A GP's guide on how to ditch bulk-billing

There are six key points, writes Dr Chee Koh

Is bulk-billing under the Medicare rebate freeze crippling your practice? GP Dr Chee Koh explains what happens when you make the leap to private billing and offers guidance to others on how to cope.

As a clinical academic, I have been fortunate enough to have had enough flexibility in my day job to accommodate clinical work in a variety of settings.

Medicare card

I’ve worked in bulk-billing, mixed-billing, and completely private-billing GP practices — the latter charged a private fee to all patients, even children.

This flexibility has also given me first-hand experience in making the transition from one billing type to another. 

Surprisingly, little has been written about this topic despite its importance in ensuring GPs have the resources to provide the best care.

The first point I want to make is this: there is a difference between affordability and a patient's willingness to pay the fees you charge.

Get this balance right and you will be reassured to know that the patients who leave are not the ones suffering financial hardship, but those who are exercising their free choice.

I accept that, conceptually, free medical care is a good thing.

In reality, however, our experience is that a bulk-billing clinic is never satisfying.

Not for patients, not for doctors.

Our experience is that we received more complaints (most of which were frivolous) when we were bulk-billing than when we introduced a private fee.

This suggests patients are less satisfied when seeking care in bulk-billing practices.

Also, our experience is that doctors were more frustrated when bulk-billing than after the introduction of a private fee.

They say money can’t buy happiness but, in our experience, a free service doesn’t buy happiness either.

So I will offer some practical observations.

I hope those considering transitioning from a bulk-billing GP practice to one charging an out-of-pocket fee find it useful.

Given the diversity of general practice settings, it’s important to stress the context.

This is for practices in a particular area where patients have choice, such as inner-city or suburban areas where other GP practices exist or where there are other healthcare options.

Rule 1: Have a clear goal and invest in it

There can be many reasons why bulk-billing GPs must consider charging a private, out-of-pocket fee.

Whatever the reasons, one goal should also be to invest part of the income back into the GP practice itself.

In short, at least one of the aims should always be to improve. And when I say improve, I mean for the patients as well.

This can range from funding newer equipment to refurbishing the waiting room to service expansion.

In one practice where I worked, we wanted to give a little back to the staff — the doctors, nurses and administration staff who provided extended, after-hour care for patients.

So that is where we invested.

Rule 2: There are very clear moral arguments for private billing

Once a private, out-of-pocket fee is introduced, you are likely to encounter arguments suggesting that what you are doing is wrong.

Most arguments come down to the idea that healthcare should be free.

If one wishes to go down that pathway, then you can argue that education should also be free. So should food. So should housing.

But the reality is that they are not free because the people providing these services cannot function as charities and do what is expected of them in terms of medical care.

As consumers we pay school fees, we have to pay for our groceries, and housing is certainly not rent- or mortgage-free.

The problem is that when a service has been provided free of charge, it is seen as an entitlement.

And, like a drug of addiction, it becomes difficult to withdraw.

Politicians stoke that sense of entitlement by using words such as, ‘Australians deserve this, Australians deserve that ...'. 

So what was once was a privilege becomes a right.

The point about moral arguments is that they are not necessarily morally just.

So without a clear goal, you are likely to waver when the going gets tough.

And it will probably get tough, so…

Rule 3: Be prepared to let go of patients

I mean let go of those patients who exercise their choice to seek healthcare somewhere else.

Defections WILL occur, no matter what.

The first to go will probably be the ones you least expect to defect — the ones you've been treating for years.

But our experience is that the patients who are not worth keeping on our books will also go — the doctor-shoppers, the time-wasters, the ones banned by every other one of your colleagues for various reasons … you get the idea.

At first glance the defections can be quite significant.

From one experience of shifting to private billing there was a dip within the first month, before picking up again after four to five months.

The impact varies from doctor to doctor at the same practice.

My feeling is that it relates very much to the business model of the doctor.

I know of one particular doctor who does the volume-based business model and I think the impact is quite noticeable.

But from my own experience, I audited my earnings over a six-month period and was surprised to find that even though my patient numbers were down, I was slightly better off financially compared to when I was bulk-billing.

Where do these patients go? We didn’t ask. So it is a matter of speculation whether they go to the bulk-billing clinic down the road.

Rule 4: Stick with it

Expect defections. Expect arguments. Expect your receptionist to become the ear for disgruntled complaints, and make sure you support them.

But persevere. Look to the clear goals — the ones you set right at the beginning.

After the first batch of defections and possibly a lull, it will pick up again.

If you are prepared to let go then you will be prepared to take on new patients, because there is now actually space on your books to take on new patients.

Rule 5: Get backing from the practice team

Before you decide to switch from bulk-billing to charging a private, out-of-pocket fee, you need to lay the ground work.

It is important to have all staff members on board. Have team meetings with all staff members: medical, nursing, administrative.

Hear everyone out. Start discussions. Address concerns. Plan. Plot. Agree on a way to execute it.


Rule 6: Start a conversation with patients about the value of what you are doing and the fact that it costs money

The point about transitioning from bulk-billing to private billing is not to inflict financial hardship on the patient, but to find a dollar amount that equates to having the service valued for what is actually costs and what it is actually worth.

No amount of literature or corporate consultancy services can replace the value of talking to the patients themselves.

In our case, we had the reception staff — not the doctors — engage patients in the conversation.

In our experience the best time to have this conversation is when the GPs are running horribly late and the patients are sitting in the reception room looking rather bored.

At this point patients are usually rather chatty – most would rather talk to someone than continually update their Facebook status.

How would you feel if we …? Would you be willing to pay? If so, how much?

These are good starting points for such a conversation.

We asked patients if they were satisfied with the current service and if we charged a fee to cover our overheads for a better service, such as extended hours, how would they feel about it?

It is very important to stress that a switch is for the long term, not the short term.

There is a fallacy that owning and running a general practice is a sure-fire, get-rich-quick scheme.

Of course there are very profitable practices and pharmacies, but the reality cannot be more different.