The Guardian November 26, 2003

The Howard vision for Medicare

Medicare, as most Australians understand it and the services 
it provides, is an overwhelmingly popular healthcare system. Even 
the Liberals have been forced to pay lip service to it and as 
recently as last week Federal Health Minister Tony Abbott had the 
following to say:

"This Government believes in Medicare. Medicare is an article of 
faith. We will strengthen and protect Medicare. And we are 
prepared to invest in a stronger Medicare system."

He was speaking in support of his latest tilt at "reforming" 
Medicare after the defeat of the "Fairer Medicare" package 
unveiled last April. Nobody ought to be fooled by the Minister's 
public declaration of faith in Medicare. More sincere and more 
passionate was John Howard's outburst to Sydney radio personality 
John Laws in 1987 about what he would do in government:

"The second thing we'll do is get rid of the bulk-billing system, 
it's an absolute rort. We will be proposing change to Medicare 
which amounts to its de-facto dismantling. we'll pull it right 
apart. Bulk-billing will be abolished, except for people such as 
pensioners who really need it."

Medicare was an "unmitigated disaster", "a human nightmare", "a 
financial monster", "an administrative quagmire", "a scandal" and 
a "miserable cruel fraud", according to the would-be Prime 

In spite of the weasel words now used to praise Medicare, the 
introduction of "Medicare Plus" would be a giant step toward 
achieving the Howard vision of its de-facto dismantling, the 
establishment of an essentially private health care system with a 
safety net for the "deserving poor".

Smashing the bulk-billing pillar

With the promotion of this latest package, the Federal Government 
has taken double-speak to new levels. On behalf of all 
Australians, Tony Abbott has concluded that bulk-billing "is not 
the essence of Medicare". He would remove it as one of the 
pillars of the system  where it once stood alongside free 
treatment in public hospitals and affordable medicines through 
the Pharmaceutical Benefits Scheme.

Consistent with this downplaying of the importance of bulk-
billing, "Medicare Plus" contains no serious measures to reverse 
the decline in bulk-billing rates. These have slid from 80.6 per 
cent of doctors bulk-billing in 1996 to just 67.4 per cent at 
present. The package proposes an increase of $5 in the Medicare 
rebate paid to GPs when they bulk-bill a Commonwealth concession 
card holder or child under the age of 16. There is no $5 extra 
for bulk-billing other patients.

As Doctors' Reform Society President Dr Tim Woodruff points out: 
"General practitioners charge an average of $13.64 co-payment now 
if they don't bulk-bill patients. Medicare Plus offers them $5. 
Why would they change?"

Mr Howard says he is confident they will. "Five dollars will add 
$15,000 to $20,000 to the income of the average GP in one 
stroke", he told the media last week while failing to add how 
much co-payments of anything up to $100 (or more for specialists) 
would add to the bank balance.

No shortage of money

"We do not intend to introduce any kind of means-testing for 
bulk-billing, none whatsoever", Howard told Parliament in March. 
Eight months later there is a proposal for bulk-billing from 
which only concession card holders (who live in poverty) and 
children under 16 (who usually do not have independent means) 
might benefit.

Using the hair-splitting semantics favoured by the Government, 
the PM has not directly violated his previous undertaking. 
Doctors could accept the present Medicare rebate and charge other 
patients no additional amount at all. The reality is that few 
could meet their overheads and remain in business with such an 
approach. Ignoring the trifling 65 cent increase in the rebate at 
the beginning of this month, the amount reimbursed by the 
Commonwealth has been stuck at around $25 for over a decade.

Some estimates have it that the Medicare rebate for a standard 
consultation is only 62 per cent of the value it ought to be when 
inflation is considered. Most commentators say that to operate in 
the way it once did to support bulk-billing, the rebate should be 
between $40 and $50.

The AMA estimates that an increase of the rebate to more workable 
$35 would cost a hefty $500 million a year. Of course, this 
option would not even be considered by a government of the 
current ideological stripe, $7.5 billion surplus or no $7.5 
billion surplus. Nor is it prepared to reduce its $16 billion 
(and rising daily) military budget  which ironically and 
tragically will cost lives and harm Australia. Far more likely 
are tax cuts and other election year sweeteners for the wealthy.

