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Wednesday, 14 September 1983
Page: 732


Mr CARLTON(10.59) —The Opposition opposes the Health Legislation Amendment Bill 1983-the Medicare Bill-for the following reasons: The Bill does nothing to improve the quality of health care in Australia. Indeed, it includes measures that will lead to the deterioration of service in doctors' surgeries and public hospitals. It is a major act of nationalisation, increasing taxation by $1.7 billion per annum to cover additional government expenditure previously met by private insurance. It means the sacking of 5,000 low cost private sector health insurance workers and their replacement by at least 2,500 high cost public sector workers and extra computers. It hides the real costs of health care. The $1 billion one per cent levy on incomes represents only one-eighth of the $8 billion spent on health by Federal and State governments. It hides the cost at the consumer level by providing so-called free services in hospitals and doctors' surgeries to people who can afford to insure. It threatens the continuing existence of private hospitals which make a major contribution to health care and puts extreme pressure on the public hospitals. It threatens the future of private medical practice by shackling doctors to a direct government payment system.

Mr Deputy Speaker, the Health Legislation Amendment Bill moves health care in Australia substantially away from choice on the part of patients and providers towards increased decision making on behalf of patients by public servants and by politicians. To this Bill I move the following amendment:

That all words after 'That' be omitted with a view to substituting the following words:

'the House declines to give the Bill a second reading as it is of the opinion that the Australian system of health care delivery and financing should be based on-

(1) the private professional practice of doctors and other health professionals charging a fee for service supported by a private sector insurance system, and sympathetic government assistance to the aged and the disadvantaged, and

(2) public and private provision of hospital and other institutional facilities and community health care, accessible to private practitioners for the treatment of their patients, supported by a private sector insurance system, and sympathetic government assistance to the aged and the disadvantaged'.

We note that the other three Bills, the Medicare Levy Bill, the Income Tax Laws Amendment (Medicare Levy) Bill and the States (Tax Sharing and Health Grants) Amendment Bill (No. 2) are money Bills associated with this measure. We are, of course, opposed to the introduction and passage of these Bills, but, because they are money Bills, we will not vote against them in this House or in the Senate. However, we place on record our total opposition to the necessity for these three Bills which support what we regard as a thoroughly undesirable piece of legislation.

Let me return to the Health Legislation Amendment Bill 1983. I begin by pointing out that the measure contains nothing that will improve health care delivery to the Australian people. It represents a major and disruptive change to the means of paying for health care delivery in Australia. It includes measures that will make it more difficult for doctors to provide an excellent or even adequate level of service to patients, and it includes provisions that will place great strain on our public hospital systems, leading to a deterioration in service in the hospitals and to waiting lists for admission.

Medicare is not about improving the nation's health. Indeed, it contains flaws within its structure that will lead to a gradual but definite deterioration of health services. I shall describe these flaws in detail later. Of course, Medicare will not improve the nation's economic health. The second general point I make is that Medicare obscures the true cost of health care in Australia, both nationally and at the point of delivery. The Minister for Health (Dr Blewett) argues that by paying an identifiable health care levy of one per cent of taxable income people will have their attention drawn to the cost of providing health services. He also argues that the net additional cost to government of Medicare will be only $25m in 1983-84 and $62m in a full year. These figures are quite misleading.

It needs to be understood that the one per cent levy is a politically determined figure. It bears no relationship to health costs. At current tax levels the one per cent levy on taxable incomes is expected to raise about $1 billion in a full year. The total cost of health care to Commonwealth and State governments in Australia is of the order of $8 billion. So the Medicare levy meets only about one-eighth or 12 1/2 per cent of that part of Australia's health bill financed by governments and, of course, even less of the nation's health bill if we include direct payment by the people themselves. Thus it is clear that the device of the levy, rather than drawing people's attention to the cost of health services, in fact, misleads people by a factor of over 8 : 1 as to the real cost of those services.

I am often asked whether I think the Government will need to raise the levy beyond one per cent to cover the real costs of Medicare. At first I tried to estimate what the levy would need to be to make it an honest reflection of the real costs. I tried also to project the increases in costs that will inevitably arise from abuse of the so-called free system. I now realise that such calculations are beside the point. The one per cent levy figure is totally unrelated to costs. As I have already demonstrated, it covers only one-eighth of what taxpayers pay for health to Federal and State governments. It was never designed to be a real figure, it is merely a political device to pretend that Labor's health scheme will be cheaper.

I turn now to the net and full annual costs of this scheme. Another aspect of the disinformation campaign being waged by the Government is its claim that Medibank will cost only an additional $25m in 1983-84 and $62m for a full year.


Mr Howard —Phoney.


Mr CARLTON —It is phoney, as the honourable member for Bennelong (Mr Howard) has said. This claim is arrived at by going through a series of additions and subtractions that obscure what is really happening. The Minister's Press release of 25 August 1983 on this subject included a table. I seek leave to incorporate in Hansard this short table.

Leave granted.

