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Relative Values

What is the RVS?

The Relative Value Study was intended to provide a much-improved basis for determining the value of all of the items in the MBS. It was undertaken as a joint project between the AMA and the Commonwealth, with representative input from other medical organisations.

The study has been undertaken in three broad phases: -

• A revised consultation/attendance structure based on approximate time references, broad descriptions of clinical content and the requirements to keep contemporaneous clinical records (completed 1997).
  
• Three technical consultancies on professional relativities, remuneration rates and practice costs (completed 2000)
  
• Subsequent limited economic modelling of the outcomes of the first two stages (in progress).
  

What is the Current Status of the RVS?

The study has been underway for a long time without a satisfactory conclusion. The outcomes of stage 2 have been forwarded to the Minister. The Minister has not responded formally nor has the study been formally finalised. It is also acknowledged by the profession that certain issues need further clarification (as discussed below). The modelling of outcomes that has been done has been limited in both its scope and involvement of the profession.

Political Context

The AMA is campaigning for "full implementation" of the RVS. In general practice this has focussed largely on the equivalent of a Level B consultation (~15 minutes) having a schedule fee of about $44. According to one model, the implication of this would be an added cost to the MBS of $1500M per annum, of which $900M would represent additional funding to general practice.

Many have argued that no matter what the RVS has indicated, which appears to be generally supported in the broad but not in the detail, such an increase in funding is not realistic. Some have argued in addition, the RACGP included, that while the indications of the RVS may be in the right direction, the RVS is not sufficient to address many key issues in general practice that go beyond the MBS e.g. structural reform, red tape, historical undercapitalisation, involvement of nurses in general practice etc. The RACGP has been proposing reforms in these areas for some time (see recent letters from the President).

Nonetheless the RVS gives a general indication of the level of fees required for Medicare bulk billing to survive in a predominantly fee-for-service environment. Because of the limitations of the scope of the study and its main focus on fee-for-service activities, its findings must necessarily be regarded as a minimum estimate of the increased funding required in general practice.

General Practice Costs in the RVS

The RVS attempts the difficult task of estimating the typical costs in general practice as a basis (with the remuneration study) for determining the fees that need to be charged to maintain a viable general practice sector capable of sustaining the health outcomes being sought for Australia.
The current modelling of the RVS relies heavily for its base costings on existing behaviours. This tends to embed historical underfunding, including declining investment in practices (particularly in the bulk-billing environment) with consequent underestimates of operating costs e.g. depreciation. It also uses a very low average level of participation in CME, underestimates the level of nursing services likely to be required in a changing primary health agenda and does not include sufficient funding of the very real need for locums (or the cost of overstaffing in a practice necessary to obviate the need for locums). There is also growing evidence that the amount of time spent by GPs in non-remunerated work is greater than modelled in the RVS (25%).

As part of providing more information for GPs the RACGP has undertaken additional modelling of some key practice costs for general practice, the major items of which are shown below.

Relativity

A continuing concern with the RVS for general practice is that it continues to enshrine significant differences between fees for GPs and specialists. The validity of the assumptions underlying such a position clearly warrants further examination by general practice.

Focus

While the RVS is a valuable study in beginning to unravel a decaying system for management and review of the MBS, the study still has flaws. In addition, an exclusive focus on fee-for-service may not be in the best interests of the profession or the community it serves.

One harsh reality is that existing care delivery in general practice is increasingly unsustainable in a bulk-billing context at present levels of rebates, both professionally and financially. A decline in bulk billing is inevitable. So too is a flight to corporates by frustrated general practitioners, who simply cannot deliver the quality of care they wish to deliver and is sought by government policy. Is this the legacy you want for general practice?

Financial and structural reform of general practice is essential. The outcomes of the RVS, despite being broadly in the right direction, are a necessary but as yet insufficiently clarified part of that equation.

Last Modified: 5 October 2001
Authorised By: Office of the CEO