If you’ve looked around the waiting room of your local GP clinic recently you may have noticed posters urging you to email your MP to “keep pathology bulk billed”.

The posters are part of a campaign by Australian Pathology which represents the nation’s private pathology companies.

It’s pushing for more government funding, warning people may soon have to cough up a co-payment for pathology services, like blood tests.

The group recently launched TV and radio advertisements and billboards have sprung up around the country.

“Could you afford to pay? Could you afford not to?” the TV ad asks.

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Pathology is big business, with more than 100 million Medicare-subsidised tests performed between 2022 and 2023, and demand is growing due to Australia’s aging population and increasing chronic illness.

The sector has been plagued by a long history of government funding freezes, but data shows more than 99 per cent of out-of-hospital tests are still bulk billed.

Providers say this cannot continue, but health regulation experts say the ads are part of a long-running scare campaign.

What’s the situation?

For 24 years Medicare rebates for pathology providers have remained stagnant.

That changed in May when the Albanese government decided to index the rebates for services it considers labour-intensive. These include haematology (the study of blood), tissue analysis, immunology and pregnancy.

The rebates for these items will increase from July 2025, in line with wages and price growth, costing $174 million over three years.

The government excluded many tests from indexing, such as urine and faeces screening, cholesterol testing, microbiology (the analysis of bacterial causes of infection) and genetic pathology.

The government says rebates don’t need to increase for these as testing is largely automated in labs and economies of scale mean it is cheaper to test them en masse.

“Technological advances are continuing to drive down the cost of providing and operating many pathology services,” Health Minister Mark Butler said.

But pathology companies fiercely oppose this argument and say it’s not grounded in evidence.

Australian Pathology CEO Liesel Wett said a lot of pathology was resource intensive and required qualified scientists to do analysis, especially in the field of microbiology.

Dean Whiting is the CEO of Pathology Technology Australia which represents manufacturers of the technology used in labs. He said Australia had reached the limits of automation-driven cost savings.

“We’ve got to the point where it’s difficult to eke out any more efficiencies,” the former clinical biochemist said.

The two largest pathology providers in Australia, Healius and Sonic, say labour costs were the biggest contributor to their weak 2023-24 end-of-financial-year results.

A ‘history of crying poor’

This new campaign by Australian Pathology is not a first – the group has rolled out similar campaigns in the past decade.

In 2016 a “Don’t Kill Bulk Bill” blitz was launched after the then-government scrapped bulk billing incentives and companies said they would be forced to charge co-payments of between $20 to $50.

Then health minister Sussan Ley called it a “tacky scare campaign by stock exchange-listed pathology companies aimed at protecting their profits”.

The campaign ended after the government agreed to do more to regulate the often-exorbitant rents pathology companies were charged to be co-located in GP clinics.

Australian Pathology is a regular donor to both major parties and health economist Stephen Duckett said they regularly used the threat of co-payments as a “bargaining chip in policy battles”.

He said he believed the companies were “bluffing”.

“They’re using this campaign, quite improperly in my view, to scare the patients to put pressure on the government,” he said.

Assistant professor in law at the University of Canberra, Bruce Baer Arnold, has a special interest in health regulation and said the industry was asking the public to do their lobbying for them.

“We’re talking about a thriving sector with a long history of crying poor,” Dr Arnold said.

“Should these companies be sufficiently shameless to [charge a gap]? Well, if they think they could get away with it they would.”

In 2010 Sonic introduced patient co-payments in Queensland after the government slashed Medicare benefits to save $763 million over four years.

“But [Sonic’s] workload plummeted overnight so they had to quickly reverse those fees,” Mr Whiting said.

Around the same time pathology provider Healius (then called Primary Health Care) introduced co-payments only to reverse some in 2012 after revenue losses.

Mr Whiting said those examples showed how co-payments had the potential to hurt the bottom line when patients chose to shop around.

Will you be out of pocket?

The head of one major pathology provider, who did not want to be named, said co-payments were “imminent”.

“It would be different if there were billions of dollars in profit being made each year, but there’s not,” they said.

“The fact that the industry is so exercised about this at the moment, has a united front, and is spending a lot of time and money on this campaign speaks volumes — we’re on the precipice.”

Co-payments aside, Australian Pathology CEO Liesel Wett said some patients would still be forking out more soon.

From next July there will be tighter restrictions on who can get Medicare-funded vitamin B12 and urine specimen testing.

Acting on recommendations from a 2018 review, the government is cracking down on “unnecessary” pathology which means B12 testing will be restricted to once every 12 months (unless the previous test was abnormal) and tiredness alone will not be an adequate reason to test.

The specifications around urine testing will also change so doctors can only order them when symptoms of a urinary tract infection are present, unless there’s a clinical need. 

This means repeat testing to check an infection has resolved won’t be paid for by Medicare if someone is asymptomatic.

But the pathology sector has said this could disadvantage women who make up the majority of people undergoing these types of tests to diagnose urinary tract infections or to check on B12 levels during pregnancy.

The government said later this year there would be an independent review into the fees for the pathology items they did not choose for indexation.