Medicare Gold or a gold mine?

Anna Pha

When Labor leader Mark Latham and shadow Minister Health Julia 
Gillard launched Medicare Gold last week, they told older 
Australians what they wanted to hear: "Australians aged 75 and 
over who need hospital treatment will no longer have to choose 
between extended waiting times in a public hospital and rising 
private health insurance premiums and out-of-pocket costs in a 
private hospital."

"Medicare Gold builds on the strengths of Medicare", they said.

"Our oldest citizens have served our country well, and it is our 
responsibility to ensure that they have the best quality of life 
possible by giving them access to hospital care without large 
out-of-pocket costs and without long waiting times."

This is exactly what Medicare and the public hospital system 
should be offering older Australians — but not just older 
Australians, all Australians — and it would if the public 
hospitals were not so desperately under-funded.

Years of under-funding

The Howard Government has systematically set about destroying 
Medicare through such means as under funding, and subsidising 
private health insurance to the tune of almost $4 billion per 
annum through such means as the 30 percent private health 
insurance rebate.

Despite the billions of dollars in government subsidies and fear 
campaigns and other measures to drive people into the private 
system, the overwhelming majority of Australians prefer public 
hospitals.

They are better equipped to provide medical services than private 
hospitals — especially for the aged and in emergencies. Fear of 
waiting a year or more in pain for a procedure or even months for 
cancer surgery, has driven many older people into private health 
insurance that they cannot afford and would prefer not to have.

Now, according to Labor, "Australians aged 75 and over will no 
longer need to purchase private health insurance hospital cover."

A Federal Labor government would directly fund their hospital 
care, bypassing the States. The payment would be "in accordance 
with agreed national fee schedules for different types of 
services, operations and treatments at both public and private 
hospitals." That is, patients will be given a choice — private 
or public and the government will pay.

So, if there is a waiting list at a public hospital then a 
private hospital becomes an attractive option or, more likely, a 
necessity, and the government will foot the bill. Sounds a great 
deal.

Not surprisingly the private health insurance companies are 
thrilled by the policy statement. The aged as a group are much 
higher users of hospitals, and as Latham points out, "this will 
produce a large benefit for private health insurers".

"Australians aged 75 and over make up 5 per cent of the private 
health insurance pool, but receive 23 per cent of hospital 
benefits paid out by private health funds."

Latham suggests that the cost of private health insurance will 
fall by at least 12 percent as a result. This is on top of the 30 
percent private health insurance rebate which "will remain in 
full". So the private health insurance companies have a guarantee 
that they will also continue to receive their buckets of gold!

Welcome

At the same time as bailing out those over 75 years for the 
insurance companies, the Latham plan also provides a stream of 
gold for the private hospitals.

"Although only 6 per cent of the population, they [over 75s] 
account for 18 per cent of all admissions and 32 per cent of all 
patient days in hospital."

Private hospitals, many with empty beds, welcomed Medicare Gold, 
after a few negotiations and guarantees about what they will be 
paid. To participate, private hospitals must opt to be in the 
system. The government's schedules will offer a basic level of 
care — much along the lines of a managed health care system.

"People will be free to choose extra amenities in public or 
private hospitals such as private rooms, or to be admitted to 
private hospitals that do not participate in Medicare Gold, with 
fees that are higher than the agreed schedule."

"This may result in some out of pocket costs", says Labor's 
policy statement — but the 30 percent private health insurance 
rebate would apply.

In effect, the policy amounts to the government carrying the cost 
of private and public health insurance under a managed health 
care system. Patients using the private system will be able to 
take out "gap" insurance to cover out-of-pocket expenses in a 
private hospital.

There are no guarantees that most of the $2.9 billion being 
invested will not go straight into the private hospital system. 
The waiting lists will still be there — but when a doctor gives 
a patient the choice of wait months in pain or go into a private 
hospital tomorrow — as so often is the case — then the 
previously unaffordable private option becomes more attractive 
and feasible.

Aged to go private

Latham proudly declares that "Medicare Gold delivers on Labor's 
promise of making private health cover more affordable and better 
value for money".

As the aged go private, it will "free up public hospital beds for 
other Australians" and thus ease the pressure on public 
hospitals.

This, says Latham, "is a major structural improvement to Labor's 
Medicare system". Is it?

Instead of using the available billions to properly fund Medicare 
for all Australians it is pouring more money into the private 
hospital system. That is not an improvement of Medicare.

Could the pressure on the public health system be eased by other 
means? Yes it could! If a fraction of the billions of dollars 
used annually to pump prime and keep the private system afloat 
were redirected to the public hospital system then Medicare could 
be restored to its full glory as a public national health 
insurance scheme with universal coverage and access and no fees 
for hospital care, not only for the over 75s, but for all.

What is Medicare?

The essential features of a fully restored Medicare would be:

* A public health system based on fully financed public hospitals

* Universal access according to need

* Universal bulk billing with no fees for services

* Central funding by government through a progressive tax system 
according to ability to pay.

This is what Australians want, not more money thrown at the 
private system. And certainly not more cuts or underfunding of 
the public hospital system which could follow.

If the Howard Government is returned on October 9, there is no 
doubt that it will set about the further destruction of Medicare.

If Labor is successful, the private health system will also 
receive a considerable boost at the expense of Medicare.

The struggle to preserve Medicare will continue irrespective of 
who wins Saturday's election.