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Wednesday, 29 April 1987
Page: 1988

Senator MICHAEL BAUME(3.05) —Everyone knows, and the Government knows, that there is a crisis in health care delivery in Australia. The problem is that this Government is determined not to do anything about it to fix it. We heard at Question Time, when the Special Minister of State (Senator Tate), who represents the Minister for Health (Dr Blewett) in this chamber, was asked what this Government was going to do about the fact that there were now waiting lists of something like 100,000 for hospital beds in Australia, particularly after the closing of something like 4,500 public hospital beds throughout the nation, that the Government would do nothing about the 100,000 people on the waiting list because it was entirely the States' responsibility. There was no suggestion that the Commonwealth Government, which provides the funds and which taxes Australians for health services, was prepared to have any input even on how to resolve this personal disaster for so many thousands of Australians.

We have seen continually in the media reports of the number of people who have been dying while waiting on hospital lists. We are aware, by news reports and television reports, of the personal disasters affecting people who have been waiting in pain for years to get admission to public hospitals. We are aware of the fact that the people who are suffering most are the poor because it is the poor who cannot afford to take the private sector health alternative which is available to the rich. Yet this very system which this Government introduced and which this Government is supporting is a system that has crowded out the poor from the public hospital system. It has, in fact, encouraged those people who may well otherwise have been able to afford, and who in the past were prepared to afford, private insurance to be given access under the Medicare scheme to the public hospital system. They are crowding out the poor, who have no alternative, with the result that there are now massive queues for the public hospital system and there is a degree of underutilisation in the private hospital system.

It is interesting to note that when points such as that are made-and they have been made repeatedly by the Opposition-Dr Blewett comes up with most extraordinary and nonsensical responses. The Minister for Health quite falsely claims that the private hospital bed occupancy rates have increased under the present Government. I am assured by the industry that that is not so and that Dr Blewett was quite improperly taking some statistics from a time when there was a strike in the New South Wales public hospital area and for a short period there was an increase in private hospital utilisation. It is extraordinary that a Minister of this Government would take such clearly unrepresentative figures and pretend to this Parliament that there had been an increase in private hospital bed utilisation when the industry clearly shows there has been a slight reduction. The reality is that, as a result of this Government's policy, State governments around Australia have been closing down beds that are in strong demand. We have to ask: Why is this happening?

Senator Coates —To take more money from them.

Senator MICHAEL BAUME —I hear the interjection `Because they need more money'. The amount of money being spent on health care in Australia has multiplied, has increased enormously, under this Government. The question is: Where is it going? Why have health standards declined so dramatically in Australia? There is no doubt that they have declined. There is no doubt that it is harder for people to get the medical treatment, and the hospital treatment in particular, to which they are entitled and which they could receive under the previous Government's health arrangements, which this Government set out to destroy.

The policy of providing universality, of pushing everyone, in effect, into the Medicare system unless a person particularly chooses to have substantially increased costs loaded on to his family budget has generated unattainable demands on the medical system, on the hospital system, in Australia. There is no chance, while the present arrangements persist, of the public hospitals in Australia ever meeting those demands. The queues will persist so long as this Government, as it has reiterated today, is determined to resist any suggestion that it should encourage change, improvement-any kind of betterment-of the lot of those people who are waiting, and who are dying while waiting, for hospital care.

Let us see what has happened to health care under this Government. It has nationalised a substantial proportion of the health industry by establishing a government monopoly in medical insurance and has forced, in effect, millions of people out of private hospital insurance. The Government has increased the annual tax take by something like $4.4 billion to pay for Medicare-Medicare which in fact has provided queues rather than effective results. The Government has increased by 3,000 the number of public servants required to administer Medicare. It has increased personal health costs by something like 35 per cent and it has forced 10 million health fund members to give up their private medical cover and join Medicare. It has pushed up the costs of private hospital insurance, so forcing 1.8 million people to give up their hospital cover.

