The Guardian • Issue #2030

Medicare under attack

  • by Anna Pha
  • The Guardian
  • Issue #2030

Save Medicare rally, Sydney, 2014. Photo: Bernadette Smith

An investigation by the ABC, and the Nine newspapers Sydney Morning Herald and The Age, claims that $8 billion (approximately thirty per cent) of Medicare’s annual $28 billion budget is being wasted. The claims are based on estimates by lawyer and researcher Dr Margaret Faux’s PhD.

The blame was laid on Australia’s doctors, radiologists, and pathologists as well as errors and the complexity of the system.

In the space of a week The Age and the Sydney Morning Herald ran more than twenty articles on the subject. The ABC, which has lurched to the right under Ita Buttrose’s tenure, also gave it extensive coverage. Other corporate media outlets wasted no time jumping on the bandwagon in what amounted to a massive attack on Medicare.

At the time of writing the media that ran hard with the claims had provided no proof but referred to anecdotal (and sensationalist) examples such as some dead people being bulkbilled. A 2020 Australian National Audit Office (ANAO) assessment estimated Medicare non-compliance costs of up to $2.2 billion per year.

Health Minister Mark Butler has commissioned a report on the Health Department’s existing compliance and audit programs. This will form part of a wider review looking for savings (read cuts) in health, the NDIS, and other social expenditure.


Rorting and fraud are not acceptable, but the source of the problem is not doctors but the cuts to funding and other attacks on Medicare and the public health system by the neoliberal policies of successive Coalition and Labor governments.

Medicare has been subjected to a death by a thousand cuts over the past forty years. That is not to deny that some medical practitioners and services such as pathology and radiology are doing what they can to increase incomes and profits – some of it illegal or overservicing.

The system of Medicare rebates has largely been deregulated and the provisions of health services privatised. When doctors, pathologists, and radiologists bulkbill, the government pays them a rebate based on a schedule of fees. It is illegal for them to charge a fee when bulkbilling. Previously patients were required to sign a form when being bulkbilled. That is no longer the case; it has been completely digitalised meaning patients have no idea when and if Medicare is bulkbilled for non-existent or additional services.

The rebate that bulkbilling doctors receive for services has been cut in real terms over the past forty or so years through freezes and below inflation rises. Medicare rebates have not kept pace with the cost of living and have never covered the true cost of delivering quality medical care.

Dr Con Costa, former long-term national president of the Doctors’ Reform Society, told the Guardian, “First they froze the Medicare rebate until it dropped from eighty-five per cent of Australian Medical Association rates at the start, to current forty three percent of the AMA rate. No bulk billing practice can survive on that.”

The rebate paid to GPs for a standard consultation was $8.20 in 1976. Sounds small, but in today’s money using the Reserve Bank of Australia’s inflation calculator is worth $54.18. The rebate paid to bulkbilling doctors since September 2022 is only $39.75.

This is intentional, aiming to force more doctors and services to cease bulkbilling. The Abbott government was forced by public opposition to withdraw its plans for a $5 gap payment when doctors bulkbill.

As with all small businesses, costs rise every year. These costs include wages for receptionists and nurses, rent, medical equipment, cleaning, electricity, computers, software, and insurance. All these costs must be met by the fee doctors are paid through the Medicare rebate or by patients. Commentators often refer to the last ten years of cuts, but they began well before then.

To sustain their practices many doctors then stated to bulkbill and charge a $30 fee – far larger than the proposed gap payment. This is illegal. The government turned a blind eye and included that “bulkbilling” in the official bulkbilling rate of eighty-five per cent.

Coalition and Labor governments have frozen and reduced rebates in real terms.

Governments have known that some medical practitioners are gaming the system but turn a blind eye. They do not want to draw attention as to why.

Some practices have resorted to renting out an office to a pathology company at many times the market value. This rent can provide up to thirty per cent of the practice’s income! The pathology company gains by patients walking out of one room into pathology.

