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UTSpeaks: Holes in the Net

The document discusses the Extended Medicare Safety Net (EMSN), analyzing its background, impact on healthcare fees and out-of-pocket costs, and reforms from 2010. It highlights that while the safety net aims to provide coverage for all, it has shown regressive tendencies favoring wealthier individuals, with significant increases in provider fees contributing to patient expenses. The introduction of caps on benefits for certain services in 2010 is examined, revealing mixed effects on service utilization and costs.

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1 UTSpeaks: Holes in the net Dr Kees van Gool - 1 February 2012
Holes in the net: Is Medicare still meant for all of us, or only a privileged few? UTSPEAKS 1 February 2012 Kees van Gool Based on joint work with Elizabeth Savage, Rosalie Viney Meliyanni Johar, Stephanie Knox, Glenn Jones and Marion Haas
Outline • Part 1: The Extended Medicare Safety Net (EMSN) – a background • Part 2: The impact of the EMSN on fees and out- of-pocket costs • Part 3: The impact of 2010 EMSN reforms • Discussion – some observations about Medicare
PART 1: BACKGROUND TO MEDICARE SAFETY NET (EMSN) 4
5 Average fees, benefits and out-of-pocket (OOP) costs per consultation General Practice Specialist Attendances 100 100 80 80 Constant dollars Constant dollars 60 60 40 40 20 20 0 0 1985 1990 1995 2000 2005 2010 1985 1990 1995 2000 2005 2010 Year Year Doctor's fee Medicare benefit Patient OOP cost Source: DOHA 2011; Constant 2010 dollars
Strengthening Medicare -2004/05 • Three main reforms: 1. An incentive for GPs to bulk-bill children and concession cardholders (+ regional) 2. Increase Medicare benefit for GP services 3. Medicare Safety Net 6
Medicare Safety Net – March 2004 • Applies to all Medicare funded out-of-hospital services • Covers 80% of OOP costs above a threshold. • As of January 2012 the thresholds were: – $598.80 for low/middle income families – $1198.00 for all other families • If registered, the family’s OOP costs count towards the same threshold. • Threshold changes: – Indexed to CPI at the start of every year – One off change in January 2006 • Works on a calendar year basis – Threshold count starts afresh on 1 January • An example… 7
8 Safety Net example for the Smith family* Date Service Doctor Medicare Safety OOP Cumulative charge rebate Net benefit cost OOP cost 1-Feb GP visit 55 34 - 21 21 8-Feb Spec - 243 69 - 174 195 obst 2-Mar Ultrasound 180 60 - 120 315 2-Mar GP visit 55 34 - 21 336 2-Mar X-ray 150 56 - 94 430 8-Mar Spec 150 69 - 81 511 3-Apr Antenatal 78 34 - 44 555 attendance 4-May Antenatal 78 34 - 44 599 attendance 9-Jun Pregnancy 2000 104 1517 379 978 planning 6-Jul Antenatal 78 34 35 9 987 attendance 2-Sep GP visit 55 34 17 4 991 5-Jan GP visit 55 34 - 21 21 * The Smith family are registered and eligible for the lower threshold of $599
Total Medicare and Safety Net expenditure (constant 2010 dollars) Year Medicare rebate Safety Net Medicare benefit (a) (b) (= a + b + OSN) $ % $ % $ % million change million change million change 2004 9,144 231 9,386 2005 10,270 12 322 39 10,601 13 2006 10,508 2 275 -14 10,794 2 2007 11,294 7 358 30 11,664 8 2008 11,951 6 436 22 12,400 6 2009 12,836 7 539 23 13,388 8 9
Individuals with out-of-pocket costs > $2000 16,000 14,000 12,000 Number of individuals 10,000 8,000 6,000 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 >$2000 >$3000 >$4000 >$5000 >$6000 >$7000 10
1 .8 .6 .4 .2 0 0 1 2 3 4 5 SEIFA Category equality line 2001 OOP 2003 OOP 2005 OOP 2007 OOP 2005 EMSN 2007 EMSN 11
Safety Net expenditure, 2007 ($ millions) Other, 16.5 GP, 26.2 Specialist, 51.3 Assisted reproductive services, 71.7 Radiation oncology & Obstetrics, 99. nuclear 7 medicine, 12.0 Diagnostic Operations & imaging, 25.7 anaesthetics, 2 0.5 12
Mean safety Number of services 13 Service description net benefit Out-of- (Medicare item) In-hospital Total $ hospital Hair transplant (45560) 3,288 12 192 204 Lipectomy (30174) 2,741 386 12 398 Rhinoplasty (45638) 1,657 2,149 20 2,169 Chronic/complex 1,611 0 61 61 dental care (10977) Reduction 1,534 229 86 315 mammaplasty (45522) Brachytherapy 1,516 427 206 633 planning (15539) Liposuction (45585) 1,400 123 84 207 Rhinoplasty (45641) 1,373 1,873 29 1,902 Vulvoplasty (35533) 1,241 1,036 99 1,135 Assisted reproductive 1,193 18 30,578 30,596 services (13200)
