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!

1. 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.
2. 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.
3. Ink for the printer – let’s allow 2 cents as most medical offices don’t have massive high volume printers.
4. 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.
5. 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.

1. 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?
2. Staff have to be employed to manage this fund.
3. 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.
4. Appointment of compliance officers. After all, someone will be auditing that safety net, I am sure.
5. 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?

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