Medicare reforms face criticism as bulk-billing incentives fall short of expectations

Health Minister Mark Butler has signalled that Medicare will feature prominently in Labor’s campaign agenda in the lead up to the Federal election. However, a fresh examination of Medicare data has reignited the debate over the effectiveness of bulk-billing incentives, suggesting their benefits reach only a limited segment of the population.

Amidst rising living costs, there is mounting concern over the decline in GP bulk-billing and the concurrent increase in out-of-pocket expenses for services not covered by bulk-billing.

The latest Medicare data for the financial year up to September 2024 reveals that the national GP bulk-billing rate for non-referred services stands at 77.6%. While this marks a marginal improvement from the previous year, it remains notably below pre-pandemic levels that consistently exceeded 80%.

Yet, new research casts doubt on the efficacy of the government’s tripled bulk-billing incentive, introduced in late 2023. The analysis, published this week, examines regional disparities in bulk-billing rates and average out-of-pocket costs from 2022 onwards. Despite hopes that increased funding would lead GPs to reduce private fees across the board, the study finds little evidence to support this expectation.

The researchers note that, except in rural areas, the additional incentive amounts to just $20.65 per service, overshadowed by average out-of-pocket costs of $43 for non-bulk-billed visits. Consequently, the current incentives appear insufficient to alleviate out-of-pocket expenses, particularly for metropolitan populations.

“In areas where the bonuses are higher than local fees, they could drive up fees and even lead to higher out-of-pocket costs for people not covered by the incentive program,” the authors wrote.

Furthermore, the analysis highlights geographic disparities, with rural areas experiencing higher out-of-pocket costs and significant fee variations between regions. This divergence could potentially exacerbate unintended consequences, including inflated costs for patients outside incentive-covered groups.

“As an alternative, the government could reduce bonus payments to the local fee level in rural and remote areas and redistribute the money saved to ensure that people with lower incomes and children receive free general practitioner care, regardless of where they live.

“As financial incentives for specific patient groups (instead of regions) reduce differences in primary health care use, they could also be used to help other priority groups, including Indigenous people and people living with disability or long-term health conditions,” the authors concluded.

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