health” and there is no foundation to Bill Shorten’s ongoing ‘Mediscare’ about covert plans to privatise Medicare.

The message being sent to the electorate is that ‘free’ GP visits are politically untouchable. Hence the Labor Party — along with the AMA, following its successful war on the Abbott government’s co-payment policy — can rightly claim to be setting the Turnbull government’s agenda in health.

But this may prove a pyrrhic victory for the medical profession. Bulk billing rates have increased despite the Medicare rebate freeze, contradicting the AMA’s dire predictions that GPs would no longer be able to afford to bulk bill patients.

The lesson is that policymakers can effectively cut real GP remuneration, while relying on fierce competition between GP practices in metropolitan areas to maintain bulk billing rates — a ‘co-payment-by-stealth’ indeed, being paid for out of doctor’s pockets.

Despite bulk billing’s rude health, the Opposition Leader has said that the “number one issue” facing the new parliament remains Medicare. The doubling-down on the politics of fear is no surprise, as Labor looks to force an early election and find the relative handful more of marginal votes it now needs to win government.

But populism is not policy. The problem with the Mediscare, and the obsession with bulk billing, is that it sucks all of the oxygen out the bigger discussion we really should be having about health reform.

GPs have perceived themselves as under attack over the last three years. This is unfortunate when most healthcare analysts and many health stakeholder groups agree that GPs have a vitally important role to play in a modern, fit-for-purpose, primary care-centred health system.

The real key issue facing the health system is the rising burden and cost of treating ageing-driven and lifestyle-related chronic illness.

The health cost curve is being bent up by the fact that too many chronic disease sufferers do not receive the type of lower-cost care that could maintain their conditions and avoid very expensive admissions to hospital. Hence, around 10% of annual hospital admissions nationally are classified as ‘potentially preventable’.

Yet this represents the tip of the chronic cost iceberg. Estimates suggest that the between  5–10% of all patients with a complex chronic condition use the lion’s share of health services each year, and account for approximately 50% of total health costs. The implications are obvious for health system sustainability — if only healthcare providers were able to innovate and discover new ways to better organise and target the care of these ‘frequent flyer’ patients.

The impediment blocking more cost-effective health services is the current Medicare structure.

Medicare’s primary function is to pay doctors on ‘fee-for-service’ basis for providing one-off episodes of mainly GP or hospital care, which locks up the bulk of health funding in largely inflexible and separate payment and service systems. Doctor’s are also rewarded for ‘throughput’ (the volume of services delivered) not for the outcomes achieved – overall improvements in health status.

These rigidities mean we keep doing business as usual in health without developing alternative models of care, including the kind of innovative services that could manage chronic illness more effectively. The international evidence on health reform suggest these kinds of services could yield substantial savings by minimizing the use of high-cost hospital services. Potential cost-saving innovations include everything from ‘social work’ style assistance to promote compliance with treatment regimes, to enhanced IT to prevent duplication of tests, to redesigned care pathways so care is delivered in lower-cost community clinics rather than expensive tertiary hospitals.

The implications with respect to the role and remuneration of GPs needs spelling out.

Billions of dollars value could be released by do things differently in health and without cutting GP’s incomes — far from it.

GPs, naturally, would take the lead in developing the new service models — and would be financially rewarded for ending waste and inefficiency, by reaping their fair share of the value they release for delivering more cost-effective care.

Achieving this requires a serious national debate about establishing an ‘integrated’ or capitation payment system for chronic care.  ‘Pooling’ the funding normally spent on hospital and non-hospital care per patient, and creating one ‘bundle’ of money instead, will give providers the financial flexibility and incentive to reorganise patient care.

However, the AMA tends to oppose all moves in this direction of so-called ‘managed care’ for fear it will kill the perceived cash cow that is bulk billing.  But this fixation is more a case of public health ideology trumping doctor’s best interests.

The salient point is that this attitude is not at all financially smart for GPs. It massively undersells the value that GPs could add — and earn for themselves — in a reformed and much more sustainable health system.

Dr Jeremy Sammut is the Director of the Health Innovations Program at The Centre for Independent Studies and the author of Medi-Value: Health Insurance and Service Innovation in Australia — Implications for the Future of Medicare.