15. Long-term health effects: Medicare Benefit Schemes bulk billing in Australia

Executive summary

Bulk billing in Australia is a system under Medicare where healthcare providers bill Medicare directly, accepting the government’s payment as full compensation. According to Culyer (2010), the system covers services under the Medicare Benefits Scheme, where doctors receive 85% of the scheduled fee directly from the government, saving them from the administrative burden of billing patients. In contrast, when patients pay upfront, they can claim rebates of 75% or 100% of the scheduled fee, depending on the type of service.

A study published by the Medical Journal of Australia examined factors influencing the likelihood of bulk billing. It revealed that patient characteristics such as health condition, income, geographic location, and the size of general practitioner (GP) practices determine whether patients are bulk billed or pay out of pocket. Bulk billing is more common for patients with chronic illnesses, those with concession cards, or private health insurance, as these individuals often seek cost-free care. In contrast, higher-income families, patients at larger practices, or those who book appointments tend to make “out of pocket” payments.

Despite bulk billing incentives for GPs in rural and remote areas, the study found that patients in inner and outer regional areas prefer paying out of pocket. Additionally, the research showed that factors like GP visit duration, patient age, and gender do not significantly influence whether a patient is bulk billed.

An ongoing survey, launched in 2013, gathered data from 2,477 Australians aged 16 and older. Conducted by the Centre for Research Excellence in the Finance and Economics of Primary Healthcare, the survey confirmed these trends and patient preferences, highlighting the impact of socioeconomic and geographical factors on bulk billing practices.

Out of pocket costs

Delays in medical treatment due to out-of-pocket costs can significantly impact patient health outcomes. When individuals forgo necessary healthcare—whether by not filling prescriptions or avoiding visits to general practitioners (GPs)—they may experience deteriorating health, exacerbating existing conditions. This is particularly concerning for vulnerable populations, including tribal communities, the elderly, women, individuals with low or fixed incomes, and those living with chronic diseases.

People with chronic illnesses require consistent medical care and regular visits to healthcare professionals. Increased out-of-pocket expenses can deter them from seeking timely treatment, leading to serious health complications. For instance, patients with chronic conditions like diabetes, heart disease, or Hepatitis B and C are at greater risk if they cannot afford necessary prescriptions or routine check-ups. The inability to access care not only jeopardizes their health but also hinders their capacity to manage their conditions effectively, resulting in adverse long-term health outcomes.

Moreover, the financial burden of out-of-pocket costs disproportionately affects Hepatitis B and C patients, who may struggle to cover the expenses associated with their treatment. This leads to delays in accessing critical healthcare services, which can worsen their health status and increase the likelihood of complications. As these individuals defer treatment, their conditions may deteriorate, requiring more intensive and costly interventions down the line.

The overall health system may face additional strains as a result of these delays. Increased health complications can lead to higher rates of hospitalization, emergency care, and more expensive treatments. Consequently, the financial burden on the healthcare system can grow, resulting in escalating costs that impact not just individuals but the entire system. Inadequate access to timely medical care creates a vicious cycle where both patient health and healthcare system efficiency are compromised, underscoring the critical need for addressing out-of-pocket expenses to ensure better health outcomes for all.

Conclusion

The bulk billing system, endorsed by the Abbott government, signifies a pivotal shift in Australia’s healthcare landscape, aiming to balance accessibility with cost management. Critics of the current system highlight that the fee-for-service model and minimal out-of-pocket payments contribute to escalating healthcare costs and the proliferation of low-benefit medicines. This perspective is rooted in the belief that when healthcare providers are reimbursed per service rendered, there is a tendency to overprovide services, which can lead to inflated medical expenses without corresponding improvements in patient outcomes.

Many health policy analysts argue that introducing cost-sharing mechanisms—either on the supply side (healthcare providers) or the demand side (patients)—is essential to mitigate the risk of overutilization of medical services. According to Ellis and McGuire (1993), implementing such measures could help control the costs associated with excessive medical interventions and ensure that services rendered are both necessary and beneficial.

Proponents of fixed payment reimbursement plans contend that they can create more predictable healthcare expenditures and promote efficiency within the system. By setting predetermined fees for specific services rather than allowing providers to charge varying amounts based on the number of services performed, the healthcare system could discourage unnecessary treatments. This aligns with the findings of Santerre and Neun (2009), who suggest that requiring consumers to make nontrivial payments can enhance accountability and encourage them to be more discerning about their healthcare choices.

Such changes in policy may encourage a more sustainable healthcare model that prioritizes high-quality, cost-effective care. As policymakers seek to navigate the complexities of healthcare financing, the bulk billing system’s evolution will be critical in determining how effectively Australia can balance patient access with the need to control costs and enhance the overall efficiency of the healthcare system. Ultimately, these discussions reflect a broader conversation about the role of financial incentives in shaping healthcare delivery and ensuring that resources are allocated effectively to maximize patient outcomes.