GP shortage
The Government is also trying to address the chronic shortage of doctors in country areas. Because doctors choose where they practise, many doctors practise in cities. Doctors are reluctant to sink money into establishing a practice in a country area if they only want to go there for a few years. They are also aware that without other doctors as back-ups they can quickly burn-out if they are on call for a town 24 hours a day.

The doctors claim, and the Government is currently agreeing, that there is a shortage of doctors overall in Australia. This has put pressure on all doctors to either see as many of their patients as they can with the risk that this time is insufficient, or have long waiting lists.

The Government is therefore offering:

• 234 new medical school places, and 150 extra places for medical graduates to specialise to become GPs. ($230m over 4 years)

Patients' high costs
Patients pay on average around $13 (after receiving the Government rebate) for a GP consultation that is not bulk-billed, according to Health Department statistics. Costs of diagnostic and specialist fees can build up to be quite a burden.

In response, the Government has offered in this package:

• $11m over 4 years to GPs for computer setup costs so patients have the convenience of paying only the gap between MBS rebate and GP fee at the doctor's
• two separate safety nets.
  • A new private health insurance product for non-concessional patients. After paying the first $1000 of doctors, x-rays and outpatient (such as cancer treatment) costs, insurers will pay the rest, if you have paid for their product for 6 months. The Government will extend the 30% rebate to this, costing $90m over 4 years.
  • After pensioners have paid $500 for doctors, pharmaceuticals, x-rays and outpatient (such as cancer treatment) costs, the government will pay 80 cents out of every dollar above this. ($67m over 4 years)

An analysis of these claims

Costs
To begin with, it is clear that some practice costs, such as medical indemnity and professional liability insurance, have risen enormously in the past couple of years. Indeed, the insurance crisis has affected a whole range of organisations, businesses and professionals.

And many doctors say that the doctor shortage means that locums to fill in for holidays etc are very expensive.

Against this, the MBS standard consultation rebate has only risen 20 per cent since 1996. About the same as CPI but not enough, it is claimed, to cover all the increases in costs.

However, the Government has taken a different approach to the funding of GPs in the past 7 years. While MBS rebates for consultations still account for most a doctor's income, the Government has spent a considerable amount of taxpayer dollars on supplementing this through grants. These grants vary widely - some are for reaching immunisation targets, some are to enable doctors to purchase computers and specialised software, and some is for meeting quality criteria. In total they are worth more than what is on offer now for MBS.

For example, on 20 May 2003 the Minister for Health announced new payments worth $6,800 to practices that adopt electronic patient records. She stated that "The Government has already spent $400 million on information technology initiatives and programs in general practice".

It is probably true that in relative terms doctors are seeing their incomes slipping behind those of other professions and private contractors who are not reimbursed by Government. The situation of a GP is probably similar to academics and teachers paid by Government who have also lost relative standing as private market salaries sky-rocket. Some structural means of addressing this without increasing the burden on patients needs to be developed.

But doubling the rebate would cost $2.5 billion extra each year. This is an amount the Government is not prepared to agree to.

But the real issue the government is responding to is the ever-increasing costs of pathology, x-rays and treatments that used to be conducted in hospitals but are now out of hospital.

A prime example of this is cited in the Budget papers as one of the treatments to be covered by the new private health insurance 'safety net' - and that is radiation oncology. This expensive cancer treatment used to be undertaken in hospital to in-patients - that is patients admitted to hospital. Increases in technology mean that now almost all radiation oncology is provided to outpatients . The key difference in definition is that while in-patient care is most definitely paid for by hospitals, outpatient care is less clear. Hospitals would argue that this is the province of federal Government.

What the private health insurance safety net does is pass these costs to the private health insurer and its members. Increasingly, more services will be provided out of hospital. Which inevitably means more costs to consumers, rather than Government.

So why not support the Government's solutions?

The measures that account for over a third of the package - the training of doctors - are useful and are not the cause for concern. Similarly, the Democrats have been pushing to extend primary care to include other health professions and therefore support the general thrust of the extension of the practice nurse program.

Reducing the hassle for consumers (in terms of reimbursing MBS payments in the doctor's rooms) sounds good, but there are a couple of catches, as explained below. Of more concern is the differential rebates, based on bulk-billing concession card holders.

The beauty of the Medicare system as it was originally conceived was its simplicity. Everyone would get free or nearly free care, irrespective of where you lived or what you earned. If you were wealthy you paid for your care through taxes, and helped subsidise those on low incomes. It did not depend on doctor 'charity'.

Doctors would either charge the schedule fee or receive 85% of it by bulk-billing. It depended on most doctors being satisfied with their incomes through these arrangements.

The Government proposes to top up the rebates of doctors who bulk-bill pensioners. The top-ups will be between $1 and $6.30 for each consultation. However, where doctors don't bulk-bill now, they already charge on average over $12 extra to the patient. So the low level of the rebate increases on offer mean that most doctors will not be satisfied with schedule fee or bulk-bill payments for anyone else. While GPs see their income slipping, they probably do start to think about the financial realities of their business and who should and should not receive subsidies.

