Medi happy returns
Andrew Gunn
The Courier Mail 24 September 2003

On the eve of Medicare's 20th birthday, we're in danger of losing our world-class health system, writes Andrew Gunn.

Australians are now paying greater out-of-pocket costs and co-payments towards their own health care. This should come as no surprise at all.

For years we have experienced moves to make the Australian health system more like that of the US.

To achieve this, an assortment of carrots and sticks has been used to push people into private health funds, coupled with a lack of support for public hospitals and bulk-billing doctors.

The Federal Government has a user-pays philosophy and is determined to make no exception for health care.

The recent decision not to provide full funding for a recommended childhood vaccine highlights this. Among Organisation for Economic Co-operation and Development countries, we are second to the US in how little the Government contributes to health costs.

Modern technology in health care does increase costs. The Government argues that the expenditure will be too great for the public purse and therefore needs to be shifted on to individual users. In other words, they believe that the patients should have to pay. This approach, however, is seriously flawed.

There are basically two ways to meet increasing health care costs. The choice is whether the necessary money should come from government or individuals.

Government funding is drawn from taxes, with the result that high-income earners pay more. Individual payments are drawn from users of the health system with the result that sick people pay more.

In addition, low-income earners are more likely to be sick than high-income earners. A user-pays system in health care means, in effect, that low-income sick people pay to reduce the tax of high income earners.

The Government argues that out-of-pocket payments are necessary to stop frivolous use of the system.

International research does not support this view. For instance, co-payments for optometry visits were introduced in the United Kingdom and were then found to be associated with delays in the diagnosis of glaucoma, a potentially blinding disease of the eye.

Out-of-pocket costs clearly have the potential to reduce health service usage. It needs to be realised, however, that they restrict access according to wealth, not health.

Co-payments deter the poor but not the worried well. By reducing access to health care for low-income earners and struggling families, co-payments improve access to health care for the well-off.

Australians like Medicare for a good reason. It works and it's fair.

Medicare has delivered good health outcomes at a sustainable cost. This contrasts with the largely privatised health system in the US.

Unfortunately, Medicare does not fit with Prime Minister John Howard's vision of an Australia with less community and more individual responsibility.

Universal health cover via Medicare and public hospitals makes health care a community responsibility. This conflicts with a personal philosophy that people who do not plan for their own health care should not receive it.

The Federal Government says funding Medicare, public hospitals and subsidised medications is becoming prohibitively expensive. Yet, simultaneously, we have seen increasing billions poured in to the private health system.

Dr Leonie Segal, from Monash University's Health Economics Unit, estimates that the true cost of the 30 per cent private health insurance rebate, once both direct and indirect expenditure is accounted for, is $3.7 billion a year.

That figure is worth considering. This is an average cost of $185 from every man, woman and child in the country and it goes to the private health insurance rebate, a policy which overwhelming helps Australians who are already better off.

For obvious reasons, the Federal Government prefers to use the rebate's direct cost, a lower figure of $2.1 billion a year.

Yet even this amount represents 25 per cent of the Medicare Benefits Schedule, 30 per cent of federal public hospital funding and 44 per cent of the Pharmaceutical Benefits Scheme. The expense and inefficiency of the private health insurance rebate is mind-blowing.

The rebate is often justified with the claim that it takes pressure off public hospitals. This is absurd.

If the Government was serious about taking pressure off public hospitals, it would simply spend these billions directly on public hospitals.

Getting well-off people into private hospitals doesn't take the pressure off public hospitals any more than getting well-off children into private schools takes it off public schools.

In fact, the opposite occurs by draining resources, staff and the patronage of the people with the social clout to complain successfully about poor conditions within the public system.

Medicare was established as a universal, taxpayer-funded system of health care financing. This is now seriously under threat. Fewer Australians are able to receive the care they need at the time they need it.

We have the resources to fund Medicare properly but not the political will.

Next Wednesday is Medicare's 20th birthday. Make a cake and have a party at work to celebrate! Let's hope Medicare gets more support in the next few years. We have one of the world's best systems of health care. Let's keep it, not kill it.

     • Dr Andrew Gunn is a Brisbane GP and treasurer of the Doctors Reform Society