14
PART 2: THE IMPACT OF THE EMSN
Data and methods • Quarterly data on doctor fees, Medicare rebate, EMSN benefits, OOP costs and services, by professional groups and in hospital and out-of-hospital • Estimate pre and post policy trend in: – Doctor fees, out-of-pocket costs and services used – Compare against trends in • Medicare rebate • In hospital 16
Trend in average fees, benefits and OOP costs, all professional groups (excludes GP and pathology) 120 100 $80 60 40 20 2000q3 2002q3 2004q3 2006q3 2008q3 17
Obstetrics Assisted reproductive services 1200 200 1000 150 800 100 600 $ $ 400 50 200 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Note: scale $0 to $200 Note: scale $0 to $1200 18
19 Obstetrics: in and out-of-hospital fees Average fee by setting Total fees by setting ($ million) 1000 60 800 50 40 600 $ 30$ 400 20 200 10 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Out of hospital In hospital
20 Assisted reproductive services: in and out-of-hospital fees Average fee by setting Total fees by setting ($ million) 1200 60 1000 800 40 600 $ $ 400 20 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Out of hospital In hospital
Conclusion from our 2009 Review • Change to Medicare arrangements • Expenditure is small but with high growth • Fewer people with very high OOP costs - but rising. • It is a regressive policy – favours the wealthy • Change in incentives for in and out-of hospital billing • Significant rises in provider fees has led to ‘leakage’: – For every $1 spend on the Safety Net • 43¢ towards increased provider fees • 57¢ towards reducing patients’ OOP costs. – Inflationary effect could make things worse for those who do not qualify for Safety Net benefits • May reinforce the mal-distribution of specialists – Enable wealthy to afford more specialists care 21
Government response: Safety Net Caps • 2009-10 Budget Measure – Review cited as support for the measures • Caps apply to Safety Net Benefits payable per service for selected MBS items from Jan 1 2010 – ART Services (11 items) – Obstetrics (57 items) – One type of cataract surgery – Hair transplantation for alopecia – One type of varicose vein removal – Nov 2010 new items for midwifery services • For capped items, there is a maximum Safety Net benefit that can be claimed • Example..... 22
23 Safety Net cap example • Item capped in 2010 • Cap is $30.00 (maximum Safety Net benefit) • Assume that the patient has reached the Safety Net threshold. Doctor fee Medicare Safety Net Out-of- rebate benefit pocket cost 2003 150.00 38.00 - 112.00 2009 150.00 38.00 89.60 22.40 2010 150.00 38.00 30.00 82.00 • After caps were introduced, in this example the patient pays 100% of any doctor fee above $75.50
PART 3:THE IMPACT OF CAPPING 24
25 Data and method – Aggregate monthly data on fees, benefits (rebate and EMSN), OOP costs – Observation period: Jan 2000 to Dec 2010 – Interested in what happened after: • EMSN introduced– Jan 2004 • Caps introduced– Jan 2010 – Contrast changes over time between • In and out-of-hospital services • Medicare items that complement or substitute for capped items • Doctors that charge high fees and low fees
26 Limitations • One year observation period after caps implemented • Medicare data retrieved March 2011 • Medicare benefits schedule revision: – Assisted reproductive technology (ART) services (new items, change in the definition of items, change in Medicare rebate – Obstetrics (new item, change in Medicare rebate)
27 Average Medicare and EMSN benefit per service 2009 2010 Medicare EMSN Medicare Medicare EMSN Medicare rebate benefit rebate benefit ART services* 475 656 1131 686 361 1047 General practice 41 0 41 41 0 41 Obstetric ultrasound* 67 11 78 68 4 72 Obstetrics* 42 106 148 55 13 68 Ophthalmology* 234 37 271 231 34 265 Plastic & recon surg* 263 53 317 263 49 312 Psychology 93 4 97 93 4 97 Radiation oncology 143 14 157 145 15 160 Specialist attendances 51 3 54 50 3 54 Vascular procedures* 121 152 273 123 66 189 * Service group with at least one capped item
28 Trend in average fees, benefits and OOP costs, all professional groups (excludes GP and pathology) 120 100 80 $ 60 40 20 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Average fee Predicted average fee Average rebate Predicted average rebate Average rebate+EMSN Predicted average rebate+EMSN Average OOP Predicted average OOP
