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The Medicare Freeze Will Create A 'Healthcare Siberia' In Rural Australia

This is not a scare campaign, it is basic economics.

11/05/2016 3:09 PM AEST | Updated 15/07/2016 12:52 PM AEST
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This is not a scare campaign, it is basic economics.

This sounds like the leader for a B-Grade horror flick, but it's not. I'm talking about the GP Tax Mark V. First introduced by the Abbott Government in its 2014 Budget, then rebadged on no less than three occasions, the GP Tax played a big part in sinking former Prime Minister Tony Abbott's prime ministership and bringing to an early end the tenure of his first health minister Peter Dutton.

But now the Turnbull Government is smuggling it back in via its election-eve Budget in the hope that nobody will notice. It's not called a GP Tax, but the "extended Medicare Benefits Schedule rebate freeze" is basically the same thing. As Christopher Harrison from Sydney University's Family Medicine Research Centre explains, the rebate freeze will lead to higher costs for patients. In fact, the Abbott Government's plan for a $7 co-payment will look like a minnow compared to the $14.40 co-payment that patients will be slugged with in a few years' time.

How does this work? It's simple. By freezing the amount the Government pays you (or your doctor) when you see a GP, it means you get less and less over time. The Australian Medical Association's President, Brian Owler, makes the obvious point: "The poorest, the sickest and the most vulnerable will be the hardest hit."

Of course, the problem is greater in rural and regional Australia where incomes are lower and bulk billing rates are below the national average quoted by the Government. These are the areas where we should be encouraging people to see their GP because it is in rural and regional Australia where rates of chronic disease and mental health problems are highest. Women in remote and regional Australia are 1.3 times more likely to report diabetes and 15 to 24-year-old males in regional areas are 1.5–1.8 times more likely to commit suicide. Compared to the average in major cities, life expectancy in regional areas is one to two years lower and in remote areas up to seven years lower.

That's why no one is surprised that the Rural Doctors Association of Australia is fuming. They know that rural practices -- many of which are already losing money -- will be forced to close. The organisation's President Dr Ewen McPhee says that "the continuation of the Medicare freeze is going to send more rural and remote patients to the healthcare equivalent of deepest, darkest Siberia."

This is not a scare campaign, it is basic economics. The researchers from Sydney University estimate that the extended rebate freeze will lead to an average yearly income loss of $50,000. If it costs $150,000 plus a GP's wages to run a regional practice, then there aren't a lot of options. Trying to churn through more patients limits the amount of time each person gets to see their GP. Attempting to pass the cost on in a cash-strapped area means many patients can't afford the bills and will avoid visits.

You can hit up the middle and high income earners in an attempt to cross-subsidise the costs. Many practices are already doing this but there is a limit to how much you can recoup.

So when GPs do turn to a $14 GP Tax many people will avoid trips to the doctor.

That will cost government more, because it is far less expensive for health problems to be addressed early by a GP compared with treatment in hospital. A single night in a hospital bed can cost more than $3,000 and people with poorly checked chronic conditions can face many trips to the emergency room if a GP hasn't had the opportunity to make timely decisions on the treatment and care they need.

The sad fact is that this new GP Tax will hurt everyone. In the bush it is going to be harder to attract doctors and other health professionals. It will mean a growing gap between the city and the bush when it comes to health. Not a good idea if you are trying to build a fairer and more united Australia, an aim that doesn't appear to be on the Turnbull Government's radar.

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