Out-of-pocket costs linked to decline in GP services

Jolyon Attwooll

31/10/2023 12:01:00 AM

GP attendances in the first six months of 2023 were 9.1% lower than the same period last year, according to a new AIHW report.

Woman paying in GP surgery
Higher living costs could also be influencing a decline in GP visits, according to the AIHW.

A decline in the number of GP services this year could be related to a rise in out-of-pocket costs, according to a newly released analysis from the Australian Institute of Health and Welfare (AIHW).
The report, entitled ‘Medicare Funding of GP services Over Time’, indicates that attendances for GP services fell to a lower point than they were pre-pandemic in the first six months of 2023.
From January to the end of June 2023, there were around 3.2 GP attendances per person, compared to 3.6 during the same stretch of 2022.
The figures represent an overall drop of 9.1% within a year, with 92.1 million GP-related MBS services recorded in the first six months 2022, compared to 83.8 million for the same time in 2023.
In the meantime, the AIHW reports a sharp increase in out-of-pocket costs in recent years, citing a rise from 10% as a proportion of all billings in 2020 to 15% in 2022.
‘In recent years, there has been a growing concern regarding the rise in [out-of-pocket] rate for GP attendances,’ the authors wrote.  
‘This trend highlights the expanding financial burden faced by patients when accessing GP care, even with the support of Medicare.’
Dr Cathyrn Hester, a member of the RACGP Expert Committee – Funding and Health System Reform (REC–FHSR), notes that the report shows out-of-pocket rates are still lower than at most points since Medicare was founded, apart from during the peak of COVID-19.
She also said the average out-of-pocket cost had stayed ‘remarkably stable’. 
‘This stability of GP billing is really quite incredible especially given how much average incomes have increased during this time,’ Dr Hester told newsGP.
‘I know how much our costs as a general practice have spiralled in the last five years. No wonder the margins for practice owners in general practice are so wafer thin and barely financially viable.’
Dr Hester believes GPs are increasingly sacrificing their own financial needs to meet the gap between the MBS rebate and the true market price for care.
‘We do this to try and avoid the situation where the patient will reduce GP review or visits as they can’t afford the gap fees, or don’t prioritise this over other spending,’ she said.
‘This is one of the main sources of moral injury for GPs, and we have to navigate this every single day for our patients and communities.’
The AIHW report identifies a ‘moderate negative linear relationship’ between out-of-pocket costs and GP services attendances, meaning as costs increase, attendances go down.
‘The moderate relationship between GP out-of-pocket [OOP] costs and GP services attendance rate implies that while there is a noticeable trend, other factors might also influence GP services attendance rates,’ the report authors write.  
They suggest that the rise in living costs is likely having an impact as well.
‘Over the short term, the GP services attendance rate may be more sensitive to increasing OOP costs especially when there are other factors that impact on individuals’ discretionary income, such as rising inflation and interest rates, which has been the case in 2023,’ the report states.
The new trend follows a marked increase in attendances throughout 2021 largely attributed to GP COVID-19 vaccine services. The widespread introduction of telehealth is also likely to have had an impact, the report suggests.
A decrease in out-of-pockets costs at the time was also linked to telehealth items, which had to be bulk billed, as well as a short-term increase in the bulk billing incentive.
The AIHW states that the number of services with out-of-pocket costs ‘is significantly influenced by MBS reforms’.
‘Changes to the MBS fee schedule and rebate structure have a direct impact on the amount reimbursed by Medicare and, consequently, the OOP costs borne by patients,’ it concludes.
‘The relationship between MBS reforms and the GP OOP rate underscores the importance of monitoring and evaluating the impact of policy changes on the affordability of GP services for individuals and the wider healthcare system.’
The AIHW notes a previous spike in out-of-pocket costs in 2003 and 2004, when they hit 31% and 28% respectively.
It said following reforms put in place in 2004 out-of-pocket rates subsequently began to decline.
This year, the overall bulk-billing rate has hit its lowest point since 2011, according to official MBS figures.
The AIHW reports that densely populated areas had a particular impact on the overall figures, noting a 10% fall in GPs services in Brisbane in the first half of 2023. It also said there is a pattern of steeper decline in lower socio-economic areas compared to more affluent regions.
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