What Labor’s election win means for the medical sector?

Health was a key pillar of the Australian Labor Party’s election focus, with billions pledged to help improve the sector over the coming four years. 

Now that the Labor Party has returned to government, the focus shifts to whether its new initiatives can meet our nation’s most pressing challenges. 

Let’s recap two of the biggest election promises for the medical sector, as a reminder of what we can expect to see unfold in the near future…

Bulk billing incentives 

Labor has promised $8.5 billion in Medicare funding to be delivered over the next four years. To be clear, this does not mean that rebates under the Medicare Benefits Schedule (MBS) have increased. Rather, the government has unveiled a Bulk Billing Incentive Program promising higher rewards for practices that exclusively bulk bill. 

The program, which starts in November this year, requires practices that participate to commit to bulk billing every eligible service for every patient to receive the incentive payment. The payment is set to be an additional 12.5% on every $1 of the MBS benefit earned from eligible services, and this is then split between the GP and the practice. 

Participating practices must also be registered with MyMedicare (which was introduced in 2023, offering a number of benefits to practices and patients who take part).

Labor’s new Bulk Billing Incentive Program appears in lock step with the payroll tax exemption incentives issued by state governments for practices that bulk bill almost all patients.  

It’s clear the squeeze is on, and it appears to be working. The latest 'Health of the Nation' survey from the Royal Australian College of General Practitioners found that 77.5% of all GP visits were bulk billed in December 2024 (an increase of 1.9% on October 2023, the last date before the investment took effect).

As we’ve seen in practice though, exclusive bulk billing models aren’t always viable. According to data from the Australian Securities and Investments Commission (ASIC), the healthcare and social assistance sector saw the highest year-on-year increase in insolvency appointments in the period ending 26 January 2025. 

While medical practices account for a relatively small portion of this data, there’s a valid sentiment among practice owners that exclusive bulk billing models are not feasible. There’s simply not enough money to cover all the expenses required to run a sustainable practice.

Tackling GP shortages

Medical professionals have highlighted another concern with the Bulk Billing Incentive Program – and that is the effect on GP availability. With incentive payments set to increase more for short consultations over long ones (which are associated with chronic disease management and complex care), there is concern that people who need their GPs most will struggle to get an appointment. 

Fortunately the sector’s skills shortages haven’t gone unnoticed by the government. There is hope that new training incentives will help address the shortfall, which the AMA has predicted to grow to 5560 full-time-equivalent GPs nationally by 2033.  

Some of the incentives include:

• expanded GP training with more placements
• salary incentives for junior doctors to specialise in general practice
• paid parental leave and study leave for GP trainees
• more Commonwealth Supported Places for medical students 

They’re also prioritising visa processing in critical sectors, with healthcare likely at or towards the top of that list. 

What’s next for medical providers

Beyond bulk billing and GP training, Labor has promised that the healthcare sector will receive more funding for:

• public hospitals
• women’s health
• mental health
• prescription medicines
• urgent care clinics 

As with any election, it’s the period after the campaign when the rhetoric is tested against reality. The onus will still be on medical practice owners to seek clarity and determine what’s best for their business, GPs, staff, and patients. 

As always, RSM’s Medical Services team is here to support you in evaluating the new incentive program, as well as your current pricing and operating model, to find the optimal path forward. 

You can engage us to help with:

• cashflow reviews
• pricing strategies
• operational deep dives
• digital transformation
• and much more

Business for Doctors is also a valuable resource for practice owners looking to improve their doctors’ understanding of effective bulk billing procedures. 

To find out how RSM can support your medical practice, contact Peter Nicol (Partner of Medical Services).