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Wednesday, 28 May 2003
Page: 15133


Mr STEPHEN SMITH (9:16 AM) —There could not be a better juxtaposition: the government introduced its unfair Medicare package at 9.05 a.m. and funded it to the tune of $917 million, and at 9.10 a.m. we are debating the Health Care (Appropriation) Amendment Bill 2003. We know from the budget papers that the government is ripping $918 million out of the funding of the health care appropriation bills.


Mr Truss —Absolute rubbish! Wall to wall rubbish!


Mr STEPHEN SMITH —Read page 179 and page 162 of the budget papers. It is there for you to see. It is a great shame that ministers of the Crown do not even read their own budget papers. There could not be a better juxtaposition. At five past nine, the government put its unfair Medicare package legislation to the parliament, which is funded to the tune of $917 million over four years, and five minutes later we are debating the appropriations for the health care agreements. In the budget papers, we have found that the government is ripping $918 million out of the forward estimates to fund it. So it is a straight switch: destroy Medicare and rob the states of a billion dollars over four years and between a billion and a billion and a half over the five-year period of the health care agreements—a billion dollar hospital pass to the states.

The minister at the table and other ministers should read pages 162 to 167 of Budget Paper No. 2 and page 179 of Budget Paper No. 2. There they will find the health care agreements funding cut—$918 million over four years—and the funding for the government's unfair Medicare package—$917 million over four years—ripped out of the state public hospitals to fund the unfair Medicare package. There could not be a better juxtaposition of those events, from what we have seen today. The government has effectively done that as a job lot in five minutes in the House today.

The Health Care (Appropriation) Amendment Bill sets the scene for the Commonwealth to make its ongoing contribution to the funding of state public hospitals through the Australian health care agreements. The current five-year agreement period expires on 30 June this year, and the new agreements commence on 1 July this year for a five-year period. The opposition support the legislative framework that would enable the Commonwealth to continue to fund the health care agreements; our great complaint with the Howard government is the level of the funding and the manner in which it funds them.

The renegotiation of the health care agreements, so far as this government is concerned, has been a great lost opportunity. People interested in this area may recall that, at the health ministers conference in 2002, all the states, both the territories and the Commonwealth—through the Minister for Health and Ageing, Senator Patterson—agreed on a reform program. A series of task forces were established, essentially under the chairmanship of Professor Dwyer. A task force of clinicians was charged by the health ministers conference to look at a range of reform proposals and reform mechanisms. This set some expectations in the profession that there would be, firstly, adequate funding of the states through the health care agreements and, secondly, implementation of some reform measures.

In August last year, when I spoke at the Australian Health Care Association's annual general meeting in Hobart, I said that people should not get their hopes up too high, because at some point in the process, someone in authority—not the minister for health—would turn up and say, `Last time they got this amount; next time they're getting the same amount plus or minus a particular percentage.' I made the point at the time that my great fear would be that it would be a minus percentage. People will remember that in November-December last year all the state and territory health ministers turned up but the Commonwealth was represented by an empty chair. Why was that? It was because the health minister had absolutely no authority in this matter. A decision had been made by the government—by the Treasurer and the Prime Minister—on the amount of funding, and no conversation would be entered into between the minister for health and the states and territories. The minister for health made it absolutely clear that she had no authority in this matter.

People will remember the crystallisation of this issue: the empty chair so far as the Commonwealth health minister was concerned and, in January this year, the Treasurer saying that we should proceed on the basis that there would be no new money for health in the budget. And that is precisely what we have seen—$917 million over four years for an unfair Medicare package and, in forward estimates: `Let's drag $918 million over four years out of the funding for the health care agreements.' It is a great lost opportunity so far as the renegotiation of the health care agreements are concerned. It is a great lost opportunity because nothing has been done to improve one of the great difficulties and problems we have in health care funding in Australia at the moment.

