Imagine what it might mean if major structural reform occurred in Australia’s health system. A forty-five-year-old man feels vaguely unwell, tired and achy. He books to see his regular general pracitioner (GP) at the practice at which he is enrolled. Because he is enrolled, he has an appointment within a few days. He has lifestyle issues, but the GP knows the family background and recognises there are mental health issues. He needs some counselling, which isn’t a strength of this particular GP. He is referred to the onsite psychologist who works with him over several months, but in discussions between the two health professionals on-site and face-to-face, they agree that his increasing weight gain also needs to be managed better. He’s referred to the on-site dietitian. The patient pays nothing but his taxes.
A sixty-five-year-old woman being treated for melanoma is discharged from the oncology unit with follow-up appointments. She has a discharge summary written by the registrar, with a one-to-two paragraph summary of the admission, a list of alterations to all her admission medications, a summary of relevant results, further follow-up, and a direct contact to the registrar. She sees her usual GP within a week at the clinic where she is enrolled, and on her return for follow-up at the hospital, a letter from that appointment written by the registrar or consultant is sent to the GP.These examples seem simple, and a very few are lucky enough to have this type of efficient care in our system. In general, however, Australian health services are struggling to provide such basic care. For patients, even the wealthy, it can be difficult to access such timely, integrated care of complex conditions. For most patients, there is no ‘system’. They see a collection of poorly connected, differently funded services that they are expected to negotiate. Recent initiatives by the Albanese government have improved service somewhat, but they remain band-aids on a system which needs substantial reconstruction. Prior to suggesting some imperatives for major structural change, let me outline the complex problems of the health system as it stands.
GPs and specialists: the changing structure of care
One prominent example, most visible to many patients, is the specialist co-payments and their increase, sometimes to hundreds of dollars. That’s affordable for the wealthy, but try finding $40 each time you visit if you’re on a pension or the dole and paying rent. Even on a median income with rental or mortgage stress, that’s a challenge. These people either delay or don’t get care, or they join public hospital outpatient waiting lists or attend emergency departments, either at the time or much later when they become very sick.
Bulk billing occurs when the provider accepts the Medicare rebate as the only payment for the service. About 65 per cent of patients are bulk billed by general practitioners, but that amounts to about 77 per cent of GP consultations because many patients who are frequent attenders are bulk billed. The latter is the figure the government tends to use. As documented in a recent Grattan Institute report, the average co-payments for specialists have increased by 40 per cent in the five years to 2025. That average includes bulk-billed consultations. The corresponding figure for GP visits is only 2 per cent because most visits are bulk billed, which reduces the average by a large amount. Those professionals who bulk bill recognise their patients’ financial hardship. Others also do, but feel they must charge to make their practices viable. Some simply have no understanding of financial hardship or believe it is an individual responsibility. Some are just greedy.
Why have specialist services become so dominant and expensive? Behind that question is a deeper one: why are specialists so different from GPs? In the 1970s, before Whitlam’s Medibank, working as a GP was regarded by many as just as good as becoming a specialist. Many GPs performed surgery. Public hospitals tended to be centres of excellence, dealing with the more complex cases. Private hospitals were for relatively simple surgery and uncomplicated general medicine.
Technology and aging changed that. Much more could be done for most diseases. Treatments could occur more safely in private hospitals. Medicare came to stay in 1984, and with it, public hospitals provided free, at the point of service, care for everyone. Specialists could work in the public hospital on a very satisfactory salary, either full-time or just doing some sessions, supplementing that with a healthy private practice for those patients who could afford it and wanted the convenience and extra comforts of private care, and the guarantee of a specific doctor. Specialist prestige and income rose as GP prestige fell. Graduates with debts looked to specialist training to pay off debts faster rather than managing on a smaller GP income.
It should be said here that, despite systemic underfunding, urgent life-saving care in the public system is accessible and, once in the system, the available care is world class. However, this can hide the serious deterioration of non-urgent care.
For the terms of the Hawke/Keating governments, the funding of public hospitals was split about 50/50 between states and the Commonwealth. But during the Howard years, the Commonwealth share dropped to 42 per cent as private hospital care and private health insurance were promoted. By the end of the Morrison Government, it was 41 per cent. Now, public hospital outpatient waiting times are a disaster. Thus, patients go private for an opinion and bear the cost or simply give up on seeing a specialist.
The medical specialist as a social type
Medicare rebates for specialist services are generally increased annually to take inflation into account, but there has been a gradual erosion of the value of this rebate, at least since 1992. Current rebates are 22 per cent less in 2024 dollars than in 1992 (using the RBA inflation calculator). One can’t really be surprised that specialists might increase the co-payment to compensate.
But GPs have faced the same ‘rebate value erosion’ and despite many more now charging large copayments (average $45), the increase across all patients is still only 2 per cent because so many bulk bill. The question then is why don’t specialists bulk bill more of their patients? From my observations over forty years as a specialist in a ‘marketplace’ of provider shortage, it would seem to be because of a combination of a sense of entitlement, combined with a dissociation from or ignorance of the lives of patients. Many specialists see patients for less than five visits. Most GPs see patients for years. Surgeons and physicians who do procedures might only see a patient three times and then discharge them to the care of their GP. Even those who see them repeatedly are seeing them for a particular issue. GPs see them for everything.
