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Wednesday, 13 October 1971
Page: 2249


Mr HAYDEN (Oxley) - 1 move:

That all words after 'That' be omitted with a view to inserting the following words in place thereof: while not opposing the second reading of the Bill, the House is of opinion that:

(1)   the Commonwealth nursing home policy is unsatisfactory because of:

(a)   its costliness to patients and their families, and

(b)   an inadequate provision of alternative forms of accommodation and domiciliary services;

(2)   the system of voluntary insurance for medical services is on the point of collapse because of:

(a)   the failure of subsidised medical benefits for low income earners,

(b)   widespread non-observance of the most common fee, and

(c)   the spiralling cost of medical insurance through the wasteful use of funds, and

(3)   pharmaceutical benefits should be provided at no cost to the patient'.

The proposed changes to the National Health Bill put to this Parliament by the Government have the following effects: They will penalise the sick, especially the chronically sick, for their misfortune; in future essential drugs will be twice as dear to them when prescribed under the national health scheme. The changes aim at legitimising again the unconscionable plundering of taxpayers' money and contributors' funds in health insurance schemes in an effort to camouflage the fraudulent nature of the Government's grotesque voluntary health insurance programme. The changes gloss over the 96 per cent failure of the Government's subsidised health insurance programme and the need for a regular adjustment of the income groupings which draw on benefits under the scheme. They avoid mention of the 20 per cent and growing failure of the common fee concept. Nowhere do they consider preventive medicine and they ignore totally a national dental health programme.

The Government seemingly is unaware of the pressing needs for Commonwealth initiatives in the development of an adequate public hospital system backed by community public health services, including paramedical services. No effort is made to ensure universal coverage under the medical and hospital insurance scheme and the proposed changes vary certain key recommendations of the Nimmo report. The Government parasiticially draws on doctors alone to subsidise the pensioner medical service and maintains discrimination against mutual help in the form of friendly societies. The proposed changes challenge and undermine the authority of parliament, are gratuitously offensive to the chairman of the House of Representatives Select Committee on Pharmaceutical Benefits, the honourable member for McMillan (Mr Buchanan) and make a mockery of the setting up of that Committee. The Government usurps the parliamentary position by seeking to insinuate into the Bill control of dispensing fees under the pharmaceutical benefits list by regulation.

Let me deal with some of the points I have just raised. Obviously I will not have time to deal with all of them but succeeding speakers from this side of the House will clearly develop some of those points and, in total, all of them. The proposed changes to the Bill penalise the sick. In 1964 the then Minister for Health, who is acting for the Minister for Health in this House at the moment, said of the prescription charge imposed on patients:

The charge is necessary in order to discourage the unnecessary use of benefits provided under the pharmaceutical benefits scheme.

That was what he said then. Of course, the philosophy behind this charge is quite clear. The charge is aimed at imposing a penalty - 'discouraging' was the word the Minister used - on those people who draw on the scheme. It is, therefore, up to the Government to establish that these people are responsible for the phenomenal and unjustifiable acceleration in the cost of this scheme, as asserted by the Government. Yet when we review the statement of the Minister in this House when introducing the Bill we find that 3 points are identified as being the major causes for the increased cost of this scheme. None of them relates to patients. The 3 causes are: Additions of new drugs; relaxation of prescribing prescriptions; increased doctor prescribing. On this basis it is worthwhile analysing the cost growth of the pharmaceutical benefits scheme to establish just what is the rate of growth and to determine whether it is an abnormally accelerating growth from year to year.

