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Tuesday, 10 November 1959


Mr FAIRHALL (Paterson) . - During the course of his second-reading speech, the Minister for Health (Dr. Donald Cameron) directed attention to the rising costs of the national health service, and it is to this aspect that I should like to direct the House's attention. Having regard to recent trends, our own experience and that of the United Kingdom, and looking at the progress of medical knowledge and techniques generally, it would appear that there is no way of halting the rising costs of the national health service. Therefore, there remains for the Government, or for any Government, only the problem of how these rising costs are to be met.

In 1952 a British doctor, Dr. Ffrangcon Roberts, wrote a book called, "The Cost of Health ". There is no time to make a detailed study of the book, but I would like to direct attention to one or two of the writer's conclusions which illustrate the point I am trying to make. First, to show what can happen, even after a most searching inquiry into, and analysis of, the problem of costs of national health services, he points out that the Beveridge Report on Social Insurance and Allied Services in 1942 estimated the cost of a comprehensive health service for Great Britain at £170,000,000, and predicted that its development and the consequent reduction in its need would cancel out, leaving the cost unchanged in 1965. Referring to 1952, Dr. Roberts said -

The cost is now £400,000.000 and only the imposition of this ceiling by the Treasury prevents it from reaching a much higher figure.

So it is that with the development of new treatment and techniques the cost of the national health service increases. Roberts's book deals with the effects of this cost, and the conclusion is that as medical knowledge increases so the cost of national health will rise. He goes on to point out also, by way of illustration of this process, that in the period between the production of the Beveridge report in 1952 and the inception of the national health scheme in the United Kingdom some five or six years later, dealing with a representative group of hospitals, pathological examinations went up by four or five times, radiological examinations went up by something like the same figure and the staff per bed in hospitals rose alarmingly through the development of specialist services. I believe that that rise still continues.

The humanitarian considerations behind the concept of national health service were referred to in Roberts's book when he quoted again from the Beveridge report as follows: - " For every citizen ", says the Beveridge Report, " there must be available whatever medical benefit he requires in whatever form he requires it, domiciliary or institutional, general, specialist or consultant ".

The humanitarian service is based on the thesis that according to the modern concept of democracy every individual has the right of access to all medical benefits which science makes available.


Mr Crean - Hear, hear.


Mr FAIRHALL -- I hear some "Hear, hears ". That appears to be a perfectly valid claim but it produces some odd effects, particularly on the economic side of the national health service. If we are going to accept the idea of a State-subsidized health service - and it would be foolish to quarrel with the idea because we have already accepted it in principle - we are committed to accept it in ever-widening fields. They seem necessarily to follow from that acceptance. I believe it follows that no life-saving drug can ever be denied on the basis of cost.

By way of illustration, in another field, if radioactive cobalt therapy is even possibly effective in cases of cancer then the community will not long tolerate the denial of this sort of service to any sufferer from cancer. One begins to see from this where the cost will rise. I hope that nobody will quarrel with me on the basis that this ought not to be done. I am not quarrelling with what ought to be done; I am merely pointing out the cost. I want to question whether our present approach to financing the national health scheme is a satisfactory one in view of these conclusions.

Of course, in these days when any symptom, no matter how simple, may well be the starting point of a major disease, no available test should be neglected. Roberts goes on to point out that once upon a time if you broke your arm you went to the doctor with the arm in a rough sling. The doctor set it and off you went, and in the course of time your arm healed and you were allegedly as good as new. But in these days when there are new techniques available, when the X-ray is there, the doctor who begins to set a fracture without an X-ray examination or without other pathological examinations taking place, may well be exposing himself to some action for negligence. So it is that as new techniques develop, doctors are obliged to use them and consequently the cost of medical services will rise.

So, we reach the paradoxical situation where every advance in medicine and the extension of diagnostic techniques will raise the cost of the national health scheme. For much the same reason, much the same effect is beginning to appear in the field of pharmaceutical benefits. I question, when one looks at the background, whether the present economic approach to this problem is adequate. First of all, I do not know whether some limit should not be nominated as the upper cost of medical services as was done in Great Britain so that when the cost reaches that point the individual will be required to increase his own contribution for those services.

The second point is that the answer may well be in the widespread development of a contributory scheme of social services which is all-embracing. Recently, in another context we considered the development of a contributory scheme for social services by way of pensions and unemployment benefits. 1 am not so sure that, when the time comes to institute such a system - and if we do not, then I believe that social services will ultimately bankrupt the country - its scope ought to be extended to include the things which, at the present time, are brought in under a national health scheme.

