What the health minister says about a 'Band-aid tax'

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Anthony Scott, University of Melbourne

Federal health minister Greg Hunt recently ruled out GP patients having to pay for bandages and dressings, despite a major Medicare review recommending it.

We won’t be putting in place extra charges for patients. I am ruling that out.

Mr Hunt was commenting on a recommendation from the Medicare Benefits Schedule Review Taskforce to charge bulk-billed patients for bandages and dressings. The idea was to save patients some money at the pharmacy, where such products can be expensive. The recommendation also addressed some GPs’ concerns they were out of pocket by supplying these items. However, some people had called the recommendation to charge patients a “Band-aid tax“.

Rather than charging patients, Mr Hunt said he’d discuss “alternative sources of government support” for general practices and doctors to supply these items. Here are some options and what they could mean for you.

A thin end of the wedge?

Since 2015, the taskforce has been reviewing about 5700 items on the Medicare Benefits Schedule to see which services you receive at your GP or specialist align with current evidence and practice, are safe and might benefit you.

Of its 1400 or more recommendations, this one initially seems to be the thin end of the wedge. What would GPs charge you for next? Using equipment to take your blood pressure? The paper your bill is printed on? Luckily, separate charges for such items are illegal.

GPs can already choose to charge any amount for a consultation. And you would presume all GPs’ costs – including rent for their premises, equipment, office chairs, as well as consumables such as bandages and dressings – are considered when they decide on the level of fee to charge, or whether to bulk-bill. If the costs of supplies are increasing, then GPs can simply increase the consultation fee.

The recommendation also seemed inconsistent with the objectives of the review. This included trying to simplify the Medicare Benefits Schedule (not making it more complicated). The recommendation also seemed inconsistent with strong recommendations aimed at reducing patients’ out-of-pocket costs and making healthcare more affordable.

What was the taskforce thinking?

The taskforce argued people with chronic wounds, such as venous leg ulcers, often paid a lot for wound dressings they used at home.

Though GPs and practice nurses help dress wounds, patients still need to regularly manage and dress wounds themselves at home. So the taskforce was arguing these costs should be subsidised.

The recommendation to allow GPs to charge patients was where the consultation was bulk-billed. This seemed to assume this would be cheaper for patients rather than them buying their own dressings from pharmacies and supermarkets. So the intention was to reduce out-of-pocket costs overall.

However, this recommendation relies on GPs charging patients less than what pharmacies or supermarkets may charge and GPs would not try to profit from selling dressings to patients. However, the taskforce presented no evidence or data to show this would be the case, even though its recommendations are supposed to be evidence-based.

Bandages and dressings on supermarket shelf
The taskforce thought patients could save money by going to their GP for their dressings rather than buying them at the pharmacy or supermarket.

Managing wounds well has both health and economic benefits

Inadequate wound care can have debilitating effects and adversely influence people’s mobility and quality of life. Like any healthcare treatment, keeping out-of-pocket costs low for patients can help improve access to healthcare and improve health outcomes. The issue is how to do this.

Treatment is also highly cost-effective. For instance, providing compression therapy products, such as compression bandages for leg ulcers, would cost the health system an additional $270 million over five years. But it would save about $1.4 billion over the same period.

So it seems to make sense for new policies to try to reduce the costs GP practices and patients face for these supplies.

How do we reduce the costs?

Centralise purchasing

GP practices and pharmacies buy their supplies on the open market, and small GP practices may not be able to get good deals.

So the taskforce also recommended a Commonwealth-funded wound consumables scheme to centralise purchasing and price negotiation, as is done for medical devices and pharmaceuticals at the Commonwealth level. The idea is to keep prices low.

Offer discounts

Certain patients with chronic wounds could also be eligible for heavily discounted dressings from their pharmacy, though this may be difficult for less-mobile patients. GPs could ‘prescribe’ which dressings are needed and for how long, and the pharmacies could ‘dispense’ these for patients from the wound consumables scheme.

Rethink dispensing

GPs could also dispense these dressings themselves. For eligible patients who are not mobile and cannot easily visit pharmacies, GPs could provide and apply dressings for chronic wounds in the practice (or through practice nurses visiting patients at home). GPs could also provide dressings for patients to apply at home. Providing dressings at home or in the GP practice would require additional payments to general practices from Medicare.

This payment would need to provide incentives for GPs to manage the wounds more effectively and to buy high-quality, low-cost dressings, perhaps purchased via the wound consumables scheme.

What needs to happen?

For patients with chronic wounds that need long-term care (not just people wanting a Band-aid), reducing the costs of bandages and dressings is likely to improve access and improve outcomes.

Examining the regulation of these markets could be a first step to ensure prices are as low as possible. This could include considering more centralised purchasing, followed by considering additional funding to subsidise these very cost-effective treatments.The Conversation

Anthony Scott, Professor, University of Melbourne

This article is republished from The Conversation under a Creative Commons licence. Read the original article.

What do you think of this recommendation from the Medicare Benefits Schedule Review Taskforce? Would you be happy to be charged an extra fee for dressings?

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Total Comments: 4
  1. 1

    Bring it on! Let’s charge all pensioners and LIHCC holders for bandages, etc. and see what the chances are of many LNPers holding onto their seat at the next federal election.. Or, for GPs, perhaps charge them dollar per 5 minutes you are stuck in their waiting rooms beyond your appointment time?

  2. 1

    Attn: Garyand – It was the Medicare Benefits Schedule Review Taskforce that came out with this.
    Federal health minister ( Liberal Party ) Greg Hunt ruled it out.

    Some GPs were concerned they were out of pocket by supplying these items. This should not happen. This could stop them updating to the latest Mercedes.

  3. 1

    The suspicion with anything the LNP propose regarding Medicare is the fact that have always been opposed to it and have for years been whittling away at it. They would love to privatise it and groups like the IPA, who now pride themselves on have Tony Abbot as one of their number, lead the charge.
    Medicare is a cornerstone of our health system which is under serious pressure with Private Health Insurance getting more and more unaffordable even with the massive government subsidy.
    Doctors, and especially specialists, are laws unto themselves re the amount they charge but the government won’t tackle them because they would be confronted by the most powerful trade union in the country, the AMA. Perhaps they should have a Royal Commission into them.



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