Mr MOSSFIELD (10:17 AM) —The Health Legislation Amendment Bill (No. 4) makes a number of amendments to the National Health Act 1953 and the Health Insurance Act 1973. Before I proceed to give my submission on the legislation, I will make a couple of points relating to the remarks of the previous speaker, the honourable member for Bradfield. I was very pleased to hear that he did speak in support of Medicare and that he acknowledged the general anti-Medicare position of the coalition parties over a long period of time. I do not know how he could be reasonably sure that all that anti-Medicare position has disappeared. We certainly hope that it has.

I felt there were some inconsistencies with his presentation because, if we are really going to have choice, the public system needs to provide acceptable levels of service. But if the government is going to prevent funds from going to the public service system, it is not going to provide the service that the public are entitled to. He misses the point relating to Medicare. It is not failing because people do not want it. It has a problem because fewer providers are servicing it.

Bulk-billing is the means by which low income families access medical services, but because of the government's refusal to allow an increase in medicines they are withdrawing from bulk-billing, and this is creating major problems for low income people. Nevertheless, I do welcome his constructive contribution and his acknowledgment of the obvious need to have some sort of a bipartisan approach to the health issue generally.

The government's stated objectives in this legislation are to allegedly improve the efficiency of the private health insurance industry and make private health insurance more attractive to customers by enabling greater product flexibility. The amendment once again highlights the strained relationship between the universal and publicly financed Medicare, which covers medicine and public hospital services, and the voluntary private health insurance industry, which provides coverage for hospital services and other health services such as physiotherapy and dental services.

In all of the debate on Medicare, many opponents overlook one basic tenet that underlined its introduction. Everybody knew that health care was expensive and would not get less so. We all therefore supported Medicare on the basis that we healthy Aussies were able and had a responsibility as citizens to look after those who were not as fortunate as we were.

In referring to the objectives of the bill, the government claims they are to be achieved by a range of measures which include increased flexibility and deregulation of the industry. Some of these are minor changes and others are desirable improvements, which we will be supporting. Some of the changes are acceptable, subject to some limitations. There are a few measures which Labor should, and will, oppose outright.

Labor would welcome greater flexibility, which would enable health insurance funds to offer their members more affordable products. This would be particularly applicable in the area of hospital cover, where consumers want to know what the total cost of their treatment will be before they go into hospital. For too long, privately insured patients have found themselves out of pocket after hospital treatment, despite paying high premiums.

This legislation also seeks to widen the rules to allow health funds to offer loyalty bonus schemes, in recognition of the period of time a contributor has been in the fund. This is a welcome move. What is not welcome is the move to permit funds to pay a benefit for minor surgery procedures performed in doctors' surgeries. This is a change which is not supported. Minor operations under category C can already be performed in doctors' surgeries.

While agreeing that there is an argument for better remuneration to cover equipment and disinfectant costs, this should be done through Medicare rebates and not private health insurance funds. There is insufficient detail provided about how the proposed `approved facilities' will be regulated and how single doctors will take part in quality programs, such as exist in day surgery centres now. On this particular point the Bills Digest gives a very balanced position on this legislation:

Estimating the possible impact of this measure is difficult because of several unknown factors. It is expected that procedures provided in such facilities will substitute for procedures which would otherwise have been provided in a hospital or day hospital because only existing items in the Medicare benefits schedule are to be approved for use in these facilities.

It is possible that savings may accrue to health funds because these procedures will presumably be performed at a lower cost than would have been the case in a hospital or day hospital.

However depending on the level at which the proposed facility benefit is set by the minister the overall cost to the health fund may end up being higher in which case contributors with the appropriate cover will be likely to face increased premiums. In addition, it is possible that these facilities may offer greater ease of access for patients and may result in increased demand for the particular procedure available in this facility.

So there are two possible problems with that part of the legislation. The procedure may therefore actually undermine the attractiveness of private health insurance.

In 1994-95, the Australian Bureau of Statistics indicated that 81 per cent of patients treated in private acute and psychiatric hospitals had private health insurance, while only 55 per cent of those treated in private day hospitals were insured. The effect of this legislation would be to disadvantage Medicare patients who would have to either pay extra or queue for such services in hospital or in a doctor's surgery.

This legislation, however, amounts to an attack on the principle of universal insurance under the Medicare arrangement and originally was aimed at opening the door to remove the restrictions that keep most specialist fees down. But the government got cold feet on this when the ALP protested and public opinion got too hot for them. Surely, if we are to be seen to be not only responsible but also fair dinkum in regard to Medicare, we need to keep fees from rising too high. Specialist fees are already a major torment for many patients who know that, whatever coverage they have, the cost of specialist fees is going to be a major headache in most cases. Surely it is our clear responsibility not to make any amendment to our legislation that will in some way permit easier fee rises upon ill Australians. The consequences of the alleged freeing up would be to make major medicines much more expensive for the mums and dads of Australia.

Any amendment to private health insurance should be seen as supplementary to our Medicare system, not instead of the system. It is recognised by none other than Dr Dick Scotton, the original architect of Medicare, that the scheme needs to encourage more competition to control costs of doctors and private hospitals. One suggestion is that for Medicare to function effectively 40 per cent of the population must have private health insurance. Currently, 30.1 per cent of the population have private health insurance.

