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Nicht nachmachen! Lessons in Germany’s failed GP co-pay

Germany recently scrapped a GP co-pay similar to the one being brought in by the Australian government. Crikey intern Danielle Thompson asks: will Australia’s work out any better?

The federal government has raised hackles with its $7 GP co-pay plan, announced in the federal budget, but it’s been light on details as to how the scheme will be administered and run. Recently scrapped German legislation may offer a hint as to how the Australian scheme might work — and whether it might be more trouble than it’s worth.

The German healthcare system is not dissimilar to the current Australian system, with free GP visits for public doctors. In 2004 Germany brought in a nominal GP co-pay, similar to the $7 proposed by the Abbott government. The “Praxisgebuehr” (practice fee) was a 10 euro co-payment for the first visit every quarter to GPs, specialists and dentists. But the German parliament scrapped the scheme in a unanimous vote in late 2012. The vice-president of parliament at the time, Wolfgang Thierse, said it was the first time he had ever seen a unanimous vote in the Bundestag.

The German co-payment on GP visits was forecast to bring in 2 billion euro a year in revenue, but the administration associated with the co-payment cost the German government 360 million euro per year to run. Norbert Metzke, president of Germany’s doctors’ association, said in 2012:

The revenue generated for the health funds is minimal compared to the administrative effort required for doctors and health funds.”

On average, the scheme cost 4100 euro per medical centre per year in administration work and resulted in 120 hours of extra work a year for every centre. For this reason it was largely unsuccessful.

Professor Hans Peter Dietz, professor of obstetrics and gynaecology from the University of Sydney, says just in Germany, the new co-payment scheme in Australia “is going to cost a lot more than it generates”.

Dr Brian Morton, a Sydney GP and member of the Australian Medical Association board, says the cost of implementing the program will be dependent on the cash-taking facilities doctors’ practices already have. “Practices that are charging a private fee would already have an Eftpos apparatus on the desk … Someone who is 100% bulk bill would have to invest in those facilities,” Morton said. A spokesperson for the federal Department of Health said:

It is not anticipated that the introduction of the $7 patient contribution will present a great new cost or degree of complexity to these practices.”

The Praxisgebuehr was described as a “bureaucratic nuisance” by a spokesperson for Germany’s Ministry of Health in 2012, and Morton says the GP co-pay could pose similar problems. He thinks it will be challenging to keep track of patients unless new technology is created. As the new $7 payment incurs only for the first 10 visits per year for concessional patients (non-concessional patients will have to continue to pay the $7 each time), it will be difficult to follow those who are seeing different doctors. “A patient could come to me five times, go and see another doctor, maybe have an X-ray …”

Morton is also concerned that pathology will lose out, as that department does not generally interact with patients, but the $7 fee still applies. He fears the billing process may be difficult if pathology can’t collect upfront fees. There would need to be “more accounting and backroom staff”, he says.

The Australian $7 co-payment scheme is expected to bring in $3.5 billion over five years, to be put into the Medical Future Research Fund, outlined in the federal budget. But according to Dietz, it’s unlikely the $7 GP co-payment will create enough revenue to contribute to the fund.

Morton says he hasn’t been told if the government would cover the cost of the administration that comes with the co-payment and the AMA would like the government to consult with it to “fine tune” the program.

Another goal of the scheme is to cut down on “unnecessary” doctors’ visits. Federal Health Minister Peter Dutton said that at the moment:

We have one of the best health systems in the world, but we have to recognise that for a population of 23 million people we provide 263 million free services a year.”

Similar rhetoric was used when the German scheme was brought in, but the authors of a 2006 study into the payment’s effect on visits noted the program appeared to be unsuccessful in reducing healthcare costs. They stated:

Our empirical results suggest that the introduction of the copayment did not have a significant effect on the probability of visiting a doctor.”

Then-German economics minister Philip Roesler said in 2012:

The Praxisgebuehr has failed its purpose. There has been no effect on visits to the doctor. The bureaucratic effort required for healthcare providers is considerable. The main victims are patients who would like to see a doctor.”

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  • 1
    Monicas Wicked Stepmother
    Posted Friday, 23 May 2014 at 2:00 pm | Permalink

    Another goal of the scheme is to cut down on “unnecessary” doctors’ visits.”

    If this is really a goal, then the Government is tackling the problem the wrong way. If you want to stop frequent doctors’ visits, you charge a co-pay AFTER a set number of visits, not a co-pay that stops (for benefit recipients) after 10 visits/year. A “frequent flyer” will only have to pay $70/year, after that all visits are free - so how would such a co-payment REDUCE doctors’ visits?

