Out-of-pocket costs leaving chronically ill vulnerable: Report

Jolyon Attwooll

9/03/2022 4:54:35 PM

Australian patients are paying more for healthcare than many other comparable countries, new analysis suggests. Changes have been floated, but what would they mean for general practice?

Patient receiving medical bill
Medical expenses mean some chronically ill patients do not get the care they need, a report has found.

A report released this week by the Grattan Institute, a Melbourne-based think tank, has set out suggestions for reducing out-of-pocket healthcare costs for Australians.
Its report, ‘Not so universal: How to reduce out-of-pocket healthcare payments’, outlines the costs paid by patients around Australia.
Citing recent figures from the Australian Institute of Health and Welfare (AIHW), the report says that more than $7 billion was spent on out-of-hospital care and on medications provided under the Pharmaceutical Benefits Schedule (PBS).
Additionally, more than a million Australians spend in excess of $1000 each year on out-of-hospital care and medications, the report states.
The authors in particular highlight the impact on the most vulnerable, saying service costs have risen by an average of 50% in real terms over the past decade.
‘Many Australians cannot afford healthcare they need, especially people with chronic conditions,’ the authors write.
‘As a result, they miss out on care, get sicker, and so the healthcare system is being put under further strain.’
The report argues that the country relies too much on out-of-pocket payments and considers what could be done to bring costs down so fewer people miss out on healthcare.
Dr Emil Djakic, a member of the RACGP Expert Committee – Funding and Health System Reform (REC–FHSR), told newsGP the report is an interesting addition to discussions around funding – although he said the focus seems to be on other specialists outside of general practice.
‘It is a fact that we have out-of-pocket costs in our healthcare system, across the system,’ he said.
According to the report, out-of-pocket healthcare costs account for 17% of Australia’s total outlay – one of the highest rates in the OECD.
The report’s authors also cite higher pharmaceutical payments among Australia’s residents compared to other wealthy nations, stating that patients in this country pay 28% of the country’s total pharmaceutical expenditure, higher than many other countries.
‘As a consequence, Australia ranks poorly compared to other high-income countries on the proportion of people who skip medications because of cost,’ the report states.
Dr Djakic believes the report is right to focus on the shortcomings of the PBS.
‘[The Grattan Report] rightly shines a light on the total unaccountability on the PBS safety net on the medical side, which manages to offer subsidies to those that are more well off,' he said.
‘There’s a huge piece of the infrastructure in our system that is not being held to account.’
There are several measures put forward by the Grattan Institute report which would have implications for general practice if they were put in place.
‘The Federal Government should subsidise the establishment of new co-located private specialist clinics that do not charge patients out-of-pocket,’ the authors write.
‘These “bulk-billing specialist clinics” should be established within bulk-billing general practices.
‘Co-locating these new services with general practice would strengthen primary care by providing informal learning opportunities for GPs, potentially reducing future referrals.’
The report also suggests state governments could consider co-locating expanded outpatient services with general practices.
Another proposal is the creation of a new list for specialist referrals ranked on cost, but Dr Djakic said this could add to red tape faced by GPs.
The Grattan Institute report also highlights the number of appointments and prescriptions missed due to concerns over costs.
It states 3.4% of people with chronic health conditions missed GP care in 2020–21, compared to 6.4% who missed out on care with other specialists. This compares to 1.3% and 4.4% among people who do not have chronic conditions.
While the missed care rates are lower for GPs than elsewhere, Dr Djakic believes the figures are still a cause for concern.
‘Our out-of-pocket costs are considered a low impediment to care but the accumulated costs may be significant for some patients who are seen multiple times a year, or for a big family,’ he said.
The Grattan Institute report came out in the same week that Federal Health Minister Greg Hunt promoted record levels of bulk billing among general practices in Australia.
He stated general practice bulk billing rates stood at 88.4 % in the December quarter of last year, a record high likely to be driven largely by mandated bulk billing for telehealth. However, as has been previously pointed out by former RACGP President Dr Harry Nespolon, this statistic represents the number of services that are bulk billed, not the number of patients.

Bulk billing numbers have been also criticised for not reflecting the increasing gap between Medicare patient rebates and healthcare inflation.
Dr Djakic references the four-year indexation freeze and notes that while other specialists have significantly increased their out-of-pocket costs, GPs’ have not gone up in the same way.
‘[The report] is a good piece of work to bring into the debate – at the very core of it is the fact that Medicare as the universal insurer is substantially failing,’ he said.
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Dr Dhara Contractor   10/03/2022 7:13:02 AM

Medicare consultation “fully bulk bill” for consultation paid by Medicare to GP’s not to the business/ rooms and facilities provided at consultation.
GP practices would wish to bring 100% bulk billing for all patients. But unfortunately, Medicare factors only consultation (talk with GP). But to help equate to inflation of healthcare ( medical stock, employee payroll increasing almost 3% or more annually), IT and software expenses, superannuation of staff increasing annually, commercial property prices increase to service general practice rooms increase CPI 3-4% annually.
But Medicare rebate for bulk billing a GP medical consultation not increasing to cover cost of living or expenses to run GP practice at all!
Either authorities may shed light on how they can assist GP practice businesses to cover cost of running the business in the community and allowing to cover the costs of running business, where GP consultations happen!

Dr Suresh Gareth Khirwadkar   10/03/2022 7:41:41 AM

What specialists are going to just offer to reduce their income by that much? GPs are the only specialists altruistic (or foolish) enough to reduce their fees by 50-75% willingly. You will almost never see a Non GP doing this and why should they? Increase the Medicare rebates for patients.

Dr George Al-Horani   10/03/2022 7:44:24 AM

The main issue my patients find when referred to see specialist is to find the whole amount of consults fees to pay upfront , some patients DO NOT have( for example) 400$ The specialist fees in their bank account to pay on the day ,but they can offer to pay 100$ ( the Gap ) .
Few of my patients cancel their appointments because of this .What will help more if Medicare allows them to pay ONLY the Gap . We have been asking for this for a while but no responses .

Dr Dion Micheal McNeice   10/03/2022 12:26:47 PM

The fact that we can still not charge "just the gap" is one of the most bulldust things ever, especially given the technology we have. There really isnt any viable excuse anymore for the government to prevent it from happening.