The government may claim some sort of victory in this area with some funds claiming an increasing membership as a result of the 30 per cent rebate. But the rebate is only solving part of the problem of our health system while starving the public health services which provide the majority of health care. But critics are still reserving their judgment as to whether the 30 per cent rebate will assist in attracting people back into the private health system. Press reports indicate:

While the 30% rebate has stimulated heavy inquiries many callers are believed to be existing members asking about using the bonus to upgrade their coverage.

This report was by Jack Marshall in the Sydney Morning Herald of 2 March, while Michael Reid, a general practitioner from South Australia, writing in the Financial Review on the same day, said:

The only deviation from the supply side measure has been the misguided private health insurance rebate instituted by the current administration. This initiative may provide short term respite for the private health insurance industry. In the medium term however it is destined to only exacerbate the existing problems by preferentially attracting `high use' individuals into the system.

There is a qualified medical practitioner, who has hands-on experience, who is actually saying that the 30 per cent rebate is not going to solve the problem and is really a waste of public money.

The Medicare system is continually under attack from this government, and from people such as the Victorian Premier, who is reported as saying that Medicare will not survive into the next century. These views are supported from time to time by the AMA, by surgeons and by the private hospital lobby. Clearly, conservative politicians have an ideological opposition to state controlled health systems, no matter how beneficial they are to the public. These views are supported by the private health lobby, who are seeking at all times to maximise their profits by providing increased health services at increased costs. The government's bill proposes to deregulate the increase in premiums by health funds. This would be achieved, firstly, by moving the decision from the minister to the Private Health Insurance Advisory Council and, secondly, by completely deregulating premiums.

This whole issue is a very sensitive one for the government and potentially is also very expensive for the government and for the taxpayer because the government will lose any capacity to control the cost of providing the 30 per cent rebate. Already we have seen one national health insurance fund increase its premiums—the 44,000-member Defence Health Benefit Fund has increased its premiums by 22 per cent. This is the important point to remember, and for the government members to take on board: as health funds increase their fees, the value of the 30 per cent rebate to fund members is reduced and, of course, that creates an additional burden on the taxpayer. But, more importantly, at the same time much needed finance which should be going to the public sector is likewise reduced.

The aim of the government should be to provide a first-class health system to the Australian public while ensuring a control is being kept on costs. The costs that particularly need to be looked are those relating to fee charges by specialists and profits to be made by the excessive costs of much needed drugs. A great deal needs to be achieved in the area of specialist fees as they relate to the availability of hospital beds. Nevertheless, medical costs are being kept under control by Medicare, and this is one of the big pluses of Medicare. This means cheaper health costs to the Australian public.

In a recent article in the Sydney Morning Herald on 18 January 1999, health writer Marion Downey made this claim:

Growth in Medicare costs is showing the real rate of growth in expenditure was

2.9% in 1997-98, significantly lower than for any year since 1992 and lower then the average annual growth rates over the period 1984-88 to 1996-97.

Australia spends 8.6% of its gross domestic product on health care making it a middle ranking country in terms of costs, despite a private health system that is the second largest in the developed world . . . proportionately three to four times the size of that in all the other developed countries apart from the United States.

Areas of uncontrolled expenses in particular drugs do remain. But drug manufacturers are participating in trials which they hope will prove that spending on drugs saves money elsewhere in the system.

While this may be true, we on this side of the House will be opposing any amendment that appears to give the green light to pharmaceutical companies to increase the price and increase their profits by increasing demand for their products.

One of the issues that needs to be raised in any debate on health insurance and any proposed amendment is the relationship between the system and older people. Schedule 2 of the bill permits insurance funds to limit the scope of policies to exclude palliative care, psychiatric care and rehabilitation from these new, out-of-hospital products.

Paragraph (bf) of schedule 1 of the National Health Act 1953 requests that all public insurance tables offered by health funds must include benefits for palliative care, rehabilitation and psychiatric care. Item 9 of the government's legislation amends paragraph (bf) to the extent that new products to be offered by health funds to cover services envisaged in parts 5 and 6 of schedule 1 of this bill will not be required to include benefits for palliative care, rehabilitation and psychiatric care.

The Australian Catholic Health Care Association has also expressed their concern about this exclusion in their submission to the Senate Community Affairs Legislation Committee. The executive director of that organisation, Francis Sullivan, said in part:

When previous amendments to this act were proposed to the Senate, we were concerned about the requirement on health insurers to cover rehabilitation, palliative care, psychiatric care and the like. At that stage of course it was talking about acute service. Our same concerns are there in regard to any service that people believe they are going to be insured for, whether they be in a hospital or outside.

This association has sought the reason for specifically singling out palliative care, psychiatric and rehabilitation care for exclusion prior to the passing of this amendment.

This is a question that maybe government members can answer for us. Nevertheless, this provision will severely disadvantage older Australians because it means that funds can offer policies targeted at young people and not offer to cover those categories of major health costs for older people.

It is very important that older people have the maximum coverage that they want. I have heard other speakers today, I think the member for Hinkler, saying how very important private health insurance is for older people who have been in the fund for long periods of time. For that very reason, for that peace of mind, it is very important that they do have that range of coverage, particularly with most health costs occurring in the last two years of life. It is important, therefore, that older Australians have the full range of health care options available. This legislation does not give older people this flexibility.

Mr Deputy Speaker, 1999 is the International Year of Older Persons. We should be particularly sensitive that, in any amendments that are made to the health system, absolutely nothing is done that causes added strife or burdens to any older people—and by that I do not just mean those who have retired.