29 Vascular procedures • Capped item 32500, in 2010: – Injection of sclerosant into varicose veins – 55,000 OOH services (↓9% from 2009) – 206 IH services (↑ 71% from 2009) – MBS rebate for OOH = $89.85 – EMSN cap = $111.65 • Uncapped item 32504 in 2010 – Multiple excision of varicose veins – 2754 OOH services (↑ 91% from 2009) – MBS rebate for OOH = $218.90
30 Fees for capped varicose veins item in and out hospital In hospital Out of hospital 1,000 1,000 750 750 Provider fee $ 500 500 250 250 79.25 89.85 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
31 Fees for capped and uncapped varicose veins items Item 32500 (Capped) Item 32504 (Uncapped) 1,000 4,000 750 3,000 Provider fee $ 500 2,000 250 1,000 89.85 218.90 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
32 Cataract surgery • Capped item 42702, in 2010: – Lens extraction and insertion of artificial lens – 4,708 OOH services (↓23% from 2009) – 125,708 IH services (↓ 7% from 2009) – MBS rebate for OOH = $660.60 – EMSN cap = $101.50 – Cuts to MBS rebate ($102.90) • Uncapped item 20142 in 2010 – Initiation of management for anaesthetic for lens surgery – MBS rebate for OOH = $97.20
33 Fees for capped cataract surgery in and out hospital In hospital Out of hospital 4,000 4,000 3,000 3,000 Provider fee $ 2,000 2,000 1,000 1,000 660.60 548.85 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
34 Fees for uncapped item 20142 -anaesthetic for lens surgery - in and out hospital In hospital Out of hospital 2,000 2,000 1,500 1,500 Provider fee $ 1,000 1,000 500 500 85.75 97.20 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
35 Hair transplant • Capped item 45560, in 2010: – Treatment of alopecia – 100 OOH services (↓50% from 2009) – 14 IH services (steady) – MBS rebate for OOH = $387.35 – EMSN cap = $152.25
36 Fees for capped hair transplant in and out hospital In hospital Out of hospital 12,000 12,000 9,000 9,000 Provider fee $ 6,000 6,000 3,000 3,000 341.80 387.35 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile
37 Data and methods for the capped groups: ART and obstetrics • Changes to MBS in ART and obstetrics • Unit of analysis: • Services • Episodes of care • Definition of an episodes of care: • Obstetrics: Confinement item – 10 months of obstetric items • ART: planning item + 30 days of ART items • Observation period: June and October 2003 to 2010 • Provider fees, benefits, OOP costs and services used over time
38 ASSISTED REPRODUCTIVE TECHNOLOGIES (ART) GROUP
0 39 $ Assisted reproductive technology services 1500 1000 500 0 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Average fee Predicted average fee Average rebate Predicted average rebate Average rebate+EMSN Predicted average rebate+EMSN Average OOP Predicted average OOP
40 ART cycles (June and October) by SEIFA SEIFA Q1 SEIFA Q2 SEIFA Q3 SEIFA Q4 SEIFA Q5 (Least (Most Year advantaged) advantaged) 2003 438 563 967 1,900 2,700 2004 468 648 1,166 2,223 3,409 2005 449 679 1,279 2,494 3,759 2006 475 703 1,340 2,530 4,052 2007 575 786 1,562 2,819 4,544 2008 543 824 1,513 3,053 4,833 2009 666 912 1,775 3,487 5,244 2010 593 818 1,639 2,936 4,668
Year Average P25 P50 P75 Average P25 P50 P75 41 Fees per cycle ($) Medicare benefit per cycle ($) 2003 2,057 759 1,418 3,498 1,231 541 858 2,022 2005 2,739 1,036 1,991 4,358 2,295 812 1,955 3,777 2007 3,382 1,369 2,409 5,688 2,783 903 2,032 4,702 2009 4,414 1,859 4,388 7,083 3,645 1,527 3,419 5,897 2010 4,306 1,982 2,923 7,198 2,921 1,254 1,572 4,979 EMSN benefit per cycle ($) OOP cost per cycle ($) 2003 827 82 390 1,504 2005 1,019 45 688 1,761 444 114 333 633 2007 1,407 213 900 2,544 599 194 465 916 2009 2,168 660 1,787 3,728 769 282 846 1,073 2010 1,051 131 667 1,668 1,385 671 1,180 2,136
42 Number of ART cycles (June and October) Year Stimulated Stimulated Non- Artificial Frozen/ TOTAL A B Stimulated insemination donated embryo 2003 2,927 0 57 1,896 1,641 6,628 2004 3,740 0 44 2,053 1,989 7,966 2005 4,194 0 59 2,107 2,245 8,745 2006 4,422 0 47 2,218 2,369 9,150 2007 2,407 2,746 28 2,257 2,833 10,369 2008 2,420 3,298 28 2,263 2,744 10,878 2009 2,857 4,030 37 2,216 2,910 12,189 2010 2,224 3,423 13 1,641 3,407 10,802
