Politics in the Pub - Private Health Insurance and Medicare

Dr Con Costa

 

 

Cutbacks to health and Medicare are just one of the many attacks on the people by the Howard Government. But it is a very sensitive area and, in my experience, people feel very strongly about the attacks on Medicare and the public health system.

 

Before Howard was elected he promised that “Medicare stays”. It was an unequivocal statement implying to the voters that Medicare and bulk-billing would stay. He promised this to the Australian people. In fact, the Liberal Party could not have won a Federal election unless they supported Medicare.

 

Well, Howard lied. He totally deceived the public. Since he has been in government the whole emphasis on health funding has switched to the private health system and the main funding initiative has been the transfer of $3.7 billion dollars of taxpayer’s money to the private health insurance industry.

 

I know people talk about the private health insurance rebate (PHI Rebate) as being $2.3 billion but Leonie Segal from the Health Economics Unit at Monash University has recently analysed the true cost of the PHI Rebate and, adding up all the on costs including money foregone from the Medicare levy from people taking up private health insurance, it comes to $3.7 billion!! Every year!!

 

So Howard and Costello are diverting $3.7 billion of taxpayer’s money annually from Medicare and from public hospitals and bulk-billing and it is going into the pockets of the private health insurance industry. Forty percent of this large amount of money goes on ancillaries - not hospital care – mainly subsidizing the wealthy.

 

Private affluence and public squalor

 

The aim is to introduce a US-style health system to this country - creating what G K Gailbraith, the famous US economist, described as a system of private affluence and public squalor. It is a health system where, if you have money you get the best and if you are poor or without insurance, you go without and you die.

 

I think an important point we need to be making to the Australian people is that it is not just Medicare that is being got rid of. It is the uniquely Australian form of health care that this Conservative government is putting to the sword by cutting off its funding.

 

Australia’s system is built on the British model with universal quality public hospital access for all, including free A&E services.  Also GP’s act as the providers of primary care and gate-keepers to specialist and tertiary care, medicines and investigations.  They are free to treat their patients with little, if any, government or bureaucrat interference.

 

Tried, tested and cost effective model

 

This is a tried and tested model and has always worked as a cost effective model. People do not go directly to expensive specialist care. They go first to their GP who, hopefully keeps them healthy and keeps them away from expensive care unless it is necessary.

 

This whole system is under threat because if Medicare goes we won’t continue with that British model. It will be the US-model and will be run by insurance companies. It will be “Managed Care” and patients and doctors will lose a lot of the freedoms that we now take for granted.

 

At the moment you are free to walk into any public casualty centre if you feel sick - you are free to do it.

 

If you see your doctor, he or she is free to treat you according to their professional judgement -  without needing approval from the government or an insurance company. There is no third party in the consultation room being a part of the decisions.

 

These basic freedoms do not exist in the US. Even if you can afford top cover private health insurance you still need to ring your insurer if you feel sick in the middle of the night and request permission to go to casualty.

 

Some bureaucrat at the end of the line may say, “Do you really need to? What about waiting until Monday and seeing your GP as it will be a lot cheaper for us.”  Or they might OK you to go to an Emergency Room but direct you to one of the hospitals they own in the next town.

 

So you are going to lose a lot of freedoms that we have taken for granted in the Australian system even if you are one of the lucky 60 percent that can afford private health insurance.

 

If you cannot afford private health insurance you just won’t get health care.  Or you will have to go to a relative to beg for the money or sell your house.  Many will not recall that, prior to Medibank being introduced [by the Whitlam Government], the commonest cause for going to jail for non-criminal causes in South Australia was for failure to pay medical bills.

 

So what is under threat here is not just Medicare. What is under threat is “ the Australian way” and Australia’s form of health care. Howard’s policies are all about shoe horning into Australia a US-style of health - because we know that Howard is a pro-US model person. The war on Iraq was just one example of his strong pro-US position.

 

He has an extreme position on these issues and a strong belief in the free market and that people should individually bear the risk and pay corporations for their health care and take out private health insurance.

 

But Howard’s position does not make economic or public health sense. Imagine trying to stop a SARS epidemic when more than 30 percent of the people do not have private health insurance - cannot access hospital or other health care in a fully privatised system.

 

How do we keep immunisation levels in this country up around 70% percent plus in the community and prevent outbreaks of communicable illness when more than one third will not be able to afford health care under a private system?”

 

Some will also ask, “How can Australia afford a health system that will increase in cost from 8.5% GDP to around 14% GDP?

 

Consider that under Medicare three per cent of the dollar is spent on administration and 97 per cent on health care. In a private system 14 per cent goes on administrative costs - to check all those claims - and another 25 per cent goes to the shareholders, leaving only around 60 per cent for health care.

