The Abbott government has been accused of exaggerating growth in healthcare spending to justify cuts to Medicare rebates.
Health Minister Sussan Ley has begun consulting doctors about reforms to rein in what she has called the “rapid and unsustainable” rate of growth in Medicare spending.
While her first public act as minister was to withdraw changes that would have cut rebates for short GP visits by $20, the government still plans to cut rebates for GP visits by $5 in July, and give bulk-billing doctors the option of charging patients a fee of up to $5.
“In the last decade spending on Medicare has more than doubled from $8 billion in 2004 to $20 billion today, yet we raise only $10 billion from the Medicare levy,” Ms Ley said in her first press conference last week. “Spending is projected to climb to $34 billion in the next decade to 2024. So my clear message to all with an interest in Medicare reform is that doing nothing is not an option.”
Stephen Duckett, a former head of the federal health department who is now health program director at the Grattan Institute, said the use of raw figures, which have also been cited by Prime Minister Tony Abbott in recent days, overstated the increase in spending because they did not take into account inflation and population growth.
“Certainly over that period there was an increase in spending and there was an increase in real spending per head, but real spending per head has not increased nearly as dramatically as the raw figures that the government is quoting,” Dr Duckett said.
According to the Productivity Commission, federal government spending on GPs was stable in real terms between 2006-07 and 2011-12, at just over $300 per person. Using a different methodology, the Australian Institute of Health and Welfare, a federal government agency, calculated that Medicare funding for primary healthcare, which includes some services delivered by dentists and allied health workers such as physiotherapists, increased from $222 to $287 per person in real terms between 2002-03 and 2012-13.
Medicare architect John Deeble said the government’s comparison of raw figures had “no credibility at all”, and highlighting the shortfall between Medicare costs and funds raised through the Medicare levy was misleading, because the levy had never been intended to cover the entire cost of the scheme.
“It’s just playing politics – it’s complete rubbish,” he said.
Professor Deeble said Australia’s health spending as a proportion of economic output was stable, and moderate compared to other developed countries.
In 2012, the latest year for which international comparisons are available, Australia spent 9.4 per cent of gross domestic product on health, a similar proportion to that spent by Britain and a lower proportion than the United States, Canada and France.
But the Department of Health said the growth in Medicare spending was not explained by population growth and the indexation of Medicare rebates.
The department said over the past decade, the annual cost to Medicare of GP consultations rose from $137 to $269 per person. It said the average Medicare benefit for each GP service had increased by 27 per cent over this period after adjusting for inflation.
Ms Ley said the government was committed to “protecting Medicare for the long term” and wanted to work with the medical profession and patients “to build a more sustainable Medicare system”.