43 Cumulative distribution of provider fees Stimulated A Stimulated B Non-stimulated 1 0.90 0.75 0.50 0.25 0 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 Artificial insemination Frozen/donated embryo 1 0.90 0.75 0.50 0.25 0 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 Provider fee $ 2004 2009 2010
44 OBSTETRICS
45 Obstetrics 300 200 100 0 $ Assisted reproductive technology services 1500
46 Private confinement (MBS item 16519) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 $ Private confinement (MBS item 16522) 2000 1800 1600
47 Number of private confinements by SEIFA SEIFA Q1 SEIFA Q2 SEIFA Q3 SEIFA Q4 SEIFA Q5 (Least (Most advantaged) advantaged) Year 2007 643 1,075 2,225 4,074 6,563 2008 640 1,137 2,247 4,147 6,553 2009 634 1,214 2,360 4,292 6,660 2010 546 1,010 2,178 3,947 6,156
48 Number of private confinements June births October births Year Normal Complex TOTAL Normal Complex TOTAL 2007 4,179 2,177 6,356 4,628 2,268 6,896 2008 4,119 2,110 6,229 4,782 2,408 7,190 2009 4,194 2,438 6,632 4,620 2,589 7,209 2010 4,023 2,517 6,540 3,870 2,295 6,165
49 Cumulative distribution of provider fees June, Normal June, Complex 1 0.90 0.75 0.50 0.25 0 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 October, Normal October, Complex 1 0.90 0.75 0.50 0.25 0 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 Total provider fees $ 2007 2008 2009 2010
50 Conclusions EMSN Caps • Government EMSN spending down – 29% on 2008 – 42% on 2009 • Caps give Government a policy lever to reduce their exposure to provider fees. • But – Remains exposed to demand side risk – Thresholds indexed by CPI – Caps require parliamentary approval
51 Conclusions EMSN Caps • Following introduction of caps, fees have fallen for some items/services. • But OOP costs have increased and service use fallen. • Unintended consequences: – Shifts care setting/billing – Substitute billing to non-capped items – Complementary services fee changes • Results are preliminary – Early days - one year follow-up only – Other changes to MBS.
52 Discussion • Out-of-pocket costs seen as price signals to improve efficiency, but is a very blunt policy tool • Leads inequity and worse health outcomes • Lack of clarity about doctor fees and Medicare benefits • High OOP costs for specialist type services, not GPs. – Have we got this the wrong way around? – Specialist services are referred services (GP’s recommendation – what is the role of price signals?) • High OOP costs for specialist services are an artifact of Medicare rebate not keeping pace with doctor fees. – Concern of government expenditure – Doctor control over fees – Subsidising the wealthy - Safety Net amplifies this • Government’s Safety Net dilemma when setting MBS rebates
53 Discussion • What do we want from Medicare? • Scotton and Deeble wrote in 1968: • Health care should be available without regard to income, age, length or type of illness, and that the cost of providing this care should be equitably distributed. • That the system should promote the most efficient use of resources in the health care industry. • Greater transparency in doctor fees, setting Medicare rebate and caps. • Patients need to know what their OOP costs will be. • Government needs to think beyond its own budget line. • Rethink on how we pay doctors: • Potential use of financial incentives to encourage lower doctor fees for target groups. • Research agenda on provider and patient behaviour in response to incentives
54 Acknowledgements: Australian Government Department of Health and Ageing Medicare Benefits Branch and the Medicare Financing and Analysis Branch If you haven’t registered your family for the Medicare Safety Net but would like to: www.medicareaustralia.gov.au/public/services/msn/ register.jsp

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UTSpeaks: Holes in the Net

  • 1.
    1 UTSpeaks: Holes inthe net Dr Kees van Gool - 1 February 2012
  • 2.
    Holes in thenet: Is Medicare still meant for all of us, or only a privileged few? UTSPEAKS 1 February 2012 Kees van Gool Based on joint work with Elizabeth Savage, Rosalie Viney Meliyanni Johar, Stephanie Knox, Glenn Jones and Marion Haas
  • 3.
    Outline • Part 1:The Extended Medicare Safety Net (EMSN) – a background • Part 2: The impact of the EMSN on fees and out- of-pocket costs • Part 3: The impact of 2010 EMSN reforms • Discussion – some observations about Medicare
  • 4.
    PART 1: BACKGROUNDTO MEDICARE SAFETY NET (EMSN) 4
  • 5.
