An analysis of BEACH data puts a rough dollar figure on how much unpaid labour GPs do each year.
Now that Mark Butler has announced his investigation into Medicare compliance, Nine and ABC journalists have achieved the ultimate prize for their CVs: a government inquiry.
At this stage the media announcements seem to indicate that it will be focused on doctors’ misuse of Medicare rather than Medicare’s misuse of doctors. The latter is what we are going to try and quantify in the article below.
No GP with their head screwed on would be opposed to an inquiry aimed at making Medicare more effective. There is no doubt that the vast majority of those same frontline GPs see the Medicare “rorting” story as a coordinated, carefully planned attack on the integrity of every GP in the country delivered by some of Australia’s largest and most influential media outlets.
But this is only one side of the story. A more balanced and informed assessment would likely conclude that “leakage” happens in both directions and that it’s the “reverse leakage” that will ultimately force frontline GPs to abandon Medicare en masse, if not abandon general practice itself.
The polls and surveys of the GP community clearly show that the unsustainability of Medicare, and its apparent reliance on the unpaid time and effort of GPs to keep it going, has been worsened rather than ameliorated by the media’s recent efforts. For years, probably decades, fear and confusion has compelled GPs to short-change themselves and underbill Medicare, with a substantial impact on their income. Yet the exact value of this underbilling and non-billing has not until now been fully calculated.
A recent poll by the RACGP found that around half of GPs were losing more than 20% of their income through underbilling Medicare each year. Only 3% of GPs reported no losses due to underbilling.
Another Healthed survey of GPs found that around two-thirds of GPs underbilled Medicare every day, and almost one-third of GPs underbill Medicare five times or more every day.
Other studies, using data from MABEL, published in the AJGP, and BEACH, published in the MJA, have looked at isolated aspects of these inputs over many years and also concluded that “reverse leakage” is considerable. The latter study concluded just non-billable clinical services was costing GPs between $10,500 and $23,000 per year, for example.
Dr Eddie Cliff, the researcher who demonstrated the implausibility of the $8 billion figure with his colleague Dr Tori Berquist, says a quick review of all the media coverage of Medicare “rorts” turned up only one mainstream media article providing an opposing view written by doctors.
“There is a very easy pub test for responsible journalism, which says 20 articles versus one article doesn’t pass,” says Dr Cliff, who is an Australian haematology registrar and a postdoctoral research fellow at Harvard Medical School.
Dr Cliff and Dr Berquist read the entire PhD thesis that was cited by the media to substantiate the $8bn figure. They found that the chapter titled “Quantitative Results” did not contain any quantitative analysis or primary data, but instead included qualitative data on 47 medical educators. There simply was no hard data to substantiate the estimate.
The reporters did not seek out any responses from key representatives from the community they had chosen to target.
“The first I heard of this story was when my phone started ringing at 6am on Monday morning,” says RACGP president Dr Karen Price. “We were very surprised as a college not to have been given any kind of forewarning. It’s unusual, especially for a story of that magnitude.”
When presented with the Heathed survey results showing the devastating impact of this media report on GP morale, especially after nearly three long years of pandemic, Dr Price said, “It’s an absolute tragedy. The fallout will be felt for a long, long time.”
Many GPs – especially those running bulk-billing clinics – will tell you that Medicare simply doesn’t cover the costs of many services that ought to be provided in primary care.
Despite this, many GPs try to make it work and end up doing paperwork and performing clinical services that Medicare rebates won’t cover, and thereby putting unpaid, highly skilled labour back into the system to keep it going.
Given that an inquiry is imminent, it’s more important than ever to calculate the value of GPs’ “free work” in dollar terms as a subsidisation of Medicare. It is crucial for us to understand just how much GPs are giving to prop up the system if we are to truly fix it.
This is where Dr Christopher Harrison comes in. When BEACH was defunded in 2016, he became the caretaker of all this historical data, which amounts to 1.8 million GP-patient encounters over 18 years.
As a senior research fellow at the Menzies Centre for Health Policy and custodian of the Bettering the Evaluation and Care of Health (BEACH) program, Dr Harrison is uniquely positioned to help us develop an indicative calculation of how much cash is leaking out of the humble suburban GP’s hip pocket into the ailing giant known as Medicare.
