Bulk billing GP rates fall, co-payments adding to cost of living

Nine out of 10 Australians see a GP at least once a year — but in many places, the country’s once-lauded “free” healthcare has given way to hefty out-of-pocket fees of $100.

Rates of bulk-billing — when a practitioner charges Medicare directly for the service — have plummeted, while doctors are charging ever-increasing co-payments as they grapple with rising inflation.

“In a few years, it’s gone from being easy to get bulk-billed doctors appointments in Sydney to pretty much impossible,” author Elle Hardy wrote on X last week.

“How on earth did it go from getting free doctors appointments to costing $40-$120 a pop without becoming a major election issue?”

Hardy noted that “not even 10 years ago, Tony Abbott had to back down from a $5 GP co-payment because it was so unpopular”.

“Turns out that there’s actually bipartisan political support for charging 20 times that,” she said.

A survey published in March found out-of-pocket costs were causing more than half of Aussies to visit the GP less often, with one in 10 saying they had changed doctor or clinic as a result.

And a growing number of patients report delaying care due to the cost, Australian Bureau of Statistics (ABS) data shows, with that figure highest among the 15-24 age group.

The latest annual Medicare statistics from the Department of Health released in August showed bulk billing rates plummeted to their lowest point in more than a decade.

After peaking at 88.8 per cent in 2020-21, national bulk billing rates for GP services dropped to 80.2 per cent in the last financial year, according to Medicare Benefits Schedule (MBS) data.

Meanwhile, out-of-pocket costs for patients who are charged a fee have generally continued to rise at about 4-5 per cent per year, outpacing inflation, according to Monash Business School health economist Professor Anthony Scott.

The fee of a standard GP consultation rose to $102 in November, after the Australian Medical Association (AMA) recommended doctors lift their prices to battle rising practice costs.

The latest inflation figures from the ABS showed medical and hospital services rose 6.3 per cent in the 12 months to September.

So how did Australia get to this point?

“General practice hasn’t been valued or funded by successive governments over the last 10 years, that has then led to a Medicare rebate which hasn’t kept up with the cost of providing care,” said Dr Nicole Higgins, president of the Royal Australian College of General Practitioners (RACGP).

From 2014 to 2018 the federal government froze increases to the Medicare rebate, meaning doctors were taking a real pay cut.

When it was unfrozen it was “poorly indexed at less than half of CPI”, Dr Higgins said.

“The [level of the] rebate now means GPs are taking more than a 50 per cent discount on the cost of providing care when they bulk bill,” she said.

“This year the government has increased the amount of indexation, but it has 10 years of lead time and lack of investment to catch up on. The majority of GPs are individual businesses, we have to employ our staff, pay rent and electricity just like everybody else. As those costs of providing care have gone up, unfortunately that has been passed onto patients.”

The federal government announced in the May budget it was tripling bulk-billing incentives for people who treat patients with concession cards and children under 16, starting from November 1.

In its latest annual General Practice Health of the Nation report, the RACGP found sharp declines in reported bulk billing rates among GPs who responded to a survey.

In the space of one year, the proportion of GPs who bulk billed all of their patients halved from 24 per cent to 12 per cent, the survey of more than 2000 doctors found.

At the same time, the proportion of GPs who fully bulk bill the majority of patients fell from 40 per cent to 30 per cent, while the proportion who bulk bill the minority increased significantly from 28 per cent to 44 per cent.

The report noted that while the decline in bulk billing was evident across most of the country, it was more pronounced in major cities.

“Bulk billing as a percentage of total billings in [metropolitan] locations decreased from 72 per cent to 56 per cent in 2022,” the report said.

In the same period, remote communities saw a smaller decline from 86 per cent to 83 per cent.

“This discrepancy may be due to a greater proportion of metropolitan practices (56 per cent) focusing on revenue generation to cover increasing practice costs versus those in regional areas (45 per cent),” it said.

GPs have also called foul on recent payroll tax changes by state governments, which put doctors — independent contractors who lease rooms from practices — on the hook for a huge new tax bill.

The tax changes, which some doctors have warned will force them to close, affect NSW, Victoria, Queensland and South Australia, although the latter two states have granted amnesty periods of at least a year.

“Just as the government is trying to fix Medicare, we have the federal government giving with one hand and state governments taking away with the other with added payroll tax,” Dr Higgins said.

Peter Breadon, health program director at the Grattan Institute, agreed there had been a “sharp and troubling decline” in bulk billing rates, “noting it had been a “big and fairly sudden shift” since the start of the pandemic.

While the freeze in indexation was a contributing factor, Mr Breadon said there were “bigger structural issues of how much we fund but also how we fund” healthcare.

The current system “doesn’t take into account how sick patients are, how much care they need”, which means GPs struggle to fit their needs into a typical consultation of 15-17 minutes.

“A lot of patients have more chronic diseases and need more time,” he said. “This fee-for-service model that promotes churn doesn’t take into account complex problems.”

Mr Breadon said a blended funding model, such as under the MyMedicare system rolling out next year, was a good start although it was “early stages”.

“The missing piece is those areas with too little care to go around,” he said, referring to bulk billing “deserts” which are more likely in poorer areas.

Dr Higgins also wants to see systemic changes, but says the “first thing we need to address is the funding imbalance”.

“GPs only account for 6.5 per cent of the total healthcare budget,” she said.

In contrast, public and private hospitals receive nearly 45 per cent of government expenditure.

The RACGP argues general practice is “far more cost-effective than hospital care”.

Productivity Commission figures show the average cost to the government for a non-admitted emergency department presentation in 2020-21 was $611, compared with $80.10 for a patient to spend 20 to 40 minutes with their GP.

“We’re now seeing what happens with the neglect of general practice — those patients are turning up in EDs, ambulances are ramping,” Dr Higgins said.

The industry has also been sounding alarm bells about a looming GP shortage, with only 13 per cent of medical graduates choosing general practice despite record numbers of students coming through.

“We’re deeply concerned,” Dr Higgins said.

“That’s the other point — whatever funding models the government uses drive behaviour. If you don’t invest in general practice it’s not going to be valued by the new medical graduates coming through. Why would you go into general practice when you can become a cardiologist and earn two or three times the amount?”


Originally published as ‘How did this happen?’: Aussies forking out $100 for GP visits as bulk billing rates plummet