Stresses on the health system

While many so-called problems with Australia’s health care system are misrepresented, it is clear that the existing public health system is not perfect. Some of the most notable difficulties include excessive waiting times for some elective procedures, and high out-of-pocket costs for particular medical services. Equally, Medicare generally does not cover non-medical services, which means that lower income groups have their access to dentists, psychologists and other allied health professionals limited by their ability to pay. An uneven distribution of doctors means many Australians, particularly those in rural Australia or low socioeconomic areas, have poor access to necessary medical services.

Split responsibilities between the Commonwealth and States and public and private sectors have led to inefficiencies, duplication and holes. Current methods of funding private medical services provide little scope for ensuring resources are directed to the nation’s overall health care priorities and towards those in greatest need. Some people query the balance of health expenditure and whether we should spend more on prevention and early intervention.

Areas such as Indigenous health, mental health and the care of people with chronic health conditions have traditionally been neglected, though improvements are occurring.

There is also a high incidence of adverse complications occurring during health care, many of which are preventable. This causes unnecessary death and illness while wasting resources.

Manufacturing a crisis

Despite Australia’s excellent health record, we hear regular calls for major changes to our health care system. But are these justified?

Health represents a major component of Federal and State Budgets, so the increasing pressure to minimise taxes and public outlays leads to pressures to reduce spending on health and to change the nature of Medicare. Calls for means testing in public hospitals, the choice of opting out of the Medicare levy for those with private health insurance and lowering the income threshold above which those without private health insurance pay the extra Medicare levy are based on the notion of Medicare as a safety net. The ‘safety net’ view of Medicare also sees it as “middle class welfare”, rather than the world-class universal health insurance system that it is.

In this environment, the public and private systems are seen as competitors, but this is not the case. Public and private health systems are complementary, with public hospitals providing a wider range of services and the private medical sector providing the majority of out-of-hospital medical services.

The problem is that critics often concentrate on their immediate concerns or interests - reducing public outlays or strengthening the private sector. They do not see the overall impact on health costs, access, efficiency and equity of the “solutions” they propose.

These criticisms of Medicare undermine public confidence in the health care system. We need a well-informed public debate about the state of our current system and about what action is needed to address identified weaknesses.

What is the Federal Government’s position?

The Federal Government continues to express support for Medicare. However, some of its actions suggest it is slowly moving away from the Medicare system as it was originally conceived.

Instead of putting extra resources into solving real problems of the public health system, the Government has put these into private health insurance - despite its demonstrated inefficiencies and poor value. The provision of massive subsidies totalling some $2.5 billion per annum to private health insurance contradicts the international evidence about the best way to fund health services.

International experience demonstrates health systems which rely predominantly on public funding and public provision of services are generally best at cost containment, equity and efficiency. While Australia has a mixed system the Federal Government appears bent on shifting us closer to a publicly funded private provision model. International evidence proves that reliance on private health insurance cannot achieve universal access and equity.

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