Until the pips squeak.

Freezing the price of Medicare benefits will be more effective than the ill fated copayment A n amendment to our constitution after the 1946 referendum (s51 [xxiiiA]) gave the Australian Government the power to set prices for medical services. 1 This amendment has often been incorrectly interpreted as the power to set doctors' fees. It is frustrating to see old misunderstandings distorting current considerations of health financing policy. In reality, the federal government has no control over whether a doctor charges $5 or $500; nor to whom such a fee is charged. Doctors can charge what they choose, provided it can be justified as " fair and reasonable ". Dabbling in price signals For the best part of a year, the health debate has swirled around a proposed copayment for general practice services. 2 All the government needed to do, if it was seeking to reduce Medicare outlays on general practice services, was to reduce the price it pays for those services. That was the apparent basis for the ill fated initiative in January 2015, directed at the short consultation. Getting into an area of price signals by unnecessarily flagging a copayment simply complicates matters. " If one is used to getting a service for nothing, instituting a cost will send an eruption of squeaking pips into the political troposphere " When, in 2005, the government removed the disincentives for bulk-billing by allowing these services to be priced at 100% (ie, the Medicare rebate for those services was set at 100% rather than 85%), an effective price signal was removed. This was done to serve a political agenda — to increase bulk-billing rates — which removing the price signal certainly did. When the first attempt at codifying the doctors' various charges was made after the publication of the Nimmo report in 1969, 3 the concept of the value of one service compared with another emerged. This then formed the basis of the prices that are set out in the Medicare Benefits Schedule (MBS). The MBS is one of the pillars of Australian health financing. Within the MBS, there is a clear scale of relativities, which means, for instance, that Medicare benefits are higher for consultations with specialists than general practitioners. There are two factors besides the relative value of services that are considered in setting the Medicare benefit. One is the descriptor of the actual service, which defines the service. …