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Coalition considers end to free GP visits

The Abbott government is refusing to rule out a fee for every GP visit in a bid to rein in health spending. Nine news.

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Reports that the Abbott government is considering abolishing bulk billing and requiring most Australians to pay a $5 or $6 co-payment every time they visit a GP (and presumably also for associated pathology and diagnostic testing) has galvanised the electorate.

While the average Australian will be rightly concerned about yet another impost on the family budget, policy and political debates will rage on the basis of issues including cost containment, appropriate use of healthcare services and health outcomes.

The predictable result is that political philosophy or political reality will trump evidence-based policymaking - or the floated idea will magical disappear. Already it seems that the paper that put forward this proposal, published in October by the Australian Centre for Health Research, has disappeared from the centre's website.

Medicare changes could be on the way.

Medicare changes could be on the way. Photo: Peter Riches

This proposal has its genesis in the flawed concept of moral hazard - the idea that if healthcare is free (or too inexpensive) people will use it inappropriately. Of course, in Australia, healthcare is not free - through the Medicare levy and taxation, everyone pays into the system on the basis of ability to pay and withdraws from the system on the basis of need. We know nothing about those segments of the population who purportedly visit the doctor unnecessarily or inappropriately, or about which population groups could instead take care of their own health problems, as suggested by the promulgator of this proposal.

Data from the Australian Bureau of Statistics shows that, in 2013, 81 per cent of Australians aged 15 years and older had visited a GP at least once in the previous year. The frequency of GP visits, not surprisingly, was a function of how healthy people considered themselves to be, whether or not they had a chronic illness and whether or not they were pregnant. If the main driver of this proposal is to generate budget savings, then it is widely accepted that higher co-payments will lead to reduced healthcare expenditures, at least over the short to medium term.

The gold standard of evidence here is the RAND Health Insurance Experiment - a randomised trial of higher cost-sharing conducted in the 1970s and, curiously, never repeated. It found that a 10 per cent increase in cost-sharing results in about a 2 per cent reduction in spending.

It also found that patients reduced the use of clinically appropriate services by the same amount as they reduced the use of services deemed clinically inappropriate. More worryingly, the largest negative impact of cost-sharing was on services for the chronically ill and prevention.

Other research demonstrates a wider range of adverse impacts on clinically important services. For example, relatively modest increases in co-payments reduce the use of preventive and screening services and medicines for managing chronic conditions such as diabetes and hypertension. The net effect is worse compliance with medication regimes, more visits to emergency departments, more hospital admissions and increased mortality. In contrast, other studies have shown that a reduction in co-payments can increase patient adherence to treatment regimes for chronic conditions.

The universality of our healthcare system is already being severely eroded as out-of-pocket costs grow. Co-payments comprise 17 per cent of health spending in Australia, a higher proportion than 13 out of 20 Organisation for Economic Co-operation and Development countries, including the US, and the third-largest source of health funding after federal and state and territory governments. Our concerns should be greatest for low-income people as these out-of-pocket costs lead to greater health disparities.

The government's expressed concern is for the budget deficit. It is possible to reconcile the basic issues - financial responsibility, sustainability of Medicare and affordable access to healthcare for all Australians. But this requires time and effort to develop a sophisticated policy approach based on the available data and evidence, rather than applying a blunt instrument based on ideology that will have adverse, and potentially costly, consequences.

Australians understand universal access does not mean unlimited access by everyone to everything but affordable access to a package of value-based services. There is room for a policy debate around what should be part of this package and for increased public education and awareness about the costs and benefits of healthcare services.

All current evidence suggests what is needed is increased access to primary care services rather than a new tax that will fall heaviest on the sickest and poorest. It is quite possible that the answer to more cost-effective healthcare lies in reducing co-payments, at least for some population groups, rather than increasing them.

Dr Lesley Russell is a research associate at the Menzies Centre for Health Policy at the University of Sydney.