On Tuesday, Treasurer Scott Morrison and Finance Minister Mathias Cormann fronted the media to deliver the Mid Year Economic and Fiscal Outlook (MYEFO) where they revealed a $26 billion budget blow out over the next four years. They also announced a number of cuts to offset spending announced since the May budget.
The most contentious of those cuts are changes to bulk billing rules for diagnostic tests, expected to save $650 million over four years. Under the changes, from 1 July next year, bulk billing incentives worth 15% of the medicare benefit will be scrapped for pathology services and incentives for diagnostic imaging services will be reduced from 15% to 10% for the majority of patients (excepting pensioners, health care card holders and children under 16). Payments for MRI services will also drop from 100% of the Medicare benefits schedule to 95%.
The finance minister justified the changes to pathology services by claiming that there is already a 90% bulk billing rate already due to a “very strong competitive sector” and that there “is essentially not the additional benefit provided by continuing that arrangement.”
Health Minister Sussan Ley told Sky News that some may be worse off under the changes, but the government could not afford to fund new medicines on the PBS without cutting ineffective policies. She also said that the bulk billing incentive for pathology services was only boosting pathology company coffers as the market was competitive and would continue to bulk bill without the incentive.
The Australian Diagnostic Imaging Association has also warned that patients will have to pay gaps for imaging services, with X-rays costing up to $56, ultrasounds up to $101 and MRIs $173. Its president Christian Weiedt warned that patients would have to pay the full amount up front before being able to claim a rebate, requiring them to pay up to $101 for an X-ray, $206 for an ultrasound and $532 for an MRI.
The changes are likely to be opposed by the powerful Australian Medical Association, which represents doctors who’s opposition to Tony Abbott’s $5 GP co-payment led to it being scrapped in December last year.
The bulk billing changes are realistically a GP co-payment through the back door. Instead of requiring a gap payment to see a GP, the government will create a larger gap for diagnostic services to recover part of money it was hoping to save through the GP co-payment. The changes will likely lead to those who most need the services to forgo them, simply because they can’t afford to be out of pocket and will place increased pressure on the hospital system when those patients present to Emergency Departments for treatment for illnesses which could have been picked up in the primary care system.