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Chapter 3: Funding Australian general practice care

3.2 General practice billing

3.2.1 Bulk billing

 

In 2020–21, 89% of patient services in general practice were bulk billed (ie provided with no out-of-pocket cost to the patient). With the exception of COVID-related face-to-face services, the bulk-billing rate was higher for new telehealth and COVID-19 vaccination MBS items introduced in response to the pandemic. For example, 100% of vaccine items #, 98% of phone and 94% of video items were bulk billed, compared to 86% of all non-COVID-related and non-telehealth general practice items.1

Most patients access multiple services from their GP throughout the year. The median percentage of patients who had all of their general practice services bulk billed in 2018–19 was 64%, an increase from 58% in 2012–13.40

Patients who receive many services each year – such as older patients with chronic diseases – are more likely to hold concession cards and to have those services bulk billed. This inflates the levels of bulk billing each year.

One in five (22%) GPs works at a practice that bulk bills all their patients, and 64% of GPs reported bulk billing the majority of their patients.3

Bulk-billing rates vary between regions, from 32.9% of patients in the Australian Capital Territory (ACT) electorate of Canberra to 96.7% of patients in the New South Wales (NSW) electorate of
Chifley (Figure 31).

Figure 31. Bulk-billing rates vary across Australia

Bulk-billing rates vary across Australia

Measure: Percentage of patients with all GP non-referred attendances bulk billed in 2018-19, by electorate.
Source: Senate Community Affairs Committee. GP Bulk-Billing Rates by Electorate, Answers to Questions on Notice, Supplementary Budget Estimates 2019-2020. Ref No: SQ19-000826 (2020).

The rate of growth in bulk billing of general practice items has been in decline for several years. The RACGP has long predicted the growth in bulk billing of general practice services would halt or reverse, meaning more patients would face an out-of-pocket cost to see their GP. In 2020–21, there appears to be an artificial inflation of bulk-billing rates due to COVID-19. Although overall bulk billing of general practice services has increased by 1.3%, when new MBS items for COVID-19 vaccinations and telehealth are removed (just over 42 million services), the remaining 129 million services were bulk billed at lower rates than seen since 2016–17. (Figure 32)

A range of factors may be artificially inflating bulk billing, including:

  • mandatory bulk billing for telehealth in the first quarter of 2020–21
  • lockdowns in Australia’s two largest states for more than half the year, which drove telehealth usage
  • consumer expectations set through mandatory bulk billing in the previous year
  • GP behaviour in response to the economic impact of the pandemic on their patients.

It may be that in the post-COVID world, bulk-billing rates will be lower as the impacts of the pandemic lessen.

A central tenet of the Australian healthcare system is that doctors can set their own fees. When Medicare was first introduced in the 1970s, the intention was that the government would fund up to 85% of the doctor’s fee and patients would pay the remainder. This policy setting changed in 2005, when the Medicare benefit was increased to 100% of the MBS schedule fee** for GP services, and modest incentives were introduced to increase falling rates of bulk-billed services.

This policy change, combined with the increased supply of medical graduates creating greater competition in many localities and, in 2020, mandatory bulk billing of COVID-19 item numbers, has pushed official bulk-billing rates to record levels.

Except for COVID-vaccine items, GPs are no longer required to bulk bill the new MBS items introduced in response to the pandemic. However, GPs continue to bulk bill COVID-related items at a higher rate, particularly telehealth.

Mixed billing – when the GP privately bills some services and bulk bills others – is a way for practices to ensure the costs of providing patient care are covered. Most GPs have an ongoing relationship with many of their patients and, through mixed billing, can ensure those patients who can least afford out-of-pocket costs are bulk billed.

Figure 32. Growth in bulk billing of general practice services has been affected by the pandemic

Growth in bulk billing of general practice services has been affected by the pandemic

New COVID-19 and telehealth items include: COVID-Face-to-Face, COVID-Phone, COVID-Video, COVID-Vaccine and Non-COVID-Video groupings.