The table read as follows-

FULL YEAR COSTING OF MEDICARE (1983/84 VALUES)

Additional Expenditure

$m

Medical benefits 900 Hospital payments to States 709 Increase in private hospital subsidy 47 Community health services 20 Administration 66

1742

Additional Revenue

Levy 1% taxable income 1050 Health insurance rebate 550 Reinsurance pool 80

1680

Net outlay 62


Mr CARLTON —I thank the House. The table shows the figures for the full year costing of Medicare in 1983-84 values and I am using the Minister's figures. In the first full year the additional expenditure on Medicare is as follows: Under medical benefits, $900m; hospital payments to the States, $709m; increase in private hospital subsidy, $47m; community health services, $20m; and administration, $66m-a total of $1,742m. Additional revenue for that period is as follows: A one per cent levy on taxable income, $1,050m, that is, just over $ 1 billion; health insurance rebate, $550m, which is the rebate which was taken away by the Government some months before Medicare came in against its clear promise during the election campaign; and the removal of $80m from the reinsurance pool-making a total additional revenue of $1,680m. The Minister says that this results in a net outlay of $62m.

What is important here is not the thoroughly misleading balancing figure of $ 62m but the additional expenditures of $1,742m, offset only by the saving in $ 80m on the reinsurance trust fund. Thus there is a net additional expenditure of $1,662m-nearly $1.7 billion-requiring an increase in taxes of $1,662m to pay for it. This increase in tax is achieved by the one per cent levy which, as taxpayers will discover on 1 February 1984, is just an increase in income tax under another name and the less obvious but, nonetheless, real removal of the health insurance rebate which taxpayers will now not get in their 1984 tax returns. I repeat that, although there was a solemn promise not to remove that rebate until Medicare came in, it was removed on 1 July this year. The simple lesson worth repeating from all this is that the Government has increased government expenditures in the health field by $1,662m and the taxpayers will be paying $1,662m in extra tax to cover it. Once again, there is no free lunch.

Let us look at the consumer price index effects of Medicare which were referred to by the Minister. He drew attention to these effects in his speech and he looked at the supposedly favourable effects of this massive increase in government expenditures on the CPI. He pretends that this is a real decrease in the cost of living, or at least a reduction in the rate of increase. The CPI is estimated by the Minister to be 2.6 per cent less than it would otherwise have been in 1984 because of the introduction of Medicare. Let no one be fooled by this piece of trickery. The nation's health costs will not have disappeared or been reduced by this measure. All that will have happened is that those items of health cost currently appearing in the Commonwealth Statistician's basket of goods and services used to measure the consumer price index will have been taken out and put in the taxation basket. Consumers will still be paying, but now through taxes rather than through insurance costs. The Australian Council of Trade Unions has simple mindedly accepted this shonky accounting as part of the prices and incomes accord, and pretended to its members that somehow they will be better off despite the fact that taxes will have gone up to offset reductions in private health insurance premiums. But the public will not be fooled. They know that costs cannot be made to disappear into thin air.

The most cruel part of the CPI deception is to be played on the pensioners who are already getting free health care, those with pensioner health benefits cards . Under Medicare they will receive the same benefits, no more and no less, but they will be deprived of 2.6 per cent of their 1984 pension increases because of the artificial reduction of 2.6 per cent in the CPI to which their pension is tied.


Mr Howard —Do you mean to say the Government is cutting pensions?


Mr CARLTON —Let me correct that. Pensioners will be deprived of 2.6 percentage points in their pension. The Government is indeed-as the Deputy Leader of the Opposition (Mr Howard) points out-cutting pensions. The Minister did not announce that one effect of Medicare then is to rob single pensioners of $2.30 per week and married pensioners of $3.90 per week in 1984. Perhaps the Prime Minister (Mr Hawke) will make the announcement and explain how it squares with his election commitment that a Labor Government would 'not take money out of the pensioner's cheques'. The Government first introduced income testing for the over 70s, then lump sum taxing, then freezing the tax threshold, then assets testing and now this Medicare mugging. What a disgraceful series of hit and run attacks on the elderly. On top of this pensioners will find themselves queueing in doctors' surgeries and for elective surgery at public hospitals because their place will be taken by those who could well afford to pay for health insurance.

Let us have a look at this supposed question of free services. At the delivery end of the system the Government again follows the irresponsible policy of disguising the costs of services. In public hospitals we revert to the system of making no charge for public hospital beds regardless of the needs of the patient . There will be no charge for outpatient services and pressure is being put on all doctors to make no charge to the patient for surgery visits but to accept 85 per cent of the schedule fee direct from the Government as full payment for the service. To increase the pressures put on doctors by patients to bill the Government direct, the Government has decided to ban 'gap insurance'; that is, insurance designed to cover the difference between the Government reimbursement of 85 per cent of the scheduled fee and the schedule fee itself. If patients know that it will cost them money out of pocket to make up this difference and if they know that it is official government policy to put pressure on doctors to bill the Government direct and accept the 85 per cent as full payment, many patients will threaten to change doctors in order to get a free service.

The Government's aim is to force all doctors to bulk bill for all patients. As with free hospital beds and free outpatient visits, these free doctors surgery visits remove any sense of financial responsibility from the patient and also from the doctor. Ordinarily, the Opposition would welcome an insurance system in which the patient agrees to make a part payment at the point of service and as a result pays a higher insurance premium. However, the Opposition would not seek to prevent people insuring for 100 per cent of the schedule fee and accepting the penalty of a higher premium. We oppose both the compulsory nature of the ban on gap insurance and also the intention to use the ban to put pressure on doctors to move over to bulk billing for all patients, regardless of their means .

