(Image: Zennie/Private Media)

A joint investigation by The Sydney Morning Herald, The Age and the ABC’s 7.30 yesterday suggested that a nearly third of Medicare spending was “wasted” in a combination of fraud, rorting, errors, inappropriate billing and overservicing, to a combined estimate of $8 billion annually.

This caught the attention of doctors, lay people and the health minister — but it is a report that should be treated with caution.  

There’s no doubt that there are fraudulent and bad faith actors in healthcare, whether individual practitioners or companies — and all are costly for our precious universal healthcare system. But an accusation of this magnitude requires nuance and clarity. Fraud is clearly unacceptable and should never occur. But in this investigation, bundled in with fraud was a suite of other offences contributing to this so-called “leakage” — such as billing errors, perceived overservicing and low-value care.

The volume of Medicare item numbers is thicker than a phonebook, and even Medicare cannot provide consistent answers on which item numbers to use in specific contexts. So I wonder how PhD researchers were able to determine optimal/erroneous billing so certainly?

In the investigation, addressing multiple issues over multiple consultations was considered inappropriate, even though it might not be necessary or possible to discuss every complaint in a single consultation. Ordering certain radiology and pathology tests was suggested to be inappropriate, as was providing radiation therapy to terminally ill cancer patients. Billing when providing care in a nursing home on the basis that a patient might not recollect the conversation was also considered inappropriate. None of these scenarios constitutes fraud — some are examples of good quality medical care, and any argument that they are not faces a high burden of proof.

As such, it’s hard to know how much of the $8 billion “leakage” is due to actual fraud. Even though the quoted experts suggested that a third of Medicare spending is wasteful, up to 47% of GPs in the RACGP Health of the Nation Report 2022 reported that they avoided claiming patient rebates despite providing a service due to fear of Medicare compliance ramifications.

So I worry that the actual fraud is only a small part of this “leakage” report, one that will result in subjective notions of what Medicare should and should not pay for. And if a substantial proportion of that $8 billion is based on those subjective ideas, then the Australian public needs to ask who is best placed to determine if they need a screening test, radiation for cancer symptom control at the end of life, or optimal medical care despite their dementia — a lawyer, a bureaucrat, a politician… or their own treating doctor.

The reality is that Medicare is broken — doctors largely believe it isn’t serving the best interests of either clinicians or patients. The RACGP report found 70% of GP practice owners are concerned about the viability of their practice, and 61% worry about the complexity of Medicare outside work hours.

Unlike the exposé that led to the banking royal commission, which was resisted by the banks, many clinicians would welcome an overhaul of Medicare — such that item numbers are indexed annually to rise with inflation, appropriately valued to ensure practice viability, simple to use with little risk of error, and allow time for direct patient care rather than increasingly onerous Medicare compliance activities.

The value of Medicare is taught to doctors from medical school, and appropriate, ethical billing is part of many conversations through specialist training. I’ve seen more education, mentoring, reporting, doctor-led Medicare item numbers and fee reviews than I can count. Doctors care about fraud and rorting: it’s our profession under scrutiny, but also our tax dollars being wastefully spent.

Medicare needs an overhaul. But aggressive compliance of all because of a few bad actors, and managed care where non-clinicians determine what care can and cannot be provided, are not the right solutions.

What do you think about the Medicare investigation? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.