Running a practice
Private Billing - Questions and Answers
In response to GP queries, the RACGP has collected a range of comments from GPs who have introduced private billing in their Practices.
If you wish to add further observations, or have any queries related to this document, please contact the GP Advocacy and Support unit, on email: racgp@racgp.org.au or fax 03 8699 0400.
The RACGP does not accept responsibility for the views expressed in this document.
Questions
- How long did it take your gross billing income or consultations to return to pre-private billing levels?
- What are your secrets of success for a successful move to private billing?
- Was introducing private billing a positive or negative workplace change for staff?
How long did it take your gross billing income or consultations to return to pre-private billing levels?
- In our group practice, we have never earned less since we stopped
bulk-billing. From Day 1 onward, patient numbers are the same, limited
by our opening time and how many patients each doctor can see. Therefore
whatever we charge is the extra earning. For example, extra $5 = 20%
increase of your income, $10=40% increase. try waiting for that sort of
increase from the government. Sure, some patients did not like it and
probably left. They are the type that are least appreciating of your
work anyway. In their absences, we could take on new patients that are
happy to pay us.
Doctors are better paid and our patients' appreciate our service. My economic teacher tells me that market force determines the price by supply and demand of goods and services. At our new price level we are still charging way down from the market price as our demand are still stronger than our supply. In other words our patient load has actually increased since we stopped bulk-billing.
Of course for people in hardship we would bulk bill them. That is few and far in between, less than 0.1%. Most elderly people/pensioner are happy to pay their share, currently $7.50.
Hairdresser next door charges $25 for a men's haircut (no shampoo or blow dry). If we bulk bill, we do it for the same price with a possibility of being sued for any one of our consult performed. They charge lot more for ladies' cut, perm, colour etc. The hairdresser drives a BMW, I drive a 7 years old Corolla, something is wrong isn't it?
To my fellow doctors: you are a service currently in short supply. Charge a price that reflect your level of service, the Medicare rebate is for the patients, not you. Your patient will not leave you because you charge a few dollars more. - On 1st September I commenced private billing with an immediate
increase in income. About 1/3 pensioners/HCC paid at attendance &
2/3 elected to pay $7 gap. I had the advantage of an immediate $7 to
balance longer wait for rest of payment together with 1/3 pts full
paying a larger amount upfront. The increased availability of
appointments resulted in my percentage of full fee paying private pts
increasing.
Hope this encourages others to make the plunge. - Our group of 6 doctors changed the billing arrangements on 1/7/01.
Prior to that our private patients paid the full fee and then claimed
from medicare. Pensioner vets and HCC were bulk billed.
After that date vets were bulk billed. HCC and pensioners paid a full fee with a $5 gap. Gap payments were not allowed. Children of HCC families aged 5 and less were bulk billed as we wanted to assure maintenance of our immunisation. Certain patients who never worked (cerebral palsy, retardation, schizophrenic , serious mental disorder on HCC) were bulk billed.
Pensioners and HCC holders who had paid 10 gaps in a financial year were issued with a laminated bulk billing card for use till the end of that financial year.
Our bulk billed fees were about 25% after the change (down from 60%), The change increased income from day 1. There was no complaint as we gave letters of explanation of our own scheme. Our new patient numbers have increased by 20% as the pensioners do less prior booking - your appointment book is less full prior to the day but fills on the day. The private patients like it, as they have better access. - I am a solo practice in an area with a perceived doctor shortage. On 1/8/02 I changed from mixed billing (BB pensioners and HCC holders - approx 70% of patients) to universal private billing with payment up front. I am currently seeing half the number of patients and am watching myself go rapidly backwards. If no change soon I will be adding to the doctor shortage.
- I am a young solo GP and started to introduce private billing for
all new and old patients in May 02. NO pre warning was given to
patients. EACH patient was given an explanation on the spot or on the
phone.
I still bulk bill age pensioners. Initially patient numbers dropped and take home income halved, for 3 to 4 months.