The Federal Government is immune to arguments about the Medicare 
rebate and its relationship to declining bulk-billing rates. In 
fact, Tony Abbott prefers to blame all sorts of other weird and 
wonderful causes and to play down the rebate issue. In a speech 
made last week  available on his website under the title Bulk 
Billing was never for everyone  he offers some alternative and 
highly original reasons:

"Since 1999, the percentage of visits to the doctor which are 
bulk-billed has fallen from just under 80 to just under 70 per 
cent. This is partly because there are fewer doctors per head of 
population and thus less competition, partly because the Medicare 
rebate has not kept up (doctors argue) with medical inflation but 
mostly because many doctors think that 'free medicine' is 

Using the Health Minister's logic, the biggest problem is that 
more and more doctors are deciding to get a bit more 

"Safety nets" and "universality"

The Health Minister would also have us believe that he is 
offended by "welfare" being paid to those who don't need it. "I 
don't think you or I or Kerry Packer or John Howard ought to be 
able to roll into the local medical practice and demand to be 
bulk-billed", he told ABC's Lateline last week.

(It should be noted that Howard does not object to wealthy people 
putting their hands out for a $14,000 first homebuyer's grant or 
having 30 per cent of their ridiculously expensive private health 
insurance paid through the government's Private Health Insurance 
Rebate scheme.)

Bulk billing for everyone is important  universal access to 
affordable primary care is very cost effective for (and 
beneficial to the health of) the individual (rich or poor) and 
the community. It is also a public health issue.

If the likes of Howard and Packer relied on the public system (as 
did Packer in a life-threatening emergency) along with everyone 
else, that would be a virtual guarantee of a high quality system. 
And if Packer and his mates paid their taxes, then financially we 
would be way ahead.

The Private Health Insurance Rebate scheme and other subsidies to 
the private health insurance industry cost around $3.6 billion 
every year  more than enough money to sustain universal bulk-
billing and eliminate public hospital waiting lists and provide a 
public dental scheme.

Bulk-billing for all not only offers the prospect of better 
quality services, but keeps the overall cost down. If the 
principle of bulk billing being available to all was abandoned, 
then the community would lose control over doctor's fees. The 
Government cannot regulate doctor's fees directly because of the 
Australian Constitution, but it can through bulk-billing, as it 
does for medications through the Pharmaceutical Benefits Scheme.

In these areas at least, Mr Abbott sticks to the generally 
understood definition of the concept of "universality" where it 
ultimately helps to put money in pockets of big businesses like 
the private hospital corporations and insurance companies.

When it comes to Medicare, a new definition of "universality" is 
trotted out. "Medicare is a universal health insurance scheme to 
ensure that no one faces unaffordable out-of-pocket expenses 
because of ill health." Of course, the meaning of the term 
"unaffordable" will be left in the hands of those guardians of 
word definitions that advise the Health Minister.

But, more importantly, the Minister omits to mention that no one 
would face "unaffordable out-of-pocket expenses because of ill 
health" if everyone was bulk-billed. This would be by far the 
best and cheapest solution.

Even within this new definition of "universality", the new 
Medicare-destroying program proposes different treatment for 
different categories of people. As mentioned before, Commonwealth 
concession card holders and children under 16 years might be 
bulk-billed and have no further out-of-pocket expenses from their 
visit to the GP as a result of the $5 bonus paid to doctors.

For members of families that currently receive Family Tax Benefit 
(A), a refund of 80 per cent of out-of-pocket expenses would be 
paid once they total more than $500. For all other individuals 
and families, the refund is paid once those expenses exceed 

To the Minister $500 or $1000 may not sound a great deal. But to 
many working people, unemployed, retirees and students it is a 
great deal of money, especially when considered along with dental 
bills, the price of medicines (a safety net of over $600), 
hearing aids, glasses, and other health needs. And, there are no 
guarantees as to how big the safety net will remain in the 

Mr Abbott has confounded commentators by introducing a three-tier 
health system, rather than a two-tier one!

Clearly, bulk-billing rates will not be improved by the current 
measures and very few Australians will benefit from the "safety 
nets" installed with "Medicare Plus" given present costs.

Queue jumping in doctor's surgery

These people may be bulk billed but they will become second class 
citizens as far as the health system is concerned.

"Private", fee-paying patients will be given 20 or 30-minute 
appointments, or even longer ones. Bulk-billed patients will wait 
to the end of the queue and/or get only half as much time as 
paying patients.

Yet any doctor can tell you that it is the elderly and paediatric 
patients who are more likely to need twice as much time as the 
other patients.

Already some surgeries are doing this, with special times are set 
aside for bulk-billed patients who sit around for hours waiting 
their turn and then being rushed through when it comes.

In effect, having introduced "hospital queue jumping" with the 30 
percent Private Health Insurance rebate, the scene is being set 
for queue jumping in the doctor's surgery!!

Inevitably, greater numbers of people will present in the hard-
pressed emergency departments of public hospitals. Newspoll 
research conducted for the Health Services Union shows that nine 
per cent of Australians  or 1.2 million people  will opt to 
go to emergency departments if their doctors put up their fees or 
stop bulk-billing. The latest measures will not fix this problem.

