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Stop the attacks on public health care!

Jennifer Thompson, Green Left News
16 March 1997

"Ministers warn of health crisis", trumpeted the February 28 Australian. "Medicare emergency", warned the September 24 Bulletin cover, "what the health crisis means to you". "Failing fast" said the Bulletin's January 14 story about the hospital system, especially in NSW.

Since the Liberals came to federal government promising to retain Medicare, bulk billing and community rating for private health insurance, the ines have been strident. Promotion of the "crisis" is being used by the government to sell health system "reforms" that will violate those promises.

The crisis revolves, say these stories and many more, around the increasing cost of our relatively accessible health care system. Our ageing population and advanced medical technologies are causing health care spending to spiral to out of control, they claim. These problems are the reason the government must make a further $1.3 billion in cuts, leaked in early March, to public health spending in the next budget.

But what sort of crisis is it? The main crisis has been the squeeze on the public health care system. The causes: increased demand - inevitable with an ageing population and lower private health fund membership - made worse by governments' refusal to build more hospitals and community health infrastructure; and inadequate funding, reflected in longer hospital waiting lists and closures of beds, wards and hospitals.

Governments have reacted to the increased need for medical services by attempting to use economic "rationalist" methods to restrain costs. One of the key mechanisms is the introduction of "price signals" to deter "overuse" of services. Another is to run down public health services so that those who can afford to will go to the private system - creating a two-tier health system.

Labor pioneered some of these changes, and the Liberals have learned from those, like Brian Howe's 1991 co-payment proposal, which were defeated by community pressure. The Liberals must find a way to quietly dismantle the public health system, especially Medicare, universal access to public hospitals and the Pharmaceutical Benefits Scheme. Among the measures announced in the last budget were:

efforts to shift higher and middle income earners from Medicare to the private health system by charging single earners with taxable income above $50,000 ($100,000 for couples and families) a higher rate of Medicare levy - the stick - and giving single earners with a taxable income of less than $35,000 ($70,000 for couples and families) a reduced private insurance premium or tax rebate - the carrot.

The Coalition now proposes, and Labor supports the move, to lower the income threshold for the higher Medicare surcharge - to $35,000 for singles and $70,000 for families.

reduction of hospital funding grants to the states by $300 million over four years. The leaked 1997 budget document detailed a planned further cut in Commonwealth funding.

abolition of the Commonwealth dental program, which was introduced in 1993-94 to provide dental services to Health Care Card and Commonwealth Seniors Card holders.

capping of pathology expenditure and freezing of diagnostic imaging prices.

increased charges for drugs covered by the Pharmaceutical Benefits Scheme. The proposals for the next budget include removing some higher cost drugs from the PBS schedule;

removal of capital grants to nursing homes and allowing the charging of an entry deposit, and means-testing of residential care subsidies, moves that may force many older people to sell their homes and leave others without nursing home care.

transfer of responsibility for the delivery of public health programs to the states, which will make it easier to cut or abolish them.

removal of some medical services, like IVF and tubal ligation reversals, from the Medicare schedule and limitation of others, such as visits to psychiatrists.

The main targets of "price-signal" mechanisms are pensioners, who are the largest users of medical services. The Institute of Public Affairs calculated in 1995 that a $5 co-payment would save the government over $1 billion per year. Much of the savings would occur because the system would discourage pensioners from "unnecessary" visits to the doctor.

The Doctors' Reform Society points out the financial "deterrent" for seeking medical services will particularly affect early intervention, particularly where the patient is poor and suffers from chronic illness, such as asthma. DRS national president Con Costa points out that real health "dividends" lie in prevention.

The government's efforts to stem the flow from the private health system will create a two-tier health system. As the squeeze on public hospitals worsens, two queues - a long one for Medicare and a shorter, more expensive one for private patients - will lead people who can afford it to the private health system. The public system can then be degraded further as it becomes the system for poorer, more politically marginalised people.

The myth that the private sector and market are more efficient and important than the public sector justifies this approach. The "efficiency" facts are otherwise. The tax office and Medicare take only 5% of the health "premiums" they handle, while the private funds take about 14%. Despite "competition" among private health insurance funds - there are now 88, operated by 49 registered organisations - health insurance premiums have increased at a much faster rate than inflation.

Unfortunately for the private health funds and providers of private health services, given the choice of a comparatively cheap, efficient and effective public health insurer - Medicare - people, especially the young and healthy, have voted with their feet. Despite the August budgetary subsidies for private health insurance, membership of private health funds remains at a low ebb.

Ironically Labor health minister Carmen Lawrence's October 1995 measure to make private health insurance more attractive, by allowing it to pay for 100% of the costs of a hospital stay, has put them into the red. Private health funds recorded a collective operating loss of $81 million in the year to June '96, chiefly because the privately insured were now choosing to stay in private hospitals, which are up to three times more expensive than public hospitals.

The failure of "carrots" to lure people back into private health insurance, the key to the private health system, means the government will try more of the stick. That's what the government cuts planned for the next budget are about.

The effects of the measures undertaken in the budget and since, and the broad polemic against universal welfare payments - "middle class welfare" to opponents of the social wage - including Medicare, are short and long term.

In addition to delivering more business to the private health system and cutting public spending, the longer term intention is to induce what "rationalist" jargon calls "behaviour change". That means that the poor should suffer ill health and shorter lives without expecting decent care.

Rather than market-based "solutions" to the health care crisis, we need a rational system of health care planning under community control. Bringing that about will require a fight against the irrational schemes of both major parties.<F41559s>n<F255D>