For most medical specialists, the work is a reward, intellectually stimulating, and generally going home every night knowing one has helped individual patients. It is privileged work. Many specialists can be unreflective about that privilege. If one is born with a smart brain, into a stable family, comfortably or very well off, with every encouragement to use the smart brain, and surrounded by powerful role models, it is hardly surprising that a person works hard to become successful in whatever career chosen—such as being a doctor—and continues to work hard throughout their career. Even those minority of elite doctors who were, say, brought up by one parent in a housing commission flat, like our prime minister, often refuse to recognise that their intelligence and character were there in infancy and early childhood and their conscious decision as a teenager to strive hard was born from unconscious personality characteristics for which they should take no credit. With that success comes the strong liberal value of a sense of entitlement, often just to luxuries in life but often also to better access to health care and education. The reverse thinking is that people who don’t strive and become successful don’t deserve the same care as those who do. For many who think this way, a safety net for the unsuccessful, rather than a system of equal care, is sufficient for ‘the others’.
There is also another factor, which might be called group think, causing gap payment charges to escalate. If one is surrounded by colleagues who charge a $200 copayment, then one is most likely to charge similarly—perhaps just $150 and then one can feel not greedy. It is a salve for the conscience, enabling one not to think that some patients can’t afford to come.
Thus, many specialists charge patients with the full knowledge that care from them may be unaffordable to many. Their liberal consciences are clear. Sadly, according to a 2024 survey by the Harvard-based think tank, the Commonwealth Fund, of 11 OECD countries, Australia ranked ninth out of 11 for access to care, andfifth for equity.
Wider structural issues
Copayments and entitlement are just one type of problem with specialists. The interaction of specialists with patients, as with all the other people who contribute to specialist patient care, is sometimes first class but often very poor—especially when patients need hospital care, and the way in which the specialist ‘total health care’ team communicates is frequently a disaster, due to miscommunication, sporadic contact, and other factors. Consequently, the expectations on GPs can be overwhelming, Adding to these stresses for GPs has been the challenge of maintaining what they feel is an adequate income in the face of increasing practice costs not necessarily matched by Medicare rebates which have fallen behind inflation. The result has been a decline in the number of patients and services bulk billed and an increasing use of larger copayments to address the financial issues. That has meant patients either don’t seek care, or delay until it’s a crisis, or go directly to emergency departments.
The Albanese Labor government recognised these issues affecting patient access and have increased rebates, reduced the cost of prescription drugs, and opened a new type of facility, the Urgent Care Clinics which provide bulk billed services from 8 am till 10 pm. All these policies improve access and affordability of health care for patients.
However, these changes, although very welcome, are band-aids for a dysfunctional archaic system designed for the relatively simple needs and care capabilities of the world up to the 1980s. Radical surgery to address major funding mechanisms and systemic dysfunction is required.
There is much to do to respond to these problems. Unfortunately, despite the work already done in consultative committees, the most recent Federal Budget and election campaign hardly mentioned reform. Band-aids are neither efficient nor sufficient.
To some degree, this is recognised by participants from the ‘progressive’ side, although action to implement is another matter. Major problems of system co-ordination, geographical fairness and socio-economic inequality are going unaddressed.
One of the early actions of the health minister Mark Butler in 2022 was to convene a Strengthening Medicare task force. This task force comprised academics and most of the major players in publicly funded primary healthcare or general practice, including the conservative Australian Medical Association. Its report recommended major changes in how primary healthcare should be funded and organised. Over the last two and a half years, various subcommittees have met to take the recommendations further and turn them into policy.
One committee, chaired by a senior public servant, recommended that there should be a fundamental change in how general practices are funded. Currently 90 per cent of the Medicare income is through fee for service—that is, you have a consultation, and the practice gets paid through a Medicare rebate. The change suggested is that by 2030 this would reduce to 60 per cent by giving block payments of some sort for various services provided. This would include all the allied health services the practice provides. The idea behind this change is to directly fund care from professionals other than the doctor, a huge need when dealing with chronic disease. It would also allow individual practices to employ those professionals which they identify are most needed. Dental care could be included in this model, but wasn’t. It is proposed this funding be adjusted for rurality, socioeconomic status and complexity of needs. This is such a major change that it will take years for it to be implemented, particularly as the government needs and wants to bring general practices with it rather than impose change upon them. This committee also recommended the establishment of an Independent Primary Care Pricing Authority, which would set the scene for transparency of incomes.
There has been a significant ongoing investment in digital technology including trying to make My Health Record much more useful. It would be so much easier to provide better care to patients if communication between health professionals was easy. That is the aim of My Health Record; the trouble is, everyone knows that it is not very well-made, something the Minister has acknowledged. Once again, this is part of a long-term major change to how things are done. One legislative step has been made in 2024 to force publicly funded providers to upload data to the record, in this case all pathology results. Radiology will probably be next in the firing line.
