Posted by http://www.thestar.ca/thestar/back_issues/ED20000320/news/20000320NEW01d_NA-WALKOM.html on March 25, 2000 at 19:10:47:
FIXING HEALTH CARE
The hard lessons Down Under
Two-tier pain: Costly lesson in
frustration
Private hospitals were to be `escape
valve' for Australia's strained public
system; it hasn't worked out that way
By Thomas Walkom
Toronto Star National Affairs Writer
SYDNEY, Australia - In a
cramped office in one of
this city's most crowded
public hospitals, Dr. Rob
Dowsett explains his
frustration with the
Australian health care
system.
The public hospitals, he
says, are being
systematically starved. For
many reasons - some
having to do with
bureaucratic turf wars -
Australian governments
have been favouring
private hospitals over their
public counterparts.
And while he has nothing
against the private system, it's sure not taking any of the
pressure off him.
Dowsett is director of emergency medicine at
Westmead Public Hospital. Situated in the midst of
Sydney's fast growing western suburbs, Westmead has
been in the news a lot recently - usually because it's too
full.
At some points last year, Westmead's emergency
department was so jammed it had to be closed to new
patients for 10 hours each day.
``People had to wait hours - sometimes days - for a
bed,`' says Dowsett. ``We were unsafe.''
To Canadians, this scenario of closed emergency rooms
and jammed hospitals would seem all too familiar. But in
Australia, this is not supposed to happen. For in
Australia, a parallel system of private hospitals and
extra-billing specialists - all funded by private health
insurance - exists alongside medicare.
In theory, this parallel private system is supposed to
take the load off public hospitals. As a Reform party
task force put it last year, in a report advocating
Australian-style, two-tier health care for Canada, ``a
small parallel (private) system would act as an `escape
valve' for the public system.''
But in Australia, the escape valve theory just hasn't
worked. In part, it is because most private hospitals
don't do the kinds of complicated surgery that is
routinely carried out in the public system. Most, for
example, don't have emergency rooms.
As Dowsett puts it: ``When you have a traffic accident,
it's not the private hospital which comes and scrapes
you off the road. It's us.''
This wouldn't matter if private hospitals took up more of
the non-emergency load. But they don't, says John
Deeble, a health economist at Australian National
University in Canberra.
`There were a lot of things we just
couldn't do because of political
constraints. We had to tread very
carefully. . . . We knew that if we were
taking on the medical profession,
we'd have to outthink them. We
couldn't take them on. Whenever the
government took them on, it lost'
- Dick Scotton
Original designer of Australia's medicare system
Rather than serving more patients, private hospitals find
it more profitable to perform more procedures on the
relatively small number of Australians who can afford
their services.
Research by Monash University health economist Jeff
Richardson shows that Australians who go to private
hospitals are four to seven times as likely to undergo
expensive cardiac procedures such as heart bypass
surgery than those in the public system.
This doesn't necessarily mean that heart patients do
better in the private system. There is no evidence that
survival rates are different. But it does mean, says
Richardson, that those willing to pay more have more
expensive things done to then.
Yet perhaps the most damning indictment of Australia's
parallel private health system is that it isn't self-financing.
It prospers only because it receives massive public
subsidies worth about $2.2 billion a year.
And when public money is spent
on the private system - to ensure,
for instance, that patients in posh
private hospitals are able to stay in
tastefully appointed rooms - it
simply isn't available for public
institutions like Westmead.
To a Canadian, the public
subsidization of private medicine
seems odd. But an examination of Australian health care
shows it to be the most natural thing in the world, a state
of affairs stemming from an irreconcilable contradiction
in the country's hybrid system. As health economist
Deeble puts it: ``The balance is unstable.''
In particular:
The better the public system works, the more the
private system suffers. Most Australians figure that if
they can get good service from the public system, they
won't need private hospitals, or private health insurance
to pay for those hospitals. As a result, the percentage of
Australians with private insurance has plummetted -
from 70 per cent in 1974 when medicare was first
introduced to about 30 per cent today.
Those who drop their insurance tend to be healthy. As
a result, private insurers find themselves stuck with sick
people, who cost them more. As costs rise, private
insurers raise their premium rates. As premiums rise,
fewer want to use the private system.
By 1998, private health insurance funds - and private
hospitals - were in dire financial straits and appealing to
the new Liberal-National government. But governments
could help the private system in only one of two ways:
by reducing funds to public hospitals to make them less
attractive, or by subsidizing the private system.
In the end, they did both. Thanks to the intricacies of
Australia's convoluted federal system, state governments
find it convenient to squeeze the public hospitals.
More important, though, was the central government's
decision to initiate a new tax break. Now, anyone who
takes out private health insurance can get 30 per cent of
his premiums paid for by government.
For a family paying $1,500 a year for health insurance
premiums, that translates into a good chunk of cash.
At the same time, the government changed the rules
governing health insurance to make it more attractive to
first-time buyers. And it has been running a lavish
$15-million advertising campaign encouraging people to
buy private.
This was on top of tax measures already put in place to
penalize anyone making more than $50,000 annually (or
$100,000 for a family) who didn't have private
insurance.
