CPA - The Guardian

Governments talk a great deal about doing more with less and in the health area that is the line of the present Health Minister Nicola Roxon. The minister is presently doing the rounds of public consultations on the National Health and Hospitals Reform Commission’s proposals for a total revamp the government’s role in the provision and funding of health services.

One of the most publicised proposals is for a federal takeover of health from the states. Another is the proposed e-health card – a national ID system which would also hold detailed medical and other personal records of each cardholder. In theory having a patient’s medical history, medications, etc, readily accessible in an emergency or when visiting a medical practitioner is great, but the potential for abuse by insurance companies, employers, government authorities and others is huge.

Another widely debated move is the recent attempt by the government to halve the Medicare rebate for cataract surgery – a cost-cutting move presented as curbing profit-gouging by specialists. There are other cost-cutting changes being made to the Pharmaceutical Benefits Scheme, some justifiable, others resulting in financial hardship or loss of access to essential medications.

These developments are part of a larger program that would see Medicare privatised through a voucher style system administered by private health insurance (PHI) funds. The government would pay the funds a certain amount per member (“voucher”) to provide basic medical cover. People would have a choice of fund to join to receive their basic cover.

Costs would also be cut, not just by removing items from the list of items considered basic, but by reducing the rebate available on specific items. Those who want cover for a wider range of procedures, tests, etc, would have to take out additional medical insurance with their PHI fund if they could afford it. The reduction in rebates has commenced – the rebate for cataract treatments are one target.

The government is talking in terms of a market-based system, with government intervention limited to guaranteeing the “basics”. Welcome to Medicare Select. People can select their cover according to their wallet. Medicare is being privatised.

The government is already subsidising the burgeoning private hospital system to the tune of $4 billion or more per annum through its 30-40 (depending on age) percent rebate on PHI premiums. This sum has no cap; it continues to grow with rising premiums. The rich who take out PHI have it paid for many times over by taxpayers in the savings they make with a one percent cut in income tax. The PHI funds offer the wealthy a means of queue jumping for medical procedures, tests and access to hospital beds.

The private sector cherry picks the procedures and services that generate huge profits and leaves the rest to the under-funded and under-staffed public sector. The distribution of membership of health insurance funds is skewed – the private funds have a larger proportion of younger, healthier patients and the public national health insurer Medicare carries the burden of the aged and disadvantaged who are more likely to have chronic and complex conditions, as well as emergency cases.

The government still shows no signs of seriously tackling the specialist colleges that strictly limit access to their specialisations. This practice has resulted in serious shortages of specialists and monopoly profits. A growing number of surgeons and other specialists have joined forces to set up their own private hospitals creating a serious conflict of interest and questions about the necessity of surgery and independence of their advice.

Apart from the higher, uncapped fees charged in the private sector, PHI funds cost far more to run than Medicare. Around four percent of taxpayer funding for Medicare is used on administrative costs. In the PHI sector, around 15-16 percent of premiums paid by patients are lost. In other words, the PHI companies cost the health system – taxpayers/patients – four times as much to run. By handing the running of Medicare over to the PHI funds, the administrative costs stand to rise overnight by around 400 percent.

The cost to the patient will rise by much more as rebates on some items are reduced (to save money!) or cut out completely. The introduction of PHI gap coverage on medical services will be a signal for many doctors to raise their fees. The cost of basic health services to families and individuals will skyrocket – and many more will slip through the net relying at best on a few basic services if they are available in their area.

On the surface the government appears to be cutting costs, but even according to its own budget predictions it will be spending more through huge ongoing and ever-increasing subsidies to prop up the private sector. The proposed reforms spell the death of Medicare, the death of universal access to quality services and bulkbilling. It will be a system of spending more and getting less.

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