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The health of general practice

04 Mar 2014

Much of the silly season commentary this year has been around the ‘sustainability’ of Medicare and the floating a thought bubble about a $6 patient co-payment for visits to a general practitioner.

There is no question that Medicare is sustainable - Australia lies around the middle of OECD countries in terms of the proportion of GDP we spend on health.

Nevertheless, Australia comes close to the top of the list when it comes to many objective health outcomes, suggesting our total spend on health is good value.

I am not a general practitioner, but perhaps this makes it easier to bring the perspective of an interested outsider to the discussion.

I am much more concerned about the financial sustainability of general practice under current funding arrangements.

Reports come to the AMA of practices closing because they are not financially viable under their bulk-billing business plan. Indeed, the costs in a bulk-billing practice are such that it is only viable if it is practising ‘six minute medicine’, it is receiving a full or partial subsidy for its infrastructure (for example, in a so-called Super Clinic), or it derives additional income from other activities, such as occupational medicine, mole clinics or cosmetic medicine. That is, they become a viable general practice only by not doing general practice.

More generally, general practices remain sustainable through private billing. Here, privately billed patients effectively subsidise bulk-billed patients - in many cases the pensioners, children and socially disadvantaged. As the difference between the private fee and the MBS rebate becomes greater, so this Robin Hood approach to sustaining general practice becomes less viable and under increasing pressure.

The freeze on Medicare rebates has only exacerbated the problem. While rebates are frozen, practice costs continue to increase. Many of these costs, such as rates and electricity, are determined by levels of government. Others, such as rents and staff salaries, are determined by market forces that have no respect for a freeze on Medicare rebates.

The argument has been put forward that a freeze on Medicare rebates could drive greater efficiency. This ignores the very real efficiency gains that have already been made in general practice as rebates have lagged well behind general inflation and wages growth.

Much of the efficiency over the years has come from working in larger practices, so that overheads and the costs of receptionists, practice nurses and so on are shared between more general practitioners.

Of course, in many parts of country Australia, coalescence into larger practices is not an option.

Nevertheless, the Productivity Commission’s Report on Government Services 2014 shows that the real expenditure in general practice has hardly changed in 2012-13 dollar terms between 2006-7 and 2011-12.

With general practitioners providing services to an aging population, with more chronic disease and more issues being raised at each consultation, this is a remarkable outcome, and speaks highly for the efficiency of Australian general practice. 

Any discussion of the distribution of general practitioners is meaningless without consideration of the business model in different locations.

General practices are small- to medium-sized businesses, with all the difficulties these experience operating in Australia, or they are run by corporate entities with executive bonuses to support and shareholders to satisfy.

If the business model works best with high levels of private billing, it is inevitable that practices and general practitioners will be drawn to locations where this is possible.

The decision-making is not too dissimilar to that of Ford, Holden and Toyota in abandoning their motor vehicle manufacturing in Australia. If the business model does not work in one location, look to another.

The current fee structure rewards fast throughput medicine, yet studies in general practice show that seeing patients for longer reduces the overall number of consultations.

Time taken to conduct a detailed history and examination also has the potential to reduce dependence on pathology, imaging and specialist referral during patient care, with their associated costs.

Is it time to review the incentives within the MBS for general practitioners, and to increase their rebates for longer and more complex consultations? A pilot trial could provide more information on the impact, and perhaps show if there is also an effect on emergency department presentations and hospital admissions.

The Government has indicated it is loath to increase taxes so, if more money is to be directed to general practice, it has to come from other areas of the health budget or patients’ pockets, either as a payment at the time of the service or, perhaps, from their contributions to private health insurance.

Currently the private health insurance contribution to general practice is very limited, though there is no such constraint on supporting services provided by physiotherapists, chiropractors, dieticians, and so on.

Any involvement by private health services in general practice would have to be within a model that maintains professional independence and the principle that the patient is the customer.

The other avenue to increase support for general practice is through practice incentive payments (PIP).

These provide incentives for services that match Government priorities and ‘quality’ general practice, but any change to the balance between fee-for-service and PIPs will need to be carefully thought through, not least because many doctors working in general practice get paid a percentage of their fee income.

The debate on health care needs to move from costs to value.

The Productivity Commission’s Report shows that the Commonwealth spent $7.4 billion on general practice, of which MBS rebates made up $6.8 billion.

This is extraordinary value – consuming approximately 5 per cent of total health spending but providing the vast majority of consultations and chronic disease management services. It must be sustained and strengthened.

It is worth remembering that for both individuals and governments, it is better to have health than wealth in terms of overall wellbeing.

Published: 04 Mar 2014