In OCT 02 my income has started returning to previous levels. I can only strongly encourage other GPs to introduce private billing in their practices. IN ONE SENTENCE: YOU NEVER KNOW IF YOU NEVER TRY. - We converted 1 year ago and introduced a $3.00 co-payment to all
card holders. We increased it to a $5.00 gap in June with the indemnity
crisis.
Bad debts are negligible. Doctor satisfaction has increased. Only 1 - 2 dissenters as far as I know from a base of 15,000 patients! I'd recommend it to anyone! - This practice ended years of universal bulk billing on 1-7-01. The
charges were voluntary - at the discretion of each Doctor. Practice -
Metro, 2 locations, extended hours. 13 Doctors - 6 of whom are full
time.
The recommended billing pattern was to bill privately for everyone who does not have a pension or H.C.C, and billing everyone after 6pm weekdays (open till 8pm) and on weekends 9am - 6pm Sat & Sun, 9am - 1pm - Totally at Doctors' discretion.
Fees - Standard Consultations VR $30, increased to $35 on 1-7-02.
Impact in round terms: 1st 6 months - Numbers of patients down 10%, billings up > 10%. Closing time of 8pm enforced easily rather than often running till 9-9:30pm.
2nd 6 months - No change in numbers. Increased time to utilise care plan and other item numbers. Billings static.
1 year - now approximately 3/12 since fees were increased to $35. Billings up by 20% on last year, so > 30% on prior bulk billing year. Numbers static.
Comment - The use of practice nurse for care plans and seniors assessment items has contributed to the improved total billings - perhaps a significant contribution. However, prior to introducing private billing, none of us had time to do any of these value added services
Current private billing varies between doctors, but averages 27% of overall services provided in the past 3 months. - Old scheme: Bulk bill
- Pensioners
- Card holders
- Recalls (i.e. Doctor generated visits)
- Non card holders - $35 for item 23
- Procedures bulk billed
As of August 1: Zero bulk billing
Visits previously bulk billed are charged $28.00. Non card holders $38.00 for item 23. All procedures $10.00 theatre fee and patient forwards "Pay Doctor Cheque". Continue to see DVA patients. Effect – ZERO – minimum effect on patient numbers. Probably immediate increase in income. Only complaint has been the inconvenience of claiming the rebate. - We moved to private billing 3 years ago and found that there was 1 week of decreased attendance and then the normal levels restored. Interestingly the pensioners were solidly in favour of it and the Health Care Card holders showed the most resistance. It is obvious, I'm sure, that the financial bottom line was well in front quite quickly and has stayed that way since - tell everyone else to cut the chains and do it too- at the end of the day if the rebate is too low its much better to get 20 million people telling the government than 20,000 'rich' doctors!
- Three years ago we gradually introduced private billing for all
patients including card holders and we did so by using "Salami" tactics,
first sundays then six months later saturday afternoons, then saturday
mornings and then after 6 pm on week days then after 5 pm on week days
and finally we are in the position of only bulk billing card holders
between 8-5 on week days. Two out of ten Doctors here are also
selectively billing some card holders.
With regard to Sundays in the first six months switching to private billing resulted in a drop in the total average days takings by $1.13 per day ie less than $30 for the whole six months but our patient numbers dropped 40%. While there was no significant drop in revenue the ease of working sundays increased and we saw people who were ill and not just turning up for repeat prescriptions. We were enormously pleased and so extended the policy to other days and increased our fees.
We now charge $59 for a non card holder on Sundays for example ($45 if a card Holder and $39 during the week. Our Patient numbers have dropped over the past three years by 25% but our total revenue has NEVER fallen when compared with the previous year on a daily rolling year basis. Now our revenue is taking off and we are increasing our fees again. Our real problem is finding another full time Doctor.
In real terms our revenue has increased by 5.61% in the past twelve months. - I stopped bulk-billing 3 years ago. (By that I mean no bulk-billing
at all.) The initial numbers dropped 20% as expected from the results of
previous surveys: the income did NOT drop because the fees were geared
to take this into account.
After 2 years my numbers were MORE than before, despite further fee increases.
