December 31, 2013
In a submission by the Australian Centre for Health Research to the federal government's Commission of Audit there was a proposal for a $6 co-payment for visits to your GP and a similar fee to stop patients from both clogging up emergency departments and abandoning GP services. Under the proposal, pensioners and concession card holders would be exempt from the fee, while families would be granted up to 12 bulk-billed visits annually.
This would bring money into the health system, which is facing health costs that are likely to grow rapidly in future. The budget in May, for instance, forecast health spending by the federal government to balloon by more than $5 billion by 2016-17, largely due to the ageing of the population and the rapid improvement in health technology and medicines. Both federal and state government health budgets are under growing stress.
For an Abbott Government desperate to make budget savings, finding ways to offset the cost of health is a clear and obvious strategy. The main driver for this co-payment proposal is to generate budget savings ($750 million over four years) . The assumption is moral hazard - the idea that if healthcare is free (or too inexpensive) people will use it inappropriately. Without further price signals, the costs of healthcare will continue to grow. The argument is that co-payments reduce inappropriate use of medical services.
The ACHR submission was written by Terry Barnes, a former senior health adviser to Tony Abbott, who argues that co-payments would provide a:
simple yet powerful reminder that we have a responsibility to look after our own health and not simply pass on all the costs of and responsibility for caring for ourselves to fellow taxpayers...I think that when you have what to your wallet is a free good you don’t necessarily appreciate the full value, the full cost of what it takes to get that service. This is sending a price signal to people, there’s no question about that... To keep access fair and equitable, but also to ensure that resources are managed properly, the states could charge a matching co-payment for GP-type services in emergency departments.
It is another step in the universality of the Australian healthcare system being severely eroded by out-of-pocket costs which continue to grow. It would provide disincentives for disadvantaged groups, including Indigenous people, pensioners and people with limited access.
It is a piecemeal change to the Medicare system rather than a proposal for a broader examination of the share of costs borne by patients across the entire health system, including on medications and diagnostic tests, to ensure a balance between sustainability, equity and efficiency.