It is worth pointing out, too, that this Bill imposes a total ban on medical insurance in Australia other than that provided by Medicare and by the Government. There is a parallel between the total ban placed on private hospital insurance under the Canadian system, of which the Minister is so fond. In Canada a person is not allowed under the law to insure privately for private hospital treatment, which I think is a disgrace and a scandalous restriction of human rights. This total ban on medical insurance other than that dished out by the Government is a move in that direction and it signals the intention of this Government, regardless of people's desires and regardless of their wish to exercise choice, to move in the direction of total government control.

Implicit in the vast increase in taxation required to finance this exercise, amounting to $1.7 billion in a full year, on the Government's estimates, is a considerable expansion of the public sector. Medicare is not merely a transfer payment system taking money from some in the community and giving it to others to spend as they wish. It is also a nationalisation measure whereby some 60 per cent of the business of the voluntary health insurance organisations within the private sector of the economy is appropriated by the Government without compensation and given to an expanded government instrumentality, the Health Insurance Commission, better known as Medibank. As a direct result of this action by the Government, 5,000 employees of the private funds will need to be sacked from their jobs in February. Some will get jobs with Medibank, but the majority will not. The Minister bears the direct responsibility for these sackings, but his responsibility is now shared by the Australian Democrats, who have gone back on their solemn word to health fund employees. On 13 July this year Senator Haines of the Australian Democrats, at a meeting of the Australian Medical Association in Sydney, said:

Now I am not, and never have been, the sort of person to turn my back on a fight. Medibank Private will get the sole agency rights to administer Medicare only after I have tried everything possible to prevent it-everything that is, short of voting against the levy Bill.

That is what was said by Senator Haines, the spokesperson on health for the Australian Democrats. On the same day Senator Haines joined with Senator Harradine and me in warning the Minister not to proceed on this action without parliamentary approval, as we intended to disallow the relevant amendments to the Health Insurance Commission Act in the Senate when Parliament resumed. Well, what happened? Last week Senator Peter Baume on behalf of the Opposition moved to disallow the regulation as the first step in saving the jobs of 5,000 health fund employees. Senator Haines behaved in an extraordinary fashion. She voted with the Opposition as a purely technical acknowledgment of her formal commitment of 13 July, but arranged for her four Australian Democrat colleagues in the Senate to vote the other way, thus allowing the Government its way. She also claimed that she was impressed with the concessions she had wrung out of the Minister for Health and used these as an excuse for reneging on her commitment.

What are these miserable concessions? The first is laughable; that is, that the funds could act as a post-box for Medicare. The Minister treated this so-called concession with contempt on the television program Sunday, pointing out that anyone could collect application forms and post them on to Medibank at his own expense. Anybody who watched that program-I got up especially to watch it-would have observed the brazen approach of the Minister in telling everybody in Australia, really, that he had conned Senator Haines on this matter, that the great concession she had wrung from him was totally meaningless, a post-box concession, and that anybody could collect Medibank applications and post them on to Medibank at his own expense. This made Senator Haines and the Democrats look absolutely ridiculous. Certainly the funds would not be paid for this task. No jobs would be saved in the private funds. The second concession related to gap insurance, a matter quite unrelated to employment in the private funds, as far as the Minister's decision goes. Senator Haines did not persuade the Minister to allow the private funds to offer gap insurance, a concession which might have saved a handful of jobs. He was persuaded by Senator Haines to spend an extra few million dollars of taxpayers' money on the centralised system Senator Haines had pledged herself to oppose.

What was the Minister's proposal, which will come up I understand today in the form of a late amendment to this Bill? It is to set a $150 limit on the outgoings of any patient in summation of that patient's gap payments in the course of a year. This means that if the difference between the 85 per cent paid by Medicare and the schedule fee in total over a year for medical services adds up to more than $150, from then on for that patient the doctor will get 100 per cent of the schedule fee from the Government and not 85 per cent. That is the effect of the amendment as I read it. The amendment takes about five pages to get that particular point over because it is a very bureaucratic and extraordinary system. In fact I believe that gap insurance could be provided by private insurers for less than $150 a year. So the Haines proposal accepted by the Minister gets nowhere. It does not provide jobs in the public sector and it also leaves a loophole for additional overservicing because any patient who goes through a major series of operations or a major surgical incident may well achieve $150 of gap payments. From then until the end of the year any doctor seeing that patient who wishes to do so can get 100 per cent of the schedule fee and not 85 per cent as provided for everybody else in the community. Not only does the Minister deny the private funds the opportunity to provide gap insurance, but he also opens the door for further overservicing by unscrupulous practitioners.

Other so-called concessions offered by the Minister direct to the funds but not to Senator Haines related only to the partial preservation of the remaining 40 per cent of their health insurance business after the nationalisation of 60 per cent. With the arms and legs removed, there will be an attempt to seal off the arteries but no microsurgery to restore the limbs. That is some concession from the Minister! While Senator Haines was proclaiming her victory and even being congratulated by the Advertiser newspaper in Adelaide last Saturday, the 5,000 employees she had deserted prepared themselves for the sack in February.


