Most pathology testing is initiated by general practitioners. Virtually all GP requests end up being bulk billed directly to Medicare by the company that provided the service. There is no feedback mechanism or any inhibition in demand.  Three generations of Australians have come to accept that whatever test they or their doctor wants will be available and apparently free.  Our government’s focus is on accessibility and affordability and has created incentives to bulk bill. Demand has increased at a higher rate than the Government wishes to afford. In the absence of any control over demand, their only reaction has been to reduce the rebates for individual items or all items. This has driven efficiency and corporatisation of community-based pathology.

Hospital pathology has been paid by the states (with Federal support) and usually by precedent based budgets. This has led to a largely unaccountable public pathology sector. Activity based funding is driving public laboratories towards a fee-for-service model. Because the PST exists as a “price list” it is increasingly utilised for internal payments. MBS rebates which are modified to meet Commonwealth budgetary requirements are not suitable this environment. 

We are approaching the end of a funding model which cannot sustain the industry and professions associated with Australian pathology. Using publicly available data all these issues will be enumerated and discussed. We need to be as analytical of our role and relevance to the contemporary practice of medicine as we are to the analysis of our specimens. We need to understand the forces which are at play and design our own relevant future or have it decided for us.