Tony Abbott’s GP co-payment is “reaching out beyond the grave” in the guise of new bulk-billing measures announced in Tuesday’s economic update, the Australian Medical Association has warned.

The government’s midyear economic and fiscal outlook (Myefo), released on Tuesday, included reducing the rebate health professionals get from the government for bulk billing diagnostic imaging and pathology services from 15% to 10% of the Medicare benefits schedule fee.



The AMA said the measure made up part of the government’s $5 GP co-payment proposal, abandoned by Abbott when he was prime minister in December last year.

“Despite Tony Abbott saying that the measures are dead, buried and cremated, it appears that the hand of the co-payment component is reaching out beyond the grave,” AMA president, Brian Owler, told Guardian Australia.

The savings measure will save $650m over four years and is due to start on 1 July.



The 15% incentive for concession card holders and children under 16 will still apply for diagnostic imaging, such as magnetic resonance imaging (MRIs), but will be scrapped for pathology services.

The Consumers Health Forum has warned the changes will be a barrier for poorer patients to access services like blood tests and brain scans.

“Many patients requiring pathology tests would face out-of-pocket costs for the first time under these budget measures, if pathology practices fail to absorb the impact of reduced Medicare benefit payments,” its chief executive officer, Leanne Wells, said.

“Pathology tests for the most part have not attracted any out of pocket charges in the past. The government’s saving measure, however, poses a new hurdle in the way of patients whose GP has referred them for what could well be a significant test.”

Owler agreed, warning that cutting bulk-billing incentives “creates a false economy” as it often shifts costs in the health system from primary care to the much more expensive public hospital system.

“A significant proportion of the population will not proceed with medical tests,” he said. “That could be very dangerous for the patient.”

The AMA and pathology and diagnostics experts were left blind-sided by the announcement as the health minister, Sussan Ley, had not consulted them on the changes.

The powerful doctors’ lobby group was instrumental in bringing down the co-payment and the new bulk-billing changes could be another battleground for Ley.

The finance minister, Mathias Cormann, said the payments were scrapped for pathology services “because there is a very strong competitive sector here”.



“There is about 90% bulk billing [that] takes place ... in relation to services provided through the pathology service providers, so there is essentially not the additional benefit provided by continuing that arrangement,” Cormann said.

The treasurer, Scott Morrison, said the changes to incentives for diagnostic imaging brings it into line with Medicare payments for GP services.

“We are applying the same targeting that applies to doctors and bulk billing of doctors to this area,” he said. “The previous government allowed this program to get out of control and to go beyond what we would consider was its original design.”

Cormann insisted scrapping the payments “is not expected to have an impact on people” but is simply “correcting an anomaly” by ensuring uniformity in the way the rebates are applied.

“There shouldn’t be any impact on patients in need of the sort of support that is provided as a result of bulk-billing incentive payments,” he told ABC TV.

The Rudd government introduced the bulk-billing incentives for diagnostics and pathology services in 2009, saying the measure would “protect patient access to services”.

The lion’s share of the savings will be redirected into enhancing the pharmaceutical benefits scheme (PBS), Cormann argued.

“Incidentally, the $650m saving helps us to pay for the $621m additional expenditure that we’ll be incurring in relation to various drugs in the context of cancer treatments that have been listed on the pharmaceutical benefits scheme,” he said. “So the money has been redirected within the health system.”

Contested savings measures in the health portfolio, including a $5 price rise on PBS- listed medicines and changes to the Medicare safety net benefits, have been factored into the budget bottom line despite not yet passing into law.

The opposition leader, Bill Shorten, said the Coalition must reexamine its priorities.

“If you have to make a tough decision and the choice is getting multinationals to pay their fair share of taxation, or starting with people who are battling critical medical treatment, like cancer, I know which one I’d pick,” he said.

“I’d go after the multinationals first. This is a government who will have a wind farm commissioner, but chase down payments going to people requiring Medicare support for our diagnostic images and pathology for the treatment of cancer.”

Labor’s health spokeswoman, Catherine King, said it did not matter who the leader was, Malcolm Turnbull had proved the Liberals “only ever see health as a source of budget cuts”.

The health portfolio also took another hit in reduced funding for training its workforce.

Streamlining health and aged care training programs by scrapping programs such as the clinical training fund will save $595m over four years. Of that, $225m will be redirected to other training programs, including $131m for a scheme that allows private healthcare providers to support undergraduate medical places.

“What we found is there is a level of duplication, inefficiency [in training],” Morrison said. “Our focus has been on removing duplication wherever we can, on making sure that all government spending, in particular and including this area, is as efficient and effective and targeted as possible.”