Mr Howard —I would hate to see one of her defeats!


Mr CARLTON —Indeed, as my honourable friend said, we would hate to see one of her defeats if this is a win. The Australian Democrats still have a chance to regain some measure of credibility in this exercise. The levy measures are separate from the health Bill. Senator Haines can still do what she said that she would do in July; that is, vote for the levy but not for the centralisation. She can also persuade her colleagues to do so. If the Democrats go back on their word once again in the vote on the Bill, their claims to act honourably and truthfully as watchdogs of the Government will forever be regarded as worthless.

I will not go again through the Minister's pitiful arguments in defence of his shameful act of butchery. They are revealed once again in his second reading speech to be misleading and contradictory. I simply refer to my remarks in this House on 10 May this year, as reported at page 352 of Hansard, when I forecast this decision and when the Minister accused me of rumor-mongering. The Minister spoke with a forked tongue on that occasion, as in retrospect it is clear that he had already made up his mind. On 24 May the Minister announced the decision to slaughter and again I exposed the fallacies in his argument-page 847 of Hansard. Finally, on 24 August this year, following the presentation by the Minister of the interim annual report of the Health Insurance Commission, Medibank, I pointed out that nothing had changed in the interim to strengthen the Minister's argument-page 179 of Hansard. This Minister remains responsible for the first major cause of unemployment in this Labor Government. It will not no doubt be the last, but it will be noteworthy for the chilling ruthlessness with which it has been carried out and for the vindictiveness against the voluntary funds that lies behind it. It will not be forgotten by the Opposition. Least of all will it be forgotten by the 5,000 innocent victims of this purge and their families.

Let me turn again to the Medicare scheme itself. What is its justification? Might it not have been possible to remedy what might have been seen to be defects in the existing system without all this turmoil? I think it is worth recalling what the existing system is. The main features of the existing system of health care are these: Free hospital and medical cards for pensioner health benefit and health care card holders are provided so that pensioners, low income groups and the unemployed can get free hospital and medical care. This takes up about 20 per cent of the Australian population. Under the present scheme the remaining 80 per cent of the population are expected to take out private health insurance to the level they wish to cover themselves for. A basic insurance of about $13 a week, subject to a tax rebate of 30c in the dollar before this Government removed it, covers public hospital costs without choice of doctor and 85 per cent of the schedule medical fee with a ceiling of $10. That is similar to the basic provision of Medicare that the Government wishes to introduce. There are other levels of insurance to cover people for choice of doctor in a public hospital, for a private hospital bed and for additional services such as dentistry, physiotherapy, chiropractic and so on.

The Government under the existing scheme subsidises private insurance in four ways. Firstly, there was a 30c in the dollar tax rebate on basic insurance premiums. This was the one removed by the Australian Labor Pary in its May statement from 1 July, costing families an extra $4 a week. There was a 30c in the dollar subsidy of the medical schedule fee paid to the voluntary insurance funds so that every medical visit was subsidised by the Government, by the taxpayer, to the extent of 30c in the dollar. There was a $100m subsidy of the Reinsurance Trust Fund. This is the Fund which the private funds can draw on to deal with the chronic cases. In other words, this was a subsidy by the taxpayers of $100m to ease the burden of those who went into substantial periods of illness. This Government cut that reinsurance pool from $100m to $20m, again in the May statement. It took $80m out of the funds of the contributors to the private funds to make its sums on Medicare look better. There is also under the existing system a $16 a day subsidy for medical beds in private hospitals and a subsidy of $28 a day for surgical beds in private hospitals. These are balanced against charges through the public hospitals, which means that the private hospitals are not disadvantaged under the system.

The advantages of this system of health insurance are that it looks after the disadvantaged, the 20 per cent of the population who need free care; it allows wide consumer choice; it provides some discipline in the use of services through user payments; and its promotes private medical practice in private hospitals on which the general health of our health care delivery system depends. It had certain disadvantages which I acknowledged when the Minister felt that we could improve over time. There was concern expressed by the present Minister, which I accepted as a concern, at the sudden death cut-off of the free medicine when one went above the 20 per cent provided free, which was hard for low income families . There was also the delayed action effect of the tax rebate which made the cost of one's weekly outgoings look higher than they would be in the long term. Also I believe there was too limited competition in the insurance market because it was difficult for commercial insurers or prepaid schemes to enter the market. I also believe that there were not enough disincentives for overuse of medical and hospital services within this scheme.

These disadvantages, which I certainly acknowledged as Minister and have acknowledged since then, could be removed by fairly simple legislation and by relatively minor adjustment to the scheme. They would have preserved the advantages of the existing system and brought in more competition to the market place and certainly greater disincentives for overuse of medical and hospital services. Was it necessary to overturn the whole of the existing scheme and to nationalise 60 per cent of the health insurance business in order to overcome whatever defects there were in that scheme? The Opposition clearly believes that this is a ridiculous way to go about remedying any defects and that it introduces methods of financing health care which go against and, indeed, reverse the advantages of the existing scheme.

