Drop in general practice funding sends ‘wrong message’

Anastasia Tsirtsakis

10/11/2020 4:28:47 PM

Australia has experienced modest growth in health expenditure, but Federal Government spending on unreferred medical services has declined.

Illustration of stethoscope and calculator
Of the $28.2 billion spent on primary care, $10 billion was directed into unreferred medical services, down from $10.7 billion.

According to the latest Australian Institute of Health and Welfare (AIHW) report, national health expenditure in 2018–19 was $195.7 billion, accounting for 10% of overall economic activity.
After adjusting for inflation, that is a 3.1% increase on the previous year, lower than the decade average of 3.5%.
‘Spending in 2018–19 equated to an average of $7772 per person. In real terms, this was $111 (1.5%) more per person than in 2017–18, also slightly lower than the average growth over the decade of 1.9%,’ AIHW spokesperson Dr Adrian Webster said.
The majority of health spending was injected into hospitals (40.4%, $79 billion), resulting in a $2.8 billion increase in real terms, followed by primary healthcare (33.5%, $65.6 million) that saw a $0.9 billion increase – the majority of which came from non-government entities.
Of the total expenditure on primary care, $12.3 billion went to unreferred medical services, primarily classed as general practice, down from $12.8 billion. While subsidised pharmaceuticals and unsubsidised medications each received $11.7 billion, and $10.6 billion went to dental services.
Experts, however, are concerned over the Federal Government’s contribution.
Of the $28.2 billion spent on primary care, $10 billion was directed into unreferred medical services, down from $10.7 billion.
Dr Michael Wright, Chair of the RACGP Expert Committee – Funding and Health System Reform, told newsGP the data represents a step in the wrong direction.
‘These figures show that overall spending is increasing, but that it’s increasing for hospitals quicker than it is for the other parts of the health system, including general practice,’ he said.
‘The Government contribution to unreferred item numbers … decreased by over half a billion dollars. That’s crucial defunding of general practice services, which is making it harder for GPs to do the important job that we do.’
More than two-thirds (68.3%) of health spending was by governments, including $80.6 billion by the Federal Government and $53 billion by state and territory governments. Non-government entities spent $62.1 billion, with individuals the largest contributor, spending $31.8 billion – a 2.3% increase on previous years.
Individual expenditure on unreferred medical services increased from $813 million to $833.5 million.
‘You can see that the amount of money contributed by patients continues to go up as GPs find they can’t manage with the decreasing [of] funding through Medicare,’ Dr Wright said.
While the next AIHW report’s figures are sure to be influenced by the lifting of the Medicare freeze and introduction of the COVID-19 telehealth item numbers, Dr Wright is concerned the decline in Federal Government funding is not in line with the vision for the sector.
‘It’s sending the wrong message at the moment when [we’re] talking about strengthening general practice within the health system – removing funding from it isn’t the way to do that,’ he said.
‘I recognise that during COVID there have been other initiatives to try and support practices. But these need to be ongoing because the defunding that’s occurred in the previous year is making it harder for practices to remain viable.
‘We definitely need to restore the funding and viability to practices that has been removed.’
Overall spending growth in 2018–19 was relatively modest when compared to key metrics such as the decade average growth, population growth, growth in the economy and tax revenues.
Future editions of the report series, according to the AIHW, will present an analysis of health spending impacted by the 2019–20 bushfires and the COVID-19 pandemic.
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AIHW general healthcare expenditure practice

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Dr Peter JD Spafford   12/11/2020 10:40:55 AM

Relying on Government funding to run private business is not logical. Let the Government pay what it thinks a rebate is worth and allow a gap fee to be paid to cover the actual cost of providing a service. What is the problem? All modern health insurances do this. Why is the Government so determined to remain primitive?