Speeches and Transcripts

AMA Transcript - AMA President, A/Prof Brian Owler, AMA Media Conference, 21 August 2014

Transcript: AMA President, A/Prof Brian Owler, AMA Media Conference, 21 August 2014

Subject: AMA alternative GP co-payment model

BRIAN OWLER: Well thank you everyone, and thank you for coming to the AMA. I have with me today Dr Brian Morton, who is the chair of AMA CGP, that's the Council of General Practice. I'd like to thank you for the opportunity to speak with you today regarding the AMA's GP co-payment alternative plan. The AMA's put a lot of work, and a lot of thinking into our proposal. We have discussed at length internally, and this morning I shared it with other GP groups. We've also spent time of course discussing it with the Government and the Department of Health. I just want to point out we have put in the hard policy work and discussion with other stakeholders before going public with our model, and wish the Government had taken a similar approach with their model in the past.


Before I detail our alternative, I want to take a few moments to talk about the AMA's position both in terms of the opposition to the Government's proposal and, more importantly, why we are offering an alternative plan. The AMA has been vocal in its opposition to the co-payment proposal that was in the Federal Budget since day one. Our opposition centres around the three Ps -patients, practitioners and policy. For patients, the current proposal is unfair and potentially harmful to the health of those most vulnerable in our society. People in age care, people who are already on welfare - such as those on Disability Support Pensions - and the unemployed are examples of who would have difficulty in affording co-payments. People who are sick and qualify for health care cards would similarly be disadvantaged. Young families, particularly those with several children, would be disadvantaged.


This is even more significant given the potential impacts on preventative measures such as immunisation. For practitioners, particularly those GPs providing care to patients in disadvantaged areas, the impact of the co-payment may make their practices unviable. Many patients in those areas will not be able to afford the co-payment, and the GPs will not be able to charge it. We've heard from many doctors that this will make their practices unviable if they accept a lower rebate. They are telling me that their practices will close. That is not the only issue - that is not only an issue for those GPs, but also for the patients, of course, that they serve. The minister has said that a GP can still bulk-bill, but when a GP has to accept a cut of $11.15 per consultation, or $14.25 in regional areas, to bulk-bill, then bulk-billing is not viable. Bulk-billing is not a viable option because of the large rebate cut.


Finally, and most importantly, the lack of consideration for health care policy, particularly in relation to chronic disease management and prevention, means that the Government's co-payment proposal will harm the health of Australians. With an ageing population and an increase in life expectancy, the burden of chronic disease is the greatest challenge for the Australian health care system. Keeping people well, particularly older Australians who often have multiple chronic diseases, and keeping them out of expensive hospital care must be a priority. Encouraging older Australians to see their GP is essential.


Last week I was in the Northern Territory talking to providers of care in indigenous Aboriginal communities. There was unanimous agreement that the imposition of a co-payment would not work. The health centres that provide services to Indigenous people would not only have to absorb the rebate cut, but also meet the co-payment for pathology and diagnostic imaging. This would significantly affect their capacity to provide services.


I'd like to remind you that the AMA is not opposed to well-designed, well-intentioned co-payments in principle. They already exist. About 20 per cent of GP visits currently attract a co-payment, and for those consultations the average is more than $7. The AMA supports a role for GP co-payments for those that can afford to contribute to the cost of their health care. The Medicare benefit schedule does not represent the true quality of quality primary health care. It does not value the vital role of general practice in the health system. The AMA model, therefore, is an attempt to support quality general practice. It aims to allow GPs the opportunities to spend more time with patients to provide preventative health care and chronic disease management, and to place a value on the valuable service they provide. The focus is on the quality of the services, and this benefits the GP, the patient, and the broader health system. The AMA model is all about maximising the benefits of high-quality primary care and general practice, keeping people well, keeping people out of more expensive hospital care.


