Is the evidence on GP co-payments as bad as Labor says?

May 7, 2014

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Healthcare spending has been named as the nation’s single largest long-term fiscal challenge by the National Commission of Audit report.

Earlier this year, Federal Health Minister Peter Dutton said the Government was considering introducing a co-payment for visits to general practitioners in the May 13 budget. This followed a speech in which he said Medicare was on an unsustainable path.

Essentially, a co-payment would mean the 80 per cent of Australians who go to bulk-billing doctors would be required to make a payment of the Government’s choosing.

Opposition health spokeswomen Catherine King is critical of the proposal and recently said: “Evidence of co-payments from around the world, evidence from all of the health groups in Australia to a committee that’s been looking at this issue are all saying that if you introduce a co-payment, what that does… it means that people avoid doctor visits, that’s what it’s designed to do. They end up much sicker and they end up in our emergency departments.”

The committee Ms King refers to in her claim is theSenate Select Committee into the Abbott Government’s Commission of Audit.

ABC Fact Check examines the evidence around co-payments to GPs.

– The claim: Catherine King says evidence shows that GP co-payments mean people avoid doctor visits, end up sicker and end up in emergency departments.
– The verdict: While Ms King is correct that the average person will visit the GP fewer times, there is only evidence to suggest the low income and chronically ill will get sicker. No studies could be found about the direct impact of GP co-payments on emergency departments.

Paying to see the GP

Medicare figures show around 20 per cent of Australians are not bulk-billed and already make a payment to visit a GP. In 2012-13 the average gap feepaid for out of hospital GP visits (non-referred GP attendances) was $28.58 per visit.

In 2013 a report was published by the Commonwealth Fund, a private American fund, which compared the health care systems of 11 countries including the US, Canada, France, New Zealand and the United Kingdom. According to the report, 25 per cent of Australians paid more than $1,000annually in out-of-pocket medical expenses, which was the second highest of the 11 countries. This includes services such as specialist care, dental care, diagnostic tests and pathology.

In the 1991 budget, the Hawke government announced a co-payment of $3.50. It was watered down to $2.50 before it began and was abandoned within months after Paul Keating replaced Bob Hawke as prime minister.

A flat-rate $6 co-payment to visit the GP was floated in October 2013 by the Australian Centre for Health Research, an organisation funded by private health funds and private hospital groups. The proposal was made in a paper written by social policy consultant Terry Barnes, a former adviser to Tony Abbott when he served as health minister.

A submission to the Senate Select Committee into the Commission of Auditby Mr Barnes recommends concessional patients and families with children under 16 would be exempt from the co-payment after 12 visits per year.

Mr Barnes also said the $6 co-payment was simply the Hawke government’s original payment indexed to 2013 using a Reserve Bank of Australia inflation calculator. “It was not plucked out of the air,” he said.

The Commission of Audit has since recommended a higher co-payment of $15 per visit to the GP with a safety net in operation once a patient reached 15 visits, reducing subsequent co-payment to $7.50.

It also recommended state governments introduce co-payments for “less urgent conditions” in public hospital emergency departments.

What Australian health groups say

There has been criticism of the proposal by the Australian Medical Association and Australia’s largest consumer health group, the Consumer Health Forum, said it would “not support measures that increase co-payments and charges given the considerable evidence surrounding the impact of growing out-of-pocket costs on Australians”.

However, the Catholic Health Association “considers there is scope to examine whether there is a role for small mandatory co-payments to be introduced in areas of health service demand that are growing rapidly, for example pathology tests or public hospital emergency department treatment that could otherwise be accessed through primary care at the same time in the same locality”.

In the Senate committee into the Commission of Audit, Simon Cowan from The Centre for Independent Studies supported the introduction of GP co-payments saying: “Our model involves not just a $5 co-payment but a $5 reduction in the Medicare benefit that is paid, and that is where the savings to Government will come from.”

Other experts who gave evidence against the co-payment include Dr Stephen Duckett from the Grattan Institute, Professor Laurie Brown for NATSEM, and Professor Geoff Dobb from the AMA.

The Senate committee believes measures which place a barrier to a person seeing a GP are not in the best interests of keeping people healthy, and “strongly recommends that the Government does not implement co-payments for GP consultations and emergency department services”.

Do co-payments mean ‘people avoid doctor visits’?

Dr Duckett referred Fact Check to a systematic review by Danish researchers Astrid Kiil and Kurt Houlberg from 1990-2011 and published in the European Journal of Health Economics, which identified a total of 47 studies on the behavioural effects of co-payments.

It concluded that “the majority of the reviewed studies found that co-payment reduces the use of prescription medicine, consultations with general practitioners and specialists, and ambulatory care”.

A leading researcher in co-payments, Amal Trivedi, an Associate Professor at Brown University in the United States,says “economic theory and empirical evidence suggest that patients will use fewer health services when they have to pay more for them”.