Let us look at those methods in greater detail now. First of all, let me look at the effect of Medicare on the doctors. We need to say quite a number of words to the doctors who are very divided in many respects on Medicare. The Minister for Health (Dr Blewett) has noted that the Australian Medical Association has been less vociferous in its opposition to Medicare than to Medibank. Doctors of course have been terrified of the threats made to them by the Minister before he became the Minister during the period of the inquiry of the Public Accounts Committee. Most doctors believe that in taking a strong line to push their ideas they would have been met very publicly with threats by the Minister to leave them less disadvantaged than they might be under the outline of the scheme. I think their fears are justified. The Minister has taken the same line with the Voluntary Health Insurance Association. But doctors generally must understand what this means for them and their profession in the longer term.

Fundamentally, this move by the Minister will take us a long step away from the ideal of private professional practice where the contract between the doctor and patient is not interfered with by a third party to the ultimate destruction of that relationship. Let us look at the steps that will occur. The first step is to get all doctors to accept 85 per cent of the schedule fee direct from the Government without any patient involvement in the transaction. The Minister makes no bones about his objective. He has given three options for payment by people of their medical bills. But the one the Government prefers and the one it has backed up by the device of prohibiting gap insurance, making it more difficult for people to pay for the gap-the one it clearly favours-is the direct payment of 85 per cent of the schedule fee by the Government, by the taxpayer. So down the line, doctors will succumb to pressure within particular areas, such as the market forces referred to by the honourable member for Capricornia (Dr Everingham) earlier. These are the sorts of market forces that apply when a government player with a limitless purse is involved. That is the sort of competition to which the honourable member referred. In any locality where some doctors decide to bulk bill and where they get more patients coming into their surgeries other doctors start to lose patients because people see a value initially in a free surgery consultation. The doctors who are left behind find that their practices are operating below their break-even points because their practice costs must be met. They will be bludgeoned into going on to this direct billing process, accepting 85 per cent of the scheduled fee.


Dr Everingham —All they have to do is reduce their fees-free market pricing.


Mr CARLTON —The honourable member for Capricornia is talking total nonsense. There is no such thing as a free market when one of the players is the Government using taxpayers' money. The honourable member knows that very well. How can one compete with doctors who have an intravenous feed into the Treasury? In competing with them one is competing with their use of taxpayers' dollars. That is no market place and never will be. So the next step if this Government remains in office for very long, and heaven forbid that will happen, is that gradually, inexorably the Minister will achieve his objective of virtually 100 per cent of medical practitioners accepting 85 per cent of the schedule fee from the Government.

What happens to doctors placed in this sort of squeeze because, after all they will receive only 85 per cent of the schedule fee and some of them charge a bit more than the schedule fee anyway, as they are entitled to do in a free situation? If they are charging only the schedule fee how will they make up the difference of 15 per cent? Admittedly, some of the difference might be made up by not having to worry about sending out accounts and collecting bad bebts, but that is nowhere near 15 per cent. The way they will be tempted to make up the difference is by seeing people more often and by operating on the schedule so as to improve their income. This is an extraordinary temptation to put before a profession which has already been subject to that kind of temptation by the relatively limited intervention which we had under the previous Government.

What will be the response of the Minister? We heard his answer to questions in this House yesterday relating to the doctors. It was the first time that the doctors had come out and said something rather sharp about the Minister's scheme . He responded in the way in which he will increasingly do. He will get back to his hectoring, attacking style in relation to the profession he employed before he became Minister for Health and while the Public Accounts Committee was conducting its investigations. There will be a public outcry then that the doctors will be charging more, the meters will be ticking over faster as they did last time under Medibank. Then the Minister will say: 'We will double up the fraud and overservicing detection system'. He has already announced this. In the Budget the $4m previously spent on fraud and overservicing detection systems is now doubled to $8m-$8m for the policing of doctors because the Government is scared that the meters will tick over faster under a direct billing system. I liken this way of dealing with overservicing to the policeman going down the High Street at dead of night, seeing that the door of Woolworths is open and, instead of closing the door, sitting on the opposite side of the road, counting the goods going out through the night and subsequently trying, on the basis of computer profiles that he has developed of goods going out during the night, to find out who the culprits are. That is the solution of this Minister to any problems of overservicing by the medical profession.

By doubling from $4m to $8m of taxpayers' funds the amount spent on the policing and surveillance systems he is introducing a new reign of police state affairs into the control of something which is extended by the very mechanisms which this Government is bringing into force. I think that this is going down a fundamentally mistaken path. If there are difficulties with the amounts going out through doctors' surgeries under the present system there are ways of dealing with them which make doctors and patients more responsible. This method makes the policing system more responsible. Of course it will not work. In any case there will be difficulties initially on the numbering system. In order to take people to medical services committees of inquiry or, if the problem is much more serious, to investigate fraud we must have a series of information which is consistent over a long period. I very much doubt whether the new Medicare card numbering system will be in any way transferable or traceable back to the original numbering system of the private health insurance funds.

I will be watching very closely and, indeed, I ask the Minister to respond in the debate during the Committee stage as to whether there is a continuity of numbering between patient records-not just the doctors' servicing, but patient records-in the old system with the private health insurance funds keeping the records and the new Medicare card numbering system. If there is not an immediate transfer of information from one system to the other the historical records on which fraud and overservicing detection systems are based will not be able to be used. There will not be consistent information on patients, although there may be information on doctors, which will enable this system to work. Fundamentally the Opposition is opposed to introducing a system which opens up the door of Woolworths in the High Street at night and lets the goods go out. Instead of shutting the door and looking at the cause of overservicing this system it pushes people into overservicing and then introduces police state methods to try to overcome it.