So onto the AMA alternative GP co-payment model. The AMA model has the following key elements: no cut to the Medicare rebate, a minimum co-payment of $6.15 for all patients that will apply to standard consultations. The Government will pay the co-payment for concession cardholders and those under 16, the patient will pay the co-payment otherwise. And there will be an incentive to encourage collection of a co-payment. Under the AMA model there would be some exemptions from the requirement to charge a minimum co-payment, and those are: residential age care facility visit items, home visit items, chronic disease management items, health assessment items, and mental health items.


The AMA does not support a cut to the Medicare rebate for GP services, pathology, or diagnostic imaging. Pathology and diagnostic imaging have had an effective rebate freeze for 14 years. It is completely unfair and inappropriate to subject those services to a cut to their rebate. As for general practice, the AMA does not support any reduction in funding for general practice. Linking the cut to the Medicare rebate for GPs to the Medical Research Future Fund was always an inappropriate link. And while we support research, we can't support a measure that takes funding from primary care and puts it into tertiary level research.


If the Government wants a sustainable health care system it must invest in general practice, for prevention, and for chronic disease management. As for the medical research fund, there are other sources of funding that will already contribute to the fund; and if the Government wants to keep the fund it may need to be accumulated over a longer term, or be delivered from alternative sources.


As mentioned, the AMA alternative model has a minimum of $6.15 payment on all patients. The question is really, who pays the co-payment? At the present time, for patients who are concession cardholders and those under 16 years, there is a $6.15 bulk-billing incentive. For rural and regional patients the bulk-billing incentive is $9.25. Under the AMA model, the concession cardholders and under 16s, if the GP charges an amount equal to the standard rebate plus the $6.15, then the Government would pay the co-payment. In rural and regional areas, the Government would pay $9.25, which reflects current incentive structures.


This measure retains protection for vulnerable patients in society including those in age care, those on pensions, or the unemployed. It also protects young families by providing protection for children. Patients over 16 years of age who do not hold concession cards will be required to contribute to the cost of their care by providing a minimum co-payment of $6.15. Where the GP charges an amount equal to, or more than, the scheduled fee plus $6.15, then the GP receives the full rebate. The AMA aim to use existing structures in this proposal to increase its simplicity.


The AMA also wanted to have an incentive to encourage doctors to charge a co-payment where appropriate and ensure a level playing field. The incentive works as follows: for an adult non-concession patient, if the co-payment is charged they would receive the full A 1 level rebate - $37.05. However, if the co-payment was not charged, or a co-payment of less than $6.15 was charged, then the rebate would fall to the equivalent of the A 2 schedule. That is a significant difference, and to illustrate the point, for a patient over 16 years without concession for a level B consultation, the rebate is currently $37.05. This would not be reduced, unlike the Government's proposal. If the GP charges an amount of $37.05 plus the $6.15 or more, that is $43.20 or more, and the GP will receive the full $37.05 rebate plus the co-payment. If the GP charges no co-payment or a co-payment of less than $6.15, the rebate reverts to the equivalent of an A 2 rebate, which for a level B consultation is $21.


For example, if they bulk-billed an adult non-concession patient then they would receive only $21 compared to the previous $37.05. If they charged a co-payment of $5 they would receive $21 plus $5, a total of $26. However by charging the $6.15 co-payment, the GP will receive $43.20 or more if a greater co-payment is charged. In this model, the minimum $6.15 co-payment would be indexed over time whether or not it is paid by the Government or by the patient.


Now of course, there are patients who are over 16 and not concession cards who, for a range of reasons, have reduced capacity to pay. They could be low income families, people with conditions that require frequent GP visits, and people with troubled domestic situations or very large families. People in these circumstances are known to their GPs, and GPs look after them under the current arrangements. They would be similarly looked after.


To summarise, the AMA proposal has a minimum $6.15 co-payment that applies to all patients, but which is paid by the patient unless they are a concession card holder or under 16 years of age, in which case it is paid by the Government. There is no cut to the Medicare rebate, and there is a mechanism that relies on a significant financial incentive that cannot be ignored for the co-payment to be charged. The model does achieve the aims of protecting vulnerable patients in the community. It values general practice to encourage quality and support prevention in chronic disease management, and it also sends a price signal for non-concession patients.


