May 17th 2003

  Buy Issue 2657

Articles from this issue:

COVER STORY: Ethanol - behind the disinformation

EDITORIAL: New situations demand new policies

CANBERRA OBSERVED: Government sets itself a trap on Medicare

Will South Australia Upper House hold the line on life issues?

STRAWS IN THE WIND: We get the rights / Rap festival / Bogus leftists, fairy luddites

QUEENSLAND: Beattie challenges Nationals over sugar deregulation

Iraq fallout may end multilateral trade deals

HEALTH: Stopping feeding and hydration is true euthanasia

EDUCATION: Surviving the latest classroom fads

LIFESTYLE: SARS, AIDS and public policy

FAMILY: Bush and Howard diverge on life and family

BOOK REVIEW: The World We're In, by Will Hutton

BOOK REVIEW: Growth Fetish, by Clive Hamilton

ARTS: Melbourne Comedy Festival: A comedy of political errors?

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Government sets itself a trap on Medicare

by News Weekly

News Weekly, May 17, 2003
Health policy has been the Achilles heel of the Federal Coalition for the past 20 years or more and the Howard Government's latest moves to create a "fairer" and "more convenient" Medicare appear unlikely to break the pattern.

The Howard Government seems determined to transform the universal Medicare system brought in by successive Labor Governments by gradually forcing the great mass of taxpayers to pay more for their health, and by providing a free service which will be available only to the needy.


That there are now seven million "needy" in Australia - or up to seven million non-wage earners, pensioners, concession card holders and the like - is in itself an indictment. It is an admission that the economic boom of the past decade is, for a large section of the community, a mirage, and that the Howard Government has not done enough on the employment front.

Obviously not all seven million are poor, and some are actually quite wealthy, but the bulk of these consist of pensioners, single mothers, people on disability payments and the unemployed.

It is the starkest statistic around to show that there is in fact a vast underclass of unemployed and underemployed in Australia.

However, helping Australia's needy is not really the basis of the Howard Government's agenda.

Medicare's popularity has always irked the Liberal Party and John Howard in particular had vowed to abolish bulk billing when Opposition Leader as far back as 1986.

Despite statements that the Government is committed to Medicare, doubts remain about its ultimate intentions.

There are several problems attached to the proposed new system, not least of which is the likely political opposition which will block the changes in the Senate.

Labor and the Democrats will join forces to vote down the proposals in the Senate, and Simon Crean would love nothing better than to fight an election on Medicare.

However, putting this large obstacle aside, the new Medicare is also likely ultimately to create two systems and two classes of patients in Australia. On the one hand there will be the seven million pensioners and poor people who will receive guaranteed "free" doctors' consultations, but who will ultimately receive inferior patient care.

On the other hand, there will be the middle class taxpayers who will subsidise the lot through the Pay-As-You-Earn Tax system, the GST and company taxes, and who will also have to pay more and more for their own health care costs.

It could be argued that this may actually fit with old-fashioned Liberal philosophies of individualism, user-pays and small government, but a nation's health system requires a much wider vision and broader objectives.

To name one obvious example, primary health care in the form of regular doctor's visits and good social health programs (all paid for by the Government) actually save the Government money in long-term health costs such as for hospitals and fewer expensive operations.

No sensible modern government, not even the United States, where health care is run on market-based philosophy and on an individual's ability to pay, wants to opt out of universal health care completely.

Shore up

The Howard Government's aim with its new Medicare, with minimal cost to its overall health budget, is to shore up the declining number of people who are able to bulk bill and to guarantee that pensioners and concession card holders have access to free doctors' services.

It also aims to streamline the system - a long overdue reform - by cutting out the extra trip to Medicare offices for people to claim their rebate. This is the one popular measure in the package, but for reasons listed below is unlikely to be universally implemented.

So far, every doctors group, from the left (Doctors Reform Society) to the right (Australian Medical Association) have come out against the plans. This in itself is no great surprise as they have opposed every major change to the health system, no matter which government is in power.

Yet doctors make the valid point that the Government's proposals are voluntary and the incentives so far provided to entice them into the new "HIC Online" are so meagre many will simply choose not to take it up. At the moment, only a handful of doctors' surgeries are hooked up to the Health Insurance Commission, and the costs of establishing computer links, training staff and maintaining the system (in effect replacing existing Medicare Offices) are not small.

The Government has offered a $750 on-off cash incentive to lure doctors into the system, but this goes nowhere near to paying for it. Many doctors will simply refuse to bulk bill at all, and cater only for full fee-paying patients.

Under the Howard Government system, they have every right to do this. This means that it is still possible that bulk billing rates will continue to slide and that concession cardholders will be either paying full fees, avoiding the doctors or going to the overcrowded and overstretched hospital emergency departments.

Doctors also correctly argue that quite a few concession card holders are not actually poor - many earning $80,000 a year or more. In other words the system is inequitable and very tough on wage earners and families on around $30-50,000 a year.

And if doctors are encouraged, forced or coerced into bulk billing all seven million of Australia's "poor" they will have to find the money to pay for them from the ordinary patients.

In other words doctors fees are likely to rise and rise quickly once these reforms are in place. The rebate will become a fraction of the overall cost of a visit to the doctor.

Other doctors will inevitably give poor and perfunctory service to the poor patients, and thorough service to the full-paying patients.

Finally, health insurance funds are not going to touch funding the gap between doctor's scheduled fee and the medicare rebate as the government hopes they will do.

The gap is gaping wide in hospital care insurance, and will be even wider with doctors' fees, premiums would be exorbitant and would suit those who go to the doctors most often. The sickest in the community are those the health funds want least to entice onto their books.

More and more flaws will become obvious in the Government's new system which has zero chance of being up and running in November as promised. The Coalition has set itself a trap, probably not a killer trap, but a politically dangerous one indeed.

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