If we use the figures which are provided in the statistical section of the annual report of the Department of Health we find certain data for 1970-71. The figures show that additions to the list of drugs which can be provided under this scheme cost $5.9m. The relaxation on prescribing those drugs already provided cost an additional $13.6m. This is a total of $19.5m. There was an increase in restrictions which saved $2.9m so the effective increase in cost was $ 16.6m. From this we can take about $1.5m which covered the increased dispensing charges allowed to pharmaceutical chemists, and this brings the total additional cost down to $15m. The effective increase in demand after we have eliminated these unusual features - unusual in their nature because they are additional to previous rates for services under the scheme - was about 9.5 per cent and this does not include any allowance for population increase or for the abnormal upsurge in demand for compounding in the winter period, a point specifically referred to in the annual report of the Department of Health. Let me repeat that the effective increase is about 9.5 per cent. On the same basis as I have just outlined and using the 1969-70 figures we find that the effective increase in that year was more than 12 per cent. So in fact the increase last year was not the abnormally large increase one would gather if one took the statement of the Minister at face value.

Of course, it is quite obvious that if we are to increase the numbers of drugs and ease the dispensing arrangements under the scheme there must be a significant increase in costs. Eliminating restrictions on one type of drug, the anti-depressants, increased costs by nearly $3m alone. The argument, therefore, surely is not whether people are demanding more drugs in an abnormal way, because on the face of the figures I have quoted this is not substantiated, but whether the Government was justified in expanding the cover and the benefits available under this scheme. Frankly, I believe the health needs of the public are such that these benefits are justified and the Government obviously believes this too or it would not have extended benefits under the scheme in this particular way.

What has the Government set about doing? It has set about penalising the people who in many cases are least able to afford their contributions and least responsible for the increased costs. These people are the chronically ill. If they have a regular demand for an expensive drug or drugs they will be paying 43 per cent of the cost on average from the date the proposed changes in this Bill come into effect. To what extent, one would ask, are prescribing fees a deterrent as was asserted by the Minister for Health in this House in 1964? I am a member of the Pharmaceutical Benefits Committee, which seems to have been a training ground and promotion field for many eminent statesmen, excluding some like me. In the evidence produced before that Committee at page 1720 of the transcript of evidence the friendly societies through their representatives showed quite convincingly that their pre-1964 members - these are the people who do not have to pay any deterrent fee - have a usage rate 5 per cent lower than the average in South Australia. These people are not paying a deterrent fee and this seems to indicate quite conclusively the fallacy of the argument the Government is putting up. Of course, the Government's real purpose in increasing the cost is to raise more revenue - $24m or $25m extra in the next 12 months. This increased revenue for the Government will be provided by the sick people in the community.

Again I refer to the statement made by the Minister about the large proportion of total health costs to the Commonwealth which expenditure in this area represents. This is another misleading argument because the total expenditure by the Commonwealth in the area of health is not really such a large amount in terms of the total community expenditure, public and private, in health. I have used the national accounts for 1969-70, the latest figures available, and one can establish from these that cash benefits and current expenditure by all public authorities amounted to S761m. To this we can add personal consumption expenditure in the field of health of $1,2 13m. The figures are a little overstated because they include funeral expenses but this would not be a significant amount. In any event, the total expenditure is more than $l,970m. Pharmaceutical benefit costs for the Commonwealth represent less than 7 per cent of the total health expenditure; so they are not an abnormal factor such as the Government is trying to establish.

Perhaps I ought to make a public confession at this stage. I recall that when the Select Committee on Pharmaceutical Benefits was formed I was rather persuaded by the argument of the then Minister for Health when he was pointing out the cost movement factor and the need to contain it. I was persuaded to believe that this must be so, that it was an abnormally large amount of money, and that somehow we must contain it. But in terms of total expenditure it is not a large amount. As a proportion of Commonwealth expenditure it seems great, but only because the Commonwealth is so limited in its commitment in the field of health.

I am not going to discuss at any length the prescribing habits of doctors. These have come before the Select Committee on Pharmaceutical Benefits, and the other members of the Committee as well as myself will be making some recommendations on the matter. I must repeat that I feel some embarrassment at this point in being asked to lead for the Opposition on these matters which are so pertinent to the issues which we are discussing in the Committee. It seems to me a highly improper situation and I feel that the Government has behaved in a very questionable way. One has doubts in one's mind about the whole propriety of the motives of the Government in setting up this Committee.