What about the other health professionals in this whole equation? I wish to say something here about such people as physiotherapists, dentists, clinical psychologists and chiropractors. All of them have been making representations to us to support their claims to the Minister that they should be admitted to Medicare. During the period of our Government we received similar claims and representations. I must say that I had a great deal of sympathy for these professions because the doctors were receiving very substantial public benefit through the taxation system while these people, unless they were in the public sector, were left on the outer. These people relied totally on their patients' private insurance. Therefore we knew that anybody going privately to any of these people believed that they were getting good service.

I have heard countless stories of the very great contribution to health care delivery in Australia by this group of related professionals. I certainly have great sympathy for them. It would have been my intention to try to even up the situation between them and the doctors over a period; but in all honesty the Opposition cannot support the entry of these additional professional groups to a nationalised, socialist system of health care finance which we fundamentally oppose. I have carefully gone through the difficulties of the medical profession as a result of even the previous system. I have taken those forward into what I think will be increasing difficulties for doctors under the new system. Would any of these professions wish to get into the kind of conflict that the doctors will get into with this Minister by joining this scheme? The Opposition, sympathetic as it is to these groups, cannot possibly support their addition to a system of which on the whole it thoroughly disapproves.

I now turn to the effects of the Medicare proposals on the hospital system. The private hospitals have been very worried about what is to happen to them under Medicare. This is not surprising, given the ideologically motivated attacks on them by this Government and its sympathisers and also by State Labor Ministers for Health, who miss no opportunity to express their distaste for any non- government activity in health care delivery. It is a parallel situation to the attacks on private schools by the Minister for Education and Youth Affairs, Senator Ryan. Just as religious schools of all denominations are being squeezed by Senator Ryan, the hospitals operated by religious orders and voluntary bodies are threatened by Medicare and by this Minister.

I make it quite clear on behalf of the Opposition that we stand firmly by the private hospitals and nursing homes, whether they are operated by non-profit organisations, including religious orders, or by proprietors honourably earning a profit by providing a desired service. We would like to see such private activities in the health care field extended rather than reduced, thereby providing greater choice to consumers, wider opportunities for innovation, more responsible attention to costs and release from the entangling web of restrictive practices imposed by unions and others with such devastating effect on publicly-owned health services. State Labor Health Ministers should also welcome this kind of competition beside their massive and unwieldy central health authorities. No doubt they would welcome it for purely pragmatic reasons if they were not bound by their political platforms to the mindless preservation and extension of the public sector.

The great fear about Medicare-it is not a groundless fear-is that the new insurance and reimbursement arrangements load the dice in favour of the public hospitals without giving those hospitals the additional resources to meet the fresh rush of patients. Under Medicare a patient, regardless of means, will be entitled to a free bed in a public hospital provided he or she accepts the doctor decided on by the hospital. So much propaganda is put out by the Government suggesting that Medicare will cover all health needs that many people will actually believe it and not bother to take out additional private insurance even though they could afford it. That is a particular worry in regard to the pensioners. It would be most unwise for them not to take out additional private insurance, as the choice of doctor in the event of a serious illness is something for which most people giving the matter serious thought would be prepared to make some sacrifice.

Any reduction in the percentage of the population taking out private hospital cover will lead to additional claims for admission to free hospital beds in public hospitals. That must follow; it is simple logic. If the public hospital beds are already under pressure, as they are in many city and suburban locations , people will have to wait for admission. One can imagine the results of that. We will finish up with a British national health situation where patients wait ages for necessary operations.


Dr Klugman —Even unnecessary operations.


Mr CARLTON —The honourable member, being a doctor, should know that many operations decided to be unnecessary by bureaucrats and politicians cause enormous pain and discomfort to many people. Under the British national health system, people with hernias who are supposed to be working cannot get an operation for over 12 months. Of all people in this House, the honourable member should know this. Who decides who needs what? This Medicare scheme determines that the people who decide who needs what will be decreasingly the patients and providers and increasingly the bureaucrats and the politicans. If we wish to take to its extreme what is happening in this case we look at the British situation which the honourable member for Prospect conveniently overlooked. To give an example of this I refer to the Victorian Bush Nursing Association. The Executive Director of this Assocation issued a Press release just over a week ago which stated:

Categorisation of private hospitals is a major disaster. Under this proposal-

he was referring to the Medicare scheme-

benefits payable by the health insurance funds will, for most bush nursing hospitals, be $80 per day. A Commonwealth subsidy of $20 will also be paid providing a total income-

to the hospital-

of $100 per day.

As there are only four bush nursing hospitals with average daily bed costs below $100, it is obvious that thirty-four bush nursing hospitals will be in severe financial difficulty within a matter of months after the scheme is introduced unless patients are prepared to pay up to $55 per day.