We know that it has always been the case that the funding of health care in Australia has been a combination of state and Commonwealth and a combination of public and private. From the Commonwealth's perspective, in my view, it is a matter of trying to maximise the health outcomes by finding the best way of spending the money available to give us the best outcomes and then maximising the integration between the Commonwealth spend and the state spend—the public spend and the private spend. We know that for years the system has been bedevilled by cost shifting. There was a perfect opportunity here for the Commonwealth to move beyond the old-style approach of simply proceeding, as in this case, to dud the states on a particular amount of money and to start to address issues of state and federal cost shifting. There was an opportunity to move beyond the health care agreement simply funding the state public hospitals to contemplating up-front pooling of funds not just for hospitals but potentially for aged care, for PBS and for a range of areas where we could have open, transparent, up-front pooling of funds between the state and the Commonwealth so that for a five-year period everyone would know where everyone stood. Everyone would know the pool of funds available and, if you wanted to vary the pool of funds, that would have to be done in an open and transparent manner.

So there is a great lost opportunity so far as that potential for structural reform is concerned, but the great damage that the government is doing through this piece of legislation is to essentially give the states a $1 billion hospital pass, ripping anywhere from $1 billion to $1.5 billion out of the funding of the state public hospitals. The juxtaposition of the government's introduction of its legislation for the unfair Medicare package could not be starker than today. What is the relevance of that measure to the funding of our public hospitals? We know that when the Howard government came to office bulk-billing rates were at 80 per cent. Shortly after Labor left office in May of 1996, bulk-billing rates peaked at 80.5 per cent. In every year since then, under the Howard government, they have fallen. On the release of the last set of official statistics, the March 2003 quarter statistics, on Friday a week ago, we saw that the national figure for bulk-billing had plummeted to 68.5 per cent—a 12 per cent drop in the seven years the Howard government has been in office. More importantly, the stark reality is that over half of that drop occurred in the last year or so—a six per cent drop, effectively, in the last 12 to 18 months.

This echoed the advice that the department of health gave the new Minister for Health and Ageing in December 2001. The government was re-elected in November 2001 and less than a month later the health department advised the minister for health, Senator Patterson, that unless the government took dramatic action there would continue to be a serious and dangerous decline of bulk-billing, and the department could not formally advise where the next stable level of bulk-billing would be. We have seen that that advice to the new minister has become a self-fulfilling prophecy, because the government did nothing. As late as December last year, the Prime Minister stood in this place and said it was factually incorrect to say that there was a problem with bulk-billing. And every time—every quarter—when we saw the release of official statistics, the minister for health would simply say, `These are disappointing rather than disastrous.'

What is the effect of the collapse of bulk-billing as far as the states and our state public hospitals are concerned? With the collapse of bulk-billing, when people cannot find a bulk-billing doctor, where do they go? It might take two days, two weeks, two months or two years, but sooner or later we know that they end up in the emergency department of a public hospital, putting even greater pressure on the state system. As I travel around the countryside and speak to state and territory health ministers, they have, to a man and woman, been saying for some time that the collapse of bulk-billing is putting additional pressure on our emergency departments, to the extent that they are now being inundated with presentations which could comfortably be dealt with at GP level. It is also regrettably the case that it is invariably the situation in health care that those people who are least able to afford making a payment, whether it is to see a doctor or pay for a script, are also those people most at risk of serious illness or chronic disease, either because of their age or their employment or economic status.

How does the government respond to the renegotiation of the health care agreements, to be effective from 1 July this year, and the collapse in bulk-billing? The government responds by ripping $918 million over four years out of the funding for the health care agreements and with the introduction of its unfair Medicare package. What does the government's unfair Medicare package do? How does it seek to address the problem? How will its solution take any pressure off the emergency departments of our public hospitals? The answer is: it does not fix the problem. It is a classic John Howard, member for Bennelong, prime ministerial fix; it does not fix the problem. It pays incentives to doctors to bulk-bill pensioners and concession card holders only. That effectively destroys the universality of Medicare and the universality of bulk-billing. That is no surprise, because the member for Bennelong has held that view for a long time—firstly, as Treasurer in Malcolm Fraser's government.