Some people will probably see nothing wrong with that, because they only go to the doctor now and again. But any system of targeting inevitably ends up with people who miss out. Wherever the bulk-billing entitlement is set, there will be people who cannot afford to go, or think twice about it. This is particularly the case for families with young children but also a whole lot of other people in insecure or low-income employment or with chronic illness.

And then there are arguments about who 'deserves' and who doesn't 'deserve' subsidised care. It means that health care for people starts depending on who you are and what your income is, rather than the fact that you are sick. Too much emphasis on thinking about who gets more income and subsidies divides a country rather than binds us.

Paying the difference at the doctor's surgery
Bulk-billing was devised to produce an incentive for doctors to keep their fees low. By trading off 15% of the schedule fee and not charging the patient directly, doctors were rewarded with considerably less administrative red tape. The Government proposal to allow doctors to bulk-bill AND charge the patient removes this incentive. Obviously removing red tape for the patient and the doctor is a good idea - but a new mechanism for an incentive to keep fees low for everyone needs to be developed.

Indeed, a survey of GPs reported in Australian Doctor, 9 May 2003 reported that of the minority of doctors who said they would take up the Government's package, the major reason for doing so would be to charge other patients while bulk-billing concession cardholders.

This proposal also removes the MBS rebate from the public gaze. The fee you pay at the doctor's surgery is likely to increase from $12 to $15 to $25 and how do you know what the rebate is? GP services become like any other product that you pay for.

Safety nets
The Minister claims that for those people facing a tough year of ill-health and very high GP, x-ray and diagnostic costs, private health insurance is the answer.

Very few economists will argue that a private funding system is likely to contain health costs - in fact they are likely to rise, and $1000 will be reached by increasing large numbers of people. Thus insurance premiums will increase. However, in this scenario, the cost will then be borne by the insurer and members through their premiums, rather than by Government.

Despite a massive 50% increase in members to private health insurance since 2000, private health insurance premiums have increased each year at around 7 per cent.

The safety net for concession cardholders appears to be designed to get pensioners to curb their spending. It only kicks in after $500 is spent, and only funds 80% of costs after that. The present separate safety nets have lower thresholds, after which the cardholder does not pay anything for pharmaceuticals and gets 100% of the schedule fee back for medical services.

Possible options

To date, Senator Lyn Allison, Health spokesperson for the Democrats has put forward longer-term, structural reform ideas to address the identified problems. These include:

• providing Commonwealth-owned infrastructure for walk-in, walk-out GP practices, to get around the problem that doctors are reluctant to risk set-up costs in rural areas.
• co-locating GPs with other health professionals, such as podiatrists, nurses and physiotherapist so as to maximise patients getting referred to the right health care provider for their health problem.
• increasing the MBS rebate by $5 across the board, tailored with higher rebates to a level of commitment to bulk-billing or charging the schedule fee for all groups. Funding for this measure could be provided by removing the Lifetime Health Cover requirement on private health insurance (estimated to save $500 m on the PHI rebate).
• an expansion of Medicare's coverage from GPs, specialists and optometrists to physiotherapists, psychologists and podiatrists for a limited range of services
• Encouraging local councils to consider how to integrate a doctor and their spouse into the local community

However, in the short-term, there is a Bill before Parliament. The Democrats parliamentary team can vote against the whole of the bill or try to negotiate on various parts.

If negotiation occurs, then there will be some key questions the team will need to think about first.

• What do Democrats and the public in general think is a reasonable amount of money for people to pay for GP services, or should bulk-billing for the majority be the objective?
• How can GPs' dissatisfaction with income levels be remedied without imposing a hefty user-pays on patients?
• Is there a place for a cap on doctor fees in return for higher rebates
• Would people on over $60,000 be prepared to forgo their income bracket tax cut if this was ploughed into Medicare?
• Is increasing the Medicare levy the best way to fund our health system?
• Are there models of care on the ground that rely less on GPs and more on other health professionals so that the waiting lists in country towns can be reduced?

The Democrats have also got the agreement of the Senate to a Select Committee inquiry that will invite submissions to consider ways to improve Medicare.

What you can do

First and foremost, engage in debate. Many people feel confused by the Medicare debate - they are not sure what is wrong with the Government's package. It is vitally important for the general public to be well-informed about the implications of the proposed changes.

Secondly, if you have information - facts that you can document - that could assist the inquiry in its deliberations, you are encouraged to do so. If you have information - for example about the costs of running a surgery, or the loss of GPs to an area, or GPs turning patients away because of unpaid bills, but are unsure how to write a submission, speak to the Democrats electorate office in your State - they will be happy to help you.

Third, the Australian Democrats require volunteers to letterbox a leaflet in their area - it could be only the letterboxes in your street - so that this issue becomes more widely thought about.