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The real agenda: Privatisation and safety nets, not co-payments

Today Associate Professor Brian Owler, President of the AMA, made the news with his speech at the National Press Club expressing the concerns that the AMA holds regarding the federal budget and the current vision of future health services.

Dr Tim Woodruff, Vice President of the Doctors Reform Society, has a somewhat different take on the Government’s policy direction. In this Croakey long read, Tim looks to history to find out whether the GP co-payment is really the end game, or just the beginning of a larger agenda.

Tim Woodruff writes:

Much has been written about the proposed co-payments for health care. It has surprised many that the Federal Government has pushed so hard so fast to attack bulk billing and to increase user pays funding of health services. This has led to a superficial unity of resistance to the changes. But these proposals need to be seen in both a historical perspective and alongside the other less publicised proposals and suggestions from the Government.

Just before the 2001 election John Howard commented on the introduction of Medibank which was the Whitlam version of Medicare introduced in 1974, reintroduced as Medicare by the Hawke Government in 1984.

“That was the cardinal mistake that we made with our health system in the 1970s when Medibank was brought in. …………..in the process we destroyed the honorary system and we dismantled a perfectly functioning health system…”

Under his guidance and later on with Tony Abbott’s help as Health Minister, two major changes occurred in the health system. First, the private health insurance (PHI) and private health system were promoted and the Federal share of funding for public hospitals fell from 50% to 38%, leaving the States to struggle and patients to wait. This resulted in a marked expansion in the pre-existing mildly two tiered access to elective surgery.

The second step was to encourage the demise of GP bulk billing by letting the value of the rebate decline. The rate dropped from 80% to 68%. The Government smelt success and then danger. The backlash from marginal electorates threatened defeat at the 2004 election. A mad policy scramble and backflip lead to a 20% increase in the rebate and the addition of bulk billing incentives, such that GP Medicare income increased by at least $40,000 per annum, enough to encourage GPs to bulk bill more patients.

The attack on public hospitals and promotion of private hospital care had worked. The attack on bulk billing had failed. Thirteen years in office. Two steps forward and one step back in the battle to destroy Medicare as we know it.

With the election of the Abbott Government the battle continues. The absence of any good economic or health outcome arguments for the proposals indicate that the agenda is purely ideological. It would be a mistake however, to believe that the Prime Minister did not expect a significant backlash. He knows from his previous experience that there is a problem. Australians like Medicare and bulk billing.

The solution to the problem is a gradual re-education process across multiple electoral cycles as necessary. The aim is to change perceptions, to remove the understanding that Medicare is public health insurance with premiums according to means and benefits according to need. This needs to be replaced by an understanding that Medicare is a safety net only, and that those who can afford to pay should do so, usually through private health insurance.

This process of re-education started under the Howard Government. There is now a widespread appreciation in the community that if one needs elective surgery, it’s best to have private insurance. Increasingly, the same applies to a variety of non elective hospital based interventions such as heart procedures, cancer therapy, and midwifery. In the last years of the Howard Government, Joe Hockey changed the name of the bureaucracy running our public health insurance from the Health Insurance Commission to Medicare Australia to limit anyone thinking that they already had health insurance i.e. public insurance.

Building on those successes, the Abbott Government has proposed an end to bulk billing and a 15% increase in prescription medicine prices. Whilst these changes may fail to pass the Senate as proposed, the opposition to the proposals is far from united. The Australian Medical Association is in negotiation with the Government and it is important to understand that its position is not that it disagrees with co-payments, but rather that it wants doctors to be able to decide how big the copayment should be and who are the deserving poor requiring cost reductions. It simply wants doctors to maintain control and continue to play God. It claims as justification the primacy of the doctor patient relationship. It fails to explain however, why such a relationship, important as it is to health, must also involve a financial component controlled by the doctor.

The Royal Australian College of General Practitioners (RACGP) has a similar view as stated:

“However, the RACGP recognises many patients are in a position to make a contribution to the cost of their healthcare and therefore supports GPs’ freedom to determine a fair and equitable private fee for their services.

This approach leaves patients at the mercy of doctors’ variable knowledge of patients’ financial circumstances and the variable attitudes and beliefs of doctors as to who is a member of ‘the deserving poor’.

The Labor Opposition has rejected the proposals but it is important to recognise how conflicted, and therefore how political rather than ideological this rejection is. In the 13 years of the Hawke/ Keating Governments the PBS copayment doubled in real terms and a GP copayment was introduced briefly by Hawke in 1993.

