Clearly the Federal Government intends to sell off Medibank Private and allow private funds to be taken over by for-profit corporations. Medibank Private would represent an important acquisition for any new player in the health system, giving access to 50% of privately insured patients in Australia and around 20% of patients overall. Deregulation means that future buyers could include major Australian institutions such as the National Bank or the AMP Society (not just Mayne Nickless or Columbia US).

Managed Care, at its simplest, is merely an accountancy tool but as such it has severe implications for the medical workforce.

Fundamental to DRS philosophy are two important points. Firstly, private "for profit" health care in general (and US style managed care as a subgroup of it) is intrinsically inequitable and inefficient compared with a publicly funded system. Secondly, there is a need in Australia for health care planning according to need, both local and nationally. Privately run systems depend on secrecy to foster competition. Secrecy prevents health care planning and excludes democratic community involvement in health care provision.

Payment for doctors employed by corporate owned medical centres would normally be at the rate of 30-35% of the gross income. Referral to the corporation owned specialist centres and private hospitals, pathology, radiology etc. would be expected (so called "vertical integration"). The corporation would regularly monitor your performance. Obviously, if you're not profitable for the corporation you would have to go.

Approved lists of GPs, specialists and other services would become the norm. If you're not on the list you won't get any work. No room for any individualism here and any blemish on your record could label you a "trouble maker". Naturally, you will have to bill according to the corporation's fee schedule and fees will go down (although they will go up at first to attract players into the system). You will have to be available 7 days a week and provide a multi-disciplinary service on site with extended hours.

The corporation would expect you to perform minor surgery and many routine procedures (a specialist would be considered far too expensive) and this could extend to procedures such as colonoscopy, gastroscopy, treatment of routine skin disorders, stress testing and lung function tests.

Sounds good? Reskilling at last! But to get an x-ray, blood pathology or expensive medications, you would need an approval from head office. And you would need a pretty strong argument if it's expensive. A bastardised version of "evidence based outcomes".

Under corporate style Managed Care, our health system will be concerned with tertiary/hospital, high-tech care and less with community based, preventive medicine. This will have a negative impact on health outcomes (GPs know that most gains lie in prevention or keeping people well).

It won't only be doctors and nurses that will be alienated in such a system. Patient satisfaction will decrease as litigation increases. The anti-science movement (more recently seen in the anti-immunisation lobby) feeds on such discontent, attacking the science and the technology rather than its misapplication in the hands of the for-profit corporations.

However, the real threat is to the doctor/patient relationship. Doctors' decisions will increasingly be based on financial consideration rather than medical need. This means that income rather than illness will determine treatment and that is unacceptable.

How can we stop US style Managed Care?

Ultimately there are only two solutions. Big Brother or Big Business. Big Brother has failings, but despite this, can be influenced.

Big Business is a much tougher task master. It demands profit. Board members are obliged by law to serve the profit seeking of the corporation. There are severe penalties for board members whose decisions are not based solely on the corporate interest.

Federal Health Minister Wooldridge is on record as welcoming the corporatisation of Australia's health system. As a doctor, he should realise the implications.

This Government continues to starve the public hospital system while giving a $6 million dollar shot in the arm to the private health insurance funds, a move that was described by the Liberal Premier Mr Kennett, as 'money down the drain' when the money was quickly swallowed up by premium increases.

Managed Care is an accountancy mechanism which greatly compromises the doctor/nurse care of the patient. It emerged in the United States because the privatised health business threatened the very stability of their economic system. No economy can withstand 14.5% of GDP to be spent on health with costs continuing to grow out of control.

US style health care is not necessary nor is it appropriate for Australia. However, there is opportunity for large profits for the corporations. Mayne Nickless makes only 7% profit from its trucking business but 25% from its health business. In the US, profits are 30% and executives are paid huge salaries by the shareholders. And our Finance Department could quietly reduce its outlays on health.

GPs have a chance to make a difference. That's why the DRS wants to work with the AMA, the nurses and consumer organisations as a coalition opposed to US style Managed Care.

Dr Con Costa

National President of the Doctors Reform Society