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Tuesday, 17 June 2003
Page: 11629


Senator NETTLE (1:24 PM) —The Health Care (Appropriation) Amendment Bill 2003 appropriates funds for the Commonwealth government's contribution under the next round of Australian health care agreements with the states and territories, due to take effect from 1 July. The Commonwealth government proposes to contribute $42 billion for the term of the five-year agreement. The Commonwealth argues that its offer represents a substantial increase, up by around $10 billion, on the previous Australian health care agreements. It also plans to penalise those states that do not match its growth rate by reducing its contribution to them by four per cent. The states have reduced their share of funding in recent years relative to the Commonwealth and they should rectify this. But this should be done in the context of a major review of how the different spheres of government fund and deliver health care and how we determine the funds required to provide quality care for all Australians. The trend in state spending does not justify a federal fine.

More alarming is the government's intention to reduce the foreshadowed expenditure in the next round of health care agreements and the justification advanced for that. The Howard government is trying to strip almost $1 billion from its contribution, as foreshadowed in the forward estimates, on the spurious grounds that an increase in private health insurance membership and private hospital admissions means there is less demand on public hospitals. This argument does not stand up to scrutiny. The latest available hospital figures from the Australian Institute of Health and Welfare are for 2000-01. They show that separations for public hospitals fell by 0.1 per cent or 5,208 compared with the previous year. This contrasts with an increase in private hospital separations of 12.2 per cent or 244,802. The rise in the private hospital rate is substantial but, more importantly, the fall in the public hospital rate is negligible. When spread across a full year, it amounts to around 100 fewer separations a week across the entire country. How then can the government argue that this is less pressure on public hospitals? Not only do the figures undermine the government's contention, but its own policy objectives are at odds with its claim.

One of the main aims of the private health insurance rebate, the Medicare levy surcharge and the lifetime cover age based premium penalties was to increase insurance membership among younger people who are less likely to need hospital treatment, particularly elective surgery. So an increase in younger people taking up private health insurance is unlikely to have any impact on reducing pressure on public hospital admissions. As well as this, a large majority of new memberships for private health insurance include high up-front fees or excess in exchange for a lower premium. This can discourage people from using their private insurance, and they can opt instead to be treated as a public patient in a public hospital. Then, of course, there is cost shifting, and the federal and the state and territory spheres are guilty of cost shifting on health. This is one more reason that we need to review the respective roles of the different spheres of government in this critical public policy area.

The shortage of aged care accommodation—a federal responsibility—has led to older people occupying public hospital beds, further increasing the pressure. The decline in bulk-billing rates for GP services, over which the Howard government has presided, has put additional pressure on the accident emergency services at public hospitals. Anecdotal evidence also overwhelmingly supports the view that our public hospitals are still under pressure in spite of the government wasting almost $2.3 billion a year on subsidising private health insurance. Ambulances are regularly sent on a search for a hospital able to take critical patients as they are turned away from one accident emergency unit to another, while other people with less serious conditions wait for hours for treatment. All the evidence points to growing, not falling, pressure on the country's public hospitals.

In the face of such evidence, we have to wonder about the government's real motives. Does the government intend to take Australia the way of the United States, which spends almost 14 per cent of its gross national product on health care compared to the OECD average of eight per cent? Yet as many as 42 million of its people are without insurance coverage for medical and hospital services and as many again have inadequate insurance arrangements. We could be forgiven for believing that this is the government's intention—forcing everyone to pay more in direct costs for health care, offering underfunded charity services for the very poor and using public funds to subsidise the private insurance of high-income earners. At the Liberal Party national conference earlier this month, the Prime Minister stated:

... what this Government has done is to take some of the load off the public component of healthcare provision in Australia by strengthening and expanding the private component.

We believe in a partnership between the public and private sector to deliver superior health outcomes for all Australians.

The fact is that most Australians want to be able to rely on a well-funded public system. The idea of taking the load off the public sector is code for expanding the profit-making sector and forcing more Australians to pay a larger direct share of the cost of health care and essential medicines. We have had the government's proposal to increase the patient copayment for essential PBS medicines by 28 per cent, a proposal that the Greens will continue to oppose because it will hurt vulnerable and disadvantaged members of our community. We have had the introduction of penalties and financial incentives. We have had the private health insurance rebate that costs the public almost $2.3 billion a year and which the government wants to increase by extending private insurance to out-of-hospital expenses as a part of its measures to dismantle Medicare by stealth.

The overwhelming majority of health economists have concluded that the private health insurance rebate is an inefficient use of public money. It does not buy one health service. We have seen that the private sector, which discriminates on the basis of income—that is, if you can pay, you get the care that you need—is performing a growing proportion of procedures that once would have been performed largely in public hospitals. Private health care is more expensive than public health care; there are fewer price controls and more money is spent on administration and marketing. Why would the government, which is continually lecturing us about economic efficiency, want to waste public funds on an inefficient allocation of moneys to the private health care sector in preference to the public sphere? It will cost us all more. At the same time, it diminishes our ability as a community to provide care to everyone who needs it when they need it, irrespective of their private capacity to pay.