The calculation
If we assume that free work by GPs can be put into two main boxes – non-billable administrative work and underbilling – and we assume that most of the loss associated with underbilling comes from switching Level C for Level B Medicare rebates, then the following calculations will provide a rough estimate of the value lost to the GP profession.
We have chosen to set a Level A rebate amount as the lower boundary for an instance of non-billable time and a Level B rebate amount as the upper boundary.
(Read more about our reasoning and assumptions in the Appendix to this story at healthed.com.au – and bear in mind this is old data.)
Non-billable administrative work:
The percentage of GP consultations that have associated non-billable time
X The number of consultations that happened nationally in the past year
X An estimate of the dollar value of each instance of non-billable time
= The estimated dollar value of non-billable work by GPs nationally each year (with an upper and lower estimate)
- The estimated percentage of GP consultations that have associated non-billable time = 12.1%
- The total number of consultations that happened nationally in the past year = 189,338,431
- The Level A rebate amount = $18.20
- The Level B rebate amount = $39.75
Therefore,
- Lower estimate for the total dollar value of non-billable work nationally per year = 0.121 X 189,338,431 X $18.20 = $416,961,092.75
- Upper estimate for the total dollar value of non-billable work nationally per year =0.121 X 189,338,431 X $39.75 = $910,670,518.50
We estimate that between $417 million and $911 million is lost to the GP profession as a result of non-billable administrative work.
Total lost to underbilling:
The number of Level C consultations that were registered nationally in the past year
X The estimated underbilling ratio (Cs billed as Level Bs:Cs actually billed as Cs – see Appendix)
X The dollar value difference between a Level C and a Level B consult
= An estimate of the total dollar value lost in general practice due to underbilling nationally each year
- The underbilling ratio = 0.624
- The number of Level C consultations registered nationally in the past year = 17,603,869
- The $ difference between a Level C and a Level B consult = $76.95 – $39.75 = $37.20
Therefore,
The rough number of consults switched from C to B in the past year = 17,603,869 x 0.624 = 10,992,817.41
And,
The estimated total dollar value lost in general practice due to underbilling nationally each year = 10,992,817.41 X $37.20 = $408,932,808.7
We estimate that approximately $409 million is lost to the GP profession as a result of underbilling.
And all together:
Estimated total free work by GPs
= Estimated total $ value of non-billable administrative work
+ Estimated total $ value lost to underbilling
So, $911 million (upper bound) + $409 million = approximately $1.3 billion lost to the GP profession annually due to non-billable work and underbilling.
And, a more conservative estimate (using the lower bound for admin work), would be $417 million + $409 million = approximately $826 million.
It’s not about GPs, it’s about patients
Someone has to pay for that estimated $1.3 billion worth of free work that GPs are doing.
Ultimately, the only choice that GPs, as private contractors, have is to raise their prices to cover this expense. This ends up with financial pressure on patients and hence reduced access. This transition is already happening; a recent survey by Healthed shows that one in five GPs are moving from bulk billing to mixed or private billing. But what is being lost in the process is universal access to primary healthcare.
We hope that the investigators will have the IQ, the authority and the cojones to do what the media reports haven’t done: take a detailed, evidence-based look at all sides of this story and make some fearless, fundamental recommendations for positive, sustainable change.
It’s been argued that Medicare was never set up to become the primary source of income for profit-oriented corporations. This idea has merit that the inquiry will hopefully shed more light on, since we’re sure there is a lot of “leakage” to be found in this area of the system. However, 84% of GPs don’t work in corporate practice, and yet they have borne the brunt of the media’s recent efforts to turn public opinion against them.
We look forward to the presidents of the RACGP, AMA and ACRRM being involved in ensuring that the inquiry is fair, balanced, constructive and not simply an extension of the media beatup. If they aren’t invited they should turn up anyway, and make a lot of noise in the foyer until someone listens. Who knows, there might even be an open-minded journo who sees a story in it.
This was originally published at Healthed.com.au.
