The Medicare Understander Has Logged On
aaron patrick shouldn't write about things that he doesn't understand
Australian Prime Minister Anthony Albanese recently announced a plan to make 9 out of 10 General Practitioner (GP) visits free by 2030. To give a very brief overview of Australia’s healthcare system when it comes to GPs: Australian doctors generally work for private clinics and Medicare, a universal public health insurance scheme, pays a rebate to cover the cost of GP visits. But the maximum rebate is set by the government and doctors are still permitted to charge whatever they like. Some doctors do ‘bulk billing’, meaning they accept the Medicare rebate as full payment. Patients don't pay anything out-of-pocket – Medicare pays the doctor directly. Other doctors engage in ‘private billing’ where they charge more than the Medicare rebate. In this case, patients pay the full amount to the doctor, Medicare refunds them the rebate amount and the patient is left with an out-of-pocket co-payment (often called a ‘gap payment’ or ‘the gap’).
A big part of the plan to encourage bulk billing involves expanding the Bulk Billing Incentive – an additional payment given to providers for bulk billing patients. Currently the Bulk Billing Incentive is only paid to providers if they provide free visits to children under the age of 16 and concession card holders, but the plan is to expand this incentive to cover all Australian citizens. This is not my preferred approach but it’s better than what we currently have.
Whenever Medicare is in the news various journalists and pundits who have no idea what they’re talking about step up to provide their uninformed opinion. The most egregious case I’ve found comes from Aaron Patrick, who penned a piece for The Nightly the other day opposing the change because it amounts to ‘ a wealth transfer from the well to sick’ and ‘middle-class welfare’. Here’s a quote:
Giving almost everyone free access to general practitioners sounds great. GPs do not work for free, though, and the policy will function as a wealth transfer from the well to the sick.
This is a strange reason to oppose free GP visits. The purpose of any insurance scheme, including health insurance, is to pool risks. Car insurance transfers income from people who haven’t been involved in crashes to people who have. Travel insurance transfers income from those who’ve gotten sick or lost luggage while travelling to those who haven’t encountered those problems.
This is especially the case for universal social insurance schemes like Medicare. Medicare is explicitly designed to transfer income from the well to the sick. It’s always done that. Claiming that expanding the BBI is bad because it ‘will function as a wealth transfer from the well to the sick’ is such a bizarre and discrediting thing to do.
If you’re working and you don’t need to visit a doctor, then you’re contributing to other people’s healthcare costs by paying tax. But you’re not just paying for other people’s healthcare – you’re paying for a promise that you too will be looked after if or when you need to see a doctor in the future.
Transferring from the well to the sick is a good thing. People should not be financially worse off because they’re sick or have complex health needs. It is unfair that someone should be richer than someone else purely because they don’t require medical services.
This is not just a luck egalitarian issue. Co-payments may discourage overutilisation of healthcare, but they also discourage appropriate utilisation. People who ought to visit a doctor decide to put it off or forgo medical treatment entirely because they are unwilling to pay. The fact that people are generally bad at self-triaging makes this problem worse. So it’s good when they don’t have to pay.
Here’s another quote from Patrick:
The new policy is fixing a problem that does not exist.
Anyone in Australia who is poor or very sick does not pay to see a GP.
This is blatantly false. It is journalistic malpractice that a claim like this was published.
There is no mechanism by which poor or very sick people are entitled to free GP visits. Poor people are entitled to a Low Income Health Care Card, which means that providers can receive the existing Bulk Billing Incentive for bulk billing them, but they are not required to bulk bill. Some clinics do bulk bill concession card holders, but some do not.
Some people with ongoing health issues are eligible for care plans. As an example, I’m entitled to a Chronic Disease Management plan (CDM). Many of the clinics that refuse to bulk bill concession card holders will bulk bill patients with these plans. But doctors are still under no obligation to bulk bill patients with them, nor do these plans cover everyone dealing with serious illness.
A final quote from Patrick:
Some 22 per cent of GP consultations, in the second half of last year, required a modest patient payment. The system allows good doctors to earn more money, provides a disincentive for unnecessary visits, and reduces welfare for the affluent.
[…]
whichever side wins will be committed to extra middle-class welfare in an economy awash with subsidies. Those who work will pay.
One of Patrick’s objections is that free GP visits amount to ‘middle-class welfare’, which is an old and tired objection to any universal welfare scheme. The objection doesn’t work for two reasons: Firstly, any benefits that flow to the affluent can be offset by making the tax-transfer system more redistributive. Secondly, this objection fundamentally misunderstands the purpose of universal health insurance, which is not to perform the ‘Robin Hood’ function of distributing income from the rich to the poor. Rather, universal health insurance is designed to perform the ‘Piggy Bank’ function of providing insurance against the risk of illness and smooth consumption over the course of people’s lives.
It is amusing that he simultaneously decries ‘middle-class welfare’ and how ‘those who work will pay’. Is this good for people who have the ability to pay or bad for them? It can’t be both.
When I started writing this I wanted to discuss some other articles I disagreed with, but I decided it would be wrong to compare their work to Patrick’s. Plenty of pundits make niche factual errors (like conflating different measures of the bulk billing rate) or demonstrate a poor understanding of the case for free healthcare, but they do not normally make errors of this magnitude. Patrick should be embarrassed to have written it and the editors at The Nightly should be embarrassed to have published it.