We cannot support the application of co-payments for pathology or diagnostic imaging at the present time. We have all of the concerns regarding the effects on vulnerable patients on health care policy, and on practitioners that surround the GP co-payments. We also know that the multiple co-payments over an episode of care will hit disadvantaged patients. The Government has also sought to cut back on bulk-billing incentive, which threatens well-established business models and the viability of those practices. The application of pathology and diagnostic imaging co-payments is simply impractical at this time. In order for co-payments to be applied to either of these services, the Government needs to work with both groups to determine how co-payments might be applied, but the timeframe must be at least two years.


For pathology, for example, currently 50 per cent of patients are not seen be the pathologist. The specimens are collected by another doctor or nurse, and that's a significant issue for collection. There are no systems, such as IT systems, in pathology to collect the co-payments. Issuing $7 invoices would cost more than the revenue generated. The diagnostic imaging, the application of co-payments is not practical at this time, either. The Government must engage in genuine consultation on these matters before proceeding with any co-payment policies.


Now, we've gone into a lot of detail, but I think it is important the detail does get across. We want both those in the media, and of course those in the public, to be fully informed of what we're proposing in our alternative model, and I'm hopeful that we'll ignite some constructive and intelligent debate.


I'm happy to take questions.


QUESTION: Can you say how confident you are that the Government will take on the model you're proposing?


BRIAN OWLER: Look, the Prime Minister asked the AMA to come back with an alternative model that sent a price signal, and it was made clear to the Prime Minister at the time that the AMA alternative could not take money out of general practice and we wouldn't deliver them the amount of savings that they want. The AMA model is consistent with all of the things that the AMA has been saying about vulnerable patients, and all of the things that we've been trying to ensure we protect. As to what the Government's opinion is on the model, we've only been hearing the public commentary of the minister and the Prime Minister around exemptions for instance.

I do hope they take a serious look at the model. I know that they've been doing internal modelling and costings inside the department, but as to what the result is going to be, I think we'll have to wait and see their answer.


QUESTION: Have they not told you what they think about it.


BRIAN OWLER: We provided the model three weeks ago. And at that time - and I must say, there has been no horse trading. I know a number of people have said that the AMA is in there trading one thing off against another. We've never done that. Because there aren't things that we can trade off. We provide an alternative model. We've allowed them time to digest the model, and acted in good faith by not releasing the model publicly before they've had a chance to do that. But now it's up to the Government to go and look at the model, and respond and see what they are prepared to accept.


QUESTION: Professor Owler doesn't this amount to a rather large pay rise for GPs?


BRIAN OWLER: I think if we are serious about the sustainability of the health care system we need to realise that firstly, general practice is not the expensive part of the health care system. It is actually the answer to sustainability. The Government's model, on their costings, delivered $480 million extra into general practice if everyone paid the co-payment by the extra $2. This model provides an extra $580 million on the Government's modelling. Now I see that as an investment in general practice, and we have to remember that GPs have had a rebate freeze for the past two years. The growth in GP rebates, or rebates across the NBS have only grown by 2.48 per cent per annum over the past 30 years. And so what we've seen is an erosion of the viability of practices on the basis of bulk-billing.


And so unless we actually move away from the notion that we bulk-bill everyone, the viability and the quality of general practice at the end of the day is going to suffer. So this is about getting an investment into general practice, and asking those patients in our society that can afford to pay, that can afford to contribute, to make that modest contribution.


QUESTION: So just to clarify, instead of a $7 co-payment between $2 to the GP, $5 to the Medical Research Fund, you're talking about a $6.15 co-payment which goes to the GP; and what - have you modelled at all what impact that's going to have on the Budget figures?


BRIAN OWLER: So, well - the ironic thing about the whole model of course is that the Government was set to save $3.5 billion, but that money was all going towards the medical research future fund. None of that money was coming off the bottom line of the Budget. Now, according to the Treasurer, and it's a bit hard to work out, but there may be some benefit by having the Research Future Fund there in being able to offset something in the Budget and make the balance sheet look better, but at the end of the day it's not about making the balance sheet look better. If they're serious about a Budget emergency, they would need to actually save that money.