During the Rudd/ Gillard Governments no attempt was made to reduce PBS copayments despite the existence of similar data to that which has been displayed in the last 6 months indicating that copayments reduce use, particularly amongst the most disadvantaged. In addition, the 2013 freezing of the GP rebate by the Gillard Government indicates that economic and political factors are more important than any concern about the effect such changes might have on patient access.

What this budget has done however, irrespective of whether the copayment proposals come into force, is to open the debate on user pays, on the concept of ‘pay if one can afford’, and has revealed considerable acceptance of that principle which the AMA, the RACGP, and the ALP support to varying extents.

For the Government, this is success. This is despite the fact that such an approach conveniently ignores the reality that patients who are in a position to contribute more have already done so through the paying of their public health insurance premiums i.e. through taxes; thus they pay twice.

The complexity of the GP co-payment proposals may well be as big a barrier to implementation as the general opposition the proposals have evoked and the presence of an uncertain Senate. This can still be a win for the Government in their battle to re-educate the public about how our health system should work.

The place of private health insurance in the Government’s agenda is crucial. The next step in this re-education process is to convince people that PHI should be a part of primary or community based health care. Legislation exists which prevents PHI coverage of co-payments for visits to doctors.

But an ongoing trial by Medibank Private funds administrative costs of a general practice and offers improved access for its members. Thus, it avoids the spirit of the legislation clearly designed to ensure that the poor have the same level of access as the rich.

The Health Minister Mr Dutton has indicated interest in the trial. Indeed his position on PHI involvement in primary health care was clearly articulated at the National Press Club post budget:

‘I believe very strongly that their (PHI) money is wisely invested earlier in the process, invested earlier in the process so that they can help me address some of my lifestyle choices which might prevent me from becoming diabetic, or from suffering from heart disease otherwise’.

The obvious consequence of such an approach is to two tier access to primary health care. The lifestyle choices of the uninsured, often much more limited anyway than the rich, can be ignored. That is part of the plan.

The PHI industry is waiting in the wings, convinced that it is the solution to quality care, happily ignoring the reality that whatever it does, it only does for those who can afford PHI.

The expansion of co-payments also helps to highlight increased calls by those who can afford PHI to allow coverage of co-payments. Sufficient public support for these changes is essential and will not be immediate but it can develop slowly, over more than one political election cycle.

The next step is to further erode the capacity of the public hospital system to manage demand. This is at the heart of the decision to axe the National Health Reform Agreement, reneging on $1.8 billion funding over 4 years and abandonment of activity based funding. Over several decades these changes would have seen a gradual increase in the Federal Government’s percentage of public hospital funding. But if the public perceives public hospitals are struggling more, the appeal of private hospitals and PHI increases.

The re-education process continues.

Medibank (the original Medicare) was introduced in 1974 as a system of funding health care through taxes. Prime Minister Malcolm Fraser spent the next 9 years trying to replace it. It was a very messy and complicated task and contributed to the Hawke victory of 1983. Medicare was introduced and has had 30 years to become embedded in the Australian psyche. But the concerted attacks on it from the Coalition have had an impact, aided to some extent by an internally conflicted Labor Party.

The concern for those who hope for an equitable health system is not the success or failure of the copayment proposals; it is the step by step erosion of the various parts of the health system and the gradual move to increasing reliance on user pays and safety nets.

In the neoliberal vision of our health system, the poor will have a safety net, the quality of which will depend upon the vagaries of changing political and economic factors. Low income workers will struggle with co-payments and long waiting times. Middle income earners will enjoy the benefits of PHI unless severe or chronic illness reduces their capacity to pay and they consider mortgages to fund adequate care.

The rich will have whatever they want, except the opportunity to live in a society which values all its citizens.

Dr Woodruff is currently the Vice President of the Doctors Reform Society, an organisation of doctors and medical students whose aim is to support health care reforms which ensure justice, equity and quality care for all regardless of social or economic status.  It formed in 1974 to support the introduction of the original universal health scheme (Medibank). He is a specialist physician working in private rheumatology practice in Melbourne. He joined the Doctors Reform Society in 1997 and served as President from 2001 to 2010. He has been a strong advocate for addressing the inequities in the health system particularly at a structural and system level.

 

 

 

 

 

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Croakey Conference News Service 2013 – 2019
2013 conferences
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Closing the Credibility Gap 2013
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Health Workforce Australia 2013
International Health Literacy Network Conference 2013
NACCHO Summit 2013
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2014 conferences
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AIDA Conference 2014
Congress Lowitja 2014
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National Suicide Prevention Conference 2014
Racism and children/youth health symposium 2014
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Population Health Congress 2015
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Australian Palliative Care Conference
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