The RAND Health Insurance Experiment – funded by the US department of health – is often cited as the stand-out study in co-payments in the health care system.

The $15 million study took place in the 1970s and 80s, and remains the largest health policy study in the history of the US. It included co-payments for visits to the GP, prescriptions and hospital admissions.

It showed that modest cost sharing, or co-payments “reduces use of services”.

Dr Beverley Essue from the Menzies Centre of Health at the University of Sydney says “there is evidence that co-payments can impact on access to health care – both necessary and unnecessary care – and that this impact differs among different population groups with the elderly, low income and those with chronic illness (i.e. frequent users of the health system) more substantially impacted”.

A 2013 report by the Australian Bureau of Statistics found 15 million people visited a GP in the past 12 months.

This reports says 5.4 per cent – or over 800,000 – of people “delayed seeing or did not see” a GP at least once because of cost, indicating if a co-payment was introduced would affect the number of patient visits.

In sum: There is strong evidence to show people visit the GP less often when a modest co-payment is introduced.

Do people ‘end up much sicker’?

In what was called “a striking finding” at the time, The RAND study found cost sharing did not significantly affect the quality of care received by participants, or their health.

However, negative health effects were founds in “individuals with high blood pressure and low income as well as individuals with poor sight”.

Dr Brett Montgomery from the University of Western Australia says: “The RAND study is methodologically the most pure of our co-payment studies, because it was a proper randomised trial – that’s why everyone refers to it so often”.

However, he warns the study is dated and excluded older patients, suggesting its results may not be that meaningful for the present debate.

Dr Montgomery says the Kiil and Houlberg review found that evidence of the effect of co-payments on health outcomes, or whether people became sicker, was sparse.

It’s a sentiment echoed by Associate Professor Trivedi, who recently said there are “remarkably few studies of the consequences of increasing co-payments for ambulatory care, and even these studies have been limited because they have excluded elderly patients”.

However, he told Fact Check: “Policymakers should exercise deep caution about increasing ambulatory co-payments, particularly for high-risk populations with chronic disease. Increasing outpatient co-payments can be an ill-advised cost-containment strategy. We have found that in response to modest increases in co-payments, elderly patients in the US cut back on the number of outpatient visits, but then experienced substantial increases in their use of expensive acute hospital care. In other words, the co-payment increases were penny-wise and pound foolish.”

Dr Essue says there are few Australian studies which have investigated the impact of co-payments on “hard clinical outcomes”. However she says one Australian study shows that in 2005 when PBS co-payments increased by over 20 per cent, dispensing of medicines prescribed for diseases including epilepsy, glaucoma, Parkinson’s disease, asthma, osteoporosis, and thyroid deficiency significantly decreased.

She also notes dispensing of statins and some antiplatelet drugs decreased. These drugs are commonly used to prevent heart attacks, strokes and other vascular diseases.

A recent review of international evidence by health policy analyst, Jennifer Doggett, for Consumers Health Forum concludes there is “a risk that the introduction of additional co-payments for bulkbilled and hospital emergency department visits could adversely impact upon the health of some already marginalised groups in the community and result in an overall increase in costs to the community”.

The Government has not yet indicated whether it would take up theAustralian Centre for Health Research’s suggestion that there would be exemptions from the co-payment for low income people and children.

In sum: There is some evidence to suggest co-payments for GP visits affect low income people, and the chronically ill.

Do people ‘end up in our emergency departments’?

In relation to this claim, Ms King’s office referred Fact Check to the 2013 report by the Commonwealth Fund. It found Australia currently has the lowest use of emergency departments in the 11 countries surveyed, with 22 per cent of Australians visiting an emergency department in the last two years. In the US, nearly 50 per cent of uninsured Americans had done so.

The results indicate people who have to pay for healthcare – and possibly cannot afford to – do end up in emergency departments more frequently.

The Government has not yet indicated whether it would take up the Commission of Audit’s suggestion that state governments should be encouraged to introduce a co-payment to try to address this issue.

Dr Essue says “there isn’t a wealth of evidence to suggest that people will be pushed into emergency departments as a direct result of co-payments but it can be inferred”.

“We know that compromised care in terms of non-adherence and non-compliance with recommended care often leads to exacerbations and complications and people use emergency departments when experiencing such exacerbations and complications of their conditions,” she said.

In sum: There are few studies, if any, that measure whether modest co-payments to GPs result in higher emergency rates. However, logic would dictate this to be the case.

The verdict

On the evidence, Ms King is overreaching. While she is correct that the average person will visit the GP fewer times, there is only evidence to suggest the low income and chronically ill will get sicker. No studies could be found about the direct impact of GP co-payments on emergency departments.

Sources

Source: ABC