The federal government has raised hackles with its $7 GP co-pay plan, announced in the federal budget, but it’s been light on details as to how the scheme will be administered and run. Recently scrapped German legislation may offer a hint as to how the Australian scheme might work — and whether it might be more trouble than it’s worth.

The German healthcare system is not dissimilar to the current Australian system, with free GP visits for public doctors. In 2004 Germany brought in a nominal GP co-pay, similar to the $7 proposed by the Abbott government. The “Praxisgebuehr” (practice fee) was a 10 euro co-payment for the first visit every quarter to GPs, specialists and dentists. But the German parliament scrapped the scheme in a unanimous vote in late 2012. The vice-president of parliament at the time, Wolfgang Thierse, said it was the first time he had ever seen a unanimous vote in the Bundestag.

The German co-payment on GP visits was forecast to bring in 2 billion euro a year in revenue, but the administration associated with the co-payment cost the German government 360 million euro per year to run. Norbert Metzke, president of Germany’s doctors’ association, said in 2012:

“The revenue generated for the health funds is minimal compared to the administrative effort required for doctors and health funds.”

On average, the scheme cost 4100 euro per medical centre per year in administration work and resulted in 120 hours of extra work a year for every centre. For this reason it was largely unsuccessful.

Professor Hans Peter Dietz, professor of obstetrics and gynaecology from the University of Sydney, says just in Germany, the new co-payment scheme in Australia “is going to cost a lot more than it generates”.

Dr Brian Morton, a Sydney GP and member of the Australian Medical Association board, says the cost of implementing the program will be dependent on the cash-taking facilities doctors’ practices already have. “Practices that are charging a private fee would already have an Eftpos apparatus on the desk … Someone who is 100% bulk bill would have to invest in those facilities,” Morton said. A spokesperson for the federal Department of Health said:

“It is not anticipated that the introduction of the $7 patient contribution will present a great new cost or degree of complexity to these practices.”

The Praxisgebuehr was described as a “bureaucratic nuisance” by a spokesperson for Germany’s Ministry of Health in 2012, and Morton says the GP co-pay could pose similar problems. He thinks it will be challenging to keep track of patients unless new technology is created. As the new $7 payment incurs only for the first 10 visits per year for concessional patients (non-concessional patients will have to continue to pay the $7 each time), it will be difficult to follow those who are seeing different doctors. “A patient could come to me five times, go and see another doctor, maybe have an X-ray …”

Morton is also concerned that pathology will lose out, as that department does not generally interact with patients, but the $7 fee still applies. He fears the billing process may be difficult if pathology can’t collect upfront fees. There would need to be “more accounting and backroom staff”, he says.

The Australian $7 co-payment scheme is expected to bring in $3.5 billion over five years, to be put into the Medical Future Research Fund, outlined in the federal budget. But according to Dietz, it’s unlikely the $7 GP co-payment will create enough revenue to contribute to the fund.

Morton says he hasn’t been told if the government would cover the cost of the administration that comes with the co-payment and the AMA would like the government to consult with it to “fine tune” the program.

Another goal of the scheme is to cut down on “unnecessary” doctors’ visits. Federal Health Minister Peter Dutton said that at the moment:

“We have one of the best health systems in the world, but we have to recognise that for a population of 23 million people we provide 263 million free services a year.”

Similar rhetoric was used when the German scheme was brought in, but the authors of a 2006 study into the payment’s effect on visits noted the program appeared to be unsuccessful in reducing healthcare costs. They stated:

“Our empirical results suggest that the introduction of the copayment did not have a significant effect on the probability of visiting a doctor.”

Then-German economics minister Philip Roesler said in 2012:

“The Praxisgebuehr has failed its purpose. There has been no effect on visits to the doctor. The bureaucratic effort required for healthcare providers is considerable. The main victims are patients who would like to see a doctor.”