Insurers make new bid for primary care coverage

Health funds can see the cost savings in well-funded general practice, even if Medicare cannot.

---

Since Medicare’s inception in 1984, private health funds have been barred from covering out of hospital care for which there is an existing MBS item. 

As GP bulk-billing rates for non-concession cardholders continue to slip, private health insurers say the time is right for a rule change.

Referencing the findings of the latest Cleanbill report, which found a decrease in the number of GP practices bulk billing new patients and an increase in out-of-pocket costs, CEO of non-profit health fund peak group Members Health Matthew Koce said allowing health funds to cover GP costs was a “no-brainer”.

“Health insurers want to be part of the solution to the out-of-pockets people are facing in the primary care space,” he told The Medical Republic.

“We know … getting fast, timely access to a GP is important to population health, and we’re hearing anecdotally that people are putting off trips to the GP because it’s becoming costly.”

In the lead-up to the federal election, Members Health is calling on the major parties to “outline policies that will help Australians deal with rising medical out-of-pocket costs”.

Mr Koce said concerns that allowing private insurers into primary care could usher in anything akin to US-style managed care were unfounded.

“It’s not a possibility, and the Members Health funds certainly wouldn’t want [managed care] in Australia,” he said.

“Supporting GP practices is just that – it’s supporting GP practices and improving access to care.

“It’s not about telling GPS how to do their job.”

What’s more, he said, the health system would likely save money by avoided hospitalisations and properly managed chronic disease.

“If people are putting off a trip to the GP, it means that we’re likely to see worse health outcomes, and that will cost the economy more,” Mr Koce said.

It’s an argument that peak bodies like the RACGP can agree with, at least partially.

“It is interesting that a private enterprise health insurance industry is keen to look at ways of investing [in primary care], yet Medicare is reluctant to come to the party,” college Funding and Health System Reform Expert Committee chair Dr Emil Djakic told TMR.

When businesses are interested in developing a new product, he said, it’s normally because they think it is going to be worth their while.

There’s also the fact that, because of the Medicare safety net, primary care represents a relatively limited liability to insurers; as soon as people pay more than $2615.50 in one calendar year, the Extended Medicare Safety Net kicks in and pays 80% of out-of-pocket costs for out of hospital services.

For concession cardholders, the yearly threshold is $834.50.

The way Dr Djakic sees it, it’s a rare situation where there are multiple winners.

“The insurers are well aware that there’s this relatively small gap [amount] that they’re going to be liable for in the current model,” he said.

“They’re looking at ways of improving their products and shaping them to serve their members better with, I think, a very good eye on promoting better primary health care for those members.

“And hopefully [that would lead to] better chronic disease management and avoidance of late-stage, hospital-type interventions.

“That is going to be a win for the patient – brilliant – a win for the health fund – terrific – and probably also a win for the government, because it would probably reduce the onflow into the public hospital system.”

Although public hospital systems are primarily state costs, the federal Department of Health and Aged Care is projected to spend about $150 billion on public hospitals over the next five years.

The amount of yearly federal funding allocated to state and territory hospitals has grown by 145% since 2012.

Despite the potential upsides, Dr Djakic said the RACGP was still focused on advocating for improvements to Medicare.

Making the situation more complex is the fact that allowing insurers into primary care would effectively let the government off the hook in terms of fixing Medicare; trying to advocate for both at the same time would be a complex balancing act.

“Just because government has been underfunding general practice for decades doesn’t mean that private insurers should be stepping in to fill that gap,” AMA president Dr Danielle McMullen told TMR.

“Actually, governments should take responsibility and pay appropriate MBS rebates.”

The AMA was also concerned about the implications for patient data and whether health funds would use it to overtly or covertly influence patient care directions or choice of health specialist.

As to the claim that managed care wouldn’t be possible in Australia – “part of the reason it can’t happen is that they’re not able to fund and access [primary care],” she said.