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21 Oct 13 ACHR Paper on GP Copayments

21 Oct 13 ACHR Paper on GP Copayments

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Published by: ABC News Online on Dec 29, 2013
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03/22/2014

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A PROPOSAL FOR AFFORDABLE COST SHARINGFOR GP SERVICES FUNDEDBYMEDICARE
October 2013
 
1
NEW POLICY PROPOSAL
To revive the Hawke government’s 1991 Budget measure to imposemodest co-paymentson Medicare Benefits Schedule (MBS) non-referredgeneral practitioner(GP) attendances.DETAILS
Estimatesfor the Forward Estimates period from 1 July 2014
1
2014-152015-162016-172017-18No. GP services1.Noco-pay
2
122,600,000126,250,000130,050,000133,950,000
2.With co-pays
3
120,200,000121,200,000122,400,000123,650,000
Difference (1 minus 2)
2,400,0005,050,0007,650,00010,300,000
No. bulk-billed services1.No co-pays
4
98,100,000101,000,000104,000,000107,200,0002.
With co-pays
96,200,00097,000,00097,900,00098,900,000
Difference (1 minus 2)
1,900,0004,000,0006,100,0008,300,000
Netrebatesavings($)
5
70,110,000147,600,000225,090,000306,270,000
Estimated net saving over FE period:$749,000,070
Some minor reduction of theestimatedsavings could be expected due to some patients and familiesreaching the Extended Medicare Safety Net and concessional limits. Asreaching these thresholdswould require many GP visits in a year,however,relatively few patients would be affected.
Policy justification for the proposal
Theunambiguouspurpose of this proposalis tofind savings in the MBS that eitherreduces orsignificantlyslowsthe growth in MBS outlays over the firstfullForward Estimates (FE) period of thenew Coalition governmentfrom July 2014.
1
For more details of underlying assumptions, please refer to page4-5.
2
30 June2014 baseline calculated from 2012-13actual outcome increased by 3 per cent.For FE period,previous year’sGP attendancesweremultiplied by 1.03 (3 per cent annual growth factor) under the no co-payment scenario.
3
30 June2014 baseline, then year-on-year growth of 1 per cent thereafter.For the FE period, previous year’sGPattendancesunder co-payment optionwere multipliedby 1.01 (1 per cent annual growth factor)undertheco-payment scenario.
4
Assumes average bulk-billing rate of 80 per cent. Bulk-billing figures therefore are total volume for each yearmultiplied by 0.8.
5
Assumes2013 standard Level B GP consultation schedule fee of $36.90frozenconstantthrough the FEperiod. Annual indexation notincludedin these calculations.The estimated benefits saved figure is theamount payable onthe difference between the volumeof bulk-billed services with and without co-payments.
 
2Nevertheless, savings must be based on sound policy justification.There are a number of reasonswhy there is policy merit in attaching modest co-paymentsto GP services. These include:
Reducing avoidable demand for GP services,particularlyin outer suburban and regionalareas where GPs arein relatively short supply. Byhelping to manage demand,GPswill beableto concentrate more of their scarce time on patients who most need treatment or caremanagement.
Reducing incentives for GPs to overservice wherethereare high concentrations of generalpractitionersthe principal justificationof the1991Budget measure.
For Unreferred Attendances (ie GP services), in which80 per cent ofservicesare bulk-billed,sending a price signal toconsumersandreminding themthat GPservicesare
not
a freegood.
Provided thatco-paymentsarenotlarge enough to deter people from going to the GP if thatis what their health indicates,reducingmoral hazard risks by makingpeople think twiceabout going to the doctor about minor ailments treatable with rest and/orover-the-countermedications.
Offering asimple yetpowerful reminder that,as far as possible,we have aresponsibilitytolook after our own health, not simply pass on all the costs of,and the responsibility for,caring for ourselves tofellowtaxpayers.
Features of the proposal
The proposalwould followthe 1991 precedent, updatedfor inflation and for evolutioninMedicaresince 1991.As modelled, itwould take effect from
1 July 2014
andinclude:
Costed as applying to GP personal attendances
only
(Levels A, B, C, D)-Butobviouslythere is scope to applyitto services
arising
from GP attendances,including Practice Nurse, Care Planningand Extended Primary Care items.
Freezing MBS GP attendance schedule fees at current levels until 1 July 2018ie $36.90 forlevel B standard vocationally-registered GPconsultation-Rather than asubstantialimmediatecutGP rebatesto be made up by co-payments, ashappened in 1991 (see below), freezing rebates means minor real reductions in theirvalue over time, giving GPs greater incentive to offset their income stream by chargingco-payments for bulk-billed services.-Introduce a flat co-payment onMBSLevelsA-DGP rebatesof$6.00,making the value tothe doctor of a bulk-billed standard(Level B)consultation $42.90.-There could be scope to increase the co-payment for longer consultations, but fortransparency and equity singleaflat co-paymentrateispreferred.

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