How the government’s ‘free healthcare’ promise could backfire on GPs…

Last week Labor announced it will extend the triple bulk billing incentive to all Australians – along with a 12.5% PIP for practices that bulk bill 100% of patients – claiming nine out of 10 GP consultations will be free by 2030.

Within hours, the Coalition promised to match the $8.5 billion investment… but perhaps they should have waited? The backlash began almost immediately, and it’s been brutal.

Former RACGP president, GP and researcher Professor Karen Price called it “performative politics.”

“No Government can promise ‘free healthcare’,” Professor Price posted on X. “It’s not helpful to anyone to pretend this promise can be delivered.”

University of Adelaide Professor and Canberra GP Dr Louise Stone wrote that addressing dissatisfaction with bulk billing “might be a government KPI, but it’s not mine. I need to ensure my patients are safe. Bulk billing privileges quick medicine.”

And they weren’t alone in their criticism. Sixty two percent of around 900 GPs who responded to an AusDoc poll said the policy would damage the financial viability of general practice, and 78% predicted their income would decline if they switched to universal bulk billing.

Peak bodies not consulted

While the AMA and RACGP had each released detailed proposals aimed at better supporting long consultations, particularly for people with chronic and complex conditions, the major parties ignored these calls for bigger rebates.

AMA president and GP Dr Danielle McMullen and RACGP President Dr Michael Wright both said their organisations had not been consulted on the policy.  (ACRRM president Dr Rod Martin called it  “history making.”)

Immediately after the announcement, Dr Wright said the Medicare package was “certainly welcome,” but that the rebates were still too low to cover the cost of care.

“More targeted funding to support people with chronic and complex conditions is still the most cost-effective way to improve Australia’s healthcare system,” he added, reminding people that the RACGP had advocated for increased patient rebates for mental health and longer consults.

Dr McMullen said that while practices in rural and regional Australia and areas of socioeconomic disadvantage would likely see a rise in bulk billing, “it is quite difficult to see how it will make a huge increase in some of our central metropolitan areas.”

“We would have preferred to see a restructure of the underlying Medicare structure so that all Australians could have access to better rebates and for longer consultations,” Dr McMullen said the day of Labor’s announcement.

“We know in some of our metropolitan centres and in some of our better off suburbs, the average out-of-pocket cost is now above $40 and so the $20 bulk billing incentive still doesn’t come close to meeting those costs, but really, I do hope this will make a difference in rural and regional communities and in our areas of socioeconomic disadvantage,” she said.

How many practices will really get the extra 12.5% PIP that requires every patient to be bulk billed?

Interestingly, the table released by the Government to show how the Medicare payments will change includes the 12.5% PIP payment which will only be available to practices where all GPs bulk bill 100% of patients. Exactly how payments will be split between GPs and practices has yet to be determined.

Show us the modelling…

The Government says that along with 90% of GP visits being bulk billed the number of fully bulk billed practices will triple to around 4,800 nationally by 2030.

At a press conference in Adelaide on Thursday, Health Minister Mark Butler insisted that most practices will be better off if they bulk bill all of their patients.

“Our modelling is very clear. We have a good line of sight of general practice income, practice by practice, and we are able to model which practices will be better off and which won’t. We are confident that for the majority of practices across the country, it is in their financial interest to take up this offer and become fully bulk billing practices,” Health Minister Mark Butler said. However, the actual details of that modelling remain opaque.

At the senate estimates hearing on Wednesday, Penny Shakespeare, a deputy secretary at DoHAC, explained that because the modelling was done at individual practice level – looking to see if the additional income under the new policy would be more than the out-or-pocket fees charged in the last financial year – there were some restrictions on what we can release because of Section 130 of the Health Insurance Act.”

Risk of over-servicing

As University of Melbourne health economists Karinna Saxby and Professor Yuting Zhang pointed out in this article – when prices are low or free, people tend to use services more, even when they’re not really needed.

“Previous research showed that free care increased the use of health care but does not necessarily improve health outcomes, especially for those who are relatively healthy,” they note, arguing instead that resources should be targeted to people with low incomes, children and those in rural and remote areas.

Will this messaging create unrealistic patient expectations?

“Obviously one of our concerns is that come the date of this announcement, our practices will face hordes of patients expecting to be bulk billed no matter where they are and as I’ve said, there are practices for whom even these extra incentives don’t meet the cost of providing care. I am worried about our reception staff, who are often the first line in facing angry patients,” Dr McMullen said.

In his weekly update on Friday, Dr Wright said RACGP member feedback reflected several concerns, including this one.

“By increasing bulk-billing incentives rather than rebates, and the narrative around ‘free visits’, devalues GPs and will be confusing to patients who may misinterpret these changes as increasing rebates and having an unrealistic expectation that should be bulk-billed. There is both fear and anger about being ‘forced to bulk bill’ because of this narrative.”

Dr Faisal Khan, a NSW GP, also expressed this sentiment. “It’s disappointing to see how government decisions have devalued general practice by relying on bulk billing as an expectation without ensuring sustainable funding. The influence of consulting giants, who have little connection to frontline patient care, only worsens the situation,” he wrote.

So what’s next?

For now the Government seems to be doubling down. RACGP President Dr Wright said in his emailed weekly update that he has been gathering feedback from many members, and the College “is taking these messages back to Government to highlight how its policy can be improved.”

We’ll wait and see…

For more information:

Strengthening Medicare with more bulk billing
RACGP’s Medicare announcement member FAQs