    If the Government wants to stop “frequent flyers” they need to identify WHY these people are visiting, and provide resources to treat the problem - support services for the lonely, psychological services for hypochondriacs etc. A flat fee, not based on a proportion of a person’s income, will do little to address this problem.

    In addition, who will be counting up the 10 visits/year before the co-pay stops? Medicare? How will Medicare communicate to every medical provider which of their patients need to pay? Or will it be a Medicare “rebate” and returned to the patient after they have provided each co-payment, and what are the Medicare administrative costs involved?

  • 2
    Pedantic, Balwyn
    Posted Friday, 23 May 2014 at 2:57 pm | Permalink

    One minor detail forgotten in the discussion of co-payments is how the Health Service will keep track of the number of visits etc.
    As there appears to be some policy dissension, at least at Ministerial level, about the exact rules to be applied, it’s a sure bet that no has started on the major project to develop the internal systems, or reporting packages required for each doctor and so on.
    As the track record for the development and implementation, within budget, of systems at Federal and State level is pretty abysmal, the Government may well be hoping that the legislation doesn’t pass the Senate.
    One suspects that maybe only IT gurus around the country are waiting eagerly for the go-ahead and for very attractive compensation packages that will accompany it for their work.

  • 3
    Harry Held
    Posted Friday, 23 May 2014 at 3:39 pm | Permalink

    The Liberals hate Medicare and have done so for 40 years. This is just their latest attempt to kill it off through a slow acting poison How can they talk about Medicare being unsustainable when they are not even putting the money they want to collect into the system, meanwhile the private section has to be subsidised to the tune of 30% to survive.

  • 4
    Steve777
    Posted Friday, 23 May 2014 at 3:50 pm | Permalink

    I think much of the discussion misses the point. The purpose of the ‘co payment’ is to force doctors out of bulk billing, as a first step in the long standing Coalition ambition to dismantle Medicare.

    As for the ‘Medical Future Fund’, that makes no sense at all if there really was a ‘budget emergency’. It’s either another Abbott eruption like ‘Direct Action or his Parental leave scheme, or it’s intended as a tool in getting this ‘reform’ through the Senate. I can see the headlines now in the Daily Telegraph “Labor blocks funds for kids with cancer”.

  • 5
    AR
    Posted Friday, 23 May 2014 at 4:03 pm | Permalink

    Surely a cash box at the reception desk is the last thing needed by a GP dealing with some of the more ..unstable.. patients at the bottom of the dungheap?

  • 6
    Marc Lane
    Posted Friday, 23 May 2014 at 7:36 pm | Permalink

    In the UK, where a similar idea has been touted, one compelling argument against it has been that it would put further pressure on emergency - from people who should be seeing a GP. The UK is already struggling with GP services wrongly being delivered by A&E because GP appointments are administratively difficult (though free).

  • 7
    Mick Handcock
    Posted Friday, 23 May 2014 at 9:47 pm | Permalink

    Honestly …what would the pesky Germans have to teach us…we are Australia mate…obviously they were doing it all wrong and we have the ability to something completely different!!! Said with tongue firmly in cheek…But in reality - Germany - all jokes aside does have a reputation for doing things right and with a high degree of organisation, if they can’t do it can this bunch of bungling, self praising wannabe’s of THE Establishment achieve anything? I mean they can’t even rort the system without getting caught quite regularly…Good Grief!

  • 8
    Heath Mitchell
    Posted Sunday, 25 May 2014 at 10:28 am | Permalink

    I took my daughter to the doctor this week. They had no trouble processing the $35 gap payment. There are no bulk billing doctors in regional towns. $7? I dream about a $7 co-payment.

  • 9
    Neil
    Posted Monday, 26 May 2014 at 7:45 pm | Permalink

    I work in a rural medical practice and we still bulk bill over 80% of our patients. We havn’t seen a drop in patients over the past two weeks and we have no real idea how this will affect us.
    I have it on very good authority that it will cost the local health service $300K per site to administer the co-payment so I can’t imagine a whole amount of enthusiasm there either.
    What we will probably do is suck it up and see the sick an really poor at a lower fee. We do however have all the infrastructure to cope with the payment and I hope that realtime communication with Medicare which occurs already will inform us of the 10 visit threshold being reached.
    Have to love the German name for co payment.

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