    5 Average fees, benefits and out-of-pocket (OOP) costs per consultation General Practice Specialist Attendances 100 100 80 80 Constant dollars Constant dollars 60 60 40 40 20 20 0 0 1985 1990 1995 2000 2005 2010 1985 1990 1995 2000 2005 2010 Year Year Doctor's fee Medicare benefit Patient OOP cost Source: DOHA 2011; Constant 2010 dollars
  • 6.
    Strengthening Medicare -2004/05 •Three main reforms: 1. An incentive for GPs to bulk-bill children and concession cardholders (+ regional) 2. Increase Medicare benefit for GP services 3. Medicare Safety Net 6
  • 7.
    Medicare Safety Net– March 2004 • Applies to all Medicare funded out-of-hospital services • Covers 80% of OOP costs above a threshold. • As of January 2012 the thresholds were: – $598.80 for low/middle income families – $1198.00 for all other families • If registered, the family’s OOP costs count towards the same threshold. • Threshold changes: – Indexed to CPI at the start of every year – One off change in January 2006 • Works on a calendar year basis – Threshold count starts afresh on 1 January • An example… 7
  • 8.
    8 Safety Net example for the Smith family* Date Service Doctor Medicare Safety OOP Cumulative charge rebate Net benefit cost OOP cost 1-Feb GP visit 55 34 - 21 21 8-Feb Spec - 243 69 - 174 195 obst 2-Mar Ultrasound 180 60 - 120 315 2-Mar GP visit 55 34 - 21 336 2-Mar X-ray 150 56 - 94 430 8-Mar Spec 150 69 - 81 511 3-Apr Antenatal 78 34 - 44 555 attendance 4-May Antenatal 78 34 - 44 599 attendance 9-Jun Pregnancy 2000 104 1517 379 978 planning 6-Jul Antenatal 78 34 35 9 987 attendance 2-Sep GP visit 55 34 17 4 991 5-Jan GP visit 55 34 - 21 21 * The Smith family are registered and eligible for the lower threshold of $599
  • 9.
    Total Medicare andSafety Net expenditure (constant 2010 dollars) Year Medicare rebate Safety Net Medicare benefit (a) (b) (= a + b + OSN) $ % $ % $ % million change million change million change 2004 9,144 231 9,386 2005 10,270 12 322 39 10,601 13 2006 10,508 2 275 -14 10,794 2 2007 11,294 7 358 30 11,664 8 2008 11,951 6 436 22 12,400 6 2009 12,836 7 539 23 13,388 8 9
  • 10.
    Individuals with out-of-pocketcosts > $2000 16,000 14,000 12,000 Number of individuals 10,000 8,000 6,000 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 >$2000 >$3000 >$4000 >$5000 >$6000 >$7000 10
  • 11.
    1 .8 .6 .4 .2 0 0 1 2 3 4 5 SEIFA Category equality line 2001 OOP 2003 OOP 2005 OOP 2007 OOP 2005 EMSN 2007 EMSN 11
  • 12.
    Safety Net expenditure,2007 ($ millions) Other, 16.5 GP, 26.2 Specialist, 51.3 Assisted reproductive services, 71.7 Radiation oncology & Obstetrics, 99. nuclear 7 medicine, 12.0 Diagnostic Operations & imaging, 25.7 anaesthetics, 2 0.5 12
  • 13.
    Mean safety Number of services 13 Service description net benefit Out-of- (Medicare item) In-hospital Total $ hospital Hair transplant (45560) 3,288 12 192 204 Lipectomy (30174) 2,741 386 12 398 Rhinoplasty (45638) 1,657 2,149 20 2,169 Chronic/complex 1,611 0 61 61 dental care (10977) Reduction 1,534 229 86 315 mammaplasty (45522) Brachytherapy 1,516 427 206 633 planning (15539) Liposuction (45585) 1,400 123 84 207 Rhinoplasty (45641) 1,373 1,873 29 1,902 Vulvoplasty (35533) 1,241 1,036 99 1,135 Assisted reproductive 1,193 18 30,578 30,596 services (13200)
  • 14.
  • 15.
    PART 2: THEIMPACT OF THE EMSN
  • 16.
    Data and methods •Quarterly data on doctor fees, Medicare rebate, EMSN benefits, OOP costs and services, by professional groups and in hospital and out-of-hospital • Estimate pre and post policy trend in: – Doctor fees, out-of-pocket costs and services used – Compare against trends in • Medicare rebate • In hospital 16
  • 17.
    Trend in averagefees, benefits and OOP costs, all professional groups (excludes GP and pathology) 120 100 $80 60 40 20 2000q3 2002q3 2004q3 2006q3 2008q3 17
  • 18.
    Obstetrics Assisted reproductive services 1200 200 1000 150 800 100 600 $ $ 400 50 200 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Note: scale $0 to $200 Note: scale $0 to $1200 18
  • 19.
