The Federal Government’s four-year freeze on the Medicare Benefits Schedule (MBS) is a bitter pill for doctors to swallow and in some cases, disillusioned patients with private health insurance will face higher out-of-pocket expenses for treatment.
Announced in this year’s Budget, the freeze on Medicare rebates until July 2018, is putting the onus on health funds to ‘do the right thing.’
Health funds face the decision of whether to index their medical schedule - effectively picking up part of the tab for the Government’s savings – or freeze their schedule and pass on the inevitable cost of inflation to their members.
Australian Medical Association (AMA) figures show the freeze will save the Government almost $2 billion by mid-2018, with more than half of this coming from medical specialists, their patients and health insurers as the value of the Medicare rebate declines and the cost of providing care rises.
The cost of indexing
Inevitably, funds that ‘do the right thing’ and index their schedule to maintain the level of cover for their members, face the prospect of applying higher premiums. In light of our consumerism-driven society and a focus on the price of health insurance, it’s difficult for fund members to reconcile more pressure on premiums.
Protecting the doctor-patient relationship
It is important that the medical profession and funds work together to encourage the government to update the MBS so that it realistically reflects the value of medical services. While this dialogue takes place, it is imperative that the keystone of the doctor-patient relationship is protected.
Doctors’ Health Fund is proof that these outcomes can be achieved. Since its inception in 1977, it has shown leadership by being the only fund that pays medical benefits up to the AMA list of medical services and fees on our Top Cover. Doctors’ Health Fund believes that the AMA fees provide fair and reasonable remuneration to doctors for their years of training, expertise and experience. Our fund also supports patients having access to benefits that enables their choice of doctor and deliver a realistic benefit for the work performed by that doctor.
The fallout of not indexing
Alternatively, there could be significant ramifications for members of funds who have not indexed their schedule in line with doctors’ fees. In addition to facing greater out-of-pocket costs for surgery, we could see members increasingly ‘shopping around’ for a treating doctor who will meet their health fund’s medical schedule. Indeed, their health fund may even encourage them to do so. Whilst an informed market is the most efficient in any economic theory, in a care paradigm this has the potential to disrupt the patient-doctor relationship; arguably the cornerstone of any sound and effective health care system.
Coupled with these impacts, is the fact that financial hits due to large out-of-pocket expenses for treatment often come as a surprise to members, leaving them questioning why they have been paying for health insurance for years and years. Of course, doctors and their practice staff face this issue every day - and at an increasing rate. If Australian health funds truly believe in our health care industry and patient choice, they too need to do the right thing and index their schedules.