Now, I can't accept a model, and neither can general practice accept a model, that actually takes that amount of money out of general practice over a period of three years. We want to actually keep money in general practice. That is the answer to the sustainability of the health care system. When we have an ageing population it's not just about the number of older people. We know that they have many more chronic diseases - so 50 per cent of people above 65 will actually have five or so chronic diseases. They have to be managed, and if they're not properly managed those patients will end up in hospital and we will get worse outcomes and more cost to the health system. So actually investing in general practice is actually about the sustainability of the health care system.


So as I said, this is not about impacting the Budget in terms of the bottom line of the Budget, this is about the Medical Research Future Fund, a fund that we support in its principle - but even the researchers are embarrassed about the idea that we take money out of primary health care and put it into tertiary level research. There are other sources of funding, about five or six other sources of funding for the medical research future fund that actually contribute to that fund, and as I said in the introduction, if the fund has to be accumulated more slowly, or gets to a lower quantum I think that's something the Government has to consider. But it can't be at the expense of general practice and primary care.


QUESTION: Following up from Laura's question, accepting the Future Fund except - the Medical Research Fund, what is the cost to the Government of paying per-year basis the co-payment for those on the concessional card and the under 16s?


BRIAN OWLER: It is actually equivalent to the expense that they have now. So for those patients, those concession card holders and under 16s, they're already paying a bulk- billing incentive to GPs, which is $6.15 or in regional areas $9.25. So for the Government there's no extra expense in terms of that part of the co-payment. The reason we chose $6.15 was because it is in line with that bulk-billing incentive. It gives some symmetry to the idea of whether you're on a concession, or whether you're a patient paying a co-payment, the amount at the end of the day is essentially the same, and I think that's a nice piece of symmetry.


Now, we still have retained the idea that in regional areas the patients will receive the $9.25 bulk-billing incentive, because we don't want to disadvantage people in rural areas and we're not asking people in rural areas to pay a greater co-payment - of course that would be a disadvantage to them. So the $6.15 is based on the bulk-billing incentive that is already there, and that bulk-billing incentive will continue to be indexed; essentially the co-payment, whether paid by the Government or by the patient, will continue to be indexed as well.


QUESTION: Professor Owler, in regards to the timing of the legislation, this could potentially be debated in the Senate next week. Are you saying that that legislation - any legislation - should be delayed and possibly that the starting time for this of July next year, should that be pushed back to allow for further consultations?


BRIAN OWLER: Well, that's one reason that we need to get this alternative out there for comment and debate. I don't think it's - we should be having a debate about a piece of policy that's been rejected not only by the cross benchers but essentially every single medical group, health group, consumer group. I mean, I haven't heard anyone in the community actually say that they feel that the current proposal is a good idea. Not one. And so I think we actually - if they want to have a debate, I think they need to have a debate about something that people can support, that is going to make a positive contribution to general practice, rather than something that is going to disadvantage people and is clearly something that the cross benches have indicated that they're not going to support concession card holder and is not a child - would they have to pay the co-payment for the standard visits hat they might have with their doctor in between their special chronic disease management plan items?


BRIAN OWLER: Yes, if they are one of those patients in that group, then yes, they would pay the co-payment. And I think it's important that - part of the aspect of the proposal is actually removing pathology and diagnostic imaging, because that additive effect for those people with chronic disease is particularly with blood tests and those sorts of things. It was actually going to be quite a multiplier effect there. Whereas, if they're in a non-concession group, for the vast majority of people in that group, the co-payment of $6.15 should be able to be affordable.

Well I think that's about it. Thank you very much and look forward to speaking with you later on, no doubt.


 21 August 2014


CONTACT:        John Flannery                     02 6270 5477 / 0419 494 761

Media Contacts


 02 6270 5478
 0427 209 753

Follow the AMA

‌ @AustralianMedicalAssociation

Related topics