We are now paying something like $8.8m for Commonwealth health care, which is about twice as much as we paid three years ago, and the standard of service has declined. Just ask any of the people waiting in a queue what sort of health service they get while they wait in pain for admission to hospital. There has been something like a trebling in this queue as 100,000 people wait for treatment, yet we still have private hospital beds remaining empty. But of course this is because of the crowding out effect brought about by Medicare pushing people into the public hospital system. There is still something like four out of 10 private hospital beds not utilised. It is extraordinary that, when the Minister for Health was responding last November to some very accurate and pointed comments by Mr Porter in the other place, he stressed that very few of the problems-he did admit that there were problems-were due to Medicare. He said that there were more people in private hospitals today than there were when Medicare was introduced. What a totally disreputable reply. Of course there are, because there are more private hospital beds. There has been an increase of something like 1,000 beds in that area. Naturally more people are using these beds. Otherwise, presumably, the people who invested their money in providing those private hospital beds would not have spent that money in this way.

The reality is that there is still a large volume of underutilised beds in the private system, whereas there is massive overutilisation, combined with the closure of beds, in the public system. There is clear evidence of total chaos in the way the Government apparently acknowledges that there is a problem. Dr Blewett says: `Yes, there are problems but very few of them have to do with Medicare'. He says that there is a problem but that the Government will not do anything to fix it. Here we have a situation where the community is clearly paying more for health cover, where patients are unable to gain access to a hospital bed when they need one and where health care providers are fed up with the level of industrial disputation, which is the highest ever.

Strikes are now commonplace. I must say that I am not prepared to blame the nurses for the level of strikes in the hospital system because of what I believe this Government has forced on the hospital system by insisting, if you like, on what is now an almost 100 per cent heavy nursing requirement, particularly in the teaching hospitals, instead of a much more balanced and normal approach to nursing. Anyone who has had anything to do with those hospitals will know the impact that that has. It is not simply for money that the nurses have been having a degree of unrest and why morale has been totally destroyed in the hospitals. It is not simply for money, and that can be seen because, as I recall it, there has been something like a $100 a week increase in some nurses wages over recent times.

Senator Sheil —When did they ever strike before?

Senator MICHAEL BAUME —I agree with the honourable senator. The reality is that there is now a lack of morale in the hospital system. That lack of morale has been brought about by this Government's policies, and the key policy is the Medicare policy.

Senator Coates —Nonsense!

Senator MICHAEL BAUME —Is it all just a coincidence that all this happened after Medicare, that this crisis developed? What absolute nonsense. The thing is that the only beneficiaries of the Hawke Government's Medicare changes have been the 3,000 public servants who have been given jobs to bring them into being. Certainly, the taxpayers have not benefited. Certainly, the patients have not benefited and certainly the people who have waited and died have not benefited. The reality is that there has been a massive involvement of waste in the health system. We can see that the Government's encouragement of bulk billing has resulted in significant waste. Initially under Medicare the enrolled population was using an average of 5.8 services a year.

Senator Coates —Wrong!

Senator MICHAEL BAUME —These figures are correct. If the honourable senator seeks to alter them, he may. The figures are publicly available. To ensure that Senator Coates does not confuse himself, so that he can see for himself the reality of the closure of hospital beds, I seek leave to incorporate in Hansard a table showing the number of hospital beds in Australia. The table comes from the annual report of the Department of Health.

Leave granted.

The table read as follows-


Table 11:

Hospitals and beds-Australia-30 June, 1982 to 1986


As at 30 June







Recognised (public) hospitals (b)...






Private hospitals (c)...













Recognised (public) hospitals (b)...






Private hospitals (c)...












Beds per '000 population...






(a) Some institutions funded under the hospital cost-sharing arrangements (e.g. nursing posts) were not recognised as hospitals between 1 September 1981 and 31 January 1984.

(b) Based on data provided by State and Territory Health Authorities.

(c) Private hospitals and numbers of beds must be approved under the Health Insurance Act.

Senator MICHAEL BAUME —I thank the Senate. Let us look at what has happened as a result of bulk billing. As I was saying, the enrolled population was using an average of 5.8 services a year initially under Medicare. Last year the average was 7.5 services a year. That is a 28 per cent increase in the volume of services in just two years. Is anyone on the Government side going to pretend that that 28 per cent increase in the volume of services under Medicare has brought any overall benefit in health terms to this nation-or has it involved a massive volume of overservicing in some areas resulting in distressing underservicing in others? Has it in fact encouraged a different sort of health service at the coal face, if you like, where there should be a close personal relationship between a doctor and his or her patient?

