The cost of freezing general practice

Objectives: We aimed to assess the effect on general practitioners' income, and the amount of any copayment required for GPs to recoup lost income, of two policies (individually and combined) proposed by the Australian Government: a continued indexation freeze of Medicare schedule fees; and a $5 rebate reduction (now retracted). Design, setting and participants: Analysis of data from the Bettering the Evaluation and Care of Health (BEACH) program, a continuous cross‐sectional, national study of GP activity in Australia. We used data for April 2013 to March 2014 on direct encounters between patients and GPs for which at least one Medicare Benefits Schedule or Department of Veterans' Affairs general practice consultation item was claimable. Main outcome measures: The reduction in GP rebate income due to the policies and the size of any copayment needed to address this loss. Results: The $5 rebate reduction would have reduced GPs' income by $219.53 per 100 consultations. This would have required a $4.81 copayment at all non‐concessional patient consultations to recoup lost income. The freeze would cost GPs $384.32 in 2017–18 dollars per 100 consultations, requiring an $8.43 copayment per non‐concessional patient consultation. Total estimated loss in rebate income to GPs would have been $603.85 in 2017–18 per 100 encounters, a reduction of 11.2%. The non‐concessional consultation copayment required to cover lost income from both policies would have been $7–$8 in 2015–16, and $12–$15 by 2017–18. Conclusion: If both policies had gone ahead, GPs would have needed to charge substantially more than the suggested $5 copayment for consultations with non‐concessional patients in order to maintain 2014–15 relative gross income. Even though the rebate reduction has been retracted, the freeze will have greater impact with time — nearly double the amount of the rebate reduction by 2017–18. For economic reasons, the freeze may still force GPs who currently bulk bill to charge copayments.