The Federal Government released its Mid-Year Economic and Fiscal Outlook (MYEFO) figures on December 14, revealing a budget deficit for 2016-17 of $33.7 billion.

To generate savings and offset the recent expenditure announced last week, Federal Health Minister, The Hon. Sussan Ley MP scrapped incentive payments that encouraged bulk billing of pathology services, such as blood tests and diagnostics, including X-rays.

Doctors have criticised the changes, describing them as a “co-payment by stealth” for pathology and imaging tests which will permit the Turnbull Government to slash the health budget by more than $650 million.

The Government is banking on the cuts to be absorbed by the private sector, with pathologists warning of increased fees for patients and potential closure of services in rural areas.

The initial bulk-billing scheme introduced in 2009-10 was designed to maximise the numbers of patients receiving free services. According to Minister Ley, providers were incentivised for pathology and diagnostic imaging at a cost of half a billion dollars for only a small 1 per cent increase between 2008-09 in bulk billing rates beyond expected levels of “natural growth”.

Official Government data show the proportion of bulk-billed diagnostic imaging services increased from 66 per cent in 2009-09 to 77 per cent in 2014. Yet Ms Ley maintains the changes will “not affect the majority of consumers, due to the high level of competition in the sector, and will ensure some of these services are better aligned with other medical and healthcare providers, such as GPs.”

In a bid to reassure Australians, Minister Ley insists, “Patients with high out-of-pocket medical costs will also continue to be covered by the Medicare Safety Net protections.”

The changes will affect patients from July 2016. Those eligible, or on concession, such as pensioners and children aged under 16, will be exempt from the changes for diagnostic imaging, while a separate MRI incentive payment for bulk billing concession patients will be reduced from 100 per cent of the Medicare fee to 95 per cent.

Australian Medical Association President Brian Owler says the policy would increase costs for Australians, particularly the sickest and poorest patients.

“These measures are simply resurrecting a part of the government’s original ill-fated co-payment proposal from the 2014 budget … It is yet another co-payment by stealth,” Professor Owler said.

“The AMA strongly opposes the measures and will encourage the Senate to disallow them.”