Ideas@TheCentre
The great Medicare swindle
An article published this week by the former head of the Professional Services Review (PSR) in the Medical Journal of Australia generated much needed debate about the wisdom and sustainability of Medicare.
According to Dr Tony Webber, Medicare rorts are costing taxpayers between $2 billion and
$3 billion every year because of over-servicing and other dodgy billing and clinical practices.
The PSR is a peer-review process that investigates suspicious conduct as identified by Medicare Australia. However, the rorts don’t end even if doctors are found to have acted inappropriately.
The PSR can order a doctor to repay funds improperly claimed from the Medical Benefits Scheme (MBS), but the repayment is tax deductible. Rort the system one year, get a tax break the next!
I spoke at a conference in Melbourne with Dr Webber a couple of years ago. When he told the audience of eminent surgeons about the tax break double rort, they all broke out laughing.
This showed just how indefensible it is to treat fraud as if it’s a legitimate business expense.
Withdrawing doctors’ ‘get out of jail free’ card would certainly help improve Medicare’s integrity. But it is also a bit like shutting the gate after the horse has bolted.
The problems with Medicare fundamentally stem from bulk billing the vast majority of
GP (approximately 75% of consultations) and other primary care services, which are consumed without any user charges.
Most patients don’t care what MBS items they are ‘billed’ for because their Medicare card,
in effect, is an unlimited credit card fully paid for by the federal government.
If we really want to control the cost of Medicare and prevent over-servicing, some basic market disciplines are needed.
To try to stem rapid growth in Medicare expenditure, the Hawke government decided to introduce compulsory co-payments in 1991. However, the co-payments were quickly abolished after Paul Keating became prime minister. Keating had opportunistically used the issue to swing some members of the Labor Left behind his successful second challenge against Bob Hawke.
If we really want to stop Medicare rorts, it’s time to revisit this issue. A properly designed system of co-payments can protect the truly poor and sick and need not mean these groups will go without necessary care. But everybody else should have to pay something out of their own pocket each time they see their bulk-billing doctor.
Dr Jeremy Sammut is a Research Fellow at The Centre for Independent Studies and author of How! Not How Much: Medicare Spending and Health Resource Allocation in Australia.
