The proposal to continue the indexation freeze for all Medicare schedule fees until July 2018 could result in a loss of income for GPs to the tune of $384.32 per 100 eligible consultations - more if the GP is rural based - according to research published in the Medical Journal of Australia.
Researchers from the Family Medicine Research Centre at the University of Sydney used data from the Bettering the Evaluation and Care of Health (BEACH) program between April 2013 and March 2014 to assess "direct encounters between patients and GPs for which at least one Medicare Benefits Schedule or Department of Veterans' Affairs general practice consultation item was claimable".
They assessed the effect on GPs' income of both the indexation freeze and the now retracted $5 rebate reduction, both individually and together.
The researchers found that the freeze would cost GPs $384.32 (in the 2017-18 financial year) per 100 consultations, requiring an $8.43 copayment per non-concessional patient consultation.
"Even though the rebate reduction has been retracted, the freeze will have greater impact with time - nearly double the amount of the rebate reduction by 2017-18", the researchers wrote.
"For economic reasons, the freeze may still force GPs who currently bulk bill to charge copayments."
The pain would be even greater for rural GPs, they found.
"As the rural incentive is higher than the urban, GPs claiming the rural bulk-billing incentive item would face a greater relative loss in rebate income due to inflation: 10 cents more per non-concessional patient in 2015-16 ($2.84) and 29 cents more in 2017-18 ($8.72)."
The researchers found that if the $5 rebate reduction policy went ahead, GPs would suffer a 4.3% decrease in rebate income in 2015-16 and then a 4.0%-4.1% decrease in 2017-18.
"The $5 rebate reduction would have affected most consultations with non-concessional patients, averaging a $4.81 decrease across all consultations with these patients", they wrote.
Combining the effect of the two policies would result in an income reduction of 9.9% to 12.5% for GPs in 2017-18, and assuming GPs charged a copayment to make up the shortfall that copayment would be $7-$8 in 2015-16, and increase to $12-$15 by 2017-18.
"The freeze will result in Medicare savings; however, patient out-of-pocket expenses will be higher than these savings because GPs will need to charge more than their lost income to recoup the additional implementation and operational costs we have discussed", the researchers concluded.
"The results of our study inform public debate by providing an objective measure of the minimum likely effect of the continuation of the freeze on Medicare schedule fees on general practice."