Insurance Rebates, Incentives and Primary Care in Australia

Luke Connelly () and James R G Butler
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James R G Butler: ACERH, Research School of Population Health, The Australian National University, M Block (Building 62), cnr Mills and Eggleston Roads, Canberra, ACT 0200, Australia.

The Geneva Papers on Risk and Insurance - Issues and Practice, 2012, vol. 37, issue 4, 745-762

Abstract: Australia has a universal, compulsory, public health insurance scheme that includes insurance rebates for private fee-for-service medical practitioner services. Recent sweeping changes to the rebates for general practitioner (GP) services provide an opportunity to observe the effects of widespread insurance changes on the behaviour of GPs and aggregate outcomes such as quantities, prices and co-payments. In this paper, we study the effect of two important changes to subsidies for GP services, the first of which increased the rebates payable for services provided to specific patient groups, and the second of which increased rebates payable for all patients. Using economic theory, predictions of the effect of the rebate increase on quantities, prices and co-payments are produced that depend on the structure of the market. Using time-series data, we then present short-run empirical evidence that suggests that the supply curve for GP services is backward-bending.

Date: 2012
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Journal Article: Insurance Rebates, Incentives and Primary Care in Australia (2013)
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