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What’s the future of Australian medical research if the $7 GP fee doesn’t get through parliament?

27 Aug 2014, by Informa Insights

Earlier this year, the Abbott government announced plans to introduce a $7 fee for GP visits in an effort to make the country’s healthcare system more sustainable.

The government said Medicare cost taxpayers $8 billion a year a decade ago. This has risen to $19 billion today and is set to reach more than $34 billion within ten years’ time.

Introducing the $7 co-payment is expected to reduce the Medicare burden, while providing money towards a Medical Research Future Fund (MRFF). Starting in January next year, the fund is expected to eventually grow to $20 billion.

However, the Abbott government may find it difficult to get the GP fee through the Senate, with a number of political parties refusing to vote for it in its current form. Doctors and medical associations have also expressed concerns.

So what are the objections to the $7 charge? And what could the ramifications be for medical research if the government fails to get adequate support?

This article will explore the current process for GP visits, what changes are being proposed and how this could affect the future establishment of a MRFF.

Medicare now

Under the current system, the government provides a specific rebate for certain services provided by GPs. For a general consultation, this is typically around $36.

GPs can choose to charge patients more than this amount, in which case patients are charged an ‘out of pocket’ expense. However, practitioners can opt to accept the $36 as full payment, meaning patients pay nothing and Medicare sends the money directly to the doctor.

This latter arrangement is known as ‘bulk billing’ and there are incentives available to medical professionals who bulk bill people aged below 16 and individuals with concessionary cards, such as pensioners.

The incentive is usually between $6 and $9 per GP visit, although doctors do not receive the payment for non-concessional patients who are bulk billed.

How does the $7 fee work?

The government aims to reduce the rebate it provides doctors by $5 and instead ask patients to pay $7 for check-ups and other services, such as X-rays and blood tests.

However, detractors have claimed the charge will disproportionately hit disadvantaged groups, including low-income families and Indigenous Australians.

This may encourage them not to seek medical care at a time when the healthcare gap between demographics from different socio-economic groups is beginning to close.

As such, the mandate has faced criticism, with the Greens and Labor both claiming they will not vote for the measures if they remain the same.

Ramifications for medical research

At first glance, it may appear that medical research would take a substantial hit if the $7 co-payment fails to make it through Senate.

Currently, the government intends to finance the MRFF with the money raised from the GP charge and this could be jeopardised.

However, organisations such as Research Australia have argued that the fund must be implemented regardless of the co-payment outcome. Political parties are also discussing amendments that would remove the link between the fund and the $7 co-payment.

The hope is that the fund will still be established even if the controversial GP fees do not get passed.

Elizabeth Foley, CEO, said the fund will still require traditional methods of supplementary financing to ensure medical innovation continues, such as donations.

“Australians need to be aware that it will take almost a decade before the fund injects approximately $1 billion each year into local health and medical research,” she explained.

“The fund will only provide enough funding for 40 per cent of quality research projects currently put forward each year to the National Medical Health and Research Council.”

Her comments came as 40 per cent of people who regularly donated to medical research claimed they would stop offering money if the $7 fee was introduced.

What now?

Facing criticism of the GP fee, Health Minister Peter Dutton has been negotiating with industry groups and political parties to consider amendments.

Mr Dutton is reportedly willing to offer aged care residents exemptions due to their limited access to money, which makes the new process impractical for them.

Brian Owler, president of the Australian Medical Association, welcomed the news, but said much more must be done before the charge would receive widespread support.

“More vulnerable and disadvantaged groups need to be exempt from the co-payment,” he was quoted by the Guardian as saying.

“Children should be exempt for a start and people who generally would not be able to afford a visit to the GP, people on the Disability Support Payment, for instance.”

Clearly, this hotly contested topic is set to continue hitting the headlines in the coming months, which may require the government to consider alternative funding structures for the MRFF.

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