The last Malcolm Fraser remake of Medibank restricted bulk-billing by general practitioners to pensioners, concession cardholders and poor people. When the member for Bennelong, Mr Howard, became Leader of the Opposition in the 1980s, his view was that he wanted to destroy Medicare and he wanted to destroy bulk-billing. His view was that Medicare and bulk-billing was a rort, and he had to gut it. His formal election commitment to the Australian people when he was Leader of the Opposition in 1987 was that bulk-billing should be restricted to pensioners, concession cardholders and poor people and doctors should be free to charge everyone else what they chose. That is precisely what the government's unfair Medicare package now seeks to implement.

The second thing that the government's unfair Medicare package seeks to do is to put in place financial incentives for doctors to bulk-bill pensioners and concession cardholders. It does that by paying them incentive payments to bulk-bill pensioners and concession cardholders, but more effectively, in the eyes of the doctors, it does so by enabling, for the first time, the patient rebate to be split from the doctor's charge or copayment. That gives the green light to doctors to charge whatever they want.

I am not the only one saying this. The AMA said, on the release of the package, that it would be inevitable that doctors' fees would rise. The Parliamentary Secretary for Family and Community Services, the member for Parramatta, Mr Cameron, also acknowledged this at the end of last week. The inevitable consequence of the government's unfair Medicare package will be to increase the cost of a visit to a doctor for Australian families. Any family with an income of $32,300 or more is not eligible for a health care card or a concession card and as a consequence, bit by bit, visit by visit, members of such a family will pay more and more every time they visit the doctor. So the government's unfair Medicare package does not provide a solution to the dramatic collapse of bulk-billing or to the funding of our state public hospitals.

As I have said, the legislation itself sets the scene for Commonwealth funding of the health care agreements over a five-year period. The opposition does not oppose the legislative framework—on the contrary, it is supported—but the opposition opposes the government's unfair Medicare package. The government is ripping $918 million out of the health care agreements and effectively funding its unfair Medicare package to the tune of $917 million through that vehicle. The opposition strongly opposes this. We also oppose what the government is continuing to do in the budget papers, which is to seek to increase the cost of essential medicines for Australians and their families by an extra 30 per cent. These public policy failures of the government are condemned, and that is reflected in a second reading amendment that I will formally move before the conclusion of my remarks.

The final area I want to draw attention to, and which the second reading amendment draws attention to, is the government's absolute refusal to countenance any review whatsoever of the private health insurance rebate. The government introduced the rebate and has consistently failed or refused to review that operation in any way—to look at its effectiveness. I have often said that the big health issues, so far as the Commonwealth is concerned, are generally health economic and health financing issues—not from a bean-counting or a fiscal point of view, but from this context: there will always be a limited amount of money that the Commonwealth has available to spend on health; what is the best way to spend that limited taxpayer resource and give the best health outcomes? The government's unfair Medicare package expends $917 million over four years, private health insurance costs the Commonwealth taxpayer $2.3 billion per annum, and the government refuses to ask this simple question: is that the best way of spending that money?

As I have said on many occasions—and I am happy to be misrepresented when I make these remarks, as the Minister for Health and Ageing, the Treasurer, and the Prime Minister have done—leaving aside the merits of the private health insurance rebate for the present, the great public policy crime that was committed when the rebate was introduced was that the government did not ask for any outcomes in return. No outcomes in return were asked of the private health insurance industry either in terms of cost constraint or improved efficiencies and no outcomes were asked in return of the private hospital industry either in terms of improving clinical outcomes or cost constraint. It was simply given. And I think it is legitimate for the Australian consumer, the Australian taxpayer and this parliament to ask the question: is this the most effective way of spending the money to give the best health outcomes?

