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Issue #1684      May 13, 2015


Privatisation agenda continues

Whenever the Abbott government talks about delivering a “fairer”, “simpler” or “better” service, the alarm bells should be ringing. No more so than its latest moves to deliver a “healthier Medicare” and “better health outcomes” for patients as “efficiently as possible”. Health Minister Sussan Ley has launched three reviews to deliver a blueprint to provide the basis for the replacement of Medicare by a privatised health system run along the lines of the failed American model. At the same time co-payments will resurface through the backdoor. BUPA and Medibank Private, the largest funds, are driving the government’s agenda.

Leaner and meaner

The first Taskforce will review the Medical Benefits Schedule (MBS) which lists the services (GP, specialist, pathology, radiology, etc) eligible for Medicare rebates and a scheduled fee for each service. The rebate is a certain percentage of this fee.

The MBS lists more than 5,500 services, “not all of which reflect contemporary best clinical practice,” Ley said. The MBS Taskforce “will come up with savings when items come off the MBS or are changed, but there are also new items to be added,” she says. It sounds a bit like a balancing act with neutral funding outcomes.

No one can object to a review and the removal of outdated items, changes to rebates to meet current practices or the addition of new items. But this is not what the Abbott government really has in mind. The minister’s claims about a “healthier Medicare” are political spin for a cost-cutting exercise.

The 2014-15 budget papers reveal government plans to reduce Medicare rebates by $3.5 billion over the three years 2015-16 to 2017-18 (following the review). (NB: The 2015-16 budget was not available at time of writing.)

At the same time the government is setting up a Primary Health Care Advisory Group to investigate “better care” for people with complex and chronic health conditions, such as mental health and diabetes, and the connections between primary health care and hospitals.

But with a government hell-bent on slashing social security and health spending by billions of dollars, the question is how they intend to fit this and other changes into its cost-cutting exercise.

Restructure of system

The third taskforce is to “develop clearer Medicare compliance rules and benchmarks”. This is targeted at doctors who “do not do the right thing,” Ley said.

There is some rorting of the system, especially by some highly paid specialists. But is this what the government intends to address? The Minister provides no details. Is the government thinking of a casemix model along the lines used for public hospital funding; a set amount per medical condition or service, not time-based?

Clearly, the Minister is thinking of a radical overhaul: “Medicare in its current form is sluggish, bloated and at high risk of long-term chronic problems and continuing to patch it up with bandaids won’t fix it.” Not a shred of evidence is provided to back up her claims.

Ley claims Medicare’s structure no longer efficiently supports patients and practitioners to manage chronic conditions or complex interactions between primary and acute care, in particular the connection between primary health care and hospital care. So what sort of structures does the government have in mind?

The former Health Minister Peter Dutton was more open about the government’s agenda: “I am encouraged to see that health insurers are looking at innovative options in the area of primary health care,” he said. “They have been excluded from the primary care space for historical reasons, and if insurers are prepared to work collaboratively with doctors and patients, then we should welcome that development.”

Abbott’s National Commission of Audit, headed by big business representative Bruce Shepherd, did not mince words: “More deregulated and competitive markets, with appropriate safeguards, have the greatest potential to improve the sector’s competitiveness and productivity,” – spin for privatisation of Medicare with private, for-profit, health insurance funds managing it.

“Also, in a system like ours, the community must become more aware of the real costs of health care,” – spin for co-payment or abolition and bulkbilling.

The aim is to prune Medicare back to the minimum of “basic” services, hand over its management to private health insurance funds to manage. Patients would be able to take out extra insurance to cover items not included and to cover the gap between the cost of the service and the privatised rebate.

Welcome to the American system! It is twice as expensive, poor quality and tens of millions of Americans receive no health care.


The $5 co-payment has been removed from the table. The government does not need it. A four-year freeze on Medicare benefits is set to all but kill off bulkbilling.

The freeze will slowly strangle bulkbilling as doctors’ surgeries face rising costs with no increase in rebate to meet them. They will be forced to charge fees or go out of business. Some have already abandoned bulkbilling.

Commenting on the government’s rebate freeze, the Doctors’ Reform Society* (DRS) noted: “The commonest private charge to see a GP starts from $60 and goes upwards to the AMA recommended fee of $75, or more. Based on these figures alone, many Australians would face a co-payment of $25 if their GP stops bulk billing, or up to $40 or more to see a GP. And thus a lot more than the $5 co-payment proposal.”

The National Health Performance Authority’s report “Healthy Communities: Frequent GP attenders and their use of health services in 2012–13” (released on March 19), states: “More than one-third of Australians (35.3%) went to a GP six or more times in 2012–13, and those who went most often tended to be older and less wealthy, were more likely to have several long-term health conditions …”

This confirms that consistent with its other cuts, the Abbott government’s plans for healthcare will hit the poorest and most in need the hardest.

The Audit Commission proposed phasing in the government’s Medicare overhaul in several stages. Ley appears to be setting the stage for the first wave of changes. Reading between the lines of her references to “fairness”, “sustainability” and the government’s constant call for “price signals”, there is another aspect to the overhaul.

That is means testing, something that the Audit Commission was very keen on.

A better Medicare

Medicare spending has not spun out of control. In fact it has been extremely stable as a percentage of Gross Domestic Product. Universal access to bulkbilling and high quality services provided by the public sector are central to Medicare.

There are a range of measures that could strengthen Medicare, provide universal access to bulkbilling and relieve the pressure on public hospitals.

These should be centred around primary and community care. GPs are the first port of call.

The first step would be to fund nurses to work with GPs who could help doctors with immunisations, baby health clinics, change dressings, give better support and care for the mentally ill – a range of things that do not require a GP. They could also assist doctors with house calls and visiting nursing homes.

Salaried doctors could be placed in nursing homes to take care of the elderly, sick residents which would substantially reduce the number going to hospital when treatment by a doctor was all they required.

The annual $6 billion plus of taxpayers’ money that subsidises the private health insurance funds (the PHI 30%-40% rebate) should be redirected to public hospitals.

Special subsidies and incentives are required to ensure regional centres have the medical centres and hospitals they require.

Such measures would result in a much better health system and would save a lot of money by taking pressure off public hospitals. This is what true efficiency and better health care is all about – not the continuous cuts to Medicare by successive governments from both major parties.

Medicare belongs to the people. It is our health system.

The task forces are expected to report back by late 2015.

*The Doctors’ Reform Society was formed in 1973 to support a proposal for a publicly-funded universal health insurance system.

Next article – EDITORIAL – Budget 2015 – Undermining principles

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