Rumour has it strongly about Canberra that the Government set up the Committee for a rushed report to establish the case for an increase in the dispensing fee to $1. When it became obvious that the members of the Committee, under the chairmanship of the honourable member for McMillan (Mr Buchanan), were taking their duties seriously and were conducting a wide ranging and in depth investigation and that this sort of report would not be coming forward as rapidly as the Government wanted it to, the Government proceeded unilaterally to introduce these increases.

Of course, the Committee was set up to act as a buffer against any political criticism, which is quite rampant in the community, arising from any move on the part of the Government to increase fees. It is significant that the Select Committee on Pharmaceutical Benefits is the only committee I can remember in 10 years in this Parliament which was set up on the initiative of the Government without any request, pressure or public demand for this sort of committee expressing itself through the House.


Mr Garland - It has very wide terms of reference.


Mr HAYDEN - Yes, but this in no way derogates from the point I just made, with which I suspect the Minister for Supply (Mr Garland) might agree on mature reflection. I referred to the problem of doctors' dispensing habits and indicated that I did not want to discuss this at too great a length because of Committee obligations. But there is one thing which has come out in the course of the Committee's work which concerns me greatly, and that is the seemingly large amount of money which drug manufacturers pour into the promotion of their lines. The Australian Pharmaceutical Manufacturers Association has submitted certain evidence and certain figures and one is able to make certain calculations from these figures with the aid of other statistics available within the community. One concludes that about $20m is being spent each year by pharmaceutical manufacturers in the promotion of their lines. These are 1970-71 figures. Of that sum about $10m or 50 per cent is used exclusively for the payment of sales representatives, people who harry and pressure doctors, who are working under a great deal of stress, into supporting particular lines of drugs.

The evidence which we have had shows quite convincingly to me that the methods of promoting these drugs are not wholly objective and do not go to the extent of explaining side effects, ill effects and so on which may arise from the use of them. They tend almost exclusively to stress benefits from using the drugs and neglect any problems which might arise from their use.

When we are talking about this area of health service, that is the provision of drugs, it is impossible to do so unless we do it in terms of a total health service. This is why it is anomalous to refer to the Bill before the House as a national health Bill, lt is not a national health Bill. It is a Bill which provides some services of fairly questionable quality and quantity in the community. It is more noticeable for what it does not provide. If we are going to improve the lot of the community through the Government, which handles the taxpayers' money, and improve the lot of the doctor so that there might be some easing off in prescribing habits we will have to provide money for regular in-service training for doctors, particularly education in pharmacology. But we have to go beyond that and uplift the standards of the doctors who are working in the community, to give them more prestige and make their role much more significant than it is at present.

This in turn raises questions not only of the present but also of the future. Perhaps one could quote from a paper entitled 'The Future of Australian Physicians' by Dr Kerry Goulston, a Canberra consultant physician, delivered to the annual meeting of the Royal Australian College of Physicians earlier this year. He said of his professional colleagues:

They could ask why we are discussing present problems here today, and why we are not discussing a holding plan for the immediate future, and formulating conceptual plans for the 1990's.

He then went on to expand some of his views. He said:

Regionalisation of medical care and continuing education can perhaps be accomplished by definition of primary, secondary and tertiary levels of medical care. Primary care given by health centres - general practitioners leading a team of allied health personnel; secondary care consisting of community hospitals with diagnostic facilities; tertiary care in academic medical centres with highly specialised facilities.

He wants to put this on a much more professional basis than it is at present, a basis where there will be much more intellectual in-puts in terms of manpower in the provision of medical services. The reason why I quoted Dr Goulston is that these are the points which have been made repeatedly by spokesmen on this side of the House. This is the way in which health services have to be developed. It is pointless talking in an ad hoc or piecemeal way about health in the Australian community. We have to see this total concept and we have to see ourselves as future oriented in the way in which we develop these sorts of services.