It is actually possible to have a thoughtful review of the private health insurance rebate. For example, if the argument, which the government used, was that it was to take the pressure off public hospitals, then why does the rebate apply to ancillaries? Could you contemplate a system where the rebate was capped so far as individual payments are concerned and means tested so far as individual payments are concerned? Or, if the rebate is given and the private health insurance industry and the private hospital industry have the direct or indirect benefit of that rebate, why not require of them outcomes that will improve overall efficiency and result in better clinical outcomes, better efficiency in terms of allocation of resources and better health outcomes generally?

So, when you look at the great areas of public health policy—Medicare and bulk-billing, health care agreements and state public hospitals, the Pharmaceutical Benefits Scheme and private health insurance—the government has dramatic failures for which they need to be condemned on every score. So far as the Pharmaceutical Benefits Scheme is concerned, we find—in last year's budget and again in this year's budget—the government committing itself to increasing the cost of essential medicines by 30 per cent. We know from statistics that I obtained through the good work of Labor senators in Senate estimates last year that the health department's own analysis of the effect of the 30 per cent increase is that over a four-year period—the department and the government itself are proceeding on this basis—five million pensioner scripts will not be taken out as a result of the increase in the charge and 300,000 Australians in families over that comparable four-year period will not take out their scripts. What is the consequence of people, particularly pensioners, not taking out their scripts? It is the same as the consequence of not seeing a bulk-billing doctor. It might be two days, two weeks or two years, but sooner or later they will end up in the emergency department of a public hospital, at far greater personal cost to themselves, because the medical intervention required will be greater, and at far greater cost to the state and Commonwealth taxpayer, again because the medical intervention will be greater and more expensive.

So across the board, everywhere you look, the effect of the government's policies on health is to increase the burden on individuals that is at the heart of the unfair Medicare package—to shift the cost to a user pays system. That runs through every area of health policy, whether it is authorising increases in private health insurance premiums—despite having gone to the last election saying that their policies would see downward pressure on premiums and premiums would be reduced—whether it is whacking the sickest and poorest with a 30 per cent increase in the cost of essential medicines, whether it is reducing funding to the states to the tune of a billion dollars so far as hospitals are concerned or whether it is giving the green light to doctors to charge Australian families with incomes of over $32,300 more every time they visit a doctor. These are the great issues so far as health policy is concerned. The opposition's views in these matters are summarised in the second reading amendment circulated in my name. Therefore, I move:

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

“whilst not opposing the Bill, the House condemns the Government for its health policy failures, including:

(a) the Howard Government's withdrawal of $918 million from public hospitals over the next four years;

(b) the Howard Government's unfair Medicare package which will result in bulk billing, in time, only being available to pensioners and concession card holders and families being left to pay more and more for their health care;

(c) the Howard Government's decision to increase the cost of essential medicines by up to 30%, hitting the sickest and the poorest hardest; and

(d) the Howard Government's refusal to review the $2.3 billion private health insurance rebate to ensure that it provides value for money for consumers and taxpayers.

These are the great issues of health care and health care policy before the Australian community. They are also the great issues which the Australian community will confront day in and day out from now until the next election. As I have made clear, both here and outside the House, so far as the government's unfair Medicare legislation is concerned, we will fight those changes tooth and nail, because the only consequence of those measures will be to hit Australian families. The consequence of that will be that more and more Australians will be deprived of access to bulk-billing doctors, and the only consequence of that will be more and more people attending the emergency departments of our public hospitals at precisely the time that the government is ripping between $1 billion and $1½ billion of the funding of our health care agreements thro-ugh the renegotiation process currently under way. Having formally moved the amendment circulated in my name, I ask my colleague the member for Gellibrand to second the amendment.


The DEPUTY SPEAKER (Mr Jenkins)—Is the amendment seconded?


Ms Roxon —I second the amendment and reserve my right to speak.