I simply stress here that the Government has promoted bulk billing as the preferred method of payment for medical services. That is the reason for this immense blowout in the cost of providing services. This cost has increased by something like 42 per cent in the first three full years of the Medicare program. Bulk billing encourages overutilisation, as I was suggesting, and has given what is known as entrepreneurial medicine an open pipeline into the Government Treasury and into the pockets of Australian taxpayers. By the way, that does not mean that the ordinary general practitioners, the local doctors, the bulk of the profession, have misused their role-not at all. However, it concerns some specific people.

Let us see what has happened under entrepreneurial medicine, which has been encouraged by Medicare. An atmosphere has been created in which it can flourish. The patient-doctor relationship has now been eroded. If we go to one of the entrepreneurial places and find the doctor on duty, we see that in some of the more aggres- sive clinics the patient has become a mere object on a production line where the goal is income maximisation instead of patient care. This Government's Medicare scheme has produced Edelstens, not health. That is the issue. It has created an environment in which we get this kind of entrepreneurial medicine, aimed more at making a business out of the medical profession rather than having a professional totally committed, as it has been through its history, to concern for the patient.

Under Medicare the provision of public hospital service has been abysmal. As I have mentioned, the chaos in the public system is such that people have been dying while waiting to get in. The cost of public hospital queues in Australia is disastrous not only in terms of financial inconvenience-for example, people cannot get back to work-but also the enormous physical and emotional costs must be overwhelming. To my knowledge there has been no definitive study, no attempt by this Government to examine that problem at all, and yet surely if it is prepared to spend hundreds of thousands of dollars on all sorts of extraordinary research grants in other directions it would be worth while finding out what damage this Government's Medicare system has done and what the consequences of it are for people who have been waiting in such queues. Many have lost their jobs and their dignity; their productive contribution to society has ceased and they end up becoming reliant on the State in so many instances.

The reason for this situation is clear. When Medicare was originally introduced people were encouraged to give up their private health insurance, and Government sponsored public relations campaigns actively promoted this by promising people that they would have access to free hospital care in a public hospital. As a result, of course, 1.8 million people left the protection of private health insurance. The public hospital sector has simply not been able to deal with this massive increase in demand. When this point was made to Dr Blewett, he said that it was because of all these other exciting things that are happening, all this technical improvement and the technological change in medicine. He said that that was what had caused the problem. He cited some figures to show, for example, that general surgery in our country has increased by 77 per cent in five years. I have news for him. About half of that increase took place under the previous Government anyway. In fact, as I look roughly at those figures, under the present Government there has been no increase whatsoever in the rate of provision of those services. So this is special pleading of a disgraceful kind. Under the previous Government's medical system we did not have this kind of disaster but now, because of Medicare, we have this expanding, dynamic if you like, disaster which not only is not getting any better but also there is no indication that it will get better. Even more importantly, as we found out at Question Time today, there is no will on the part of this Government to seek an improvement.

Let us look at what the Government should be doing, at least in this area of high technology which is apparently increasing the demand for medical services. This Government's own actions have severely hindered the improvement in the quality of services that can be provided. There was a recent article in the Centre for Independent Studies booklet about high-tech medicine, by John Logan. He points out quite clearly that high-tech medical services, which are those that use expensive newly developed machines, have created a concern in the Government that their overuse will cause an explosion in the Medicare budget. Of course the reality is that if government left the market to itself, even if a monopoly situation developed for a short time with some particular kind of equipment, consumers would still not have to pay monopoly prices for the service because the threat of competition would force prices to be held down. Of course Medicare, under its kind of funding, raises the demand for medical services because it reduces the costs for which patients pay at the point of service. So Medicare funding itself makes it ir- rational for sellers to reduce their prices, even if their costs go down. There is no point having a competitive environment under Medicare. This is simply a microcosm of the sorts of problems occurring. When governments try to limit the number of high-tech services provided by limiting the number of machines, for example through licensing, it causes queuing because the system simply cannot meet Medicare induced demand. So if government grants a monopoly licence the monopolists are free to charge a higher price. This is what has been happening under Medicare. This is an example of the way this Government has been attacking the pockets of the taxpayers of Australia, destroying the medical service available to families, destroying the hospital service that once was so readily available and imposing by its determination not to fix it up a hardship on the Australian family that is untenable.

The DEPUTY PRESIDENT —Order! The honourable senator's time has expired.