What is the future of general practice funding?

Chris Hogan

25/03/2022 2:12:01 PM

Associate Professor Chris Hogan considers the current state of primary care and suggests basic steps for enacting change.

A stethoscope and a piggy bank.
The Medicare freeze pushed many general practices to the brink, according to Associate Professor Chris Hogan.

Who pays the GP? Unless they are in a salaried position, GPs have always been paid by the patient directly or indirectly.

As such, GPs are paid or – or not paid – depending on the number of patients seen and the type of service provided.

Prior to Medicare, affording general practice services was eased by savings plans, reimbursement by friendly societies or lodges, or by insurance schemes similar to the pet insurance provided by RSPCA.
But at all times, it was the patient’s money.
Then along came governments who said they would use patients’ money via taxes to become a de facto health insurance company.

They told GPs that this would save them the cost of collecting money from patients and thus would discount the fees that GPs usually charged (even though this premise was not completely correct, we will accept it for the sake of argument).

But once GPs got used to relying on Medicare for their fees, governments of all persuasions started to believe that paying for health services was an expense, rather than an investment in the stability and strength of our society.
They sought to reduce that expense by the Medicare freeze and squeeze.

This approach pushed many general practices to the brink, so GPs started to reduce non-profitable services that impacted the viability of general practice, and countless others became bankrupt.
The impact has been damaging and is visible for all to see, for those who care enough to look.
Even prior to the COVID-19 pandemic, GPs had increasingly abandoned:

  • ownership of their practices
  • long consultations
  • many clinical procedures
  • after-hours consultations
  • home visits, aged care visits, palliative care visits
  • prescription of narcotics and benzodiazepines
  • rural practice.
Then during COVID, the temperature increased sharply and the slowly boiling frog began to boil fast – and the frog jumped.
As the deficiencies of our health system became starkly obvious, changes that were slowly evolving started to happen quickly.
Outside of our major cities during normal business hours, there is now a palpable shortage of GPs, despite them being needed desperately to provide the invaluable primary care on which our health system relies.
And without change, the future looks bleak.
In the past, 50% of all recent medical graduates would enrol in general practice − currently it is between 15−18%.

All those graduates previously destined for general practice will instead go into better paying disciplines, taking up the slack abandoned by GPs and performing similar, but not all, services at a much higher cost.
Now, if governments were serious about reducing medical fees, I would recommend starting at the expenses of general practice – many of which are due to government regulations and the costs of compliance.

General practice expenses also include:
  • rent or purchase of the practice property with associated taxes and charges
  • costs of administration
  • costs of staff
  • costs of equipment and consumables, eg PPE. 
Again, by way of contrast, those doctors who work in hospitals − public and private − often have their consumables and other overheads provided.

But the lack of assistance for GPs – and, in many instances, understanding of the contribution we make – has pushed the profession to a breaking point whereby there is a growing call for the cessation of universal bulk billing.
It makes sense, as the law of supply and demand suggests a shortage of doctors should lead to an increase in GP fees.
But sadly, many GPs are not as assertive as they deserve to be.
You would also think that patients would value the services of GPs and demand a better deal from their insurer − the government.

However, there are several barriers.

Health literacy
The health literacy of the community is quite poor. While more than 90% of people think they have adequate literacy, when it is objectively tested only 41% have basic or better knowledge.

It is not enough to rely on logic − the biological sciences are the graveyards of logic. We rely on what does happen and not what should happen.
That is why we have drug trials − human biological systems are so complex that things happen that we were not expecting when we try something new.
Recognition of GPs’ role
Most of the community, and indeed many other medical disciplines, do not know what GPs actually do.

GPs are not always confident in their own skills. Locked away in their individual rooms, they see one patient at a time and compare themselves with perfection rather than with others who would do a similar job.
Consequently, GPs do not promote what they actually do. Experts make a complex task appear if not easy, then at least straightforward.
Quality control of general practice activities
The work of the good GP is invisible – the activities of the not so good GP, not so much. General practice does not have the capacity to police or promote the performance of quality practice by colleagues.
So, what role can we as GPs play in safeguarding the future of this vitally important profession?
In my opinion, any response should encompass:
  • increasing community health literacy – starting with CPR in primary school, then adding first aid
  • raising consciousness among GPs to promote their self-confidence and an appreciation of their abilities
  • encouraging GPs to communicate with patients about what they do and how well they do it
  • GPs abandoning universal bulk billing and encouraging patients to complain to their insurer – the Federal Government − about their rebates.
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Prof Max Kamien, AM. CitWA   29/03/2022 11:50:22 AM

Succinct and spot on. In 1977 GPs had community status and new developments such as general practice teaching in medical schools, vocational training and rural exposure heralded even better care for the Australian populace. But it was not to be for all the reasons that Chris has described. A once independent and important branch of the medical profession has been reduced to begging the MOH (self-described as the Minister for General Practitioners) for a small rise in the Medicare rebate. The economics of General Practice have dictated how many GPs now practice. New graduates are avoiding a career in GP and good old fashioned GPs are increasingly hard to find. In the 1960s USA, the work of GPs was devalued and most graduates went into specialities. Patients could not access medical care and incited political action. The politicians had to bring back the GP (now Family Physician). 'Those who who fail to learn from history are bound to repeat it'.

Dr Suzanne Joy Baker   30/03/2022 2:49:25 PM

I graduated in 1979 and have lived through the changes to General Practice described in this excellent article. I have believed for many years that (in general) the best GPs make the least money.

Dr Allan Michael Fasher   30/03/2022 3:24:55 PM

Both Chris and Max make excellent points as we have come to expect. Yet, I think they are gazing at the wrong horizon. They and teeming numbers of colleagues get joy in the work because they see every day the positive difference they make in working with individuals and families and, often, communities.
Chris makes a distinction between good GPs and not so good GPs. Anecdote suggests that the latter earn more than the former. We are paid for the volume of work we do not for the value of the work we do.
"Locked away in individual rooms" is a vivid image of the fragmented system in which we work.
Many gifted colleagues now look to a horizon which leads to system transformation and away from a limited focus on improved billing. Let the taxpayer recognise the return to be had by investing in building teams of carers in GP and work out how best to measure outcomes in a way that embeds virtuous cycles of continuous quality improvement in the daily work.