What we really need for Christmas is a new Medicare - Grattan Institute

Many of us are stressed about wrapping up work commitments and getting the Christmas shopping done, but spare a thought for the people rushing to fix Medicare.

It’s a broken system that needs an overhaul, and there’s a tight timeline to work out what comes next.

The Albanese government was elected in May on a $1 billion pledge to do this. New Health Minister Mark Butler has established a taskforce and given them until the end of the year to come up with a plan.

It won’t be easy. Medicare was established four decades ago and has hit a mid-life crisis. While Medicare hasn’t changed much in that time, Australians’ health needs have transformed.

In 1984, one in 10 Australians was over 65. Now it’s one in six. Most people that age have at least one chronic condition, such as diabetes, and half have at least two. Younger Australians have rising chronic disease and mental health needs too.

That means GPs are rushing even faster than the minister’s taskforce. With increasingly complex patients, GPs have to pack more and more into each consultation, but the average appointment length has been stuck at 15 minutes for 20 years. Many GPs feel they can’t keep up.

Forcing GPs to carry this load without enough support, and a rigid funding model that rewards speed not need, are the real reasons for the crisis in general practice.

While lower Medicare rebates and a national GP shortage have been blamed, the facts don’t bear this out. A recent study showed that general practice income has been rising and profits have been steady. And Australia has more GPs than ever, more than almost any other wealthy country, and record numbers in training.

Right now, GPs are struggling to handle a historic surge in demand from the pandemic. They need support to do so. But that shouldn’t distract us from longer-term pressures that require structural reform.

The first problem is the workforce model. Complex funding rules and workforce regulations force GPs to provide even the most basic care themselves, and do mountains of administrative work. GPs need another option.

Those who want to should be able to lead a team of medical assistants, allied health workers, and nurses. This would enable GPs to share simpler tasks, do less administrative work, and spend more time with complex patients. It would also let them spend more time planning care, managing their team, and joining up care with other providers.

The federal government should dismantle the regulatory and funding barriers that force GPs to go it alone. It should fund 1000 more clinicians, such as nurses, physiotherapists and psychologists, to work alongside GPs in communities that struggle to get care. Other countries, including New Zealand and the UK, are doing this.

Of course, GPs can’t share care if it means forfeiting a visit fee. That’s why we need a new way to fund general practice.

Practices should be able to choose a new funding model that supports team care. It should combine visit fees with a flexible budget for each patient, based on the patient’s level of need. That way, GPs will be rewarded for overseeing a patient’s care, without having to do it all themselves. They will also be rewarded for looking after the most complex and disadvantaged patients, not for how quickly they can see them.

Here too, Australia lags behind. Most wealthy countries have already adopted this kind of funding model for general practice.

Finally, general practices shouldn’t be left in the dark. They need a clear vision from government about where general practice is heading, better data to help them improve care, and more support from primary health networks to try new ways of working.

Why has it taken a Medicare mid-life crisis to get us to confront the changes we need?

There have been attempts before. Over the years various new billing items have been grafted onto the Medicare Benefits Schedule, such as new payments for making a chronic disease plan, or employing nurses. But these add-ons haven’t really altered the incentives for GPs to do it all.

There have also been four national trials of new funding and workforce models in the past 25 years. Some were disappointing, showcasing what not to do. Others achieved real successes and are worth revisiting. But none have been built up into an enduring new model for general practice.

With a billion dollars, Minister Butler has the opportunity to deliver real change. It might be tempting to take another spin on the merry-go-round of short-term reform trials. And there is no shortage of pressure to simply pay GPs more, without making their workload more manageable.

Grattan Institute’s new report, published today, shows how Minister Butler can embark on real reform of general practice, equipping clinics to respond to the rising tide of chronic disease and giving Australians what we really need for Christmas: a new Medicare.

Peter Breadon

Health Program Director
Peter Breadon is the Health Program Director at Grattan Institute. He has worked in a wide range of senior policy and operational roles in government, most recently as Deputy Secretary of Reform and Planning at the Victorian Department of Health.

While you’re here…

Grattan Institute is an independent not-for-profit think tank. We don’t take money from political parties or vested interests. Yet we believe in free access to information. All our research is available online, so that more people can benefit from our work.

Which is why we rely on donations from readers like you, so that we can continue our nation-changing research without fear or favour. Your support enables Grattan to improve the lives of all Australians.

Donate now.

Danielle Wood – CEO