In Australia there has been a political imperative to support high levels of bulk billing. The government of the day often looks at the percentage of medical services that are bulk billed by doctors as the key measure of success in handling healthcare. The higher the bulk billing rate, the higher marks they give themselves and expect from the public.
Everyone loves a free medical service. But let’s ask the question, is it reasonable for all Australians to pay nothing to see a GP and be bulk billed?
The first issue is that it is just much harder to run a bulk billing GP practice in 2022 compared to 1984 when Medicare began. Medicare rebates have not kept up with wages and inflation and you can see how the increases in rebates have played out over the last 36 years relative to wage and CPI growth in the graph below from the Australian Medical Association.
It would seem reasonable that that the government could slow down the trend to private billing by increasing Medicare rebates faster than inflation. It is unlikely that a government can afford this over the longer term and the impact could be limited due to other larger economic forces at play.
The economy has changed since 1984. Personal income tax rates for high earners were 75% back in the 1950’s and declined to about 60% in the mid 1980’s, and then in the late 80’s they fell to something close to the current rate of 46.5%.
The changing tax rates are one thing that has impacted trends in personal wealth since 1984. The Gini coefficient is the most common measure of a country’s wealth inequality. A Gini score of zero means that everyone is equal and a score of 1 means that one person holds all the wealth. In Australia, like most of the western world, the trend is clear, and the Gini coefficient has been rising. That is wealth inequality has risen significantly in Australia since Medicare was established in 1984 .
We can also look at some more recent data from 2004 to 2016. For the top 20% of Australians, their wealth is up 56%, while the bottom 20% have seen their wealth decline 9% in the same period.
If you take Medicare rebates that are not keeping up with the cost of running a GP practice, and then combine that with the increased wealth accumulation for the better off, what is the correct response?
It can be argued the reasonable and even the ethical response is to charge fees to the better off as a way of keeping GP businesses viable AND to cross subsidise the delivery of cheaper or bulk billed care to those on lower incomes.
It is probably fair to say that universal bulk billing, based on using the current standard rebates is not fit for purpose in the current economy.