When we develop these services I suggest that as a step to upgrading considerably the standing of the doctor professionally and in terms of community respect we would want to develop such services as accrediting through in-service training so that there is a regular refresher experience for the doctor as a professional, so that his standards are geared upwards always, so that he is cognisant of what current practices are and so that he does not get out of touch with the latest trends in his profession. This, in association with facilities for in-service training at the appropriate local or district hospital, would allow him the right to treat his patients at a public hospital. It seems to me that this is a highly essential service which ought to be available to the general practitioner who, as far as we can see into the future, will be the most important man in the medical team - I stress the word 'team' - which provides public health services in the community.

Out of all this, of course, one accepts then that there must be a Commonwealth responsibility to develop CommonwealthState financial relations. Of course, these would be associated with certain qualitative requirements in the provision of these services. These services should be developed through a Commonwealth commitment. The proposal of the Australian Labor Party is to set up an Australian hospitals commission for this purpose. But it will not be restricted to the provision of hospitals. It will aim at the development of public health services which focus out, as I have said here several times before, from a central teaching hospital complex through a district hospital. This would be of considerably smaller size but would provide a range of the regularly used medical services including the frequently used surgical services. The more rarely used and expensive sorts of surgical services would, of course, be provided at the teaching hospital complex. This could radiate further into the smaller convalescent nursing centre and then into the community health centres which provide day facilities in terms of medical practitioner services, paramedical services and so on. I mention the case of in-service training. This would be no great problem in the Australian community in terms of cash. There are some restrictions in terms of the sorts of resources one can mobilise to operate such a service. From the information I have been able to obtain, an inservice training period of about one week a year costing about $400 a doctor could cater for about 600 to 700 doctors each year. This would involve a total cost of about $300,000. It would not mean that every doctor would attend once a year. Probably, doctors would attend about once every 4 or 5 years. Unfortunately the period could be even greater because of the lack of locums who can replace doctors while they are undergoing this training. However, in my mind, there is no argument at all that this sort of service is not needed.

Evidence which was presented to the Select Committee on Pharmaceutical Benefits and which related to the sort of thing about which I have been talking, establishes convincingly that we must have this type of service available for the regular retraining of doctors so that they can maintain high standards of service for the community. In-service training is not enough. It must be backed up with frequent seminar-type discussions on applied therapeutics. This could be done through local medical associations and the post graduate medical committee could be mobilised to assist in conducting clinical discussions twice a year through the local medical associations. This could be done on a half-day basis and, again, I estimate that this would cost about another $500,000. So, in all, this sort of service could be provided for less than Sim a year. This is a very small amount compared to the tremendous advantages that would be derived by the community.

That is only one aspect of the approach of the Opposition to a national health scheme. Another aspect, and one which gives members of the Opposition considerable concern, is the lack of universality of coverage of the current scheme. About 74 per cent of the community is covered by the present voluntary health insurance scheme. To this can be added about another 9.5 per cent who benefit from the pensioner medical service and 3 per cent who are covered by the repatriation scheme. This still leaves something like 13 per cent to 15 per cent of the community - between 1.6 million and 2 million people - who have no cover at ali under the voluntary health insurance scheme. We need a scheme which provides universal cover.

I do not intend to go into the Australian Labor Party's programme in detail except to point out that it is geared to a proportion of taxable income. It provides cover for the whole community, not only for free public ward treatment - standard ward treatment, as the current terminology has it - but also for treatment by a private practitioner of one's own choice. One contrasts this with the current scheme, which not only has the deficiencies of inadequate cover but also involves tremendously costly arrangements to keep it in operation. According to the reply I received last week to a question I had asked, more than $3 3 m is lying idle in the voluntary medical insurance funds. This is an unreasonable amount of money to be tied up in this way, and contributors pay for it. Management expenses account for 15.7 per cent - nearly 16 per cent - of contributors' payments. If this could be slashed to 6 per cent, which is about the level at which we reckon our scheme would operate, considerable amounts of money, measured in millions of dollars, would be available to redistribute as benefits.