Mind boggling bureaucracy

Bureaucracy will not be eased. It is set to get worse as 
eligibility for families to the $500 safety net is linked to the 
flawed Family Tax Benefit scheme. This year over 600,000 families 
have had to pay back overpaid benefits to Centrelink as they 
passed its various thresholds.

To determine people's access to the Medicare system in future, 
their status will have to be determined by HIC Online  the same 
expensive broadband facility to be placed in doctors' surgeries 
that will enable the payment of those out-of-pocket expenses to 
the patient's bank account three days after they pay them up 

This means more hassles, more humiliation. This is exactly the 
pattern of treatment that followed the dismantling of the 
original bulk-billing system (Medibank) by the Fraser Government 
when Howard was Treasurer.

No one expects the package to do much to attract nurses and 
doctors into the system and to stop the exodus from general 
practice. Much is made of items like the 234 places to be created 
each year in medical schools. Graduates from these courses would 
be bonded to practice in regional, rural and remote areas. 
However, by far the most costly of any of the recruitment items 
is the $432.5 million to be spent to recruit and support 725 
overseas-trained doctors by 2007.

The current crisis in GP numbers is due to the fact that most 
medical students in Australia no longer see general practice as 
viable. The Federal Government will be encouraging a brain drain 
from developing countries to help "fix" the problem their 
policies have created.

They have consciously restricted Provider Numbers for new GPs for 
the last five years to reduce the bulk-billing outlays  a 
tactic that was recommended by "privatise everything" 
Productivity Commission.

Labor health spokesperson Julia Gillard actually doubts the 
government will be spending $2.4 billion of "new money" over the 
next four years.

She believes that it will be more like $800,000 and that many of 
the "Medicare Plus" items are accounted for in other outlays.

In addition, the Government's figures are quite misleading, often 
giving total figures for the next four years  not how much next 
year. Quite often the money is not spent in later years, this has 
been particularly the case in the environmental area.

However, the latest package is proposing to put a safety net 
under most out of hospital medical services. Dental services are 
not included. While there is a Medicare Benefits Schedule  
which sets the rebate paid by the government for services like 
radiology and pathology  the existence of a "safety net" for 
patients would ensure that these costs would go through the roof. 
Corporate medicine will have no mercy when it can reassure 
patients that the Commonwealth will pick up 80 per cent of the 
tab. There is no "cap" or upper limit on what these providers can 

In common with other measures taken in the health area by the 
Howard Government, "Medicare Plus" takes money out of the 
treasury vault and out of workers' pockets and gives it to 
corporate interests.

Designed to fail

The $2.4 billion estimate given for "Medicare Plus" could well 
blow out. This suits the Government's purposes. Speaking about 
his health portfolio last week, Tony Abbott concluded his listing 
of major budget items with the following observation:

"One thing should be obvious from these astronomical figures: 
health care is not free."

The careful choice of the term "astronomical" would not be made 
by someone committed to keep paying for expensive items like the 
Pharmaceutical Benefits Scheme. His longer-term objective is to 
have private hospitals and other corporate service providers 
dealing with patients with expensive private health insurance. 
The Commonwealth would be left to deliver a substandard service 
for those simply too poor to contribute to corporate profits.

The immediate focus of the package is to get the Senate's 
approval for this latest attack on Medicare. While many of the 
measures contained in "Medicare Plus" can be implemented without 
the need for parliamentary approval, the adoption of its most 
important features does require some of the non-Labor forces in 
the Senate coming on board.

"This package is the result of talks with the Democrats", Abbott 
points out and it appears that, with some reservations, the 
Democrats and key independents like Meg Lees have been "disarmed" 
by the sophistry used to sell it. The Health Minister expects 
"Medicare Plus" to pass largely untouched through the Senate 
before it rises for its break.

The Greens today are calling for the $5 increase to be for 
everyone  not just pensioners and children  as a means of 
defending bulk-billing and its universality. This would be a step 
forward and would only cost $500 million.

The provision of nurses to GPs who bulk-bill all of their 
patients would also be a strong incentive for doctors to bulk-

The coalition of forces that has come together over recent months 
to defend Medicare must alert the people to the dishonesty of the 
"safety net" propaganda being pedalled by the Howard Government. 
Those holding the balance of power in the Senate must be made to 
see that the people will not be "disarmed" by the package and 
will continue to defend all the vital elements of Medicare. Bulk-
billing is affordable, it is the most cost  effective and 
socially desirable basis on which to build Australia's health 

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