💲 GP Billings, Part 2

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In my last post, I discussed broadly how a GP generates income and what the income streams usually are.
Here, I’d like to focus on the nuts and bolts of the system.

Simplistically speaking, there are only 3 options when it comes to a GP raising a fee for their consults:

1. Bulk bill everyone. Places that have such a policy are called ‘Universal Bulk Billing’ or UBB for short
2. You set your fee and charge everyone a private fee. The patient then gets whatever rebate the govt deems appropriate for them. The private fee setup
3. A mix of the above. You privately bill some and bulk bill others. The mixed billing model.

If you’ve been reading the headlines, especially if you’re abroad and thinking of moving, you might be excused for believing that ‘Bulk Billing is dead’

Nothing could be further from the truth!

And,

There are 2 parameters to look at:

1. The % of all GP services that are bulk billed. This figure for Sept qtr of 2022 stood at 83.4%
2. The percentage of people who are always bulk billed. This varies widely between States (Tasmania being the lowest) and within different electorates. It would vary quite widely even at a suburb or street level.

So, whilst the number of Surgeries offering UBB, i.e affecting the 2nd figure is declining, this doesn't automatically affect the top figure

Rather like Mark Twain, the reports on the death of Bulk Billing are greatly exaggerated.

The Guardian article also makes a rather bold statement:

Whilst the first part is true (I mean I am not doubting the statistic), the conclusion drawn is full of holes.
However, in unpacking this, we can gain some insight into the matter.

What it simply means is that some Medical Centres offering bulk billed GP services can be viable. However, it doesn't mean that:

1. Bulk Billed general services are viable, or
2. The only services being offered at the Centres are bulk billed GP services.

That General Practice can be a very profitable loss leader for business is well known. It is well known because this was precisely the model for the now defunct Primary Group. Their GP services (all bulk billed, usually open 365 days a year, from 8AM to 8PM) ran at a loss. But the group made money on their pathology and other services.

Whilst a GP makes money from Medicare, even if they are charge a Private fee, a Medical Centre can have several income streams.
Huge Centres can have multiple streams:

1. Rent from Allied Health, Specialists, Diagnostics and Pathology
2. Co-located private fee paying facilities like Skin Clinics, Dentists
3. Cafe and Parking
4. Advertising in waiting rooms
5. Various Govt grants and subsidies

Large Medical Centres aren't the only type of setup that do this either. Many set ups rely on the GP services being bulk billed to drive traffic to other more profitable parts of their venture.

Think of a weight loss clinic where the Gastroenterologist has a BB GP attached to the clinic. Think of a Medical Centre owned and operated by a pharmacist or an allied health professional. The name of the game is increasing footfall through the doors by using the Bulk Billed GP Services as a beacon for the punters.

So, in short, it is not enough to just look at the Billing Model of the Practice; it is essential to examine their policies.
UBB centres are the object of derision on The Australian GP Job Portal

However, the evidence would suggest that across large swathes of the country,  even centres which proclaim to be Mixed Billing are in fact Bulk Billing the vast majority of their patients. There doesn't seem to be any logic behind their billing policies either (apart from local competition, I guess)

Many surgeries choose to BB everyone over 65 and all children for example. This could well be the bulk of your clientele. Some will BB certain Item numbers (usually Chronic disease management, CDM items) whilst others will BB all consults for patients who have a CDM item billed at the surgery

I find the almost universal Bulk Billing of Children problematic from an ethical viewpoint. If a person can pay for their own health care, more often than not send their children to private school (up to 40K annual fee in some schools), why should the GP subsidise the care of their children from his/her own pocket? 
When you BB a non concession card holder, you don't even receive the BB incentive.

So the children of well off parents end up paying the GP even less than a person on a Health Care Card. And it's not as if this would become a bottomless pit for parents, as there is a Safety Net for Medicare expenses the cap isn't calculated individually but at a family level.

So, if effect a small proportion of middle class moderate income earners end up subsidising both the needy and the well off retirees or those with children.
This is even more egregious where a Surgery chooses to BB everyone over 65.

That Australia has literally 10s of thousand of retirees with a net worth of several million is no secret. Over 80,000 have Supers in excess of $2 million. That they probably also own property and other assets goes without saying. Why would you BB such individuals or their children? Equally important is what everyone is doing in your practice.

What all of this means is that is crucial that you look at billing policies of the practice carefully. If you are joining a Loss Leader kind of set up, you must be comfortable in being that mug. This is not to say that these jobs don't pay well or are substandard and unrewarding.
I personally take a broader view and nourishing my own profession is rather high on the Agenda.

Next time I'll look at Collegiality within a Practice

Till then...