The Guardian October 23, 2002

Public health:
The prognosis isn't good

The Medicare system is in trouble and, with Dr Howard and his 
privatisation practitioners in charge, the outlook for public health isn't 
good at all. Having failed to adequately fund Medicare, the Pharmaceutical 
Benefits Scheme (PBS) and the public hospital system, the Federal 
Government is proposing to adopt policies that will make patients pay. 
Their major objective is the destruction of Medicare.

While the majority of doctors supported bulk-billing when Medicare was 
introduced and still do, those who continue to bulk-bill for their patients 
have been steadily declining. This is a direct result of the failure of the 
Howard Government to provide extra funding for Medicare standard fees to 
allow for inflation and the increased costs facing doctors.

The extra load this has placed on medical practices has been exacerbated by 
the collapse of insurance companies, resulting in a huge rise in the cost 
of medical indemnity insurance. The Government has left them with no 
alternative than to charge their patients for an amount over and above what 
they recoup through Medicare.

According to Tim Woodruff, National President of the Doctors' Reform 
Society, the nation's sickest patients are spending on average $750 more 
per annum on medical treatment. "Patients are putting off seeing their 
doctor because of costs, and ending up sicker and going to the overcrowded 
public hospital emergency departments.", he said.

AMA President Karryn Phelps stated, "Unless the government acts to address 
the inadequacy of the MBS, it won't be long before bulk-billing GPs in 
Australia are extinct."

In reply, Federal Health Minister Kay Paterson claimed that the number of 
specialists who bulk-bill has risen. This is, however, a desperate red 
herring as specialists who bulk-bill comprise a small proportion of the 
total number of doctors. The Minister acknowledged that the overall number 
of doctors who do not bulk bill is now over 25 percent of the total.

The latest rise of 0.7 percent in non-bulk-billing practices means that 
some 2.5 million more patient calls to doctors in a 12 month period will 
now not be able to access bulk-billing.

The situation is particularly acute in the country. In many towns there is 
no bulk-billing medical practice, and in some towns there is no medical 
practice at all, resulting particularly from the crisis in medical 

Dr Woodruff commented: ".in the country [people are] simply not going 
because the doctors have left. That means patients are not getting treated 
properly, or [are] simply not going for treatment. Many will suffer. Some 
will die."

To make a living some medical practices may be tempted to favour "quick 
turnover" consultations, such as those for recurring asthma and diabetes, 
rather than to drop out of the bulk-billing system altogether.

The general insurance crisis in Australia has been reflected in medical 
insurance costs which, for some practitioners, have risen 400 percent.

Melbourne's Footscray West Medical Clinic, which opened last year with the 
specific purpose of providing a bulk-billing service for local residents, 
may have to alter its policy because the shortfall in Medicare rebates and 
the rise in insurance premiums are making the practice economically 
unviable. The clinic is considering limiting Medicare billing to students, 
pensioners and healthcare cardholders, for week day attendance only.

Governments are considering several steps to deal with the insurance 
crisis. They include subsidising premiums for high-risk medical practices, 
reimbursing medical defence businesses for 50 percent of claim payouts 
greater than $2 million, and imposing a special levy on half of Australia's 
doctors, to pay for medical insurer UMP's shortfall of $390 million.

In short, governments want to subsidise the medical insurance industry. 
Further support for Medicare is, apparently, out of the question for the 
Howard Government.

Pharmaceutical benefits

The Government has also failed to provide adequate funding for public 
hospitals, and interfered with the independent running of the 
Pharmaceutical Benefits Scheme (PBS), the operating costs of which have 
increased substantially since the enforced replacement of most of the PBS 

Some of the new Board members appear to be far more sympathetic to the 
pharmaceutical companies than their predecessors, when it comes to 
determining what drug to be put on the PBS list.

One of the Howard Government's key responses to the developing 
pharmaceutical crisis is to propose legislation to increase the "co-
payment" (i.e. the amount that consumers must pay for subsidised 
pharmaceuticals). Concession cardholders and pensioners must now pay $4.60, 
a 28 percent increase, for PBS listed medicines. Others will pay $28.60, a 
20 percent increase.

Although not originally intended to do so, the PBS is of benefit to 
pharmaceutical companies as well as to patients. It broadens the consumer 
base to include those who previously could not afford the medication and 
would have either sought alternative medication, adopted a healthier 
lifestyle or simply gone without. As a result the pharmaceutical firms sell 
more of the subsidised medications.

The PBS was established to make available to the public at reasonable cost 
crucial pharmaceutical products needed to deal with life-threatening or 
painful diseases. However, under pressure from the drug companies, the PBS 
list of subsidised products has now been expanded to include drugs that can 
scarcely be included in this category.

As a result, the cost of funding the PBS has risen substantially. Although 
this situation was a result of opening the floodgates to the drug 
companies, the government now wants to relieve the financial pressure on 
the PBS by making patients pay more.

The Government's previous attempt to introduce these savage increases was 
blocked in the Senate. Significantly, the Government has now decided to 
reintroduce the legislation. It has already held talks on the issue with 
former Democrats leader Meg Lees, of GST infamy, and is believed to have 
also discussed the issue with other right-wing rebel Democrat senators.

Treasure Peter Costello stated recently that if the rising cost of PBS was 
not reined in, the system would "break" and "we will not be able to make 
available to Australians the kind of pharmaceuticals they want."

However, the Treasurer's statements on PBS, which he describes as "the 
fastest-growing area of government expenditure", is deceptive. PBS is of 
enormous benefits to the Australian people, and its cost pales into 
insignificance compared to Government's blank cheque for military 
expenditure. This is particularly so in view of the extra amount now needed 
to fund the Government's role as sidekick to US overseas military 
operations, an expenditure of no public benefit.

Back to index page