I lost a lot of troublesome whingers and time wasters and gained an improved self-respect, better life-style and increased income. - I used to direct bill all pensioners and disadvantaged patients up
until the day UNIVERSAL BULK BILLING was introduced in about 1984 (very
Orwellian, don't you think?)
On that day I advised my pensioners they would have to pay ONE DOLLAR. Yes that is right: An entire dollar, above the Medibank (as it was then known) rebate. Despite all the house calls, night calls, and my 110% effort - my pensioners mostly left the practice. It would seem that a miserable dollar was more than I was worth!
Anyhow, that was the best thing that ever happened to me.
My income doubled. It continues to be double that of most GP's. I have set the local hair dresser as my yardstick for fees. I make sure I charge $5 more than he does for a hair cut. My current fee for a standard consult is $60. A house call after-hours is $200 and $250 after midnight.
By the way, I still see quite a few poor people. I accept the Medicare rebate as full payment from those in desperate need and I charge 3 or 4 dollars above the rebate to the rest ($25 consult fee for most). I would urge all my colleagues to rid themselves of the wretched Medicare shackles which have destroyed the viability of so many worthy doctors and their practices (Aided and abetted by the amoral opportunists in the Bulk Billing Clinics) - It took 1-2 years to get back to bulk billing levels. However, net income may still be lower. Reception costs increased by approximately 25% by going private – It’s much more work.
- My experience has been in a rural practice. There was no change in activity on dropping bulk billing for concession card holders, although they did have a reduced fee. I have also worked for a bulk billing practice on the edge of Melbourne which dropped BB. There was a drop in activity for about 1 week before resuming usual levels. Basically there was no where else to go.
What are your secrets of success for a successful move to private billing?
- We informed our patients for at least 2 months before conversion. We
made payment easy by offering EFTPOS terminal, cash or cheque payment.
We do not give out account to avoid bad debt. We ask the patient to pay
their gap, not the full amount, lodge the Medicare claim form for them
for the Medicare rebate, and ask them to bring it back to pay for the
balance. Most people bring back within 6 weeks. Sign up for the 90 days
cheque cancellation plan and whoever not bother to pay you will have
that cheque eventually in your account anyway.
And we offer those who choose to pay in full at time of consultation a discount of $2.
- If a GP does not feel his/her service is worth $48.50 for a Level B
consultation, then he/she should not expect the public to pay this
amount.
If he/she does, the patients should be notified appropriately about one month before ceasing bulk billing and, advised with every phone call. Thereafter, during at least the next twelve months, that the practice no longer bulk bills.
Install an EFTPOS machine and do not give any credit.
Was introducing private billing a positive or negative workplace change for staff?
- Very positive for medical staff due to increase income. Secretaries
stressed initially due to changing to computer billing system. They are
OK now.
- Our practice changed over to private billing on 1st May, 2001.
We found our change ran very smoothly. Our front desk staff were trained to deal with an aggressive patient situation, but thankfully this training was never needed. The patients were notified from 1 month prior to the change with notices in the waiting room plus doctors & staff explaining what & why the need to change.
About 2/3 of our patients accepted this. Others decided to go elsewhere, but we have found a few of these have since come back.
The reception staff did have a few phone callers hang up on them when they were told the practice private bills, and this is still happening occasionally. Very occasionally we have had a door slammed in anger but this is rare. Patients did express that they weren't happy about the change but most accepted that for quality of care, it had to happen.
I think the fact that our staff and patients were well prepared for the change, there was very little negative outcome that came with the change.
As for the doctors, they seem a lot less stressed (due to the downturn in patient numbers) but financially are better off. - We have found in general that private billing has been accepted by
the majority. The surgery has now been offering gap payments for nearly
3 months to those who hold a Centrelink HCC/Pension card (full fee
otherwise) and still bulk bill children.
We feel that patients who do hold a health care card now consider the justification of making an appointment and are then willing to pay for the service. When patients (card holders) were bulk billed, they tended to come more frequently.
The transition from bulk billing to gap payments was smooth as the majority were forewarned for some time beforehand. The advantage of the change is that now most patients can now get an appointment on the same day that is requested.