Are we zombie-walking into an American healthcare system?

How do we maintain equitable healthcare without blowing the bank? Our primary care system is the key, writes Jillann Farmer …

In my first year of general practice, a patient I had seen a couple of hours earlier requested a home visit. When I called to see what was wrong, she told me she had left her glasses at the surgery and wanted me to drop them off. “But it’s okay doctor, bring a Medicare form and I’ll sign it”. I dropped the glasses off on my way home, and Medicare was spared the bill.

It was a moment summing up the potential abuses of bulk-billing.

That day always comes to mind when considering the “free at point of care” goal for bulk-billing services. I have worked in fully bulk-billing, mixed billing and fully private practices. There is a necessary balance needed in terms of free at point of care versus unfettered consumption of health care services. Even in my mixed billing practice, some patients accelerate their use of services after hitting the Medicare Safety Net, trying to squeeze as many specialist attendances as possible into a month or two at the end of the year before it resets in January. Same with the Pharmaceutical Benefits Scheme safety net. Maybe we should have that kind of insurance all the time.

I am not against bulk-billing. I detest that we have moved to a user-pays system to keep general practice sustainable and GPs even remotely appropriately remunerated. But I do have mixed feelings.

I fear that years of bulk-billing, combined with feminisation of the workforce has led us to a place where the skill and contribution of Australia’s GPs is neither understood nor valued. And because of recent (intentional or otherwise) lazy language about GP pay (rather than patient rebates) being one of the core issues the Royal Australian College of General Practitioners is seeking to address, it is worth reflecting on how Australia perceives its national health insurer.

We talk about having a publicly funded health care system. What we have is a publicly funded hospital system, and publicly insured ambulatory care services for both GP and non-GP medical specialists, and some limited insured services for allied health services. Medicare was set up under the Health Insurance Act 1973 and remains the sole provider of health insurance for outpatient services.

Most people don’t think of it as health insurance. But we pay premiums (the Medicare levy) and make claims (either ourselves, or the health provider lodges it on our behalf). Like the United States health care system, we have what is known as a “deductible” (a threshold for out-of-pocket costs after which higher benefits kick in – just ours is called the Medicare Safety Net). We increasingly have co-payments, which is the amount you pay out of pocket when you go to see the doctor. Incidentally, when I lived in the US, my primary care maximum co-payment was $15, and my other specialist co-payment was $20. In Australia, many patients pay hundreds of dollars for non-GP specialist consultations, and $40–$50 out of pocket for GPs.

In sum, this means that everything that happens outside of the public hospital system (and some of what happens inside it) is actually for-profit health care operating in the context of a government monopoly health insurance provider. So long as we have health care professionals selling a product (health care) with their income linked to how much of it they sell, it’s for profit. If health care practice outside of hospitals did not turn a profit, it would not exist.

Our system has many strengths, including community rating. Our premiums are unaffected by personal health history without fear of excluded conditions, pre-existing illnesses, or hidden policy caveats. We have an income-based differential in premiums, so the rich subsidise the poor.

For a person earning $200 000 per annum (let’s call her Carol), her annual Medicare levy is $4000, roughly $330 a month. Sounds pretty good. However, Carol must also pay the Medicare Levy Surcharge, which is a further 1.5% of taxable income bringing it to roughly $580 per month. By international standards, that’s also pretty good. But it doesn’t cover dental, optical or allied health services (except in certain restricted circumstances), and provides patchy coverage for medical consultations.

If Carol takes out private health insurance to at least partially cover those allied health gaps, her additional monthly costs go up by a further approximately $120 to 160 per month. She still has to pay the Medicare Levy Surcharge, for a total of $700 a month, and still can’t see a doctor, physiotherapist, psychologist and be sure she won’t have large out of pocket costs.

Purchasing private hospital insurance will buy Carol relief from the Medicare Levy Surcharge, so she saves the $330.  She pays around $500 per month for this, a total spend of $830 per month, and still can’t see a doctor, physiotherapist, psychologist and be sure she won’t have large out of pocket costs.   

Let’s contrast that with “Eric” who earns the Australian median income of $70 000. Eric pays the Medicare Levy of $1400, just over $120 per month. Eric can’t get Medicare-funded access to allied health unless he has a chronic disease, and if he has, for example, diabetes, he gets a paltry five sessions per annum.

For comparison, the US plans under the Affordable Care Act (which weeds out “junk” plans), come it at about $US 700 per month, or about $1000 AUD per month. The main difference between Australia and the US is that there is no concession for low income earners. You can only have the insurance you personally can afford or that comes with your employment. Some jurisdictions in the US also have safety net hospitals; for example, the famous Bellevue Hospital in New York will treat uninsured patients without cost, funded by the City.

