A little background information for overseas readers added after receiving comments.
The situation here is all taxpayers pay a 1.5% levy to fund Medicare. Medicare provides a rebate to the patient for medical consultations and other health related services such as blood tests and x-rays. So let’s say the GP charges $65 for a consultation, the patient can claim back $36 from Medicare.
Poor patients can be “bulk-billed” by the doctor, meaning the patient pays nothing and the doctor accepts the rebate as full payment.
The plan discussed here is that patients will pay $7 for these services as an up-front co-payment, the government will reduce the $36 rebate down to $31 and bulk-billing will no longer exist.
I could have accepted a co-payment to visit the GP provided it was straightforward and not likely to cost more than itself to process. Someone is going to make money here at the cost of our poorest and most vulnerable. The $7 is to be effectively split between the doctor and the research fund.
The Medicare rebate IS being reduced by $5 so the medical practice only gets $2.
That $2 will get eaten up in processing costs. This is not an exhaustive list – if you can think of extra steps or costs, please let me know!
- Medical practice office staff now have to process collecting the $7. This may be cash or EFTPos. Let’s say the staff member is earning $20 per hour and spends 3 minutes processing the $7 that is $1.
- A receipt will need to be produced for the $7. Cost of a sheet of A4 (most of these things are printed on A4 these days it seems) is 4 cents.
- Ink for the printer – let’s allow 2 cents as most medical offices don’t have massive high volume printers.
- If the payments are received in cash, there is a trip to the bank. Banking is already a function and I am assuming the practice computer system will produce the banking paperwork, however the money will still have to be counted and balanced so there is an incremental time cost. I’m not quantifying that in this exercise.
- Additional EFTPos transaction fees or credit card merchant fees if not paid in cash.
The doctor isn’t going to see much of the $2. I assume that is the logic behind the differential between the $5 rebate reduction and the $7 co-payment.
Let’s move to the government end.
- Systems and staff to calculate and reconcile the $5 amounts to be transferred to the research fund – or is this just a rough estimate type thing?
- Staff have to be employed to manage this fund.
- The above requires computer systems, phones, desks, chairs. Hopefully some can be reallocated from the 16,500 APS redundancies, but even so there will be the depreciation costs of all this. Cost per transaction? I wouldn’t even hazard a guess, frankly.
- Appointment of compliance officers. After all, someone will be auditing that safety net, I am sure.
- Computers use electricity. Lights in the offices, heating and cooling.
I’d love to see the costings. Any other accountants want to buy into estimates?
I looked at this question when the co-payment was first mooted. I thought it was ill-conceived then. It is still an ill-conceived plan. Perhaps Medicare is in financial straits and there needs to be some adjustments, but that is not the issue I see here. The government has reduced the rebate by $5 so I will now, presumably, pay $5 more* than I already pay to see a doctor – which nets out to about $28 if I am lucky and none of the kids need a weekend consultation. But, but, but….. that $5 isn’t being used to improve the financial situation of Medicare at all, it is being put into a research fund. So HOW, exactly, is this saving Medicare? (*The $28 is in a NOT bulk-billed situation – maybe I’ll pay $7 more. Unclear at this stage.)
Many experts are already warning of the health risks to the poor who will avoid consulting a doctor or getting pathology tests done, so I will not address that issue. $7 may not seem much to Joe and Tony, but if you have to decide between buying a kilo of mince ($5.99) and a packet of pasta to feed the kids and getting that cough checked by the doctor, guess what the choice is? Yes the doctors can waive the co-payment but that is merely pushing a social responsibility into the private realm. If you are unemployed and saving for a new shirt for interviews, again the health question might be sacrificed.
I’ll leave you with this thought. The objectives of the Liberal Party state:
(j) in which social provision is made for the aged, the invalid, the widowed,
the sick, the unemployed and their children;
(k) in which adequate medical services are within the reach of all;
Veronica has written a heart-wrenching article about her personal situation. Her words certainly put the $7 in perspective.
Corrected – levy was given as 1.3% when initially published. This has been edited to 1.5%.