Dancing on the grave of after hours providers might be a short lived celebration
Whether you like or hate the after hours service providers, today’s recommendation that they should be prevented from using urgent items all together, if implemented, will kill after hours as we currently know it.
And although it’s likely that some changes are necessary to ensure this sector is well managed and effective, destroying companies like National Home Doctor Service in the short term, will likely signal the destruction of the whole sector and any useful after hours servicing on a national basis.
On average, urgent items make up nearly 30% of all after hours calls across the country. The yield of an urgent item is about $138 per call. That is versus the average of non-urgent calls, of about $81. The difference is $57 for 30% of all calls done by these services. Dropping this item all together will decrease the revenue of these organisations by upwards of 13%. And that will fall to profit. And that, for any company, is likely to be catastrophic.
Different businesses operate on different margins. Retail can operate as low as 2% because of its huge volumes. Banking is low as well, publishing averages around 16%. But some businesses operate at margins well above 30%. We don’t have access to any financial data for these deputising services, but the labour intensive nature and volume of their businesses suggest a margin of not much more than 10%.
Even if they can survive a financial hit like this , then the likely abandonment by GPs who currently work for them, could end them. What GP is going to work for an after-hours provider if they are getting a pay cut equivalent to 12%. Already it is agreed that these services don’t have enough GPs working for them. If these changes go ahead they are likely to have under 10% in their ranks and that isn’t good for anyone.
There is one scenario which is possible but doesn’t seem likely. That the deputisers charge a co-payment to replace their lost income and it quickly makes up the difference. That would be a neat outcome and one that perhaps the government is banking on, as if doesn’t occur the sector will be in a lot of trouble. It’s a big risk if this is the government’s backroom thinking.
When less radical changes were made to medical deputising in 1996, we saw several deputising companies go under very quickly, which suggests we might be in for a shock. It’s why the government over time reversed their position and introduced incentives to build these businesses back up. Now, apparently, we’re going to tear them down again. Sounds like baby with political bathwater to me.
If we implement these changes let’s assume we do destroy medical deputising as we know it. Is that what we want?
BEACH data suggests that 48% of GP practices use a medical deputising service. What are they going to do if this industry sinks quickly into the never never? “Who you gonna call”, after 6pm? Emergency perhaps.
Maybe we will all put on our own doctors scheduled between groups of surgeries. Well, as these changes read, if you’re a GP and you’re seeing someone else’s patients that night, you may not to get reimbursed for an urgent item to see four out of five patients. This assumption is made on the basis that the recommendation is grey on what relationship a doctor has to have with patient they can charge an urgent item for so far. Whose up for the after hours shift then? In general, GPs don’t like doing after hours work.
It’s very hard to see how the MBS came up with such a potentially catastrophic recommendation.
Not only does it threaten the whole deputising industry in a very short space of time with destruction, it is also reasonably insulting to a whole cohort of GPs.
Thirty per cent of medical deputising workforces are made up of GPs. What we are saying with this recommendation is that we don’t trust these GPs to make a call on an urgent item. Worse, we are saying, we never trusted them. And by implication, they’ve been doing the wrong thing for some time.
How are we making that call? Where is the robust data that firmly backs this recommendation?
There is none. Even the head of the MBS review, in his media release, uses the words “seems to be” when referring to the evidence that there is misuse of urgent items.
When you talk to doctors who are disaffected with medical deputising it invariably comes down to the growth of use of urgent items, which, quite reasonably, they are suspicious about. But suspicion and evidence are two different things. And the reason GPs are so upset is because they have had their pay frozen for three years while they see these services growing exponentially. No wonder they are upset.
But the data says that the rate of urgent item claims hasn’t actually risen on a per capita basis. The net amount of urgent items has massively, of course. This, is according to the medical deputisers, is a result of them creating more awareness in existing populations that are serviced and moving into new populations that have never been serviced. Is this a bad thing?
Well, when you’re making a call between a pay increase for GPs and expansion of this service, you don’t give GPs much choice.
The fact is, the rate of claiming has only changed a little. So the argument the deputisers are making might be right.
But we haven’t done the right research to find out. Which is a huge issue. We’ve only done random and underfunded “before and after” unrelated data desk research. Which isn’t reliable, as we will report on later this week.
This sector is highly charged, emotionally and politically. For one thing, the use of urgent items by medical deputisers amounts to nearly $290 million a year. By unfortunate coincidence, this is about the same amount that you would need to fund an immediate unfreezing of the MBS for GPs.
The RACGP has been quite vocal recently about the potential over servicing of urgent items by these providers. It would be a very logical argument for them to make to the Department of Health to swap this money out and back to GPs.
But pitching GP remuneration against medical deputising is way too simplistic and misses the point. If you don’t pay GPs properly you are going to stuff your health system. But if you destroy medical deputising within a short space of time you are going to do huge amounts of damage as well.
It should not be an either or situation, as it seems to be shaping up as, politically. In some ways, we are seeing divide and conquer. Make a choice, because the Department of Health, isn’t going to fund both.
Yes, the rapid growth in the use of urgent items by these groups needs very close scrutiny. It does look like a smoking gun. But are we jumping the gun here? This MBS review recommendation has come in with a verdict of guilty, without any clear evidence at all.
This recommendation is reactionary to the howls of “foul play” from various lobby groups and not to the evidence.
We need to ask these companies to be front up and let us do independent audits to provide much more transparency as to what is going on. And we need to do dedicated research to understand how these services effect ED presentations. We’ve done neither yet, but both these initiatives aren’t that hard to do.
I suspect that the health department and the federal government are playing us all here. By pitching one against the other with a budget constraint, made very apparent with the original MBS freeze, they are forcing healthcare professionals to choose sides.
If we destroy medical deputising rather than making it more transparent and fixing it, we are going to end up with a situation where nearly half our practices are left without proper after hours servicing, and a lot of patients, especially in regional areas, are left with no after hours servicing at all.
And we are very likely to send a lot more patients to EDs. There will be no where else to go at night.