“Abbott dumps co-payment” the headlines ran yesterday afternoon, rather misleadingly. A more accurate description is that the Medicare co-payment has been dumped onto doctors, who’ll now have the responsibility of charging it to make up for the $5 per consultation cut in the Medicare rebate, a freeze in rebates and a redefinition of consultations to cut the rebate for shorter consultations. If doctors don’t charge patients a co-payment, they’ll be significantly out of pocket. A bit like cutting university funding by 20% and then telling higher education institutions to go make up the difference by charging higher fees.

The only actual dumping relates to rebates for children and concession card holders, for whom the rebate will remain as is, and the removal of pathology tests. Otherwise, it’s pretty much the same co-payment proposal, but now rendered “optional”. The sort of option whereby you implement the government’s agenda or cop a major pay cut. As the Prime Minister put it yesterday:

“… what we’re saying to doctors is that with adults who don’t have concession cards, we don’t mind you charging a co-payment of up to $5. That’s what we’re saying, obviously we’re saying that … that’s an entirely reasonable position, an absolutely reasonable position.”

You bet you are — you bet I am.

The way Health Minister Peter “the invisible man” Dutton now tells it, the original proposal was just an opening gambit, a basis for negotiation. That’s somewhat in contradiction to his insistence, and especially that of Treasurer Joe Hockey, before 3pm yesterday that the original proposal was outstanding policy and the government wouldn’t be deviating from it, no way. As you may recall, it was only last Monday that the Prime Minister, in his “reset” media conference, insisted he was sticking with the original proposal, contrary to what someone he implicitly rebuked as a junior staffer from his office had told multiple media outlets.

Still unresolved is the downright bizarre contradiction at the heart of the co-payment: it’s not about unsustainable health spending (which isn’t unsustainable anyway, as repeatedly demonstrated) or about fixing the budget deficit. All of the savings will still go to a medical research fund, not to the budget bottom line. [update below] In an extraordinary moment at yesterday’s announcement, Abbott appeared to get annoyed at being asked why he was persevering with the fund and demanded “is there anyone in this country who doesn’t support the principle of a greater spend on medical research?” Coming from the man whose government has slashed funding for the CSIRO, sacked researchers and denies basic science as a matter of policy, it was a question laden with hypocrisy. Regardless of that, there’s still no clear, single explanation from the government as to why it wants a co-payment for GP services.

In the government’s view, doctors will welcome the opportunity to act, in effect, as tax collectors for Peter Dutton. Whether it’s successful in convincing GPs and patients that all is well, however, may depend on the information campaign that the government will almost certainly roll out to try to sell the new policy. This is an area in which misinformation can spread rapidly — after the budget, many doctors’ surgeries had to explain to worried patients that the co-payment didn’t instantly apply and that they continued to bulk-bill. But having excluded children and pensioners from the reduced rebate, and knowing that middle- and higher-income people probably already pay to see their GPs anyway, the government can be confident that even if GPs aren’t happy about being tax collectors, the main demographic affected by the co-payment is low-income earners. And they don’t tend to vote Liberal anyway.

Update: Fairfax’s Peter Martin corrects me on the deficit — the savings will both reduce the deficit and fund the medical research fund. He notes: “Under the accounting rules for such funds, (Future Fund, higher education fund etc) the contributions are accounted toward the bottom line as additions to the surplus (or subtractions from the deficit).  It is only when the proceeds of the funds are spent that they detract from the budget bottom line.”

Peter Fray

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