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The federal health minister, Mark Butler, has all but ruled out substantial increases to the Medicare rebate to encourage more GPs to offer bulk billing, saying a review of medical funding will aim to reform the system rather than “simply adding more money to the existing structures”.

It goes against a key request of the Australian Medical Association, which had urged at least a doubling of the rebate, with the peak doctors lobby saying general practice needed urgent immediate funding before it could start planning for long-term changes.

“Reforms needs to happen, but we’re hearing general practice is on its knees. It’s at a crisis point with practices closing and patients facing increasing out-of-pocket costs,” the AMA vice-president, Danielle McMullen, said.

Butler will within weeks release the report of the government’s Strengthening Medicare taskforce, a group of medical organisations and health experts that has recommended ways to address hospitals, primary care and chronic conditions. Its recommendations will be funded through the government’s pledge of $750m.

On Monday, the Australian newspaper reported Medicare would get its biggest overhaul since inception. In a subsequent press conference, Butler said gap fees for GP appointments had “skyrocketed” in recent years and patients were now paying more out of pocket than what the Medicare rebate offered.

“Too many Australians simply can’t get the care that they need,” he said.

The minister foreshadowed major changes to Medicare funding models, including more focus on paying medical staff in a “block” funding model for “blended” services that would better address chronic conditions that required more integrated care and planning, rather than purely relying on fee-for-service payments.

However, despite calls from the AMA for a “three-figure-percentage increase” to the rebate for GPs, or more than a doubling, Butler downplayed the potential for significant increases to the payments given to doctors, saying the focus was more on updating services.

“I have also been clear that more of the same is simply not going to cut it. Strengthening Medicare means also modernising Medicare,” he said.

“A range of commentators have also reflected on the fact that simply adding more money to the existing structures is not going to deliver the quality, wraparound care, particularly [what] people with complex chronic disease need and deserve … Our government is not simply going to be adding more money to the existing system.”

Taskforce member Dr Stephen Duckett, an honorary professor at Melbourne University and a former federal health department secretary, told Guardian Australia earlier this month that paying doctors more – without adjusting other settings – could result in some GPs offering fewer services because they could make more money in less time.

“Simply throwing more money at rebates is not a good solution,” he said.

The Royal Australian College of General Practitioners vice-president, Dr Bruce Willett, called for “substantial” increases to Medicare rebates. He backed reforms to better fund blended care models, but said rebate increases were key to increasing bulk billing.

“They’ve been eroded to be about 50% of what they were when Medicare began. Practices have been absorbing those costs for all that time and the straw has broken the camel’s back,” Willett said.

Butler said the taskforce’s recommendations would inform funding arrangements in the May budget and would not pre-empt further deliberations. He declined to comment on whether the government could cap gap fees, but said the taskforce’s recommendations could include greater funding for qualified nurses to carry out roles in primary care.

The Australian College of Nursing chief executive, Prof Kylie Ward, welcomed that news and said nurses were “hiding in plain sight as the solution to addressing rural and remote health care shortages”.

McMullen, also a member of the taskforce, hoped the government could look at rebalancing some items on the Medicare benefits schedule to better fund longer consultations so patients on low incomes or with complex health needs could get larger rebates. She said current funding arrangements incentivised some GPs to prioritise shorter visits.

“For the most part, fee-for-service works … but more people with chronic illness need team care, longer consultations, more check-ins. The coordination work isn’t well funded,” she said.

McMullen could not comment on the taskforce’s final recommendations, but suggested those with chronic conditions get further access to funding blocks to hire allied health professionals, like physiotherapists or dieticians. Such funding would also give GPs more time to coordinate and plan with other members of the patient’s care team.

Willett also backed more funding for long consultations, as well as the blended care model.

“If care is fragmented across other environments and they’re all working independently, mistakes get made and things get missed,” he said.


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