The Government’s co-payment model – the facts and a possible ‘plan B’

1 Dec 2014

AMA President, A/Prof Brian Owler, said today that the Government’s hardline defence of its flawed and unfair co-payment model is creating a health policy vacuum.

A/Prof Owler said there is currently no intelligent debate about primary care, preventive health, health workforce, or resourcing public hospitals to deal with existing and future demand.

“The Government must drop its co-payment model for general practice, pathology, and diagnostic imaging, and broaden the health debate,” A/Prof Owler said.

“We need to be talking about policies that provide better access to health services, not policies that will deter people from seeing their doctor.

“The Prime Minister said this morning that if the Senate blocks the Government’s current co-payment model, which hurts the most disadvantaged, he might have to consider a ‘Plan B’.

“The AMA, at the Prime Minister’s request, developed a co-payment model that is fair and equitable, and which protects the poorest, the elderly, the chronically ill, Indigenous Australians, and children under 16.

“Under the AMA plan, the co-payment would only be paid by those who can afford to pay.

“We urge the Government to engage in an intelligent health debate on the AMA model,” A/Prof Owler said.

A/Prof Owler said the Australian health system is sustainable and not facing a ‘budget crisis’.

“The Health budget is 16.13 per cent of the total Commonwealth budget, which is down from 18.22 per cent in 2007-08,” A/Prof Owler said.

“General practice is the most cost effective part of the health system. Spending on general practice is just 7 per cent of total health spending, with the Commonwealth contributing 5.6 per cent of total health expenditure on general practice.

“Spending on general practice is not unsustainable.

“We must avoid policies such as the Government’s co-payment which would steer people away from general practice to more expensive care in public hospitals.”

The Facts:

The Government’s co-payment proposal has the following elements:

  • $7 co-payment or ‘price signal’ - not just for GPs, but also for pathology and diagnostic imaging;
  • $5 cut to the Medicare Rebate - this is the source of the $3.5 billion in savings for the Medical Research Future Fund (MRFF); and
  • cuts to bulk billing incentives for pathology and diagnostic imaging.

The Government’s co-payment proposal:

  • disadvantages vulnerable patients – the poor, the elderly, the chronically ill, and Indigenous Australians;
  • discourages prevention and chronic disease management; and
  • is realistically not able to be implemented by July 2015 because of the complexity, technology, billing systems, and red tape that would be imposed on medical practices.

The AMA has consistently stated that it is not opposed to a fair and equitable co-payment that protects the most vulnerable patients in the community.

The Government’s co-payment model is unfair and inequitable. The AMA’s co-payment model is fair and equitable, and preserves the principles of universal access to quality health care.

The AMA’s co-payment proposal – ‘Plan B’ - has the following elements:

  • $6.15 GP co-payment for those patients who can afford to pay;
  • for non-concession patients over 16 years of age, the patient pays the co-payment;
  • for concession patients and patients under 16 years of age, the Government pays the co-payment (replacing the current bulk billing incentive);
  •  deferral of pathology and diagnostic imaging co-payments until proper industry consultation; and
  • no cut to the Medicare patient rebate

The AMA’s co-payment proposal:

  • protects vulnerable patients;
  • achieves the Government objective of a price signal for patients who can afford to pay;
  • invests in quality general practice, and
  • allows time for proper implementation.

The Medical Research Future Fund (MRFF)

Despite claims to the contrary, the MRFF is not dependant on the Government’s co-payment model for the majority of its funding.

The Government's budget measures strip $3.5 billion over four years from Medicare rebates for GP visits, blood tests, and x-rays.

The MRFF is primarily funded by numerous savings measures already undertaken, including cuts to agencies and programs. It can be established without the Government's co-payment proposal; and would still reach $15 billion by 2020.


1 December 2014


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