AHHA Publishes Findings on Co-Payment Research

By Petrina Smith
Tuesday, 18 November, 2014

The Australian Healthcare and Hospitals Association's (AHHA) academic journal will publish findings of research on the Federal Government’s recent Budget proposal to introduce a $7 co?payment for doctor visits, pathology tests and diagnostic imaging will effect disadvantaged and vulnerable Australians.

In the study Co?payments for Health Care: What Is Their Real Cost?, evidence is provided on how out-of-pocket expenses disproportionately impact people of lower socioeconomic means, those with a chronic disease or long term illness, those receiving income support payments and Aboriginal and Torres Strait Islander people.

Out of pocket expenses are the payments for health services and pharmaceuticals paid by people that are not covered by government subsidies. This includes the gap between Medicare benefits and the actual fee paid by a patient, and co?payments for pharmaceuticals. The study identifies that, “out of pocket costs comprise much of the household economic burden of many chronic and long term illnesses”.

The study also discusses how increasing out of pocket costs will have a direct impact on access to healthcare with potential long term impacts on both health and healthcare costs.

While the Federal Government has justified the co?payment as a price signal to deter unnecessary visits to doctors, the lead author of the paper, Dr Tracey Laba, noted that it, “cannot be assumed that consumers know the severity and prognosis of a condition before a consultation and can discriminate between necessary and unnecessary services”. The study also cites evidence showing that when pharmaceutical co payments were raised by over 20% in 2005, fulfilment of prescriptions to treat a number of conditions significantly declined.

Bulk billing rates were also considered with the study noting that only around 30% of specialist appointments are bulk billed with large out of pocket costs being common. The Extended Medicare Safety Net is available to offset these costs, but only 4% of such benefits are distributed to the 20% most disadvantaged people, while over half are paid to the 20% most advantaged. A Medicare incentive similar to that provided to GPs to encourage specialists to bulk bill could assist in overcoming this financial barrier to seeing specialists faced by many patients, particularly among the most disadvantaged.

A key conclusion of the study is that a financially sustainable healthcare system requires early diagnosis and treatment to avoid higher downstream healthcare costs arising from delayed access to care.

“The introduction of a co?payment on GP visits and diagnostic tests in the form currently proposed by the Federal Government will only compromise the effectiveness of the primary healthcare system and lead to worse patient outcomes among the most disadvantaged people in Australia,” says Alison Verhoeven, AHHA Chief Executive.

A copy of the article can be accessed at: http://www.publish.csiro.au/paper/AH14087.htm.

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