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Issue # 1405      1 April 2009

A new public health care system needed

The government has widely publicised its “education revolution” but far less is known about its “health reform” plan. The government has emphasised that it will “maintain the principles of universality of Medicare and the Pharmaceutical Benefits Scheme, and public hospital care”. The question is what will people have universal access to and under what conditions? At present Medicare and public hospitals are administered and run by the federal and state governments respectively. The private health industry is dying to get its hands on the public health system and they may well do so if the government’s health plans takes off.

Soon after coming to office the Rudd Labor government set up a number health inquiries, including the National Health and Hospitals Reform Commission (NHHRC) which is to deliver a long-term health reform plan by June.

Like all governments planning radical changes, the selection of committee members is the key to getting the intended outcomes. There is no need to look beyond the Chair of the Commission to determine its ideological direction. Dr Christine Bennett is the Chief Medical Officer of BUPA Australia, better known by private health insurance brand names it owns in Australia – HBA, MBF and Mutual Community. BUPA is a transnational corporation, with global operations in health insurance, aged care and other health related businesses.

The other Commission members have a range of experience in the private sector, academia and government departments and one as president of the pro-private sector Australian Medical Association. Health unions and other trade unions, the Doctors’ Reform Society, the Australian Health Care Reform Alliance (AHCRA), the Australian Consumers’ Association and other progressive organisations have no voice on the Commission.

Backdoor privatisation of Medicare

There are fears that the government has plans for people to belong to a private health insurance fund, even if they have no private health cover. The government would pay the private health fund a certain amount per member and the company, instead of Medicare, would hand over refunds for medical expenses and fund hospital visits. Those wishing a higher level of service beyond the most basic of treatment would be able to top up with additional medical and hospital cover. Public hospitals would provide basic services for the poor who do not have any top-up insurance.

The end result would be a private managed health care system along similar lines to that in the US. The national health insurance provider Medicare would in effect be privatised as its operations are taken on by competitors in the private sector.

The NHHCR released an interim report in mid-February allowing one month for its distribution, “a national debate” and feedback! It presented three options for discussion. None of these options promoted a fully integrated public health system centred around Medicare and a well-funded public hospital system. Nor did they address the billions of dollars of public moneys that prop up an otherwise unsustainable private hospital system.

In fact, Health Minister Nicola Roxon made it absolutely clear from the start of the inquiry that the retention of the 30 percent rebate on premiums paid to people who take out private health insurance (PHI) was non-negotiatable. This subsidy to the private insurance companies, and through them to the private hospital system, costs taxpayers an uncapped $3 billion plus per annum.

Delegates to a recent AHCRA conference were stunned when the Health Minister Roxon unequivocally declared her personal support for private health insurance and the private health sector. She declared that the PHI rebate would be a fundamental plank of her government’s health reforms. AHCRA is a coalition of 46 organisations representing consumers and health care providers, including the DRS and health unions. It is a strong advocate of the public health system.

The PHI rebate plays an extremely destructive role, diverting billions of dollars away from the public hospital system and from other areas such as primary health and community care. The private health system is a drain on the public purse with its higher costs and layers of profit. It has become a means of queue jumping for those who can afford it.

In addition to the $3 billion plus in PHI rebates, it drains millions more dollars from the public purse with a one percent discount in the taxation rate paid by the rich who take out PHI. Those on very high incomes save many more thousands of dollars with the tax cut than they pay in private health cover. It is an absolute rort and should be ended.

Corporate health

The minister is supportive of the private sector running the new super clinics when tenders are called for, “as long as they provided the services that were required”. Will the public sector be competing with the private insurance and other corporate and church agencies, or will it just be bypassed altogether?

The NHHRC’s interim report recognises the importance of dental care as a health issue, but seeks to separate it from general health care and Medicare. It proposes Denticare, a dental scheme that would be funded by the government and administered by private health insurance companies.

At present people with chronic illness can receive full rebates through Medicare for dental treatment where their dentist has agreed to be part of the system. Instead of extending the scheme to make it universally available, the government intends replacing it by a scheme for the poor.

The three options presented by the report take up different approaches to federal-state roles in the provision and funding of health services. They talk about strengthening primary health care and take up Indigenous, rural and aged care services – all important areas which are in crisis. At the same time they fall short on how to do this.

All options fall short on the immediate priority of fixing the public health system which is chronically under-funded and under-staffed. Pubic hospitals need more funding. At present their funding is capped at an unrealistically low level by federal and state governments. This chronic under-funding is political. It has the objective of driving people through fear and desperation into the private system. The PHI rebate is to make it financially possible. After all, who wants to risk being on a waiting list for months with cancer or wait weeks or months for a test when in pain?

Funding is not the only issue that needs addressing. Hospitals have become the default destination of patients who are not necessarily in need of the high cost services and high level of care that they provide. It is estimated that on any one day 2,000 or more public hospital beds are taken up by elderly people who are stuck there because of the lack of available beds in other more appropriate institutions.

Existing nursing homes are chronically understaffed and many of the staff under-qualified. GP shortages and lack of doctors prepared to bulk bill place additional pressures on public hospitals. Some rural and remote areas are without GPs. The lack of provision of suitable Indigenous health services is nothing short of scandalous and criminal.

Primary health care services are either unaffordable or lacking in the mental health area. The community care programs that were supposed to support people with mental health conditions when de-institutionalisation took place are totally inadequate.

People’s health

If these issues were addressed and preventative and community health care improved, then many of the conditions that lead to hospitalisation could be avoided.

The Communist Party of Australia is calling for major reforms to the health and community care services in Australia. These should be based around the following principles:

  • universal access – regardless of income or locality
  • free services at the point of delivery
  • services to be of the highest quality
  • services funded through central taxation revenue
  • services provided by the public sector
  • planned system of training, staffing and provision of services

Funding and planning are critical. The economic crisis does not preclude finding the necessary funds to build a public health system on the above principles. The present under-funding is ideologically based and a matter of lack of political will.

The 30 percent (40 percent for older people) PHI rebate should be abolished. This would free up more than $3 billion to provide a quality health care program. A 10 percent cut in military expenditure would not endanger Australia’s security, but if redirected to health and other social services including education, would improve the well-being and security of the Australian people. That would free up another $2 billion.

Funding to public hospitals must be increased as a matter of urgency. As an initial step, while rebuilding the public hospital system, private hospitals would be directly subsidised for private patients at $300 a night per patient. This would be phased out over several years.

The question of how doctors are paid needs reviewing, with a focus on components for salary and other costs to replace the present focus on payment per patient consultation. Funding per visit through Medicare rebates has lead to rapid churning of patients in some practices and made it more difficult for doctors to give the time needed and for the elderly and chronically ill, in particular, to receive the attention they need.

Dental health should become an integral part of Medicare.

Aged care should be taken out of the hands of the private sector and philanthropists.

Measures are needed to overcome the shortages of qualified nurses, GPs, medical specialists, aged care, and other health professionals. This needs planning in conjunction with universities and other training institutions. It cannot be left to “the markets” any longer. It is scandalous that nursing homes and hospitals are largely staffed through a brain drain from poor nations.

Substantial increases in funding are required for preventative health care and community care services, for Indigenous health programs, for aged care, mental health and rural and remote areas.

These goals can only be achieved through planning and coordination by the public sector. The development and provision of services needs community involvement.

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