Yet all of this hasn't been enough.
Figures released last month show that even with the
subsidy in place, the number of Australians with private
insurance has barely inched ahead.
To an outsider, it seems a queerly illogical system. If so
few want private health care, why keep it alive
artificially? Particularly if, as Australian National
University political scientist Gwen Gray has argued, the
money spent for tax rebates would be enough to fund
more than 7,000 acute care beds in public hospitals.
``It's an appalling waste of money,'' says health
economist Dick Scotton. ``One-half of that amount
would wipe out all the (public) waiting lists.''
Stephen Leeder, dean of medicine at the University of
Sydney, goes a step further, warning that the
government's attempts to resuscitate private medicine
``are in reality steps toward the ultimate demolition of
universal health insurance.''
How did such a curious system - what Scotton calls a
``monstrous'' hybrid of public and private enterprise -
come to pass?
The answer lies in Australia's history and particularly in
the powerful political role played by the country's
physicians.
While Australia was far ahead of Canada in labour and
pension legislation, on the health front governments
faced an implacable foe: the Australian Medical
Association or AMA, an organization dominated by
specialists.
Dr. David Brand, the organization's current president,
refers to the AMA as the second most influential
political organization in the country.
``Only four or five (federal) cabinet ministers have a
higher profile than the president of the AMA,'' he says.
``We have a national machine.''
Even Australia's constitution contains a clause, added in
1946 at the behest of the AMA, that specifically
prohibits the federal government from controlling
doctors' fees.
When Canadian doctors go on strike - such as Ontario
physicians did in 1986 when Ottawa banned
extra-billing - they usually lose.
But when Australia's doctors strike, the government
invariably backs down.
``We're tight,'' says Brand. ``Doctors have gone to
school together; they all know one another. I can ring
any medical practitioner in the country and I'll be put
right through.''
The other key reason for the persistence of two-tier
medicine in Australia has to do with popular attitudes.
Historically, both Canada and Australia have had a mix
of private and public hospitals, but in Canada, public
hospitals were better regarded. As Anne Crichton
points out in her study of the two systems, Children Of
A Common Mother, Canadian private hospitals were
viewed with suspicion, and justly so. As late as the
1920s, they were demonstrably worse than their
prestigious public counterparts.
In Australia, on the other hand, public hospitals were
seen as second best, as charitable institutions suitable
only for the very poor. For middle-class patients, and
what Crichton calls the respectable working class, the
private hospital - or at least the private wing in a public
hospital - was the preferred place to be.
When public health insurance (then called Medibank)
was first introduced by a Labour government in 1974, it
faced not only powerful critics but a wary populace.
The original idea was to base the Australian system
directly on Canadian medicare. Dick Scotton, who
along with fellow health economist John Deeble
designed Medibank, spent two years in Ottawa
observing the Canadian system.
Both say they had to make adjustments to take account
of public attitudes and the power of the AMA.
``There were a lot of things we just couldn't do because
of political constraints,'' says Scotton cheerfully, over
coffee in a Melbourne hotel. ``We had to tread very
carefully.''
A big, bluff man, recently retired from teaching at
Melbourne's Monash University, he makes no apologies
for the system he helped create. You work, he says,
with what you've got.
``We knew that if we were taking on the medical
profession, we'd have to outthink them. We couldn't
take them on. Whenever the government took them on,
it lost.''
And that is why the two-tier system was left intact - not
so much because voters demanded it but because it
solved the political problem posed by the AMA.
Doctors working in public hospitals would be salaried.
This allowed governments to control public hospital
costs.
But the same doctors would be able to work in the
private system and charge whatever they could. There
would be no salary caps imposed by government,
private insurers or the AMA itself.
In effect, the real purpose of Australia's two-tier system
was to keep specialists' incomes up. It suited the
government, which feared that otherwise the scheme
might not fly at all. It suited the private hospitals and
private insurers, both of whom would, unlike their
Canadian counterparts, be permitted to stay in the
business of providing core medical services. Most
important, though, it suited the specialists.
All of this was sold to the public as a matter of choice.
And here lies an important difference.
Australian public hospitals, unlike their Canadian
counterparts, do not allow patients their choice of
physician.
Whichever salaried doctor is on duty the day the
patient's operation is scheduled does the job. Someone
who wants, say, a specific specialist to remove his
gallbladder, has to be willing to pay privately for the
privilege.
In practice, as AMA head Brand acknowledges, most
patients wouldn't be able to tell a good gallbladder
surgeon from a bad one. But that doesn't seem to
matter.
``There's a market for private health care because some
people want it,'' he says, shrugging.
Indeed there is. Some of the most ardent defenders of
medicare, when pushed, admit that, deep down inside,
they think private insurance gives them a better chance
at surviving the medical system.
``I've got private insurance because I want choice,'' says
Matt Viney, a Labour MP in Victoria's state parliament
and parliamentary secretary to the health minister.
``Especially now that I've got kids; I want to get the best
doctors I can.''
Asked if he knows which doctors are good, Viney
admits he doesn't. ``It's psychological, I suppose.''