Frozen rebates. They sound like they could be a new dessert - cold, quite tasteless but certainly not fattening. Some thought they were just a passing fad but it looks like there here to stay.
As a result many general practitioners will be disappointed by the return of the Coalition. Health financing was one of the key areas of difference between the two major parties in the recent election.
Bulk billing rates are at record highs. To the economists of the Liberal Party this means the rebates are at least adequate. The market has spoken and in these times of austere government spending it would be reckless to increase them.
The Medicare freeze originated with the Labor government in 2013 and was embraced by the Coalition when they came to power. The extension to 2020 announced as part of the Liberal Party platform at the last election came as a shock to many in the medical profession. However, if bulk billing rates stay at their current levels there is no reason to believe the rebates will increase again in 2020. It's the market, dummy.
So, stop bulk billing. That's what everyone is telling you. It sounds easy enough. Yet, there are a couple of wrinkles.
The bulk billing incentive in rural areas is $9.25. You lose this if you do not bulk bill. The transaction costs for every consultation are probably a dollar or two and you may want to make up for the last 3 years of the freeze. For some patients going from 0 to 18 dollars in out of pocket expense is quite an impost.
Ceasing bulk billing is simple enough for practices where the bulk billing rate is already low. The slight change in patient mix that results is compensated by the increased income. It is much more difficult for practices that largely or exclusively bulk bill. They should expect a significant decrease in their patient numbers and subsequent income.
If making the change to private billing is not viable the options are stark; either cease whingeing or cease general practice.
The constant rebalancing of supply and demand is the hallmark of an efficient economy. This is achieved through the process known by economists as “creative destruction”. It's the way of the future and the market is never wrong.
Anyone for dessert?