As far as we can tell, the government has no intention of withdrawing the private health insurance rebate on the basis that the rising membership should be delivering the sort of financial stability that the industry claims it requires to be viable or on the basis that it has enabled the funds to boost their reserves, which increased by 51.6 per cent between 1999-2000 and 2000-01. The latest annual report of the Private Health Insurance Administration Council sounds a warning about the financial viability of the funds, yet the government is content to pour billions of scarce health dollars into this sector, even with these warnings being sounded. This is industry assistance for the long haul not to improve health outcomes, not to provide greater social equity and not to strengthen the public health care system that treats all people; this is industry assistance to underwrite an ideological agenda, undermining community services to enrich the private market and entrench privilege.

We are seeing in health funding what we have seen this government do in schools funding in recent years. We should be alert to the consequences of this agenda in health. Australian National University political science lecturer Dr Gwen Gray, writing for the ABC Online in March this year, noted that it is well established by international research that private health insurance cannot survive without taxpayer subsidy, `unless the public system is so poor that people feel forced to insure privately'.

The Greens are deeply concerned that the government is setting the framework for doing just that, slowly starving the public sector of funding, forcing people to pay more when they need to buy health services—rather than through progressive taxation—and undermining support among high- and middle-income earners for a system that spreads the risk and the cost across the community. There is enough evidence on the public record so that no-one should be in any doubt as to the Prime Minister's view of the national public health insurance scheme. The Prime Minister has never supported bulk-billing, having once described it as a rort. He was the Treasurer in the Fraser government that, the little by little, dismembered Medibank. It took a series of electoral defeats for him to understand that Australians would never vote into office a party intent on dismantling Medicare, so he chose instead to smooth his path to election and then announced his plans to destroy Medicare.

The government's package spells the end of the principle of universal public health care. It focuses on providing additional funds to support bulk-billing for people with concession cards, and this includes—let us remind ourselves—self-funded retirees earning $50,000 a year, but it excludes low-income earners who do not qualify for a health care card. There is nothing fair about that.

Under the guise of simplifying the claiming system, the government will open the way for doctors to directly claim the patient rebate at the same time as charging a copayment. This is a major shift. Previously, direct claim of the patient rebate was permitted only for bulk-billing services. This new proposal will enable doctors to increase fees because the quantum, initially, will be lower than what people are paying now, being reduced by an amount equivalent to the rebate. The package is misdirected because around 80 per cent of services provided to concession card holders are already bulk-billed. The challenge is to lift bulk-billing rates for all Australians.

The Australian Greens have already outlined a series of measures to work towards that goal. The private health insurance rebate should be abolished and the funding redirected towards public health. It should be used to lift the rebate for GP services by $5 for all patients, and the value of the rebate should be maintained not eroded through neglect, as this government has done. There should also be incentives for GPs who bulk-bill a substantial proportion of their patients.

The fall in the value of the rebate is not the only reason for the decline in bulk-billing, but it is an important factor. Other measures are needed to address work force issues. The Australian Greens support the work force measures in the government's package, but they fail to show any vision for alternative ways of delivering health care. For example, the Australian Greens believe we should be examining salaried GPs who work in community health centres or who are stationed alongside public hospitals. These models may be particularly useful in regional centres and rural communities, where it is difficult to attract doctors working on a fee-for-service basis. We note that some states are experimenting with these options.

The Australian Greens want Medicare expanded to cover more procedures, starting with dental services and the provision of more funding for mental health. Our proposals and our vision for providing quality, affordable public health care for all Australians stand in stark contrast to the government's plan, which undermines the principle of universality enshrined in Medicare and takes Australia down the road of privatised health care, with all of its dire consequences.

We are alarmed at reports that the Australian Democrats are considering abandoning their opposition to any measures that undermine bulk-billing for all Australians. Initially the Democrats joined the Greens in opposing the government's package, but late last week Senator Allison was reported as indicating that the Democrats could be persuaded to support the package if the government found a way to cap the copayment for non-concessionary patients. This is no way to defend the principle of universality, nor will it improve access to bulk-billing for all Australians. We call on the Democrats to join the Greens in protecting Medicare from the government's privatisation agenda for health care.

The Howard government is bent on destroying Medicare little by little, in the way the Fraser government dismantled Medibank two decades ago. Reducing the Commonwealth's contribution to the states and territories for public hospital services on the grounds that private hospitals are treating more private patients is just one more tactic in this offensive agenda. Most Australians want government to spend more, not less, on health care, and the most efficient and equitable avenue for this to occur is through the public sector. In the committee stage of this bill, the Australian Greens will give the government the opportunity to respond accordingly by reinstating its earlier spending commitment.