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Insurance Rebates, Incentives and Primary Care in Australia


  • Luke B Connelly

    () (Australian Centre for Economic Research on Health (ACERH), The University of Queensland, Edith Cavell Building, Royal Brisbane and Women's Hospital, Herston, QLD 4029, Australia.
    Centre of National Research on Disability and Rehabilitation Medicine (CONROD), The University of Queensland, Edith Cavell Building, Royal Brisbane and Women's Hospital, Herston, QLD 4029, Australia.
    School of Economics, The University of Queensland, Colin Clarke Building, St. Lucia QLD 4072, Australia.)

  • 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.)


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.

Suggested Citation

  • Luke B Connelly & James R G Butler, 2012. "Insurance Rebates, Incentives and Primary Care in Australia," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 37(4), pages 745-762, October.
  • Handle: RePEc:pal:gpprii:v:37:y:2012:i:4:p:745-762

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    References listed on IDEAS

    1. Elizabeth Savage & Glenn Jones, 2004. "An Analysis of the General Practice Access Scheme on GP Incomes, Bulk Billing and Consumer Copayments," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 37(1), pages 31-40, March.
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    Cited by:

    1. Ian McRae & James Butler, 2014. "Supply and demand in physician markets: a panel data analysis of GP services in Australia," International Journal of Health Economics and Management, Springer, vol. 14(3), pages 269-287, September.

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