GP co-payment set to be dropped as the Coalition mulls blended system

A stethoscope
The health minister, Sussan Ley, has been considering ways to find savings, including giving rebates to doctors rather than patients. Photograph: Carl Court/Getty Images

The federal government is set to confirm that its controversial GP co-payment has been dropped, and is looking at longer-term savings measures, including a “blended payment” model.

Ending the current fee-for-service model and instead paying doctors in advance for patients who are chronically ill or have special requirements is one option on the table, as the government considers moves towards a blended system that would incorporate user-pays, rebates and upfront government payments.

The health minister, Sussan Ley, has been discussing ways to find savings, including giving rebates to doctors rather than patients, with the Australian Medical Association (AMA).

“It’s certainly one option that has been discussed. That would be I think a positive move,” the AMA’s president, Brian Owler, said.

“Obviously we’ve yet to hear what the discussions were from cabinet, whether or not that might be included in any decisions that the government might take. But I think that would obviously reduce red tape and I think just make it easier for people when they go to the GP,” he said.

The AMA had been vocal in its opposition to plans to introduce a $7 co-payment for patients, which the government introduced in the last federal budget, but dropped just months later.

The association also opposed plans to cut GP rebates by $5 for non-concessional patients for short consultations, in effect forcing doctors to increase fees or absorb the financial loss themselves.

The government has all but confirmed that those policies are off the table for good.

The assistant treasurer, Josh Frydenberg, told ABC’s Q&A program on Monday night that “there will be significant change to our health policy in that respect”.

When pressed on what convinced the government to drop co-payments, Frydenberg replied that “there wasn’t the public support for it, and particularly in the Senate”.

Clive Palmer, whose Palmer United party hold two seats on the crossbench, is not keen on changing the fee-for-service payment. “We don’t think you should tamper with Medicare at all. That’s the reality of it,” Palmer said.

The finance minister, Mathias Cormann, said the findings of Ley’s consultations on health savings would be considered by the party room. “There will be some announcements in the not too distant future about how we move forward,” he said.

The AMA said the government must look at longer-term structural reform of the healthcare sector.

“Those are the sorts of discussions we need to be having. And that’s one of the reasons we need to get the debate around the co-payment off the table… so we can get back talking about health policies,” Owler said.

Owler described Ley as “a breath of fresh air” and has welcomed her consultative style.

He is urging the government to drop plans to freeze rebates until 2018. “We’re obviously very keen to see the freeze end as soon as possible, he said, adding that he hoped the freeze could be removed as early as this year.

The Business Council of Australia warned both sides of politics against over-promising.

Its CEO, Jennifer Westacott, said: “As a first step, let’s not spend money we don’t have. Then we’ve really got to start mapping out a 10-year course for how we slow the rate of growth of our health, and welfare [expenditure].”