Fact check: Have bulk billing rates increased under the Coalition?

Updated

The claim

Medicare is a key election battleground for the Coalition and Labor.

Federal Opposition Leader Bill Shorten has promised a Labor government will remove a freeze on Medicare rebates paid to doctors from January 2017, saying this would "protect bulk billing".

But cabinet minister Josh Frydenberg told ABC News Breakfast that the Government would not remove the freeze and defended the policy, saying bulk billing rates had "increased substantially" under the Coalition.

"Importantly, bulk billing rates averaged under the Labor Party 79 per cent and they have gone up to 85 per cent," he said.

Have bulk billing rates increased during the Coalition's tenure? ABC Fact Check investigates.

The verdict

Mr Frydenberg's claim checks out.

Bulk billing rates for general practitioners have increased by 4 percentage points since Labor was in government, despite a freeze on their rebates in 2013-14 and since July 2015.

Specialist bulk billing rates have also increased over that time, despite a longer freeze on their rebates.

But experts told Fact Check it was not possible to know why bulk billing rates had increased in spite of the freezes on rebates.

They say a range of factors could have increased bulk billing, including that the freeze on GP rebates had not been in place long enough to affect bulk billing rates and that doctors were absorbing rising practice costs themselves instead of passing them on to patients.

An increase in ageing patients on pensions who were more likely to be bulk billed could also have contributed to the increase.

How does Medicare work?

The Medicare Benefits Schedule (MBS) was introduced in 1984 to give everyone in Australia access to government-subsidised health services.

Visits to general practitioners and other healthcare professionals, pathology, diagnostic and hospital services are all covered by the MBS.

The Government pays doctors a schedule fee for different types of consultations they provide to patients.

This schedule fee includes the doctor's time as well as other costs such as consumables like needles and bandages, practice administrative costs and rent on the consulting rooms.

The government benefit paid to doctors ranges from 75 per cent of the schedule fee for private patients in hospital to 85 per cent for specialist services and 100 per cent for GP consultations.

Doctors can charge more than the schedule fee, but the shortfall is paid by the patient.

But some doctors will agree to accept just the benefit paid by the government as full payment for that service.

This is referred to as "bulk billing", with no payment made by the patient.

The freeze on MBS rebates

Schedule fees have traditionally been indexed each year using a combination of a wage index and inflation.

But in the May 2013 budget, the then Labor government announced that the MBS fees, usually indexed on November 1 each year, would be instead realigned with the financial year and indexed on July 1.

This in effect froze the rebate for eight months to achieve savings of an estimated $664 million over four years.

In its first budget in May 2014, the Coalition extended the pause for two years from July 2014, though GPs were excluded from the measure and their rebates rose in July 2014, as Labor had planned.

Then in December 2014, the Coalition announced that MBS fees for all doctors and health professionals would be frozen at July 2014 levels until July 2018.

Health Minister Sussan Ley said in a media release in March 2015 that the Government would proceed with its freeze on MBS rebates for GP and non-GP items "while we work with stakeholders to develop future policies".

In the May 2016 budget, the Coalition froze MBS indexation on all healthcare professionals fees at 2014 levels for a further two years to June 30, 2020, at an estimated saving of $925 million for those two years.

The basis of the claim

A spokesman for Mr Frydenberg told Fact Check the basis for his claim was the most recent Medicare statistics, which are for the first quarter of 2016.

The figures include bulk billing rates for the 2015-16 financial year to the end of March.

Mr Frydenberg has compared the first three quarters of this financial year with the first three quarters of every financial year since Labor took office in December 2007.

He has quoted the bulk billing rates for all "non-referred attendances", which includes services provided by GPs but not practice nurses, and not specialist services or services in hospitals.

This data shows that the bulk billing rate for these non-referred services was 78.2 per cent in the first three quarters of 2007-08, which covers part of Labor's first year in office, and was 84.8 per cent in the nine months to March this year.

Averaging rates across these periods shows that the bulk billing rate was on average 79.9 per cent under Labor (the first three quarters 2007-08 to 2012-13) and 84.0 per cent under the Coalition (the first three quarters 2013-14 to 2015-16), close to the numbers Mr Frydenberg quoted.

Increasing bulk billing rates

Fact Check considers a better approach than using Mr Frydenberg's first three quarters of each financial year is to use quarterly figures.

This allows the June quarter figures to be included and matches the data more closely to election dates.

For non-specialists, the bulk billing rate averaged 80.4 per cent from March 2008, Labor's first full quarter in office, until September 2007, when the election was held.

The rate averaged 84.3 per cent from December 2013, the Coalition's first full quarter in office, until March 2016, the most recent data available.

The freeze on rebate indexation applies to all services provided by GPs, medical specialists, allied health and other health practitioners.

Medicare data shows that bulk billing rates have been rising across all categories of healthcare professionals, though bulk billing rates are much higher in general practice than other specialty services.

Fact Check spoke to several experts about why bulk billing rates have risen while doctors' rebates have been frozen but none could offer a definitive explanation.

Containing costs?

Stephen Duckett, director of the health program at the Grattan Institute, an independent think tank, told Fact Check that bulk billing rates might have increased because there were more doctors practising, creating more competition in the market.

"[But] I think it is principally because inflation has been quite low over this period and so the costs that doctors have actually faced hasn't actually gone up dramatically," he said.

He said GPs could have decided to take a cut in income, or decided to increase the number of services they provide, or not have increased staff salaries, so their revenue went up but their costs did not.

Changing patient demographics

Andrew Bonney from the University of Wollongong told Fact Check said he thought the rise in bulk billing was being driven by a growing ageing population with chronic diseases who make up the majority of bulk billed patients.

Professor Bonney pointed to Australian Institute of Health and Welfare research from 2008, which showed that 3.2 per cent of the population received 51 or more Medicare services per year, accounting for 24 per cent of the total benefits paid.

He said GPs were reluctant to charge those patients a fee.

"I think it is a pretty long bow to try and draw a line between government policy and bulk billing rates," he said.

Is the freeze yet to bite?

Australian Medical Association president Brian Owler told Fact Check some GP practices "mix bill" patients, depending on their financial circumstances and could choose to bulk bill fewer patients.

"Certainly in those areas where there are lower incomes, I think the pressures to bulk bill are generally higher because people will change practices if there's a financial barrier there," he said.

But he said another factor is that the freeze on GP rebates has only been in place for two of the potentially six years for GPs because their rebates were increased in 2014 and the extension of the freeze represented a "tipping point".

"So far we've really only missed one indexation when it comes to general practice, apart from the delay in 2013," he said.

"I think the real effects of the indexation freeze are yet to bite."

Sources

Topics: federal-elections, health, health-policy, liberals, australia

First posted