Australian Health Minister Says General Practice in ‘Worst Shape’ Since Medicare’s Inception

Australian Minister for Health and Aged Care Mark Butler speaks at Parliament House in Canberra, Australia, on July 28, 2022 . Martin Ollman/Getty Images

Australian Health Minister Mark Butler has blamed the former Coalition governments for the current state of general practices across the country, saying they were in “worst shape” in 40 years.

In an interview with ABC radio, the health minister said the Medicare system needed a “comprehensive revamp” to keep local clinics operating.

He added that the problem was due to the Medicare rebate freeze previously implemented by the Coalition.

“There’s no question that the cuts, the freezing of the Medicare rebate for six years under the former government, has placed enormous financial pressure on general practice in particular, and the Medicare system more broadly,” Butler said.

“Frankly, I think our general practice right now is in the worst shape it has been in the 40-year history of Medicare.”

The Medicare Rebate Freeze

In Australia, the Medicare system is a type of public health insurance funded by taxpayers’ money that helps patients pay for their medical expenses.

The government will provide rebates for a wide range of medical services listed in the Medicare Benefits Schedule, including GP visits and consultations with other medical specialists.

However, the rebates do not cover the full cost of medical services, and patients are expected to pay the difference.

A Medicare and Centrelink office sign is seen at Bondi Junction in Sydney, Australia, on March 21, 2016. Matt King/Getty Images

Under normal practice, the government will raise the rebate rates after a certain period to reflect the changes caused by inflation and other factors.

But between 2014 and 2020, the Coalition governments maintained a freeze on the rebates, effectively keeping them at the same level despite the rises in inflation, wages, and other costs faced by medical practices and clinics.

While the Coalition kept the policy going for six years, with some easings, it was Labor that first introduced the practice in 2013.

For years, medical peak bodies have lobbied the government to raise Medicare rebates, but with little success.

In December 2022, Maria Boulton, the president of the Australian Medical Association (AMA) Queensland branch, alerted that the funding for Medicare rebates was at least $8.6 billion (US$6 billion) behind where it should be.

Recently, the AMA has called on the government to double the rebate rates to prevent doctors from abandoning bulk billing.

Other Medicare System Issues

While Butler singled out the rebate freeze as the leading cause for the decline in general practices, the minister said there were some broader structural issues at play.

Specifically, he said the Australian population was ageing and having more complex chronic diseases.

In addition, Butler noted a lack of coordination between multiple disciplines in the healthcare system as he wanted local doctors to work hand in glove with nurses, allied health professionals, and pharmacists.

“The system is not well designed to allow them to do that,” Butler said, adding that the digital connections between primary health, hospitals and aged and disability care were also “not up to scratch”.

A general view of the Albert Road Clinic in Melbourne, Australia, on April 26, 2020. AAP Image/Scott Barbour

Another major problem lies in the workforce as the number of medical graduates pursuing a career in general practice plummets.

Butler said less than 14 percent of graduates were now choosing a general practice, while the figure was about 50 percent not too long ago.

“If we think we’ve got a problem now getting in to see a GP, think five, 10, 15 years down the track if we’re not able to turn those numbers around,” he said.

Medicare Reform in Progress

While discussing the problems of the Medicare system, Butler said the Labor government was working through them with medical and patient groups to come up with solutions to strengthen Medicare, with a report expected to be finalised within weeks.

Regarding current government efforts, the minister said the government was already channelling money into Medicare, providing help for rural GPs, and building new care centres to relieve the pressure off hospitals.

“But I don’t pretend there’s not more we need to do,” he said.

At the same time, Butler said the Medicare reform would require a concerted effort from federal and state governments and the healthcare sector.

“(The states) have got a direct interest in rebuilding general practice for the benefit of their communities,” Butler said.

“But also for the viability and sustainability of their hospital systems that are under pressure from presentations that frankly could be quite adequately dealt with in the community if the general practice system was in proper shape.”