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What A Labor Government Would Really Mean For The 'Medicare Freeze'

Last federal election Labor went hard on Medicare, claiming the Coalition would privatise health care.

Three years on Medicare is still a hot-button issue.

Bill Shorten has already made a promise to remove the 'Medicare freeze' in his first 50 days as PM, bringing the issue of health care to the forefront of his bid for prime minister.

"If I’m elected Prime Minister, I won’t waste any time stopping Mr Morrison’s cuts to Medicare. His Medicare freeze will end in my first 50 days," Shorten said in a tweet on Monday.

The Medicare freeze is a pause on the indexation of the Medicare rebate. Under the indexing process, the Medicare Benefits Schedule (MSB) fees (what health services are paid for by the government) are raised according to the Department of Finance's Wage Cost Index.

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Bill Shorten pushed the issue of the Medicare freeze in his 2016 election campaign. Image: AAP

General Practitioners (GPs) have been pushing for the freeze to be thawed out since it was introduced in 2013. The freeze has gradually lifted since 2017 and is due to be completely abolished by 2020.

Labor's change will end the freeze a year early, but according to Public Service Researcher and Professor Helen Dickinson, the amount of extra money available to GPs will be minimal.

"It’s going to be fairly limited ... indexing a little bit isn’t going to make a significant amount of difference," Dickinson told 10 daily.

"They [Labor] are going to go very hard on health and Medicare in the election... it swung them quite a lot of votes [in 2016] and clearly that tactic worked, so it's something they are going after in this election I suspect," she said.

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Labor's change is expected to have limited effects. Image: AAP

The Medicare freeze was introduced by the Gillard Labor government as a 'temporary' measure in a $664 million budget savings plan.

READ MORE: Medicare Has $110 Million From Your Unclaimed Rebates

The MBS fees help GPs cover the costs of their services. GPs who bulk bill agree to charge the same cost set in the MBS. GPs who don't bulk bill set their own costs and charge patients a 'gap' between what the government gives them and what the service actually costs.

When the indexation was frozen, GPs started receiving the same money from the government each year, without it raising according to other costs like wages and electricity.

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The Medicare freeze means more money out-of-pocket for GPs and patients. Image: AAP

According to President of The Royal Australian College of General Practitioners (RACGP) Dr. Harry Nespolon, this left GPs with a choice between patient health and bankruptcy.

"We are of course happy that services will be indexed again, although it’s important to note the level of indexation is generally below the level of inflation with medical practices, so we [GPs] are always getting further and further behind."

Nespolon told 10 daily the freeze cost GPs about $1 billion since 2013. He said general practice is "the cheapest, most effective part of the healthcare system" making up just eight percent of the government budget allocated to health.

"I’d suggest General Practitioners are small businesses ... we have to build our own practices and we have the risk that the practices will go broke."

READ MORE: The Huge Cost Of Staying Healthy In Australia Revealed

When money is cut from GPs, they've got to find a way to fund their businesses, whether that's making appointments shorter, sacking staff or stopping bulk billing.

GPs struggled to make ends meet when the Medicare rebate is cut. Image: AAP

"What we're finding is GPs have a lot more pressure to see patients ... and that's not good for the GP and that’s not good for the patient ... you can't take a lot of money out of something and then expect to get the same sort of product," Nespolon said.

A recent study published in JAMA Internal Medicine found people who lived closer to GPs live longer than those who live closer to specialists.

There have long been calls for an overhaul of the health care system, so GPs can focus more on treating patients and less on making ends meet.

For the RACGP, this is a larger rebate that takes into account the wide range of services GPs offer.

People access healthcare in a variety of ways. Image: Getty Images.

"People are now able to access health care in a variety of different ways be that electronic or email ... if you want a prescription over the internet you can get it," Nespolon said.

Dickinson also called for a change in the way GPs are funded. This would include a wider look at the way chronic and aged care are funded.

"We need to rethink how we fund the whole system because GPs can’t serve the needs that come to them, they are not being approximately funded to do that," Dickinson said.  

The future for the funding of GPs will be clearer in Tuesday's Federal Budget.

Contact Siobhan at skenna@networkten.com.au