The Guardian August 4, 1999

Put people's health first

Media reports heralding the death of our public hospitals are premature. 
There is no crisis in the public hospital system  the crisis is in the 
private health insurance industry.

None of the media reports state the obvious: there is no blow-out in 
Medicare or public health costs. Public health spending has been stable and 
cost control in the public system has been incredible through all of the 

In addition, Medicare remains extremely popular and the most fair and 
equitable health system in the world.

But the public hospitals are under pressure and the constant stories about 
a lack of funding for public health are very real. They are frightening for 
the community and, left unanswered, they can only undermine confidence in 
the public hospital system.

Private health funds crisis

Prime Minister Howard repeatedly asserts that "Medicare stays in its 
entirety". As recently as two weeks ago he again dismissed calls by the 
Liberal Premiers to scrap Medicare, saying "Medicare is the best health 
system in the world". But the Howard Government is also ideologically 
committed to saving the private health insurance industry.

It is now widely accepted that the 30 percent private health insurance 
rebate will fail and is already failing dismally.

The response of the Liberal State Premiers, with the Australian Medical 
Association (AMA) yapping at their heels, is to declare war on the public 
hospitals. They are demanding even more extreme measures to shore up the 
private health insurance funds.

Their latest call is for means testing of public hospitals, and/or co-
payments on patients to use public hospitals. Co-payments would be a tax on 
the sick. Research in the US shows that it would not in any event contain 
health costs.

Means testing of public hospitals would be de facto privatisation of our 
public hospital system. (Means testing of Medibank by the Fraser Government 
in 1981  when John Howard was Treasurer  resulted in two million 
Australians not being able to afford private health insurance or qualify 
for free care.)

"The private health funds are the golden goose for the private doctors, 
particularly the private procedural specialists", says Dr Con Costa of the 
Doctors' Reform Society.

Dr Costa points out that a gastroscopy, colonoscopy, arthroscopy or other 
relatively routine procedure is bulk billed at around $250 directly to 
Medicare. At most, a public patient might have a $100 or so out-of-pocket 
cost for the anaesthetic.

For the same procedure a privately insured patient is billed around $600 
and the private insurance is billed a further $600 for bed-day-fee and 
surgery fees  even though the patient may have only occupied the bed for 
an hour or two.

"We do need a debate on how to pay for our health system", says Dr Costa. 
But he stresses that debate should focus on improving the system that works 
 Medicare  not on how to force Australians into a system that doesn't 
work i.e. private health insurance.

Indeed, there are a few pertinent questions that need answering which would 
go some way toward addressing the needs of the health system:

* If the Howard Government can "throw away" $1.5 billion annually on the 
public health insurance rebate, why can't we find $1.5 billion from the 
current large budget surplus for our public hospitals?

* Why is the extra one percent Medicare levy on higher income earners who 
have not taken out private health insurance going back into consolidated 
revenue rather than going to Medicare where it belongs?

* After squeezing the States in the last round of Medicare funding 
agreements, why has the Howard Government not come up with the extra $150 
million they promised the States?

* Why are we being railroaded into a debate about privatising the health 
system at a time when Medicare is working and costs are controlled, 
compared to the private system which is not working and where there is no 
cost control?

Who sets the agenda?

Any inquiry into funding of the health system should be predicated on the 
continuation of Medicare. This is clearly the desire of the great majority 
of Australians and the often stated position of the Prime Minister.

In other words, any inquiry into health should focus on the people's 
system, Medicare, and how to improve it  not on formulating the ways and 
means of privatising the health system.

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