Medicare Funding Fails to Cover Costs
Kalbarri, a rural town in Western Australia, is set to lose its only general practice, leaving 1500 residents without a local GP. The closure is scheduled for June, following the practice’s switch to a fully bulk-billed model, which proved financially unsustainable.
This closure highlights the ongoing gap between Medicare funding and the actual cost of delivering care, as noted by the Royal Australian College of General Practitioners (RACGP). Despite Kalbarri’s qualification for the second-highest level of increased Medicare funding due to its remoteness, the practice cannot remain viable.
Dr Ramya Raman, RACGP WA Chair and Vice President, stated, “If a practice can’t survive while bulk billing, it either has to charge a gap, or it closes.”
Impact of Inadequate Funding
Medicare funding has been indexed at only 2.6%, while the Consumer Price Index inflation was 4.2% over the past year. This inadequate indexation leaves many rural practices struggling to cover operational costs.
The RACGP points out that this is not the first instance of such closures in rural Western Australia, indicating a systemic issue in healthcare funding.
RACGP President Dr Michael Wright commented on the challenges faced due to poor Medicare indexation, noting that many GPs are hesitant to switch to fully bulk billing due to financial and trust issues.
“For decades, patients’ Medicare rebates have failed to keep pace with inflation and rising operational costs, driving up out-of-pocket expenses and creating barriers to access,” Dr Wright added.
The RACGP is urging the Federal Government to reconsider its funding priorities. They suggest that the $25 million allocated to new practices in New South Wales should be redirected to support existing rural practices like the one in Kalbarri.
Dr Ramya Raman challenges Prime Minister Anthony Albanese and Treasurer Jim Chalmers to ensure that rural communities maintain access to their GP services. She emphasised, “There is a bucket of money already in the budget to help this service.”
The closure of Kalbarri’s sole GP practice represents a broader issue, where MPs are pressuring practices to bulk bill, even as evidence mounts that funding is not covering operating costs.
Last updated: 29 June 2026, 11:54 am
