Cost of living crisis affecting GPs

As the cost of living crisis continues, more Australians are delaying their own health care due to cost, and the decline is affecting GP clinics.

The cost of living crisis is causing Australians to postpone making appointments to see a doctor.

According to researchers at Monash University, the cost of living crisis — the result of inflation, the coronavirus disease 2019 (COVID-19) pandemic, the Russian invasion of Ukraine, and now an economic downturn — is affecting the health of Australians.

“Rising prices have an obvious negative impact on our financial health. But they can also have a profound effect on our physical and mental wellbeing, which is often overlooked,” Professor Nicole Black and her team wrote.

“Australians may continue to feel the health effects of high inflation for quite some time.”

InSight+ reported last year that up to 10% of patients would not visit their general practitioner (GP) due to cost (here), and that people with chronic disease with a sudden reduction in income wouldn’t be able to afford to go to a GP.

“I would have someone tell me that they would have come sooner but it was too expensive, every second day,” one GP, who wanted to remain anonymous, told InSight+.

Decline in bulk-billing

The continued cost of living crisis is affecting how GP clinics operate and the feasibility of offering bulk billed sessions.

According to a recent business reporting health data, Cleanbill (which has aggregated data previously lacking regarding the number and type of GP clinics in Australia), there was a significant decline in GP clinics offering bulk-billing in 2023 in Australia.

A 2023 report from the Australian Medical Association (AMA) estimated that the freeze on Medicare rebates resulted in a loss of around $3.8 billion from the primary health care system. The Australian Government’s recent Medicare incentive boost was $3.5 billion, less than the AMA’s figure.

Federal Minister for Health and Aged Care Mark Butler conceded that the system was in trouble.

“General practice, which is the backbone of our healthcare system, is in a truly parlous state,” said Mr Butler (here).

Patients and GPs hit with a “double whammy”

Experts say that we may not know how the crisis has affected GP clinics for some time.

Professor Anthony Scott, a professor at the Centre for Health Economics at Monash Business School, told InSight+ that GPs are reducing bulk-billing services to survive, and the cumulative effects of delayed health care are difficult to gauge.

“I’m interested in how the health workforce, and medical workforce in particular, makes its decisions and what drives that,” Professor Scott said.

“If there are lots of GPs in an area, we’ve shown that the bulk-billing rates are higher, and prices are lower. There’s more competition, which is good for patients.”

Professor Scott explained that these measures often focus on patients and not on doctors.

“Trying to work out what kind of things motivate doctors to make the decisions they do is important from a policy perspective. The policies generally assume that funding matters and funding works, but it doesn’t always matter for [GPs],” he said.

“There was always a proportion of people foregoing care due to cost — even before the cost of living crisis. That’s probably increased a little bit during the cost of living crisis. But during that same time, GPs were reducing bulk-billing because of the Medicare fee freeze.”

“So, patients got a double whammy. It would also have made [patients] think twice about going to the GP. If GPs get fewer patients, that reduces their revenue.”

The pressure on GPs has increased in the last few years, Professor Scott said, and since the rebate has not increased, they have had to stop bulk billing.

“There is a bit of evidence that the fee freeze in 2014–2018 had longer lasting effects. GPs were reducing the number of nurses employed and that kind of thing. Then during [the COVID-19 pandemic], as well, practice costs did increase. But after [the COVID-19 pandemic], it’s hard to know what happened with GP costs. Gas and electricity prices have also increased, so they were facing some cost pressures as well,” Professor Scott said.

“[Rates] are starting to pick up again, but they’re not back to where they were, yet.”

An uncertain future

With inflation rising more than expected in March, the cost of living crisis could continue impacting GPs and their patients for some time to come, which raises concerns about the consequences of delayed care.

“[Delayed care] is an issue, but there’s not much evidence to show how big an issue it is. It certainly happened [during the COVID-19 pandemic]. People were still dealing with that and the system waiting lists. There’s some evidence that patients were getting diagnosed with cancer later than they ordinarily would, which meant that their outcomes would have been worse,” Professor Scott said.

Professor Scott said that the government needs to make GP specialisation attractive to new doctors, to make the profession more sustainable for doctors and their patients.

“Government investment in primary care hopefully will be changing, and that that will influence GP recruitment and retention as well.” Professor Scott said.

“We’ve got a budget coming up in May as well, and maybe more announcements for primary care.”

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