 

Medicare and bulk billing on the rack

 

As a result of transferring $3.7 billion of taxpayers money annually to the private health insurance industry, we are seeing drastic effects on the public health system and bulk billing. People are suffering badly, suffering unnecessarily and, inevitably some die through lack of care or because of perfunctory care from an alienated or “overly busy” doctor.

 

Queue jumping has become rampant and is being encouraged – principally by the governments PHI rebate.

People are getting turnstile medicine when they go to the bulk billing GP - if they can find one that still bulk bills! 

 

I have told the story before of a young woman who turned up at our medical practice on a Monday feeling nauseous. She said she had been to a 24 hour Medical Centre the day before and had waited two hours before getting in to see a doctor. He gave her some anti-nausea pills but she didn’t get better. She came to me and of course the first question asked was, did he do a pregnancy test? The answer, “No”. The pregnancy test was positive and we took a different approach to her nausea symptoms.

 

Doctors can maintain their incomes by pushing patients through quicker and sicker under Howard’s policies – and it is the patient that loses.

 

At nursing homes patients don’t get visited – or not regularly enough – because those doctors still bulk billing are rushed off their feet in their Medical clinics. Elderly people on multiple drugs who are really sick and have not been visited for a long time either die quicker or they yo-yo back and forwards into and out of our public hospitals - at $1000 a bed day.

Their GP won’t make a $30 nursing home visit because the government won’t increase the rebate by 10 per cent. So to save $6 we are paying $2000 to $3000 for three days in a public hospital!

 

This is what Howard is doing. He is bleeding the system dry and the States are now starting to scream because all the cost is ending up on the State public hospitals - which are, incidentally, about $1 billion under-funded. So patients are sent out of hospital quicker and sicker and the whole process goes round and round.

 

The public system is being squeezed financially while the Government gives $3.7 billion annually to the private health insurance industry.

 

It is the people who are paying with their health and with their lives and this is what Howard has done for the last four years and we should be really screaming about it because it is inhumane.

We are now down to the sort of health system one would expect in Africa or poorer parts of Asia - where 200 people line up in the morning to see a village health doctor.

 

Most bulk billing doctors still have a professional and conscientious attitude and are trying hard. But they are going to the wall. They are just getting fed up and are putting up a sign “from July 1 we will charge $45”. They will see half the number of patients but earn the same money.  Again it is the patient that loses.

 

Howard has achieved this through his private health insurance rebate. At the last budget Costello proudly said that the Liberals are spending more on health than any other previous government. He justified this claim by including the $3.7 billion insurance rebate in his figures.

 

Costello also said on TV on Budget night that the next thing that has to go is the Pharmaceutical Benefit Scheme (PBS), “if not this year or next year, it is going”. Scrapping of the PBS will result in the immediate doubling in the price of a medical prescription from $23 to $47 - and eventually to $70, $80, $120 a script. And a lot of my chronic heart disease or diabetes patients are on five or six scripts a month!

 

In the United States where there is no PBS it costs $1000 a month for your tablets if you are a diabetic or chronic heart disease patient. Patients in the US often ask the doctor for 4 times the normal strength of their tablets so they can break their tablets in quarter in order to make them last for 4 months instead of the one.

 

At this very moment the free trade agreement between Australia and the US is in an advanced stage. The Pharmaceutical Benefit Scheme has been one of the key items up for negotiation - and this is all happening in secret.

 

How are the sick going to afford their drugs? This is major concern  we are talking about. No wonder Howard is having trouble selling his US style vision of health to the public.  And he knows that Medicare is popular even with Liberal voters!

 

An alternative way

 

The Doctors’ Reform Society (DRS) and the National Medicare Alliance have come up with an alternative way to spend Howard’s annual $3.7 billion gift of taxpayers money to the private health insurance companies.

 

It is essential to end the 30% PHI REBATE rip-off because, if we don’t, Medicare cannot be properly funded.

 

1)  We suggest putting $420 million to increase the rebate to GP’s by, say $5, to encourage continuation of bulk-billing. (However many GPs will only return to bulk-billing when a raised BB rebate is properly and permanently, indexed for inflation).

 

2) And then, rather than give all the money to the doctors let’s help them, and their patients, directly by putting another $180 million to pay for nurses to work with our GPs in general practice.

 

The girl who waited two hours in a medical centre because of nausea could have been seen by the nurse while she was waiting and could have had the pregnancy test done and been better prepared to see a busy doctor. Also mothers with asthmatic kids waiting for hours could be shown how to use the nebulisers or receive advice on asthma or diabetics can be given advice on diet and the home management of their condition.

 

GPs working with practice nurses are commonplace in country areas which are declared “areas of need” and receive government subsidies.

 

We are saying, lets make bulk-billing GPs an “area of need”.

(Cutbacks to Medicare have included reduced provider numbers for doctors to work in general practice. There are no locums or new doctors willing to joining bulk billing medical practices. Bulk billing doctors are overworked and they can’t get any help because there are no doctors to help them.)

