Does affirmative action reduce disparities in healthcare use by Indigenous peoples? Evidence from Australia's Indigenous Practice Incentives Program

Globally, Indigenous populations experience poorer health but use less primary healthcare than their non‐Indigenous counterparts. In 2010, the Australian government introduced a targeted reform aimed at reducing these disparities. The reform reduced, or abolished prescription medicine co‐payments and provided financial incentives for GPs to better manage chronic disease care for Indigenous peoples. Exploiting the framework of a natural experiment, we investigate how the reform affected these health disparities in primary and specialist healthcare utilization using longitudinal administrative data from 75,826 Australians, including 1896 Indigenous peoples, with cardiovascular disease. The differences‐in‐differences estimates indicate that the reform increased primary healthcare use among Indigenous peoples, including 12.9% more prescription medicines, 6.6% more GP services, and 34.0% more chronic disease services, but also reduced specialist attendances by 11.8%. Increases in primary care were larger for those who received the largest co‐payment relief and lived in metropolitan regions, whereas the reduction in specialist attendances was concentrated among lower income Indigenous patients. Affirmative action can reduce inequalities in Indigenous use of primary healthcare, albeit careful design is required to ensure that benefits are equitable and do not lead to substitution away from valuable, or necessary, care.