    19 Obstetrics: in and out-of-hospital fees Average fee by setting Total fees by setting ($ million) 1000 60 800 50 40 600 $ 30$ 400 20 200 10 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Out of hospital In hospital
  • 20.
    20 Assisted reproductive services: in and out-of-hospital fees Average fee by setting Total fees by setting ($ million) 1200 60 1000 800 40 600 $ $ 400 20 0 2000q3 2002q3 2004q3 2006q3 2008q3 2000q3 2002q3 2004q3 2006q3 2008q3 Out of hospital In hospital
  • 21.
    Conclusion from our2009 Review • Change to Medicare arrangements • Expenditure is small but with high growth • Fewer people with very high OOP costs - but rising. • It is a regressive policy – favours the wealthy • Change in incentives for in and out-of hospital billing • Significant rises in provider fees has led to ‘leakage’: – For every $1 spend on the Safety Net • 43¢ towards increased provider fees • 57¢ towards reducing patients’ OOP costs. – Inflationary effect could make things worse for those who do not qualify for Safety Net benefits • May reinforce the mal-distribution of specialists – Enable wealthy to afford more specialists care 21
  • 22.
    Government response: SafetyNet Caps • 2009-10 Budget Measure – Review cited as support for the measures • Caps apply to Safety Net Benefits payable per service for selected MBS items from Jan 1 2010 – ART Services (11 items) – Obstetrics (57 items) – One type of cataract surgery – Hair transplantation for alopecia – One type of varicose vein removal – Nov 2010 new items for midwifery services • For capped items, there is a maximum Safety Net benefit that can be claimed • Example..... 22
  • 23.
    23 Safety Net cap example • Item capped in 2010 • Cap is $30.00 (maximum Safety Net benefit) • Assume that the patient has reached the Safety Net threshold. Doctor fee Medicare Safety Net Out-of- rebate benefit pocket cost 2003 150.00 38.00 - 112.00 2009 150.00 38.00 89.60 22.40 2010 150.00 38.00 30.00 82.00 • After caps were introduced, in this example the patient pays 100% of any doctor fee above $75.50
  • 24.
    PART 3:THE IMPACTOF CAPPING 24
  • 25.
    25 Data and method – Aggregate monthly data on fees, benefits (rebate and EMSN), OOP costs – Observation period: Jan 2000 to Dec 2010 – Interested in what happened after: • EMSN introduced– Jan 2004 • Caps introduced– Jan 2010 – Contrast changes over time between • In and out-of-hospital services • Medicare items that complement or substitute for capped items • Doctors that charge high fees and low fees
  • 26.
    26 Limitations • One year observation period after caps implemented • Medicare data retrieved March 2011 • Medicare benefits schedule revision: – Assisted reproductive technology (ART) services (new items, change in the definition of items, change in Medicare rebate – Obstetrics (new item, change in Medicare rebate)
  • 27.
    27 AverageMedicare and EMSN benefit per service 2009 2010 Medicare EMSN Medicare Medicare EMSN Medicare rebate benefit rebate benefit ART services* 475 656 1131 686 361 1047 General practice 41 0 41 41 0 41 Obstetric ultrasound* 67 11 78 68 4 72 Obstetrics* 42 106 148 55 13 68 Ophthalmology* 234 37 271 231 34 265 Plastic & recon surg* 263 53 317 263 49 312 Psychology 93 4 97 93 4 97 Radiation oncology 143 14 157 145 15 160 Specialist attendances 51 3 54 50 3 54 Vascular procedures* 121 152 273 123 66 189 * Service group with at least one capped item
  • 28.
    28 Trend in average fees, benefits and OOP costs, all professional groups (excludes GP and pathology) 120 100 80 $ 60 40 20 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Average fee Predicted average fee Average rebate Predicted average rebate Average rebate+EMSN Predicted average rebate+EMSN Average OOP Predicted average OOP
  • 29.
    29 Vascular procedures • Capped item 32500, in 2010: – Injection of sclerosant into varicose veins – 55,000 OOH services (↓9% from 2009) – 206 IH services (↑ 71% from 2009) – MBS rebate for OOH = $89.85 – EMSN cap = $111.65 • Uncapped item 32504 in 2010 – Multiple excision of varicose veins – 2754 OOH services (↑ 91% from 2009) – MBS rebate for OOH = $218.90
  • 30.
    30 Fees for capped varicose veins item in and out hospital In hospital Out of hospital 1,000 1,000 750 750 Provider fee $ 500 500 250 250 79.25 89.85 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
  • 31.