 

3) Increase public hospital spending by $710 million - because we know they are hugely under-funded and the figure is thought to be really  around $1 billion.

 

4)  We also call for $750 million for a proper National Dental Scheme.

 

(The meanest act of the Howard Government was to get rid of the $100 million (and very minimal) dental scheme where very poor and elderly people could get their teeth fixed so they can eat.  Instead the $3.7 billion PHI rebate was brought in – thus ensuring more tax dollars are spent on subsidizing dental care for the rich than on lower income earners.)

 

We’re saying don’t just bring back the minimal $100 million scheme but build a $750 million scheme to give a proper dental care for all those Australians who really need it.

 

5)  Also the PBS needs fixing as costs are going up – new prescriptions now hit the market at around $120 per month. The pharmaceutical companies are spending $750 million dollars every year to promote their products through direct marketing to the doctors. They are spending $30,000 per year on each and every doctor in Australia!!.

 

In contrast our government spends $5 million dollars on independent prescriber education schemes – and even this small intervention saves 3 times what it spends - $15 million dollars.   We are calling for the Government to spend $150 million to fund independent drug detailers – (and even then we would be outspent five to one by the drug companies.)

 

6)  $120 million dollars would give a 10 per cent increase for Aboriginal health which would be money well spent on an area where health outcomes are still shockingly bad.

 

The total of this package adds up to less than $2.4 billion annually.  Thus we still have more than $1.3 billion dollars of the $3.7 billion PHI rebate left over.

So obviously we can afford Medicare and we can afford the PBS.

 

Action needed

 

Medicare cannot survive without the support of the Labor Party. But their position was hardly clear until more recently. It was not so long ago that Labor health spokesperson Steven Smith was talking about the future of Medicare as “a safety net”.

 

To his credit, Simon Crean has since clarified Labor’s health policy as one of full support for Medicare and bulk billing.  But the Labor Party is still trying to have it both ways when they say they will defend Medicare but they will also keep the PHI rebate – they will keep financing the private health insurance industry. You cannot have it both ways!.

 

Only the Greens and the CPA have a clear position on getting rid of the PHI rebate. The Democrats are talking about supporting Howard’s budget changes to bulk-billing if they can get guarantees on the capping of doctors’ costs. Pigs might fly. They also support the PHI rebate – albeit that it should be means tested, “to make it fairer”.

 

The ACTU through Sharan Burrows and their National Committee has taken a good position on Medicare and bulk billing - although some individual unions are still under the delusion that their members will be OK through enterprise bargaining for PHI cover.

 

Women often understand the importance of good health care - women are usually the main carers for children. Before Medicare it was often only the rich women who had reproductive checks. Before Medicare there were no doctors in the western suburbs of Sydney. So the ACTU felt keenly that this would impact very strongly on workers, particularly on fixed wages, and they took a great position.

 

There is the National Medicare Alliance which has been working well for several years. It includes ACOSS, the Pensioners, the ACA, WEL and the National Nurses Federation and, when the ACTU came on board, State Save Medicare Committees were also formed. Now we are seeing them spring up in locality areas.

 

 

We need to support this nationwide and local grass-roots activity and clarify the issues. I think we have to attack principally the PHI rebate and it is important that we know where people stand on this issue.

 

Let’s be quite clear. If the PHI rebate stays, Howard does not need to make any further attacks on Medicare. He does not even need to get his latest budget initiatives through the Senate.  The whole system is imploding through lack of proper funding and we are going over to a wholly user-pays and US-style health system.

 

We also need to get into the specifics, because everyone is saying they support Medicare because it is popular. In fact, some do not.

We need to promote the objective of getting rid of the PHI rebate.

We can use slogans such as “a national dental scheme or private health insurance”, “bulk billing or private health insurance” etc, so people understand what their choices are and don’t feel that “something is being taken away from them”.

 

People are being tricked by the offer of discounted private health insurance because they can get their sunglasses for free or free gym shoes. But when they go to the GP with their kids they all have to pay $50, and soon they will be paying double for their prescriptions as well as co-payments for medical services such as x-rays and mammograms.

 

Soon they will find that the local public hospital is means-tested and that they will no longer have a choice about whether they choose to use their PHI or not. Very quickly that free pair of sunglasses or free pair of gym shoes will come to seem very expensive.

 

Work together on Medicare

 

Above all the anti-Howard political forces need to start working closer together on Medicare and to save Australia’s health system - and not spend time on attacking each other.

 

This will be a challenge in itself given the Labor Party’s hostility and competitiveness with the Greens and other progressive parties, the deep divisions among left parties and the divided and often opportunistic policies of the Democrats, not to mention the arbitrariness of the numerous key independents in the Senate.

(Remember it was Senator Harradine’s single vote that gave Howard his victory on the PHI rebate in return for a “no gaps” or “known gaps” guarantee.)

 

 

 

 Dr Con Costa