Missing out on fair and affordable health care

• David Baker
• The Australia Institute

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Image: Paul Schreiber / flickr

28 October 2011When sick, the doctor is the first port of call for most Australians. In 2009-10 one in five visits to a GP resulted in extra fees over and above the Medicare scheduled fee. An estimated $557 million extra were paid for these visits. While the government encourages GPs to charge the scheduled fee (known as bulk billing) many Australians, including Centrelink concession card holders and disproportionately more women, are paying gap fees when they see the doctor.

The cost of health care continues to stack up for those people who leave the doctor with a prescription for medication or a referral for diagnostic testing.

Through the Pharmaceutical Benefits Scheme (PBS) the government subsidises the cost of prescription medications. Within this cap, however, the price of medications can vary widely between pharmacies and between drug manufacturers. Price competition is available when generic medications are able to compete against branded medications, providing the public with a more affordable option. To date increases in the proportion of prescriptions filled with generic medications has occurred despite GP prescribing rates for generic medications remaining consistent at 14 per cent. While the government pays pharmacists an incentive to provide generic medications where possible, Australians still paid $53 million in brand premiums alone in 2009-10.

Referrals for diagnostic testing also come with the chance that additional costs will be charged. Three out of ten referrals for imaging tests resulted in extra fees in 2009-10, as did 15 per cent of pathology referrals. This gap between pathology and imaging is larger now than it was when Medicare was introduced. The lower rate for pathology is likely to be due to the ability GPs have to determine when a test is bulk billed. Interestingly, GPs are more likely to bulk bill a pathology referral than their own services. Despite this, Australians are paying more than $433 million in extra charges.

At the doctor's clinic, the pharmacy counter and in diagnostic imaging rooms and pathology labs, a GP's attitude to patients' rights to access 'fair and affordable' health care can result in a very bulky bill. With Australians paying more than $1 billion in extra charges to access primary and diagnostic medical care it is evident that current health policies are producing an inequitable health care system. The dominance of private providers delivering primary health care, dispensing medication and providing diagnostic services influences this situation.
The government has taken different approaches to funding health services in an attempt to limit the charging of additional fees. The first was the Medicare rebate differential that saw providers who bulk billed receiving a greater payment. The inability of this approach to limit the levying of gap fees has seen the government pay incentives to service providers who bulk bill and the introduction of safety net policies for people with high health care costs. The continuing burden of additional costs for medical services and medication mean that more deliberate policies are needed if the promise of 'fair and affordable' health care is to be realised.

Policy options presented in this paper include:

• automating registration for safety nets and associated record keeping.
• prescription software that uses the active ingredient of a medication instead of a brand name.
• promoting the choice of generic medication.
• mandating the use of government-supplied referral forms for diagnostic tests.

Image: Paul Schreiber / flickr