There are suggestions that doctors over-test to ensure the pathology service has enough business to want to keep the rental going. Federal government turns a blind eye to this as it covers up the extent bulkbilling has been eroding and the cosy relationship between doctors and Big Pathology/ Radiology at the “all in one” centres.


Not only is there a shortage of GPs but according to the Australian College of General Practitioners’ annual General Practice Health of the Nation 2022 report, almost half of GPs in a survey reported that it was financially unsustainable for them to continue working as a GP. In addition, one quarter of those who responded indicated that they planned to retire within the next five years. (See Guardian, “Health Care is a Human Right,” #2028)

Some doctors have gone into large private clinics that charge patients’ fees – sometimes quite large. The door has been opened wide to foreign-owned corporations who offer bulkbilling by churning patients through in five or six-minute consultations. As a result, the quality of health care suffers greatly, all-too-often resulting in higher costs down the track.

Anyone who has tried to find a bulkbilling practice will know how difficult it is.

GPs are not responsible for the present health crisis. Governments through neoliberal cost-cutting, privatisation, and deregulation are the cause. The present beat-up is the precursor to justify future cuts.

“The real losers are patients who are stuck with five-minute medicine, long delays to see a GP, and under the table fees by ‘bulkbilling’ doctors,” said Dr Costa.

“It’s a bad situation for patients in suburbs. It’s even worse in rural and more remote areas where doctors are now an extinct species.”

Labor’s first budget has small increases in medical spending, primarily in rural regions and on Indigenous health services, and urgent care centres within established medical centres.


The public health system is in crisis. Doctor shortages, regional areas without GPs, rural hospitals without a doctor, emergency waiting rooms at public hospitals with waiting times of up to thirty hours. Increasingly patients who cannot get into a GP or afford a GP are turning to emergency departments. There are major shortfalls in nursing numbers.

Rorting the Medicare system by such means as bulkbilling Medicare for rebates for services that were not delivered or overservicing are not the cause of the crisis. They are an outcome.

It is worth asking why the sudden furore and sensationalism around rorting, fraud, and errors in Medicare rebates alongside the concerns being raised about future cost blowouts.

Is it because the private health insurance companies are pushing to provide medical outpatient coverage for their members – another source of profit and means of privatisation of Medicare? The profits on top of rebates will cost taxpayers more.

Those who cannot afford private health insurance will remain under a Medicare system starved of funds as Australia’s health system is Americanised. In the US, spending on healthcare (mostly by patients) is nineteen per cent of GDP – the highest in the world.

The Medicare budget is not much more than the cost of one nuclear-powered submarine. What sort of values has a government got that it is willing to spend hundreds of billions of dollars on killing machines rather than saving lives and providing for the health and wellbeing of its people?


There is rorting of $10 billion in government handouts to sustain an otherwise unsustainable private hospital system.

Labor’s Health Minister Mark Butler has announced a departmental probe into Medicare which will play up the “rorting.”

The Health Department’s watchdog, the Professional Services Review (PSR), has always been massively understaffed. “By reducing funding and staffing they removed the teeth from PSR which remained only as a rump,” Costa said.

“GPs are right to be outraged at this kick in the guts by successive neoliberal governments that abandoned Medicare and its principles a long time ago, and their audacity to blame Medicare and GPs for the current mess the politicians have created,” Costa said.

The Communist Party (CPA) is calling for:

  • The full restoration of bulkbilling with universal access;
  • Medical rebates to be fully indexed;
  • Doctors to be given the choice of being salaried;
  • Training of more doctors;
  • Inclusion of dental care under Medicare;
  • PBS scripts free at point of delivery;
  • No nuclear-powered subs;
  • Diversion of $10 billion private health insurance rebate to public sector;
  • No tax cuts for the rich.

The CPA supports medical and other health services being funded through a progressive taxation system and the eventual nationalisation of health care.

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