    31 Fees for capped and uncapped varicose veins items Item 32500 (Capped) Item 32504 (Uncapped) 1,000 4,000 750 3,000 Provider fee $ 500 2,000 250 1,000 89.85 218.90 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
  • 32.
    32 Cataract surgery • Capped item 42702, in 2010: – Lens extraction and insertion of artificial lens – 4,708 OOH services (↓23% from 2009) – 125,708 IH services (↓ 7% from 2009) – MBS rebate for OOH = $660.60 – EMSN cap = $101.50 – Cuts to MBS rebate ($102.90) • Uncapped item 20142 in 2010 – Initiation of management for anaesthetic for lens surgery – MBS rebate for OOH = $97.20
  • 33.
    33 Fees for capped cataract surgery in and out hospital In hospital Out of hospital 4,000 4,000 3,000 3,000 Provider fee $ 2,000 2,000 1,000 1,000 660.60 548.85 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
  • 34.
    34 Fees for uncapped item 20142 -anaesthetic for lens surgery - in and out hospital In hospital Out of hospital 2,000 2,000 1,500 1,500 Provider fee $ 1,000 1,000 500 500 85.75 97.20 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile 90th percentile
  • 35.
    35 Hair transplant • Capped item 45560, in 2010: – Treatment of alopecia – 100 OOH services (↓50% from 2009) – 14 IH services (steady) – MBS rebate for OOH = $387.35 – EMSN cap = $152.25
  • 36.
    36 Fees for capped hair transplant in and out hospital In hospital Out of hospital 12,000 12,000 9,000 9,000 Provider fee $ 6,000 6,000 3,000 3,000 341.80 387.35 0 0 Jan 00 Jan 04 Jan 10 Jan 00 Jan 04 Jan 10 25th percentile 50th percentile 75th percentile
  • 37.
    37 Dataand methods for the capped groups: ART and obstetrics • Changes to MBS in ART and obstetrics • Unit of analysis: • Services • Episodes of care • Definition of an episodes of care: • Obstetrics: Confinement item – 10 months of obstetric items • ART: planning item + 30 days of ART items • Observation period: June and October 2003 to 2010 • Provider fees, benefits, OOP costs and services used over time
  • 38.
  • 39.
    0 39 $ Assisted reproductive technology services 1500 1000 500 0 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10 Average fee Predicted average fee Average rebate Predicted average rebate Average rebate+EMSN Predicted average rebate+EMSN Average OOP Predicted average OOP
  • 40.
    40 ARTcycles (June and October) by SEIFA SEIFA Q1 SEIFA Q2 SEIFA Q3 SEIFA Q4 SEIFA Q5 (Least (Most Year advantaged) advantaged) 2003 438 563 967 1,900 2,700 2004 468 648 1,166 2,223 3,409 2005 449 679 1,279 2,494 3,759 2006 475 703 1,340 2,530 4,052 2007 575 786 1,562 2,819 4,544 2008 543 824 1,513 3,053 4,833 2009 666 912 1,775 3,487 5,244 2010 593 818 1,639 2,936 4,668
  • 41.
    Year Average P25 P50 P75 Average P25 P50 P75 41 Fees per cycle ($) Medicare benefit per cycle ($) 2003 2,057 759 1,418 3,498 1,231 541 858 2,022 2005 2,739 1,036 1,991 4,358 2,295 812 1,955 3,777 2007 3,382 1,369 2,409 5,688 2,783 903 2,032 4,702 2009 4,414 1,859 4,388 7,083 3,645 1,527 3,419 5,897 2010 4,306 1,982 2,923 7,198 2,921 1,254 1,572 4,979 EMSN benefit per cycle ($) OOP cost per cycle ($) 2003 827 82 390 1,504 2005 1,019 45 688 1,761 444 114 333 633 2007 1,407 213 900 2,544 599 194 465 916 2009 2,168 660 1,787 3,728 769 282 846 1,073 2010 1,051 131 667 1,668 1,385 671 1,180 2,136
  • 42.
    42 Numberof ART cycles (June and October) Year Stimulated Stimulated Non- Artificial Frozen/ TOTAL A B Stimulated insemination donated embryo 2003 2,927 0 57 1,896 1,641 6,628 2004 3,740 0 44 2,053 1,989 7,966 2005 4,194 0 59 2,107 2,245 8,745 2006 4,422 0 47 2,218 2,369 9,150 2007 2,407 2,746 28 2,257 2,833 10,369 2008 2,420 3,298 28 2,263 2,744 10,878 2009 2,857 4,030 37 2,216 2,910 12,189 2010 2,224 3,423 13 1,641 3,407 10,802
  • 43.
