What the Medicare Freeze Lift Actually Means For Medical Centres and GPs

Despite the recent Medicare freeze lift, both GPs and patients in Australia are still feeling the pinch due to the rising cost of running a practice.

This respite was welcomed by Australian Medical Association president Tony Bartone, who said, “The Government has delivered a much-needed significant investment to general practice – the driving force of quality primary health care in Australia.”

However, many argue there is still a huge discrepancy between what the Government helps cover through Medicare, and the true cost of delivering healthcare services. This leaves GPs with the tough decision about whether to absorb out-of-pocket costs, or pass them onto patients.


Some claim that patients who have been forced to pay significant out-of-pocket costs are feeling “burned” by the healthcare system, and as a result are less likely to prioritise their own health. This feeds into the theory that the Medicare freeze lift is simply a half-measure on the back of the recent election.

How did we get here?

Under a process known as indexation, Medicare Benefits Schedule (MBS) fees are raised each year in accordance with the Government’s Wage Price Index.

Labor first introduced the Medicare rebate freeze as a “temporary” measure in 2013, as part of a budget savings plan. Despite criticising Labor for introducing the measure, the Coalition continued the policy after being elected to office in 2014. The rebate was frozen initially for only four years, but was extended in the 2016 federal budget to 2020.

Fallout from the 2019 Federal Election

Just before this year’s federal election, the Coalition matched Labor’s commitment to end a freeze on the Medicare rebate for GP visits, a year ahead of schedule, as part of a $1.1 billion primary healthcare plan. This means all 176 GP items will now be indexed every year.

But despite this recent policy amendment, many GPs are still feeling the squeeze.

Less than $1

In a recent interview with the ABC, Dr. Harry Nespolon, president of the Royal Australian College of General Practitioners (RACGP), explained why doctors are feeling the pinch.

“This goes a very tiny way to helping patients see their doctors. The increases are likely to be less than $1… We’d like to see increase for longer consultations for chronic and complex care, and longer consultations for mental health issues.”

Dr. Nespolon’s estimate of an approximate $1 increase checks out when we look at the three most commonly used consultation items:

  • Item 23: $37.60 (previously $37.05)
  • Item 36: $72.80 (previously $71.70)
  • Item 44: $107.15 (previously $105.55)

The true cost of the 5 year freeze for GPs

GPs have been dealing with rising costs and stagnant Medicare reimbursement rates since 2014. And although the Consumer Price Index (CPI) has had an average of approximately 2% over the past two years, the percentage value of the indexation that will take effect on July 1, 2019 will be just 1.5%.

This percentage is far too low according to many prominent voices within the Australia medical community, including RACGP President Dr. Bastian Seidel who shared his views with RACGP members earlier this year.

“Medicare Benefits Schedule rebates need to recognise the real value of general practice, and the RACGP has called for an 18.5% increase of the Medicare rebate for GP attendances to bring us into line with other medical specialist attendance items.”

What about bulk billing?

It would be safe to assume that considering the rising costs of running a practice, it has become increasingly difficult for GPs to offer bulk billing over the last few years.

Interestingly, the data on bulk billing suggests bulk billing rates have not fallen despite the Medicare freeze. The latest data show bulk billing at an all-time high at 86.1%.

However, some have argued that these figures are misleading as they are calculated on services rather than patients, and may simply be an indication of the increasing number of health services that use the MBS. As costs continue to rise, many GPs who have offered loyal patients bulk billing for years may be forced to rethink their offering.

Can doctors afford to put patients first?

Dr. Nespolon feels strongly that the current system puts both doctors and patients in a tough position. He explains,

“Doctors shouldn’t be perversely incentivised not to spend time with their patientswhich is what the current MBS does… Patients should be seeing their GPs when they need to, not when they can afford to.”

Dr. Seidel has also emphasised that investing in general practice services saves costs across the whole community.

“If you see your GP early you’ll save the whole community money by staying out of hospital, and receive GP health services that can cost up to 10 times less… If we are serious about focusing on a preventive general practice healthcare, we need to end the inequality of general practice Medicare rebates compared to other clinical specialties.”

The path forward

The Medicare freeze lift has been a long time coming due to the increasing frustration of GPs across Australia, but for some services the lift will only make a tiny dent. For example, the Australian Sonographers Association argues that for ultrasound alone the average out-of-pocket cost for patients has increased by 117%.

This said, it appears medical centres will continue to battle to keep delivering a quality service to patients in the face of rising costs. Some GPs may even be forced to abandon bulk billing for certain services. In the worst case scenario, this could impact how often many patients choose to see their GP.

All things considered, it is likely the Australian medical community will continue to lobby the Government to increase the indexation percentage to more accurately reflect the cost of running a practice.

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