Strengthening Medicare: Impact on GP Practices

What does the Strengthening Medicare with More Bulk Billing announcement mean for GP Practices?

The Australian Government has announced a significant initiative to strengthen Medicare by expanding bulk billing incentives. This initiative, set to commence on November 1, 2025, involves a $7.9 billion investment aimed at making healthcare more accessible and affordable for all Australians. The Federal Opposition has promised to match this pre-election promise if it was to win the upcoming election.

Here’s a detailed look at what this initiative means for GP practices:

Expanded Eligibility for Bulk Billing Incentives 

The initiative will expand eligibility for bulk billing incentives to all Australians. Currently, these incentives only apply to concession patients who are under 16, or those who have a Health Care Card or Pension Card. From 1 November 2025 all Australians including non-concession patients, regardless of their income, will all be eligible for the bulk billing incentives. 

The Government is claiming that this will Increase Patient Access: i.e. More patients will be eligible for bulk billing, reducing out-of-pocket costs and making healthcare more accessible. But the reality may be that it just creates Higher Patient Volume as more individuals seek bulk-billed services.

Increasing bulk billing doesn’t necessarily increase access. With most practices struggling for the GP workforce that they need to manage demand, the bulk billing incentives may just further increase demand and extend wait times for the next available appointment.

Bulk Billing Practice Incentive Program

A new Bulk Billing Practice Incentive Program (BBPIP) will be established to support GP practices in bulk billing all patients. The incentive will offer an additional 12.5% on Medicare rebates for GP consultation services.

This incentive will be split between the GP and the practice, but the Government has promised to consult with the sector before determining what portion each party will receive.

Impact on GP and Practice Revenue

There is no doubt that with a promised injection of $7.9 billion dollars into Medicare that there will be an uplift in revenue, but at this stage without a decision of the split that will apply to the BBPIP, it is impossible to determine the impact of this revenue.

Impact on GP revenue: Our analysis across multiple practices including metro and rural practices is that the bulk billing incentives fall well short of the private out of pocket  cost being paid by patients who are currently privately billed. The average out-of-pocket cost for a GP consult across Australia is about $45. The triple bulk-bill incentive is currently $21.50 in metropolitan areas and up to $41.10 in the most remote areas of Australia. Therefore, the bulk bill incentive alone does not offer enough value to encourage GPs to increase bulk billing.

However, we know that most mixed billing GP practices do bulk bill a portion of consultations for their non concession patients and they will receive an uplift in revenue for the services that they are already bulk billing. i.e. there will be an increase even if they decide not to bulk bill all their patients.

Impact of 100% bulk billing: Will there be enough incentive through the BBPIP to encourage GPs to change their fee policies and decide to bulk bill 100% of their GP consultations? 

Most practices charge a service fee as a percentage of revenue generated by the practitioner. Our analysis indicates that for the majority of practices, bulk-billing non-concession patients will decrease the revenue derived from these services but there will be some uplift from additional incentives for services provided to non-concession patients that are already being bulk billed. The uplift will not off-set the losses.

However, the additional 12.5% BBPIP provides sufficient additional revenue to more than compensate for the loss of private fees, and the overall revenue increase is significant. 

If the spilt of the BBPIP is aligned with the Service Fee changed to the GP by the practice, the GP and the practice will both be better off. The Practices with the higher bulk billing rates currently are likely to benefit more proportionally than the practices that currently have a high rate of private billing.

GP practices that use Cubiko will find their calculator for these proposed changes very helpful in calculating the projected increase in revenue, but practices will need to wait to find out the BBPIP split before they can determine the net revenue impact for the GP and the practice. 

Will these Bulk-Billing Incentives Work?

Anecdotally, regardless of the financial impact that practices might be able to realise from bulk billing, many GP Practices are reporting that they are reluctant to change their fee policy for what they see could be a short-term gain, resulting in long term pain. The Government's persistent focus on bulk-billing rates as the primary measure of an effective healthcare system has overshadowed more impactful opportunities for funding general practice. This narrow view overlooks strategies that could enhance the capacity of healthcare services and significantly improve the quality of care available to all Australians. By broadening their approach, the Government can ensure a more robust and effective healthcare system.

Conclusion

The Strengthening Medicare with more Bulk Billing initiative represents a significant investment in Australia's healthcare system, aiming to make healthcare more accessible and affordable for all Australians. By expanding eligibility for bulk-billing incentives and introducing the BBPIP, the government hopes to reduce out-of-pocket costs and increase patient access to healthcare services. However, the impact on GP and practice revenue remains uncertain, as the bulk billing incentives may not fully offset the loss of private fees for many practices. While the additional 12.5% BBPIP will ensure that in most cases revenue will increase overall, it is not enough to encourage 9 out of 10 GP practices, as heralded by the Prime Minister, to adopt 100% bulk billing. 

Disclaimer

The information provided in this article does not constitute advice. The information is of a general nature only and does not take into account your individual financial situation. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances.