Communist Party of Australia  


The Guardian

Current Issue

PDF Archive

Web Archive

Pete's Corner


Press Fund


About Us

Why you should ...

CPA introduction

Contact Us

facebook, twitter

Major Issues





Climate Change



What's On






Books, T-shirts, CDs/DVDs, Badges, Misc


Issue #1623      January 22, 2014

Insurance companies declare war on Medicare

Several thousand people took part in rallies and marches across Australia in defence of Medicare on January 4 and 11. Members of trade unions, Greens, Communist Party, and other left parties, Young Labor, and the ALP were amongst those taking part. The message to the Abbott government was loud and clear: “Hands off Medicare”.

Sydney rally. (Photo: Bernadette Smith)

The actions were in response to leaks that the National Commission of Audit is considering a number of measures that could see the destruction of Medicare and Americanisation of Australia’s health system. The outcome would be a two-tier system, managed and controlled by insurance companies, with hefty insurance premiums and fees.

The private health insurance (PHI) companies are pushing for a compulsory fee (“co-payment”) of $6 for patients visiting bulkbilling GPs. Bulkbilling is not all that is threatened. The PHI companies want to cover gap (out-of-pocket) payments for visits to GPs and other medical practitioners and other services covered by Medicare. At present the private health funds are restricted to hospital and “extras” such as optometry, physiotherapy, psychology, speech therapy, dental, etc, when not covered by Medicare.

Terry Barnes, former adviser to Tony Abbott when Health Minister in the Howard government, is again in the driving seat. In a submission to the National Commission of Audit on behalf of the Australian Centre for Health Research (ACHR), Barnes called for the $6 co-payment for GP visits, a four-year freeze on Medicare rebates for GPs (to make bulkbilling economically unsustainable) and other measures to enable the private health insurance industry to take over Medicare.

The ACHR claims to be an independent think tank. It was set up by one of the largest private health funds, Australian Unity, and its membership includes major private health funds, private hospital groups and the Pharmacy Guild of Australia. Its directors are all private sector, and include representatives of Australian Unity, BUPA, Cabrini Health, Epworth HealthCare and others with experience in funds management, insurance, financial services and pharmacy industries.

Those pushing for the co-payment claim it is to reduce the cost of payments made to doctors (Medicare rebate) and reduce the number of visits to GPs by stopping overservicing.

The accusations of overservicing are absurd – 19 out of 100,000 doctors have been found to be overservicing, hardly a reason to hit patients! The health system suffers from gross underservicing in the area of primary care for critical groups such as nursing home, housebound, palliative care and mental health patients.

The co-payment would certainly reduce the number of GP visits. The most vulnerable, the chronically ill, pensioners, families and others on low to medium incomes would be hit hardest. When short of cash they wait as long as possible before seeing a doctor, not attend for regular screening for blood pressure, diabetes, delay their pap smear or prostate examination, etc.

The resultant decrease in early intervention and routine testing would result in more and mostly avoidable hospitalisations far outweighing any savings. A $5 or $6 fee to visit the GP might save $170 million but this is peanuts compared with the likely billion or more dollars in additional expenses as a result of fewer GP visits.

The Doctors’ Reform Society (DRS), the Australian Medical Association and College of General Practitioners have all spoken out against the proposals.

Thin edge of the wedge

“These costs add up and most of my patients have difficulties already affording medication and other care. This will be another deterrent in seeking care,” Doctors Reform Society (DRS) vice president Dr Tracy Schrader said. “This won’t just stop at $6 either. These fees escalate.”

The Pharmaceutical Benefits Scheme (PBS) illustrates this process. The fee (co-payment) for prescriptions under the PBS was free for pensioners until a $2.50 co-payment was introduced in 1990. After 25 scripts, they were free in any year. Today, pensioners must pay $6 a script, and the threshold kicks in at $360 – 60 scripts.

For non-concessional card-holders, singles and families, the prescription price crept up from $2.50 in 1979 to $36.90 a standard script in 2014, with a threshold of $1,421.20 – 38 standard scripts.

These co-payments are already beyond many on low incomes and families. Their abolition would improve health outcomes, and also result in savings in hospital admissions and other services.

“Price signals do not work in health care. This is not cups of coffee or luxury items you’re dealing with here. This is people’s lives and health. People don’t need to be hit with a financial hammer when seeking care. Preventative care, screening and chronic illness management will all be impacted,” Dr Schrader said, “and down the line more illness that could have been dealt with more efficiently in the primary care setting.

“Free at the point of service is a fundamental principle of universal health care and Medicare. This will only create bureaucratic chaos and won’t save money. It will be more costs for the sick and less well-off and less tax for the wealthy,” said Dr Schrader.

“Introducing a co-payment in emergency departments would create an administrative nightmare. The practicalities are almost unthinkable. Who collects and when? Would you be sent a bill if unable to pay at the time? Would debt collectors be sent after people unable to pay? Remember back in the early ‘seventies before Medibank/Medicare, failure to pay medical bills was the main reason for imprisonment for debt in South Australia.”

“The Doctors Reform Society is shocked to hear that the Health Minister Mr Dutton sees no problem with the trialling of private health insurance covering co-payments for GPs,” said DRS president Dr Con Costa. “Co-payments will increase, the rich will pay via their insurance, taxpayers will pay more through the PHI rebate, and those 55 percent of Australians who can’t afford PHI will miss out.”

Dr Costa told the Guardian that it was not just about a co-payments. “There is a whole raft of measures designed to attack Medicare and the primary health care system in Australia.”

Sydney rally. (Photo: Bernadette Smith)

Primary care and GPs critical

Dr Costa explained that GPs are the gatekeepers, the first port of call for patients. They are free to make decisions with their patients for treatment, referral for tests or to specialists, hospitalisation, etc. It is a highly cost efficient system, based on a high level of trust and the needs of the patient foremost. Bulkbilling ensures GPs are universally accessible and holds down the fees charged by non-bulkbilling doctors.

Patients attending non-bulkbilling GPs can be out of pocket $40 to $80 or more. When it comes to specialists, charging hundreds of dollars a visit, the gap can run into the hundreds. At present the private health insurance companies are not allowed to provide gap insurance for medical services.

“Insurance companies are behind the push to put the squeeze on primary care and bulkbilling so they can enter the primary care market. It is insurance companies versus GPs and patients,” Dr Costa warned.

They are lobbying a very friendly Coalition to let them in. Once the door is open to gap insurance for GP, specialist and other medical services, the fees will rocket, especially if bulkbilling has been destroyed.

But that is not all the PHI and private hospitals are after. “They want to replace our system with the US model of managed health care with insurance companies running the system. They will decide which GP you see, which emergency department you can go to. Like the workers’ compensation system, the GP will have to get permission to do anything,” Dr Costa explained.

“It is an attack on the independence and liberty of GPs, an attack on patients. Australians have always chosen who they would see as their doctor.”

The US managed health system eats up 18 percent of GDP, and still leaves millions without cover. Even with cover, people are forced to mortgage their homes for surgery or just go without and suffer the consequences. Surgery and other treatments require the authorisation of insurance company bean counters who have their eyes on profits, not the interests of patients.

The OECD recognises Australia as having one of the best and most cost efficient health systems amongst the industrialised nations. Our life expectancy, low rate of still births and other statistics confirm the quality of care. This is at stake.

That is not to say that there are not areas where it could be improved. As mentioned above, there are huge gaps in servicing to specific groups in the community.

Lack of funding is not the real issue. The agenda is political and ideological: public versus private, GPs and their patients versus insurance companies. Does Australia want a two-tier system based on wealth or universal health care based on need?

There is no shortage of money. The question is how it is raised and distributed. The government could take a tougher stand in negotiations with the big pharmaceutical companies and save an estimated $1.2 billion. Why for example, is the government paying $19.32 for a box of 30, 40 milligram atorvastatin tablets when in Britain the wholesale price is $2.84 and in New Zealand $2.01?

The private health insurance rebate of between 30 and 40 percent (depending on age) should be abolished. It is costing close to $6 billion and will rise again with the latest whopping increases in PHI premiums. It is nothing short of corporate welfare, money transferred from the public hospital system, to prop up an otherwise unsustainable and inefficient private hospital system and line the coffers of the insurance industry.

Instead of cutting corporate taxes, the government should be increasing them and imposing higher rates on super profits. Cuts could be made to Australia’s bloated military budget without harming our security.

The Communist Party of Australia believes Medicare and other public health services should be funded through central revenue. The principles of free at-point-of-delivery (no fees), universal access, public provision, quality care and independence of GPs and other providers are non-negotiable.

Health Minister Dutton has failed to rule out the co-payment or entry of private health insurance into primary health care. In practice, the Coalition has never supported Medicare. The Coalition and its mates will have control of both Houses of Parliament from July. It is imperative that the campaign to defeat the insurance companies is built as quickly and broadly as possible.

Next article – Editorial – Abbott’s culture war over national curriculum

Back to index page

Go to What's On Go to Shop at CPA Go to Australian Marxist Review Go to Join the CPA Go to Subscribe to the Guardian Go to the CPA Maritime Branch website Go to the Resources section of our web site Go to the PDF of the Hot Earth booklet go to the World Federation of Trade Unions web site go to the Solidnet  web site Go to Find out more about the CPA