I now wish to turn to pharmaceutical benefits. Under this scheme, the Government provides widespread benefits in pharmaceutical services for which the public pays. In this scheme, the chemist is the avenue of service, therefore he is obliged to come into it whether he likes it or not. The theory of the thing is that the chemist may drop out of an approved scheme, but in practical effect he can do nothing of the sort. But if the chemist is obliged to come in because his is the operative part of the supply of pharmaceutical benefits, then the Government is equally obliged to see that the pharmacist is not thereby disadvantaged.

The plain fact is that the national health scheme is a socialist effort. I hope that no honorable member opposite will take me up too quickly on that statement. It involves a control, partial or complete, of a section of individual businesses by the Government, in the interests of the people. That, as I recall it, is the standard justification for socialism. But if I go back to where I was earlier, we agree that this is a good thing and provided we see that it does not continue to expand to the detriment of those involved in it, then we cannot have any argument.

Coming to cases on the supply of pharmaceutical benefits, it is probable that at the moment, one-third of the area of prescribing by the chemist is already covered by national health services. On the basis of this one-third of his prescribing service, the chemist's allowable mark-up and his fees are fixed. Some will claim that this is done by agreement between the Govern.vernment and the chemist, but there are chemists who will deny that the present rates have been fixed by agreement but by consultation. The expansion of the national health services now proposed will expand the amount of prescribing under the national health scheme to perhaps twothirds of the whole of the chemist's prescribing business. In other words there will remain available to the chemist only one-third of private prescriptions. Of course, it necessarily follows that if this additional one-third of his prescribing business is to come in at anything like the present rates fixed by the Government, which are vastly under those agreed to by the Pharmaceutical Guild, it is inevitable that the reward for the chemist's services and the economics of the pharmacy business will be seriously disturbed. I know that negotiations are under way at the moment between the Government and the Pharmaceutical Guild concerning the basis of these charges. I make no secret of the fact that, from my point of view, I would have been much happier had this agreement been reached before this bill was brought into the House, or certainly before honorable members were called upon to vote on it. All I can hope and urge on the Government, through the Department of Health, is that when the new scale of fees for dispensing is arranged and the mark-up margins are set, they will be by reasonable agreement with the chemists concerned.

In considering the 4,000 pharmacies which serve the people of Australia, some considerations ought not to be overlooked. First, great changes in the Australian pharmacy business are coming along. Pharmacies are under assault from two points. They are under assault, first, from the effect of this proposed extension of the national health service, unless and until there can be a re-negotiated agreement on the remuneration of pharmacists. The second point, of course, is vast inroads into the traditional business of the chemists are being made by chain stores. To-day, a vast number of products which normally were available only through chemists' stores are being sold in super-markets and chain stores. Nobody can argue very much about this. It is a change in the pattern of trade and every one in trade knows that this sort of competition must be faced and ways and means found to combat it. The chemists are doing just that.

But the inevitable result is to force chemists further away from pure, pharmacy and in this sort of situation the community will lose because in the chemist families have to-day an adviser on non-vital health problems. The right honorable member for Cowper (Sir Earle Page), having returned recently from a world tour during which, on his own statement, he looked at pharmacies in other countries, was happy to admit that we in Australia were pretty fortunate in the sort of pharmacy service that we have been enjoying. If we are not careful to preserve the economic health of the pharmacy business by a reasonable approach to the subject of remuneration, we may well deprive the community of a very great service.

Sir, Ibelieve that inevitably we will move to an overall contribution scheme to cover all social services. For the moment, the demand for pharmaceutical benefits arises directly as a result of medical consultation. Therefore, if the medical consultations are covered by a national insurance scheme, as they are at present, it would seem to me a logical conclusion that the side effect - that is, the need for pharmaceutical benefits - should be financed in the same way with perhaps an extension of the premiums we pay to medical benefit schemes. It would not be beyond the bounds of possibility - indeed, it would appear to be reasonably simple - to arrange that sort of system for the supply of pharmaceutical benefits.

I should like to direct the attention of the House to another very important aspect of this problem. Virtually the whole of the national health scheme at the moment is devoted to curative medicine. If we were able to survey the improvements in health, size, weight and so on of the generation that has been born and has grown up since the baby clinic came into operation throughout Australia, I believe that we would have a dramatic illustration of the benefits of preventive medicine. I would like to see some additional thought given to, and some greater provision made for, an extension of this type of service which may in the long run be the road to higher standards of national health. It will certainly do something to reduce the cost of national health services and of pharmaceutical benefits.







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