By Con Costa
Changes to health care in the recent budget include the usual attacks on the sick and weak — more pressure on bulk billing, prescription costs to go up for all and attacks on dental care for health care card holders.
Coalition health minister, Dr Michael Wooldridge, claims that he is maintaining Medicare and spreading the pain by also "slugging" the rich. However, the increase in the Medicare levy for the upper middle classes won't go to the public hospital system. It is mainly ideological and makes a further round of changes to the health system inevitable.
The cash-strapped public hospitals don't get any increase — in fact they have been cut by $80 million per year for the next four years. The cost of medicines goes up for everyone, including pensioners and health care card holders. Federal dental health subsidies have been stopped (a particularly mean and nasty move). Bulk billing is under further pressure with, yet again, no real increase in the Medicare rebate for GPs (a cut of 4% in real terms to bulk-billing doctors).
The centrepiece of the health cuts is an increase of 1% in the levy for higher income earners who don't take out private health insurance, and the cash rebates for lower income earners who do. The increase in the Medicare levy for the middle class is more to do with encouraging private health insurance than raising money. The big winners out of the health changes in the budget will be the private health insurance companies, the inefficient smaller private hospitals (the bigger efficient ones are already working at 90% capacity), with the money then flowing on directly to the private medical specialists.
The less well-off are encouraged into an expensive private system. With private health premiums set to rise and people needing to take out top cover to avoid all the extra bills when they use the service, the rebate will hardly be worthwhile.
There is a big windfall for private specialists, who have been strongly lobbying the health minister. The specialists resent the fact that "patients can drive to a public hospital in their Mercedes and get treated for free". By "free" they mean treated for free by the specialists, not free to Medicare. A specialist cannot render a private account to a patient using a public hospital if they are not privately insured.
The federal government's pre-budget hype was that we are overspending and that we need to be more efficient. Yet in this budget it seems to be saying to patients, "You can all afford private health care, and the inefficient private sector will be used to raise the extra money needed for the health system".
Many will see a contradiction here. If there is an $8 billion black hole that needs to be plugged by cuts to the unemployed, public service, ABC, education, health care, then why is the government telling us we can all afford (in health terms) to drive a Mercedes instead of a Ford? Medibank Private instead of Medicare!
Dr Wooldridge says that the current growth in Medicare and PBS (pharmaceutical benefits scheme) outlays is "around 40%" and "unsustainable". He says that his government's cuts are designed to save and maintain Medicare. He claims to have done this despite a lot of pressure from the AMA to get rid of it. Dr Wooldridge certainly comes over as a very earnest and honest broker for the health changes in the budget. But let's examine his claims more closely.
We are all aware of tremendous pressure on health systems, all over the world. But is Medicare performing so badly? Patients like bulk billing. We do need more funding for our public hospital system, and taking a bit more from the rich certainly seems an appealing way of paying for it.
A recently published paper in the Australian and New Zealand Journal of Public Health ("Health care expenditure and life expectancy in Australia: how well do we perform?", by Richard Taylor and Glen Salkeld, 1996, Vol 20, No 3) analyses Australia's performance in health terms from 1973 to 1990 (most recent figures available). Medicare's cost is 8.2% of GDP and around the average for the OECD countries. Growth in health costs over this period in Australia is minus 1.6% compared to plus 26% growth in the USA and plus 22% in Canada.
A very good performance by any standards!
Also, Australia's health system is already one of the most privatised in the western world, with a relatively small public sector. Dividing the community in health terms, that is, weakening Medicare, would lose Australia three strong advantages — cost control, equity and the efficiencies of scale which give Medicare a very low administrative cost.
As against this there is little cost control, if any, in the private system, where over-servicing is also commonplace. Using the private sector as a way to raise money for health is highly inefficient. Its administrative costs are 14% compared to 4% for Medicare.
Taking from the rich to pay for health is, in this case, a simplistic and populist idea. By rich they mean you and me. And expect them to move the goal posts downwards over time. The trick is how to take from the rich while maintaining equity. Someone who pays more ends up expecting more. The private patient inevitably gets more attention, and the rest of us get charity.
Also, transferring Australia's finite health resources to the private sector means there is less available for those left in Medicare, not more.
A major concern is that we are seeing history repeat itself. Significant changes during the Fraser years — on an almost six-monthly basis — left doctors and patients totally confused. In the end there were 2 million Australians unable to afford private health insurance and who didn't qualify for Medibank. John Howard was the treasurer in the Fraser years.
Yes, let's make the wealthier pay more. But let's also make sure it goes to the public system, where it is most needed. Dr Wooldridge's way of charging the rich more is not more equitable. It is simply taking from the rich to give to the rich.
The public hospitals have been cheated out of the extra funding they so desperately need. And Dr Wooldridge's claim that he has maintained Medicare remains open to serious doubt. n
[Dr Con Costa is national president of the Doctors Reform Society.]