Knives out for Medicare

by Anna Pha

The private health insurance funds are calling for greater powers and 
further deregulation of the private health industry. At the same time they 
are seeking coverage of GP services which currently are covered by 
Medicare. Their aim is the destruction by privatisation of Medicare.

In its place they seek the establishment of a "managed health care system", 
a two-tier system based on profit with your capacity to pay determining the 
level and quality of health care you receive. This is along the lines of 
the US system.

The Federal Government has responded to industry demands by setting up a 
review to determine the next round of "reforms" This is being done in 
consultation with the Australian Health Insurance Association (AHIA), which 
represents the private health insurance industry. They have the ear of 
Health Minister Kay Patterson.

The health funds want to be able to operate along similar lines to the 
general insurance industry i.e. they want unfettered control. For example, 
a company offering car insurance decides whether a particular driver can 
have a policy.

The premium depends on the age and previous history of the driver, the age 
and model of the car, its condition, risk of being stolen, the cost of 
replacement parts, and so on.

Following an accident, the insurance company decides if and where the car 
will be repaired, what will be done and how much the owner contributes to 
the cost of repairs.

That is the kind of dangerous and inequitable model the private health 
industry wants. If community ratings and price caps on premiums were 
lifted, then the health insurance funds would decide who could be covered, 
and the insurance premium they would pay (based on age, race, medical 
history, genes, lifestyle, weight, alcohol consumption, smoking, etc).

The outcome would be that older people, diabetics, and others with chronic 
illnesses or a family history of certain diseases would be charged a much 
higher premium than say a young, fit person.

The health insurance companies would determine whether a patient can have a 
transplant or bypass, where it would be carried out, who would perform it 
and the fee. That is, US-style managed health care.

These are medical questions that should be decided by patients in 
consultation with their medical practitioners, not by insurance clerks and 
accountants.

The AHIA has called for health insurers to be given the freedom to choose 
which hospitals will be covered.

AHIA head Russell Schneider referred to escalating services in "poor 
quality hospitals". "If they don't meet quality standards, we don't want to 
have to pay them at all", he told the Financial Review.

The Government has already taken a step in this direction with higher 
premiu ms for people who take out private health insurance over the age of 
30.

While these comments refer to the private health system, they are relevant 
to ALL patients in the public health system.

The AHIA is seeking the right for private health funds to compete with 
Medicare — i.e. to commence the privatisation of Medicare.

At present the private funds are not permitted to give re-imbursements or 
pay claims for services performed by GPs. The AHIA wants this ban lifted so 
that funds could cover GP services and hence offer "whole health care" 
packages in competition with Medicare and the public system.

This would spell the death of Medicare and the public health system with 
bulk billing and no-fee public hospitals.

This idea has been on the drawing board for some time. When the Howard 
Government was first elected it set up a National Commission of Audit. The 
Commission's report proposed that Medicare refunds be provided through 
private health funds.

"The Commonwealth would pay a national health insurance premium in respect 
of eligible citizens to registered health funds, to cover public hospital 
and all other Medicare health services", said the report.

The private funds would be required by law to cover a percentage of the 
Medical Benefits Schedule fee and free standard ward accommodation in 
hospital. (No bulkbilling.)

"The funds would compete for eligible members by offering greater 
efficiencies and add-ons to the standard package. Such extra benefits could 
include additional nursing home and hostel benefits, physiotherapy, dental 
treatment et cetera.

"The choice would lie with the individual. The funds could negotiate 
hospital charges with the States and any private hospitals willing to treat 
public patients, and negotiate fees with doctors."

The aim is to integrate Medicare with private health insurance. Already 
certain steps have already been taken in this direction with people being 
able to lodge private health fund claims at Medicare offices.

The Audit Commission report admitted that "the success of Medicare has 
undermined the incentive for people to maintain private health insurance".

The 30 percent government rebate was one attempt to lure people into the 
inferior and more costly private system.

The dispensing of Medicare entitlements through private health funds — 
what the AHIA calls competition with Medicare — has the same objectives.

The report talked of "blurring the Medicare entitlement boundary" and 
"integrating the private insurance with Medicare". This is similar to the 
approach adopted when the Government set about privatising the Commonwealth 
Employment Service.

In that instance the Government brought in private job search companies 
alongside the public welfare system.

In the case of the health system we are looking at a situation where the 
Government would allocate specific funding per person and each person could 
then sign up with a health fund.

There might initially be free coverage for basic GP services and hospital 
stays (possibly means tested) which could be provided in a public or 
private hospital. The health fund would negotiate deals with specific 
hospitals and health professionals.

Those who could afford it could take out more extensive coverage (with a 30 
percent subsidy from the government).

This could include more expensive hospitals, single rooms, elective 
treatment, longer hospital stays, choice of hospital, choice of doctor, and 
other services such as physiotherapy, dental, optical, etc.

The distinctions between public and private and what the Government covered 
would be blurred. There would be many choices for those able to afford 
them. The price would depend on the range, quality and quantity of services 
covered, where and who offers them, age and history of patient, and so on.

The gap or co-payment between the amount charged and the amount covered for 
would also vary.

That would be the death knell for Medicare and also an escalation in health 
costs because of the ridiculous duplication of administrative functions and 
the drive by deregulated health insurance companies for profits.

This threat to our universal system of health care is real. There is a 
crucial need to build a campaign to defend Medicare with its universal 
access, bulkbilling and free public hospitals.