Around $4b lost in Medicare freeze

Morgan Liotta

31/03/2023 4:10:15 PM

A new analysis lays bare the impact caused by the long-term devaluing of general practice, highlighting the urgent need for investment.

Money on Medicare card
Indexation of MBS rebates has failed to keep up with the rising costs of running a medical practice.

New Australian Medical Association (AMA) research has revealed that the Medicare freeze has resulted in a $3.8 billion loss to general practice since being introduced in 2013.
And according to the report, which points to a ‘substantial disconnect between Medicare and the realistic cost of providing health services’, the flow-on effect will see the gap further widen to more than $8 billion by 2027–28 if the indexation rate is not lifted.
AMA President Professor Steve Robson said the long-term analysis demonstrates the true impact of the freeze by successive governments.
‘Like all businesses, the costs of providing medical care go up each year, with increases in wages for staff, rent, medical equipment, cleaning, electricity, technology and insurance, and these increases must all be covered by the fees a doctor charges,’ he said.
‘The most vulnerable people, the people with chronic conditions, the ones who have to see a GP the most, are paying the biggest penalty. And when they can’t find a bulk-billing GP anymore, the only option is public hospitals.’
The AMA report mirrors warnings that have been consistently issued by the RACGP in recent years, with college President Dr Nicole Higgins recently stating that substantial investment is required to ease the stress caused by successive governments’ long-term neglect of general practice.
‘GPs can no longer afford to subsidise patient care,’ she previously told newsGP.

‘GPs have simply had enough – many have had to make the difficult decision to move to mixed billing and pass on some of our costs on to patients just to stay afloat.’
Using Medicare data, the AMA analysis details that, from 1995–2022, the annual average MBS indexation rate was 1.1%, while factors linked to the increased costs of running a medical practice – Consumer Price Index (CPI) and Average Weekly Earnings (AWE) – have risen on average by 2.42% and 3.53%, respectively.
To accompany the Medicare analysis, the AMA also released the general practice chapter of its 2023–24 Federal Budget submission which calls for ‘a significant and urgent investment’ in general practice beyond the four-year $1 billion commitment the Government announced ahead of last year’s election.
These calls echo those of the RACGP, which argued for increased bulk-billing incentives and patient rebates for longer consultations in its 2023–24 pre-Budget submission, as well as funding to support enhanced primary care services for vulnerable patients and more investment in rural health.
The college has also previously criticised poor MBS indexation and long-called for increases, saying the status quo does not reflect the true cost of general practice services and is contributing to rising patient out-of-pocket costs.
Both the RACGP and the AMA are calling on the Government to urgently address these issues in the upcoming Federal Budget.
Federal Health and Aged Care Minister Mark Butler has said strengthening Medicare is a high priority, and although increased rebates are not mentioned in the recently released Strengthening Medicare Taskforce report, he has not ruled out this measure.
In the wake of the college’s release of its pre-Budget submission, Dr Higgins said the current crisis ‘demands action now’, with urgent funding increases needed to ‘stem the bleeding’.
‘Funding has been ripped from general practice patients for decades … so now we’re seeing the decline of bulk billing, people across the country are struggling to get in to see their GP, and they’re being turned away from overloaded hospitals,’ she said.
‘Without urgent action to stem the bleeding and improve access to care for Australians, inequality, and the gap between rich and poor will get much worse.’
The AMA is also calling for ‘funds the Government has saved from freezing Medicare indexation now be returned in the form of an immediate lift to the Medicare rebate’.
This week’s release of Medicare analysis follows a November 2022 AMA report showing that from an indexation evaluation of MBS Level B item 23 – the most commonly used in general practice – $8.5 billion was withheld due to inadequate indexing from 1993 up to 2022.
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bulk billing decline indexation MBS Medicare freeze rebates

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