Equity, payment incentives and cost control in Medicare: an assessment of the government’s proposals

Abstract

The Australian health system combines equitable access to comprehensive and affordable health care and effective controls on health expenditures. The proposed changes to GP funding and Medicare claiming procedures announced in the government’s package ‘A Fairer Medicare – Better Access, More Affordable’, comprise the first major change to the structure of Medicare since its introduction in 1984. The government claims the package is a response to falling rates of bulk-billing and that it will benefit all Australians by providing more affordable access to GP services and improved access to free GP consultations for concession cardholders. This paper examines the likely impacts of the package, focusing on the proposed changes to bulk-billing and payments to GPs. It outlines the broad features, strengths and outcomes of the current Medicare system, and discusses how the package changes the incentives for how GPs charge patients and the likely impacts on patients and the level and distribution of health expenditures.