Demystifying funding models for GPs

With various moving parts in motion to strengthen Australia’s healthcare system, including a Medicare overhaul, general practice funding reform remains in the spotlight.
 
A new paper co-authored by the RACGP President takes a deep dive into the range of general practice funding models, their pros and cons, and related health economic concepts.
 
It also explores different ways to ensure funding models enable access to quality care and sustainable businesses.
 
Published in the December issue of the Australian Journal of General Practice (AJGP), the purpose of the explainer article is to ‘demystify’ funding models for GPs – according to lead author Dr Winnie Chen, a Darwin GP, research fellow in health economics at the Leeder Centre for Health Policy, Economics and Data, and a clinician researcher at Menzies School of Health Research.
 
‘With Medicare turning 40 this year, discussions around primary healthcare funding reform, bulk-billing and MyMedicare changes, we felt it would be important for GPs to understand the Australian general practice funding landscape,’ Dr Chen told newsGP.
 
‘Sometimes discussions on primary healthcare funding gets lost in a purely “fee-for-service” versus “capitation” debate, which I feel is unhelpful.
 
‘We wanted to highlight that the amount of funding proposed is just as important as the model itself … and also communicate why each funding model type is used and highlight some relevant past lessons of funding reform.’
 
Examples of funding initiatives and ‘lessons learnt’ include the Health Care Homes trial which ceased in 2021, and the United Kingdom’s Quality and Outcomes Framework which is primarily a pay-for-performance model.
 
While funding initiatives may improve patient outcomes, the authors say their evaluation of these showed mixed outcomes, with potential ‘undesirable consequences’ from focusing on specific payable outcomes.
 
They say that while both the amount and type of funding model are important, the examples used also demonstrate that quality measures and provider support are needed.
 
Following the Strengthening Medicare Taskforce report released last year recommending the need to review and reform current primary care funding models, the Federal Government introduced voluntary patient registration to MyMedicare in October 2023, and tripled bulk-billing incentives for children and concession card holders a month later.
 
But with these changes also come challenges to ensure funding models are fit for purpose, the authors say, enabling access to quality care, adequately paying providers, and are sustainable for the future.
 
And while blended funding models like MyMedicare can minimise negative effects of individual funding arrangements, they can introduce complexity and may require ‘additional resources’ to monitor outcomes, the AJGP paper identifies.
 
RACGP President Dr Michael Wright has a background in health economics and until recently served as long-time Chair of the RACGP Expert Committee – Funding and Health System Reform.
 
‘It was great to work on this paper, because we know there’s been a lot of conversations in the last 10 years about how general practice should be funded,’ Dr Wright told newsGP.
 
‘GPs really need to be aware of what the options are and how systems are funded, and that we’re involved in the decision-making process of those changes that happen around us.
 
‘We want to be increasing our understanding of the variety of models and give GPs the chance to better engage in any proposed changes.’
 
The authors concluded that understanding the ‘strengths and limitations’ of types of funding models is important for GPs and any future reforms.
 
‘Funding general practice with the right amount and right incentives is important for delivering quality care to patients, important for sustainability of practices and general practice as a profession, and for optimising the resources that everyone contributes to as taxpayers,’ Dr Chen said.
 
‘We have deliberately sought to write this piece as an explainer rather than an opinion piece.
 
‘We hope the article equips more GPs to contribute meaningfully to the discussions around primary healthcare funding, and sparks future find solutions for best ways forward in Australia and beyond.’
 
Log in below to join the conversation.

Australian Journal of General Practice funding models general practice funding health system reform Medicare reform