In 2014, the Australian government proposed a $7 co-payment for GP visits which, after much public debate, was never implemented. Explain the government’s rationale for this proposal. In your essay,...

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In 2014, the Australian government proposed a $7 co-payment for GP visits which, after much public debate, was never implemented. Explain the government’s rationale for this proposal. In your essay, discuss the likely impact such a co-payment would have on patients, GPs and government expenditure.




What we are looking for



Specific microeconomic theories (approximately 3 theories) that will apply this scenario.


• In a demand and supply framework use economic rationale for introducing the co-payment in terms of efficiency/welfare/expenditure - needs graphs and interpretation from a microeconomics issue.


• Potential unintended consequences in terms of equity, health outcomes and longer-term health expenditure. - Needs supply and demand graphs and interpretation






Do not write the introduction and explanation of the issue however focus on the microeconomic interpretation using graphs and theories.

Answered 2 days AfterMay 17, 2021

Answer To: In 2014, the Australian government proposed a $7 co-payment for GP visits which, after much public...

Pallavi answered on May 19 2021
141 Votes
Micro Economics
Introduction
The Australian Government introduced a mandatory $7 copayment to be made by patients to be made to their General Practitioners on their regular visit to the GP’s, as well as for getting X-rays and bl
ood test done. This proposal made by Australian Government was strongly opposed by medical practitioners, healthcare service providers as well as the general public. The main reason for opposing this bill was that it would lead to greater out of pocket costs for patients as well as major revenue or earnings drop for the practitioner. However, despite of the big claims by the government that how the copayment will help to improve the Medicare in Australia and will have many long term benefits, the proposal was anticipated to have a lot of adverse impacts on the public, specifically the rural poor who would not be able to afford any out of the pocket copayment charges.
Rationale for introducing copayments
The copayments are a form of contributions that are made by individuals towards the cost of accessing certain specific services. Even though there are a number of services which are provided free of cost i.e. no copayment is required to be made for accessing the services. The Australian Government introduced a number of healthcare reforms in the 2014-15 budget, and the mandatory $7 copayment was a part of these healthcare reforms.
Contribution of copayments in Australian health funding
Co-payments are the 3rd largest source which provides funding to healthcare costs in Australia after the Federal and State Governments. The contribution by copayments towards health funding amounted to $24 billion. The copayments are used to finance a wide range of health services and goods.
Contribution of copayments in Australia’s health funding
Source: (Doggett, 2014)
Establishment of Medical Future Research Fund
The GP’s would be required to collect a $7 mandatory copayment from their patients towards the cost of their consultation. It is important to note here that while the copayment proposal would have lead to higher medical costs for patients, specifically the out of pocket costs, and would adversely impact the medical service providers and general practitioners, the main argument given by the Australian government in its favour was that...
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