Posted by Age article re fed govt support of private health industry on March 19, 1999 at 23:12:45:
Thursday 18 March 1999
THE AGE newspaper http://www.theage.com.au/daily/990318/news/news24.html
Health carrot gives way to the stick
By KENNETH DAVIDSON
THE Howard Government has tried the carrot - a $1.5billion
bribe to get the middle class to take up private health insurance.
Now it threatens the stick of higher premiums for those who want
to delay buying private health insurance until middle age or later.
Why is the Government bending over backwards to drive
Australians into the arms of the private health insurers? The
answers it offers are risible.
The Government didn't have to give money to the private insurers
for a 30per cent rebate to their customers. This simply boosted
private health insurees' disposable income. The money could
have been put into hospitals.
If the Government was concerned to increase private hospital
usage, the best and most economical way would have been to
put the $1.5billion into the private hospitals, in return for a
compensating cut in private hospital charges.
If the Government put the money directly into hospitals - public
or private - it would have some control over the way the public
money was spent.
There is no reason why public patients could not be treated in
private hospitals if there is a shortage of public beds. The public
purse met 75per cent of the cost of medical services and 50per
cent of the total cost of private hospitals before the $1.5billion
rebate was introduced.
Only government can contain health costs, not the private
individual or private health funds. This is clear from the contrast
between the largely private US system - which spends 14per
cent of GDP on health compared to 6.5per cent in the largely
public British system - and the hybrid Australian system, which
consumes about 8.5per cent of GDP.
The higher expenditure in the US has generated phenomenal
incomes for health providers and investors and worse national
health outcomes in terms of infant mortality, morbidity and
longevity than either Australia or Britain.
Subsidising private health insurance premiums, and abandoning
community rating in an attempt to drive more young people into
buying unnecessary private health insurance, is a recipe for a
long-term explosion in health costs.
Private hospitals exist to make money for their private
shareholders by selling medical procedures. According to a study
by Professor Geoff Richardson of Monash University, the
chances are two to four times greater that private patients
admitted for heart attack will have angiography, bypass surgery,
angioplasty or stenting procedures compared to public patients.
The study showed no discernible difference in health outcomes
for the two groups of patients.
The Government claims it wants to take pressure off the public
hospital system. But what is the point if that goal can be achieved
only at the expense of creating a second-rate public health
system and an inefficient US-style private health system, which is
ruinously expensive for the bulk of the population?
The simplest, fairest and most efficient way to finance health is
through the levy, which should be set at a level to cover health
costs, with a compensating reduction in general taxation.
Such a system provides automatic lifetime community rating and
the Government has a big incentive to hold down health costs.
The cost of Medicare administration is only 3.5cents in the dollar
compared to 12cents for private health funds.
The bribe to keep people in private health insurance was not
sufficient to reverse the rational, national trend towards
self-insurance and reliance on Medicare.
Now the Government wants to stampede young people into
private health insurance by imposing a surcharge on people who
don't take out health insurance before the age of 35.
This won't work either. Self-insurance is still the best bet for
those who don't want to queue in the public sector. Private health
cover now costs about $500 a year for the individual, and about
$1200 a year for a family, without covering the first $300 of
hospital expenses.
A reasonably healthy young adult could put aside the premiums
for two to three years (relying on Medicare in the interim), and
save more than enough to cover the cost of private elective
surgery and private hospital accommodation.
The only way the Howard Government can now destroy
Medicare as a universal system is by means-testing access
(which is in direct contravention of his promise at two elections),
or running down the public health system to the point where only
the desperate and the impoverished would use it.