Measure: Growth in percentage of bulk-billed services in category ‘Broad type of services: GP non-referred attendances’, Australia wide, split by COVID-19, telehealth.

Base: Population-level data.

Source: Department of Health. Annual Medicare statistics – Financial year 1984–85 to 2020–21. Canberra: DoH, 2021.

Figure 33. The value of MBS patient rebates falls further each year

The value of MBS patient rebates falls further each year

Measure: Actual increase in MBS item 23 (standard GP consultation lasting up to 20 minutes) compared to the value had it increased in line with general inflation.
Source: Reserve Bank of Australia Inflation calculator, MBS Online.

Indexation of Medicare rebates has not kept pace with inflation (Figure 33). Average health inflation rates are 3% per year, with practice costs rising by a similar amount, while MBS item indexation is set at 0.9% in 2021. This growing gap between the Federal Government’s contribution to the cost of general practice care and the cost of providing care is affecting the sustainability of the primary care sector and the out-of-pocket cost for patients to access care. See section 3.2.2 for further discussion.

3.2.2 Out-of-pocket costs

Almost four out of five (78%) GPs work at a practice that privately charges at least some of its patients, with the average reported out-of-pocket cost for a Level B (MBS item 23) consultation $38.80.3

Average patient out-of-pocket costs for all GP non-referred attendances have increased by 49% over the past decade and are now a greater amount than the patient rebate for MBS item 23, the most common general practice item. Over the same period, the patient rebate for MBS item 23 has increased by 11%. (Figure 35)

This means a patient attending their GP in 2012 paid an average of $27.65 out of pocket while the Federal Government contributed $34.90 (for MBS item 23). In 2021, that patient would pay $41.12 on average while the Federal Government contributed $38.75 for MBS item 23.(Figure 34)

Average out-of-pocket costs vary across Australia, with patients in remote and very remote communities experiencing higher out-of-pocket costs than in other areas.1

Figure 34. Growth in patient out-of-pocket costs is outpacing the patient rebate

Growth in patient out-of-pocket costs is outpacing the patient rebate
Measure: Value of MBS item 23 at July 2012 to 2021 and average patient contribution per service in category ‘Broad type of services: GP non-referred attendances’, Australia wide, 2011–12 to 2020–21.
Base: Population-level data.
Source: Department of Health. Annual Medicare statistics: Financial year 1984–85 to 2020–21. Canberra: DoH, 2021.

Figure 35. Average patient out-of-pocket costs have increased by 50% over the past decade

Average patient out-of-pocket costs have increased by 50% over the past decade
Measure: Average patient out-of-pocket costs for GP non referred attendances, compared to cumulative general inflation and health inflation rates, 2010–11 to 2020–21.
Sources: Department of Health. Annual Medicare statistics: Financial year 1984–85 to 2020–21. Canberra: DoH, 2021.
Australian Bureau of Statistics 6401.0: Consumer price index. Canberra: ABS, 2021.
  • COVID-related face-to-face items refer to additional psychological services (MBS items 93300, 93303, 93306, 93309, 93312, 93313, 93316, 93319, 93323, 93326, 93327, 93330, 93333, 93350, 93353, 93356, 93359, 93362, 93365). Just over half (53.8%) of these services were bulk billed in 2020–21.
  • # Due to mandated bulk billing of COVID-19 vaccine items.
  • ** The MBS schedule fee in 2005 was $31.45 for a Level B (item 23) standard GP consultation. The Australian Medical Association’s recommended private fee for Item 23 at that time was $54, based on average practice income and costs.
  • 1. Department of Health. Annual Medicare statistics: Financial year 1984–85 to 2020–21. Canberra: DoH, 2021.
  • 3. EY Sweeney. RACGP GP Fellow Survey. Melbourne: EY Sweeney, 2021.
  • 40. Senate Community Affairs Committee. Answers to Questions on Notice, Supplementary Budget Estimates 2019-2020: GP Bulk-Billing Rates by Electorate, Ref No: SQ19-000826. Canberra: Parliament of Australia, 2020.