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Why are GPs turning their backs on bulk billing?
27 November 2022
More Australian GPs are shifting away from 100% bulk billing as the costs of running a practice continue to outstrip the Medicare rebates offered by the government.
A study of 477 GPs by Healthed in August 20221 revealed that 22% of those surveyed had recently changed their billing model.
When the same survey question was put to over a thousand GPs in July last year, only 10% had recently changed their billing model, although 7% said their practice was considering switching.
Following the research release, the Royal Australian College of General Practitioners (RACGP) warned2 that general practice care needs a shot in the arm, citing inadequate Medicare rebates for patient consultations were central to driving doctors to ditch bulk billing.
From 1 July 2022, an MBS indexation increase of 1.6% applied to most general medical services items, all diagnostic imaging services, except nuclear medicine imaging, and some pathology items. The Medicare indexation is calculated using the Wage Cost Index 5 method, which results in annual increases significantly lower than the Consumer Price Index or CPI, which hit a 30 year high of 6.1% in September.
Compounding the inadequacy conundrum, rebates were frozen in 2013 as a cost-cutting measure for attendance items until July 2019. Consequently, research from the University of Queensland’s Medical School3 found the gap between the AMA-recommended fee (around $86) and the Medicare rebate for a standard GP consult ($39.10) had grown by $13.50 over a decade to around $47.
Meanwhile, average patient out-of-pocket costs for services directly provided by GPs have increased by 50% over the last decade.
Meanwhile, average patient out-of-pocket costs for services directly provided by GPs have increased by 50% over the last decade.
Patients are the losers
Outgoing RACGP President Adj. Professor Karen Price said that the current mode of indexation increase was insufficient4. “The miserly 1.6% increase is yet another reminder of why a boost in investment for general practice care is sorely needed,” she said.
The RACGP President said the way the indexing of MBS was a long-term problem requiring urgent attention.
“If practices are struggling to make ends meet due to Medicare rebates not keeping pace with the cost of providing high-quality care, they have little choice but to pass the cost on to patients.”
Great financial pressure, nothing new
General practice has been under great financial pressure for a while, with some now struggling to keep their doors open. “The profitability of most practices now relies heavily on incentive payments or rental income because the revenue from consulting fees is insufficient to cover the costs of running the practice”, said Danny Haydon, Chairman/Principal, Health Division, Brentnalls SA.
The RACGP President agreed that investment in general practice was sorely needed. “General practice care must be put on a more sustainable, long-term financial footing,” Dr Price said.
“Medicare patient rebates for GP consultations simply haven’t kept pace with the cost of providing high-quality care, and on top of that, the impact of the Medicare rebate freeze stretching all the way from 2013 to 2019 is still being keenly felt by GPs and general practice teams across Australia.”
Shortage of GPs another factor
Adding to the bulk billing malaise is the fact the general practice is in a deepening workforce crisis.
Research published in the Medical Journal of Australia in 2020 showed that the proportion of medical graduates from the University of Western Australia registered as GPs in December 2019 had dropped from about 40% of those who graduated in 1985–1987 to about 15% of those who graduated in 2004–20075.
Moreover, there is a trend for GPs to increasingly work part-time. Consequently, there could be situations where two or three GPs are required to replace a retiring full-time GP, which adds to the workforce crisis.
GP earnings are another issue. In 2018, specialists earned almost double the amount of GPs. Importantly, this gap has widened over time, according to an ANZ/Melbourne Institute Health Sector Report6.
Danny Haydon summed up, “The Government and community at large have failed to appreciate the value of their GP services. If the government doesn’t invest substantially, general practice as the foundation of our primary health care system will soon collapse. Patients who can afford to pay, but still expect to be bulk billed, may find they won’t have access to a local GP.”
The situation will inevitably mean more people are forced to attend emergency departments because they can’t get an appointment with a GP. This extra patient traffic won’t help our already overcrowded and under-resourced hospitals.
Surviving in this challenging climate
In this climate of decreasing GP resources, increasing costs and high demand for services, practices need to be strategic in the way in which they review their billing practices and set their fees.
Our Brentnalls Health team have assisted many practices to commence mixed or private billing, and providing them with calculated strategies for setting fees. These are our top 3 hints for successful implementation:
- Wholesale changes can be difficult to implement. Gradually implement one change at a time, or focus on implementing the change that will have the greatest impact.
- Effective communication with patients about the changes is needed to manage patient expectations and reduce negative responses directed at reception staff.
- Increase fees regularly, at least annually applying incremental adjustments rather than larger hikes being applied less frequently.
Taking the right action that supports your practices objectives is our priority. If you would like to discuss further, contact one of our health professionals for a no obligation meeting.
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Disclaimer
The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.
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