New research by The Australia Institute released today reveals that Australians are paying more than $1 billion each year in out-of-pocket expenses for medical care. Despite Medicare being introduced in 1984 to provide ‘fair and affordable’ health care to all Australians, many are now faced with extra costs for visits to the doctor, having prescriptions filled and diagnostic testing such as blood tests and x-rays.

One in five visits to the doctor now result in gap fees not covered by Medicare and almost a quarter of Australians surveyed by the Institute said they had postponed or avoided having a prescription for medication filled due to the cost. GPs have enormous discretion over how much patients pay, not just for their consultations, but also the cost of medication and pathology tests. By prescribing generic medications and selecting bulk billing on pathology referrals health costs can be reduced.

For example, the prescribing rate for generic medicines has been stuck at around 14 per cent for the past ten years. Only six per cent of survey respondents reported first hearing about generic medications from their GP, while 43 per cent said they would not use generic medication without first checking with their doctor.

In the past, the government has previously regulated the default settings on prescription software used by GPs. The government could again regulate software so that when a GP inputs a medication name, the patient is prescribed the cheapest medication with the equivalent active ingredient (except where this was deemed inappropriate for a particular patient).

Another option would be to require GPs to use referral forms provided by the government rather than private medical companies. While these branded forms once helped GPs meet legislative requirements recent reforms have made this purpose redundant. A better outcome for patients could be achieved by providing details for the three closest diagnostic testing centres, including a public option so that patients were less likely to be coerced into paying extra fees.

The increasingly steep cost of medical care is also the subject of a report out today from the Australian Institute of Health and Welfare which found Australians pay an average of $900 a year in out-of-pocket expenses. The Health Minister Nicola Roxon pre-empted this report by floating the idea that it might be time to revamp Medicare.

What is needed are fewer of the band aid policies applied in the past, and instead real structural reforms that facilitate a functional and affordable health system that does not rely on extra money from the public over and above their contributions as taxpayers, much of which flows as profits to medical and pharmaceutical companies.

Go back to Between the Lines