However, all this is occurring with insufficient acknowledgement of the social inequalities within the system. A 2022 Grattan Institute report, A New Medicare, focused on major reconstruction of general practice and primary health care, like the Strengthening Medicare Taskforce. It noted that GP and GP-trainee numbers are increasing, and Australia has more GPs than most other OECD countries. The problems are in their distribution and their utilisation to make maximum use of their skills. Patients in less wealthy areas tend to be sicker, more difficult to treat and less able to afford copayments. That is not attractive to most GPs or other health professionals. It needs to change.
Small bulk payments are already made to general practices. They are already adjusted for age, gender and remoteness. We know however that socioeconomic status (SES) correlates closely with health outcomes. These payments and the suggested extra ones to make up 40 per cent of general practice payments by 2030, could very quickly be adjusted for SES using data already collected down to the level of the basic ABS statistical ‘Mesh block’ which is about 60 house units. This would mean practices in areas of disadvantage would receive an immediate increase in funding and those in wealthy areas would lose nothing. It would immediately improve the attractiveness of working in areas of greatest need.
One clear advance has been the introduction of patient enrolment. This is a scheme whereby a patient enrols with a particular GP or practice. It is voluntary but is aimed, at least in the long run, to improve continuity of care. There are small financial benefits for patients and practices, but the intention appears to be that benefits for both patients and practices will increase.
How does the patient benefit? The practice incentive payment for enrolment needs to be partly and variably contingent upon delivering certain levels of continuous care to the patient. This already occurs with Aboriginal and Torres Strait Islander patient payments.
Towards a Universal system
The next step could be to have the bulk payments to primary care providers to be sufficiently large that they are made contingent on full bulk billing—that is, to develop an actual universal health system, at least at the primary care level. That is different from a universal public health insurance scheme which simply gives access to an inadequate rebate—Medicare as we know it. Universal bulk billing cannot possibly be introduced, however, until the many practices in wealthier areas that believe they can’t manage without copayments are satisfied that the extra funding will enable them to survive.
We should then stop fee-for-service payments altogether for enrolled patients, or at least to those being treated for chronic diseases. Thus, the system would be a fusion of fee-for-service payments for some patients and situations, block funding for other situations, and even the potential to move to salaried health professionals which is the norm in public hospitals and Aboriginal Controlled Health Centres. GP and primary health care needs to interact better within its own teams and in its interactions with hospitals and specialists. Improved IT is essential and is planned.
In relation to specialists
Some years ago, the Doctors Reform Society suggested dedicated federal funding for an increase in salaried specialists both in public hospitals and in the community. The recent Grattan report on specialists recommends such changes as well as addressing the shortages of specialists in many geographical areas and in many sub-speciality areas.
In 1994, Peter Baume, a specialist physician, Liberal senator, and former Liberal health minister, authored The Cutting Edge: A Report of the Inquiry into the Supply of, and Requirements for, Medical Specialists Services in Australia, 1994. The report recommended that universities be tasked with some of the training of specialists because the professional colleges were not producing an adequate workforce. The recent Grattan report repeats this 30-year-old concern but does not raise that as a possible solution. In light of the corporatisation of universities perhaps that is appropriate. However, getting change through the very conservative professional colleges will be challenging.
How do we move towards a humane, efficient, effective health system that could provide this type of care? Implementation of the suggestions with which Minister Butler has been involved in developing would be a start. But much more is needed.
Public funding of specialist clinics in the community could be implemented in the short term. The new Urgent Care Clinics for general practice were set up and functioning very soon after being announced. Specialists in public hospitals are salaried. There is no reason to expect public specialist clinics would be hard to staff. The other changes to address specialist issues would take time.
Funding such reforms is an investment in people and although difficult to measure, would almost certainly save money across governments. One obvious source of funds is the inequitable private health insurance (PHI) rebate which permits those who can afford PHI to avoid the queues the majority of Australians face at public hospitals. This rebate could gradually be reduced with the simple argument that the sensible thing to do is to reallocate spending to where there is demonstrable greatest need. With an increased capacity of public hospitals, waiting lists might stop getting longer even as some patients are less able to afford PHI and use the increasingly better resourced public hospitals.
Ultimately, the grossly inefficient debacle of federal, state and territories, and local government funding of health services needs to be addressed. A National Health Care Reform Commission should be established as the single funder of public health care, independent of politicians and the many stakeholder groups. Charged with distributing funds on the basis of need, it would be a long-term project. Politicians’ only decisions would be how much to fund the total health care budget and who to appoint to the Commission. As well as the Commission we need a restoration of Health Workforce Australia and a Preventive Health Agency. Without developing our workforce, nothing can happen. Without prevention, we are asking for a tsunami of preventable illness and death.
It is all possible. Little can happen quickly. Tiny steps have been taken. We need major steps. We are hearing little by way of commitment to major structural change. Two terms of Labor could be long enough to entrench sufficient change that, like Medicare, would be very difficult for the political Right to reverse, and would make a big difference to patient’s lives.