That cost will not be covered by the basic table. I was given this morning the example of a hospital in Euroa in Victoria, classified as C category, getting this level of benefit. It would get $80 from the funds and $20 from the Commonwealth Government, making a total reimbursement of $100, and the actual cost of a bed is $146.


Dr Blewett —Have you checked those absurd figures?


Mr CARLTON —So the bush nursing hospital in Euroa will have to ask people to pay an additional $46 for admission.


Dr Blewett —You would believe any story you were told by any vested interest.


Mr CARLTON —The Minister questions whether I would accept all figures unchecked. I am bringing these figures to the attention of the House because the Minister has refused to see this group. The Press release continued:

An attempt to see the Minister for Health, Dr Blewett was unsuccessful and the Department of Health in Canberra 'misplaced' its copy of a detailed submission made to the Minister by the Association.

I telephoned the Association this morning. It still had not heard from the Minister even though it had sent him a new copy of its submission. The onus is on the Minister to check out these matters and if necessary to refute them; it is certainly not on me. He is the responsible Minister. I just use this as an example of the grave threat to country health services. There are nearly 40 of these hospitals in Victoria. They make up one-third of the private hospital system in Victoria.


Mr Lloyd —Six in the Murray electorate.


Mr CARLTON —There are six in the honourable member's electorate. The next step in this process is that some people will realise that they have to take out private hospital cover and will do so at the minimum level, entitling them to the choice of doctor in a public hospital and shared ward accommodation. This will be the category C, where we have this sort of hospital, and other categories that will get higher reimbursement depending on their level of services. If they go to a public hospital, they will be able to get choice of doctor and they will pay nothing. But if they go into a private hospital for a six-day stay, including, say, surgery, they could have to pay up to $40 or $50 a day additional bed charges and perhaps $200 or more in theatre fees which would not be covered by Medicare, and they could be out of pocket by $400 to $500 for an average six-day surgical stay in a hospital. Even if the sum were only $200, surely they would be tempted to try harder to get into the public hospital system and pay nothing, and further pressures are thereby put on the public hospital system.

The Minister has suggested that this kind of private cover, at the minimum level, will cost $5 a week for a family. No justification has been produced for this figure, which is one that will be charged by the remnants of the private health insurance industry. How do we know that $5 will be enough for basic private hospital cover? I have heard estimates within the industry as high as $8 a week. What will the figure be? It is of very considerable importance, because it affects the costs of health care for every family in Australia. Until we know what it is, we have no means of judging exactly how false are the Minister's claims for the costs of Medicare for the family. What we do know, however, is that it will cost considerably more than $5 a week to insure for higher levels of private hospital treatment, an insurance that would guard people against the large extra bills that they will meet if they are on the lowest private hospital table. Of course, beyond that, they will want extra cover for dentistry, physiotherapy, chiropractic and the like. Many families will get a nasty shock on 1 February 1984 when their tax rises by one percentage point and they also find, to their dismay, that they must take out a great deal of additional health insurance. Bear in mind, too, that under Medicare, there will be no tax rebate for health insurance premiums.

Let me summarise what will be the effects of this scheme on consumers. The first effect is clearly the disruption and uncertainty of a full-scale change to a new system which is totally unnecessary. It will lead to two-stop shopping. If a person wants to take out additional insurance-over half of the people who insure these days do that-it will be necessary not only to deal with Medibank but also to deal with a private fund; that is two-shopping. There is great uncertainty about the costs of this system. The Minister has said that a third will pay more. Maybe more than a third will pay more. This ignores, of course, the taxation situation. It will be recalled that I said that the one per cent levy meets only one-eighth of the government payments for health care in Australia, so what a person pays on the levy is no indication at all of the real costs to the taxpayer of health care. There will be more going out in ordinary unmarked tax dollars from people than there will in the one per cent levy. We must understand that. The one per cent levy is purely a political figure; it has nothing to do with costs.

Many people could find themselves uninsured. The Government's propaganda as to how marvellous Medicare will be might fool people into thinking that they can get way without taking out extra private insurance. The pensioners will be disadvantaged, because those who are on pensioner health benefit cards will be affected by the 2.6 percentage points difference in the consumer price index next year, as forecast by the Government. They will miss out on pension increases in 1984 of about $2.30 for a single pensioner and $3.90 for a married couple.


Mr Saunderson —Ha, ha!


Mr CARLTON —The honourable member may well laugh at this, but they are the figures. Consider the drop in the CPI. These people are getting free health care now. Next year they will be getting exactly the same benefits. The CPI will be down by 2.6 percentage points, and that means that pensions will not rise by that 2.6 per cent for purely artificial reasons, so pensioners will be missing out in this situation. Beyond that, and looking down a bit, because of so-called free treatment in doctors' surgeries, the queues will begin to form in doctors' surgeries. The doctors who provide so-called free treatment will start to get full surgeries. The disadvantaged and the poor will be at the end of the queue, as they have been in Britain. These systems do not work. In the public hospitals , which are already under pressure-there are waiting lists in certain areas, particularly metropolitan areas, for surgical procedures-the same so-called free beds available to people without means test will put more pressure on the public hospitals because the private hospitals will be disadvantaged and will lose patients. The way in which we sum up how the consumer stands in relation to Medicare is best illustrated by going back to the policy speech of the Prime Minister (Mr Hawke) for the election in March. The Prime Minister made this solemn promise:

It will mean that nine out of 10 Australians will pay less for the health needs of themselves and their families.