Between 1954-55 and 1969-70 reserves in the medical insurance schemes currently operated increased by 1.000 per cent while benefits increased by 670 per cent. This is the sort of imbalance which is presented by the current system of health insurance. Again, one of the criticisms the Opposition makes of this scheme is its failure to uphold the common fee concept which was held out as a promise of providing a special benefit for the community. From calculations I have made from statistics provided in the annual report of the Department of Health, the introduction of the common fee has meant an extra $32m income for medical practitioners. This is the amount of money which has been paid straight into their pockets. This is an amount above that which they would have earned, given demand rates and average cost rates which existed previously. Of that money, 60 per cent to 70 per cent went into the pockets of specialists. This is no way to operate a health insurance scheme. 1 instance the high rate of non-observance of the common fee by doctors. For instance, 25 per cent of doctors in New South Wales do not observe the common fee for surgery visits and 50 per cent of doctors in Tasmania do not observe the common fee for home consultations. This has led to all manner of abuses. A surgeon has contacted me complaining that some people, usually wealthy women, join hospital and medical insurance schemes and, after 2 months - that is, once they have established their eligibility for medical benefits - go into hospital for expensive cosmetic surgery. In one case quoted to me, the operation cost $300 of which only $5 was paid by the patient because, on that occasion, the common fee was being observed. The operation involved straightening the woman's nose, certain foundation work, if one can call it that, about the body, certain facial lifts and so on for this woman who was in her late 50s and who had lived with these problems for many years. This operation cost her $5, but it cost the health insurance funds and, therefore, the Commonwealth and the contributors to these funds the difference between the total cost of the operation and $5, which was $295. This woman came from a very high income family. Of course, given that the bulk of fund contributors are low and moderate income earners, this means that there is a redistribution effect away from those people to people in the high income groups.

That is one factor of the problem. Another unfortunate factor is that it imposes a high demand rate on fairly scarce acute hospital beds in Brisbane. We had been assured that the common fee would minimise the outlay imposed directly on patients. From the figures provided in the annual report of the Department of Health it can be seen that patients are paying 26 per cent of the cost of medical services. This is a fairly substantial proportion. Of course, it is a reduction on the figure of, I think, 35 per cent for the previous year. However, 26 per cent still leaves the patient with a considerable sum to find. In cases where doctors are not adhering to the common fee - as this clearly indicates that in many cases they cannot be- a substantial amount of money must be raised by the patient. This can cause all manner of great personal problems.

I will not deal with aspects of the low income health insurance subsidies scheme. The honourable member for Bendigo (Mr Kennedy) will be dealing with this subject and, in any event, I discussed it in this House last week. There is, however, one other aspect I should like to raise on the inequity of this scheme. It is dearer for a low income earner to contribute to the scheme than it is for a high income earner. For instance, hospital and medical insurance costs 3.9 per cent of the taxable income of a person earning $2,600 a year but for a person earning $6,240 a year it costs only 1.14 per cent of his taxable income. Unfortunately, I am unable to discuss friendly societies or the neglect to fully implement the proposals of the Nimmo Committee but I do want quickly to refer to nursing homes. I wonder how the Government decided to strike on this particular level of $3.50 as the basic bed subsidy rate because it has no evidence upon which to establish what the true figure should be. In an answer to question No. 3363 which was provided last week the Minister for Immigration (Dr Forbes) said:

Tables 3.25 and 3.27, which relate to fees charged in private nursing homes, have not been updated as projects have not been undertaken to compile more recent information.

In other words, this was a stab in the dark, no doubt to take off political pressures. Of course this is no way in which to develop these services. As I mentioned on Tuesday night of last week, this should be seen as part of the total development of health and welfare services in the community - an integrated, balanced plan for the provision of adequate health and welfare protection for the community.







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