So what is my point? It is that Medicare, as a health insurance product, is nowhere near best in the world. Higher income earners pay about the same as US residents and get much less back. Higher income earners subsidise the system to support lower income earners. This is actually a good idea, but it’s not well understood and not freely articulated. For all its shortcomings, Medicare is better than nothing: much, much better than nothing for the poorest Australians. However, accessing anything other than doctors or drugs, Medicare largely lets you down.

Our public hospital system is very good because of funding it gets from taxpayer dollars, including the Medicare Levy, but at least some of that comes because of the disproportionate distribution of funds to hospital care and away from ambulatory care. With waiting lists in the public system getting worse, with clinically significant delays to treatment now almost the norm, we, along with all other health care systems in the world, must face the fact that we cannot continue as we are.

If the goal of the governments over the past decade was to take us towards a US system, they got us a lot closer by stealth than you might imagine. I had a patient recently who desperately needed surgery for a very painful and debilitating condition. Their surgery was cancelled several times, and in the end, their employer, unable to bear watching them suffer any longer, agreed to pay for them to have the surgery in the private sector.

The care given in the public system is world class – or so the prevailing wisdom dictates. The reality is, the care given in the public system is very good, if you can get access to it. However, seeing the difference in access for my patients who are privately insured or who can afford out-of-pocket private specialist or allied health fees versus those who are not, the only conclusion I can draw is that we have embraced inequity, not quite as badly as the US, but we are on our way. We seem to be quite happy to have whole swathes of health care out of the reach of people on or below the median income. The system is designed as though anything other than doctor care is a luxury.

So how do we get an equitable system without blowing the bank? Our primary care system, in my view, is the key. Despite its woes, it is one of our great strengths. I really missed my Australian GP when I lived in the US. I needed a total of six doctors to do the work they used to do.  

Working in general practice in Australia is incredibly frustrating, because every day is the challenge of knowing what optimal care would be and having to accept that it just isn’t available. So inadequate as I might be, I design physical therapy exercises for my injured patients. I give dietary advice. I treat mental health conditions. I educate patients with diabetes, patients with heart failure and people with chronic obstructive pulmonary disease. I counsel domestic violence survivors. All jobs that, if Medicare actually worked like proper health insurance, I could delegate and coordinate and would likely be better done by people with specific skills and training in those areas.

I hope that the Strengthening Medicare Taskforce is going to deliver some improvement. A fundamental shift to include much more access to publicly funded allied health and nursing services is needed. This might sound like it would lead to cost blowouts, but the benefits in years to come could be immense.

My suggestions are as follows:

• Progressively increase the share of the health budget directed to primary care – not just GP rebates, but proper insured access to primary care allied health and nursing.
• Decide whether we want free at point of service or not – don’t leave that to chance or altruism. And if it is wanted, then it must be funded.
• Give easier access to the full scope of services – this would allow, for example, intensive support (more than five sessions) for newly diagnosed patients with diabetes, or aggressive rehabilitation for injuries not covered under workers’ compensation. Where there are no private allied health professionals, remove barriers to GPs referring direct to publicly funded hospital services.
• Give GPs the authority to refer into the private sector on Medicare funding if, for example, after six months, a patient with a serious and deteriorating condition has still not received treatment. This happens currently, but is sourced through health departments as middle men. However, putting this authority in the hands of the person who knows the patient best and sees them most frequently is likely to be more effective, responsive and will focus the attention of the public system if such referrals come with a penalty for them.
• Fund Medicare rebates for non-contact time. This is already in part achieved through Chronic Disease Management Plans, but there is a lot that happens outside this space. It doesn’t have to be GP rebates, but could, for example, support nurses to work in their optimal scope. It would also really help with the frustration expressed by patients that they have to have an appointment to get a renewed referral or prescription.
• Finally, and this is a big one, I would ask the system to stop disrespecting general practice and the people who work in it. Among all the discussion about role substitution and working at top of scope, I am not seeing any non-doctors say that they value general practice. I am seeing people who say that the work we do is not worthwhile and could easily be done by others. Much of it could be, but isn’t because they would not be paid. So the GPs of Australia have been holding this together. I would love to see someone such as the Health Minister or even the Pharmacy Guild acknowledge the skill set that they believe GPs have – that would be a good starting point for a discussion about where the professional boundaries lie.

In summary, our health care system needs stop the divide between hospital and GP care and between medical and non-medical providers. State health ministers regularly talk about the health care system and what they mean is the stuff they fund, largely the acute hospitals. But primary care needs to be an integral part of that system, and until it is, we are going to continue to deliver inequity and poorer quality care. It’s bad for patients, creates inefficiency, and results in bad decisions that are not in the patients’ interest. At the end of the day, we should be laser-focused on what is good for patients, no matter their ability to pay.

Jillann Farmer is a Brisbane based physician currently working in emergency medicine. She lived in New York during the first wave of COVID-19.

The statements or opinions expressed in this article reflect the views of the authors and do not necessarily represent the official policy of the AMA, the MJA or InSight+ unless so stated.

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