    43 Cumulative distribution ofprovider fees Stimulated A Stimulated B Non-stimulated 1 0.90 0.75 0.50 0.25 0 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 Artificial insemination Frozen/donated embryo 1 0.90 0.75 0.50 0.25 0 0 2,500 5,000 7,50010,000 0 2,500 5,000 7,50010,000 Provider fee $ 2004 2009 2010
  • 44.
  • 45.
    45 Obstetrics 300 200 100 0 $ Assisted reproductive technology services 1500
  • 46.
    46 Private confinement (MBS item 16519) 2000 1800 1600 1400 1200 1000 800 600 400 200 0 $ Private confinement (MBS item 16522) 2000 1800 1600
  • 47.
    47 Number of privateconfinements by SEIFA SEIFA Q1 SEIFA Q2 SEIFA Q3 SEIFA Q4 SEIFA Q5 (Least (Most advantaged) advantaged) Year 2007 643 1,075 2,225 4,074 6,563 2008 640 1,137 2,247 4,147 6,553 2009 634 1,214 2,360 4,292 6,660 2010 546 1,010 2,178 3,947 6,156
  • 48.
    48 Number of private confinements June births October births Year Normal Complex TOTAL Normal Complex TOTAL 2007 4,179 2,177 6,356 4,628 2,268 6,896 2008 4,119 2,110 6,229 4,782 2,408 7,190 2009 4,194 2,438 6,632 4,620 2,589 7,209 2010 4,023 2,517 6,540 3,870 2,295 6,165
  • 49.
    49 Cumulative distribution ofprovider fees June, Normal June, Complex 1 0.90 0.75 0.50 0.25 0 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 October, Normal October, Complex 1 0.90 0.75 0.50 0.25 0 0 2,000 4,000 6,000 8,000 0 2,000 4,000 6,000 8,000 Total provider fees $ 2007 2008 2009 2010
  • 50.
    50 Conclusions EMSN Caps • Government EMSN spending down – 29% on 2008 – 42% on 2009 • Caps give Government a policy lever to reduce their exposure to provider fees. • But – Remains exposed to demand side risk – Thresholds indexed by CPI – Caps require parliamentary approval
  • 51.
    51 Conclusions EMSN Caps • Following introduction of caps, fees have fallen for some items/services. • But OOP costs have increased and service use fallen. • Unintended consequences: – Shifts care setting/billing – Substitute billing to non-capped items – Complementary services fee changes • Results are preliminary – Early days - one year follow-up only – Other changes to MBS.
  • 52.
    52 Discussion • Out-of-pocket costs seen as price signals to improve efficiency, but is a very blunt policy tool • Leads inequity and worse health outcomes • Lack of clarity about doctor fees and Medicare benefits • High OOP costs for specialist type services, not GPs. – Have we got this the wrong way around? – Specialist services are referred services (GP’s recommendation – what is the role of price signals?) • High OOP costs for specialist services are an artifact of Medicare rebate not keeping pace with doctor fees. – Concern of government expenditure – Doctor control over fees – Subsidising the wealthy - Safety Net amplifies this • Government’s Safety Net dilemma when setting MBS rebates
  • 53.
    53 Discussion • What do we want from Medicare? • Scotton and Deeble wrote in 1968: • Health care should be available without regard to income, age, length or type of illness, and that the cost of providing this care should be equitably distributed. • That the system should promote the most efficient use of resources in the health care industry. • Greater transparency in doctor fees, setting Medicare rebate and caps. • Patients need to know what their OOP costs will be. • Government needs to think beyond its own budget line. • Rethink on how we pay doctors: • Potential use of financial incentives to encourage lower doctor fees for target groups. • Research agenda on provider and patient behaviour in response to incentives
  • 54.
    54 Acknowledgements: Australian Government Department of Health and Ageing Medicare Benefits Branch and the Medicare Financing and Analysis Branch If you haven’t registered your family for the Medicare Safety Net but would like to: www.medicareaustralia.gov.au/public/services/msn/ register.jsp

Editor's Notes

  • #12  Distribution of OOP costs by SEIFA quintile Distribution of EMSN benefits by SEIFA quintile year 1 (low) 2 3 4 5 (high) 1 (low) 2 3 4 5(high) 2000 0.07 0.12 0.17 0.23 0.41 2001 0.07 0.11 0.17 0.24 0.42 2002 0.07 0.11 0.16 0.24 0.42 2003 0.07 0.11 0.17 0.24 0.41 2004 0.08 0.12 0.17 0.25 0.38 0.05 0.09 0.14 0.23 0.50 2005 0.07 0.11 0.17 0.25 0.41 0.04 0.06 0.12 0.23 0.54 2006 0.06 0.10 0.16 0.25 0.42 0.03 0.06 0.12 0.23 0.56 2007 0.06 0.10 0.16 0.25 0.42 0.03 0.06 0.12 0.24 0.55