GPs say a lack of government support has forced them to either charge patients more or close practices, with Health Minister Mark Butler stating Medicare needs a "comprehensive revamp" to make clinics viable.
Royal Australian College of General Practitioners president Nicole Higgins said frozen Medicare rebates and poor indexation hadn't kept up with the cost of delivering health care.
"GPs have subsidised that for a long time. We can no longer afford to subsidise our patient care," she said.
Dr Higgins said the gap fee was increasing as GPs coped with the cost of living "like everybody else".
"GPs are seeing sicker, more complex patients … we are the cost-efficient engine room of the healthcare system," she said.
"You don't notice us until we're broken and that's what's happening now."
Mr Butler agreed frozen Medicare rebates were the source of the issue but said broader structural issues were also at play.
"Our general practice right now is in the worst shape it has been in the 40-year history of Medicare," he told ABC TV.
"We're no orphans. We're seeing this across the developed world but there are some particular challenges here in Australia that we are determined as a new government to fix."
The minister said digital connections between primary health, hospitals and aged and disability care were "not up to scratch".
Mr Butler said significant workforce issues had led to fewer than 14 per cent of medical graduates choosing general practice.
"Not too long ago it was half of medical graduates coming out of university were choosing to go into general practice," he said.
Mr Butler has worked with medical and patient groups to investigate problems with Medicare, with a final report to be published within weeks and funding to flow in the federal budget.
Dr Higgins said there were opportunities for innovation but the system needed urgent repair.
"What we really need to do at the moment is urgently stem the bleeding in general practice … we need to ensure we actually have a viable general practice to continue to reform," she said.
"We've had a decade of neglect. It's underfunded and undervalued."
Health is expected to dominate discussions when national cabinet meets again in February, with the premiers of Victoria and NSW putting forward their own policy plans to ease pressure on hospitals.
Mr Butler said the federal government was already pumping money into strengthening Medicare, assisting rural GPs and delivering urgent care centres to take pressure off hospitals.
He said a concerted effort was required from the Commonwealth in consultation with the sector and the states.
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