At the very time that he made that promise, it was wrong, because two out of 10 already got free cover, so it was impossible in any case from the start. The pensioners and the others still had the cover. Under this scheme, pensioners will still need to take out private cover if they want choice of doctor. So certainly, out of that two out of 10, they do not get anything better than they currently get. The Minister, in using his assessment, says that two-thirds of the remaining 80 per cent will be better off and will pay less under Medicare. Even if we accept that, two-thirds of 80 per cent is 53.3 per cent of the population.

The Prime Minister claimed that nine out of 10 Australians will pay less for the health care needs of themselves and their families. We have pointed out that two out of 10 already got it for nothing, so that is impossible. The Minister varied that and said that maybe it is seven out of 10. Now he says that two- thirds of 80 per cent-which is 53.3 per cent by my calculation-will pay less. That is on his estimates of private health insurance extras; and his estimates are not worth a crumpet because he is talking about $5 a week and the funds have not even been able to work out what they can charge yet, and they will not know until 5,000 of their employees have been sacked in February, when they will know what their overhead costs are. The changes are that their overhead costs will be higher in relation to premiums than they were previously because they will have lost economies of scale. So the $5 figure is not worth a crumpet and, of course, it will be higher for private beds in private hospitals and for multicover and the like.

What is the Opposition's stance in relation to this legislation? What would the Opposition do in this area? The Opposition is carefully looking at all its policies in each area, carrying out a complete review, and that includes the health care delivery area. Our full policy on this will be announced as soon as we have done the necessary work and checked it out with the various people who will have an interest in it. However, we make it clear that we could not live with certain key aspects of Medicare. Let this be perfectly clear. We cannot live with bulk billing for general patients as opposed to the disadvantaged. We cannot live with so-called free public hospital beds regardless of patient's means. We cannot live with the attacks on the private hospitals. We cannot live with the attacks on private medical practice. We could not, in government, allow such provisions to remain. I make that absolutely clear. I have said that already previously. The Opposition is absolutely united on those four points relating to this scheme, which we would not be able to maintain on a return to office as we see them as being destructive of the provision of good health care in this country.

So where do we stand? We stand at a very crucial turning point in the delivery of health care in Australia. The Government, regardless of overseas experience, regardless of experience of certain aspects of the existing scheme, regardless of the inquiries by the Joint Commitee of Public Accounts, regardless of all the available international evidence, has decided to go back on a 20-year-old experiment, an experiment of a kind that will certainly reduce consumer choice, patient choice, and will inexorably move choice in health care away from patients and providers and in the direction of public servants and politicians. There is no suggestion by the Opposition that in the end the Government will not control the costs of this scheme. We are quite certain that in the beginning the costs will start to run away; but by force majeure, as has been tried in England , one can contain costs by squeezing the system dry-squeezing, ultimately and inevitably, the poorest and the least advantaged. That has been the end result of the system in Britain, and the system in Canada in moving rapidly in that direction. If there is so called free provision with no responsibility on the part of the patient and minimal responsibility on the part of the doctor or the provider, subject only to some overall computerised 1984 surveillance system, there will be increasing usage of services which are unnecessary. The figures in Canada certainly show this. The figures in Australia certainly show this, even on the limited subvention that has been given to doctors under the present scheme with the disadvantaged patient. The evidence is there that the kind of experiment on which we are embarking at this nation's expense will lead inexorably to the difficulties in service delivery that have occurred over the last 30 years in Great Britain.

What the country also needs to understand is that this is a major, old fashioned, nationalisation measure. We cannot add $1.7 billion to Federal expenditures on any single item without fundamentally altering the balance between the public and the private sectors of activity. Under these provisions $ 1.7 billion is being transferred from the private sector to the public sector. Five thousand employees-low cost ones such as Federated Clerks Union of Australia employees-are to be transferred; they are to be sacked. An additional 2,500 expensive union employees are to be taken into the public sector, with all the managerial apparatus that that involves. The scheme will involve a substantial transfer of resources and authority from the private to the public sector.

If this legislation is not rejected by the Senate this nation will take a path which is fundamentally in error and which it will certainly regret in the future . I think it has to be made absolutely clear on behalf of the Opposition that, however awkward and unpopular it might be at this point to seek to illustrate the facts of life in relation to this measure, the Opposition will not draw back from talking about them. The Opposition will point out why this is an historically mistaken step. That will become clearer to people once the scheme gets closer to implementation and aftewards. The end results will become clearer as the months and years draw on. The kinds of things we have to say at this point, however unpopular they might be in certain quarters, will be seen to have been necessary and true. I have a great deal of faith in the Australian population because I think they have learnt over the last 20 years that there is no such thing as a free lunch, that health care is not free and never can be, and that the good health care we have in Australia is worth preserving. It is worth paying for, and it is worth keeping as much of it as we possibly can within the private sector of our nation's activity.


Mr DEPUTY SPEAKER (Mr Rocher) —Order! Is the amendment moved by the honourable member for Mackellar seconded?


Mr MacKellar —Mr Deputy Speaker, I second the amendment and reserve my right to speak.