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Thursday, 6 December 1973
Page: 4428


Mr HAMER (Isaacs) - The Bills we are considering are a perfect example of how an incoming Government should not go about complex legislation. I do not mean so much the formal procedure, although it would have been better if the Government had dared to have a debate on the White Paper on the Australian health insurance program before it prepared the Bills we are considering. But the real error lies further back. When in Opposition, the Australian Labor Party, desperately looking for a health program of its own with which to try to counter the very successful national health scheme of the Liberal-Country Party Government, became aware of some research work by 2 economists, Doctors Scotton and Deeble. Without proper consideration the Labor Party grasped their scheme, loudly trumpeted its supposed advantages - and now it is stuck with it.


Mr Ian Robinson (COWPER, NEW SOUTH WALES) - It made a mess of the arithmetic.


Mr HAMER - Yes. Its great defect is that it is an economists', almost an accountants', scheme and does not tackle the basic requirement of an alternative health scheme - how to improve the standard of health care in Australia. I do not want to give the impression, despite the remarks of the honourable member for Diamond Valley (Mr McKenzie), that I believe that health care is solely a matter for the medical profession. The United States of America, where the pattern of health care has been almost entirely dictated by the medical profession, is a salutary example of the danger of that course. What a sensible government does, what the Liberal-Country Party Government did, is to balance the views and interests of all those involved in health care and in particular the interests of the patients. And this is what this Government, in this Bill, has conspicuously failed to do.

The health scheme this Bill seeks to supersede has been outstandingly successful. It is not perfect - no purely human institution ever has been or ever will be - but it has been progressively improved, and the honourable member for Hotham (Mr Chipp) has outlined the form in which the Opposition would like to see the next stage of improvement. Now all this is to be cast away. And for what? It is to be cast away for an accountants' scheme, for a political gimmick, that will do little to improve the standard of health care and a great deal to harm it! What this House should do is to examine critically all the changes proposed in this Bill, and to identify the areas where it makes improvements - and these are remarkably few. Even where there are alleged improvements, such as the increased grants to hospitals or the bringing of pensioners into full membership of the health scheme, this House should satisfy itself that these improvements would not be better achieved by simple amendments to the existing National Health Act.

So, let us examine the improvements claimed by the Minister for Social Security (Mr Hayden) and his supporters. The Minister frequently has trumpeted claims that his scheme will improve coverage, and that one million people are not covered under the present scheme. I heard an interjection to that effect a few minutes ago. There are a number of points to be made about this. Firstly, the Minister is attempting to confuse in the public mind the question of health cover with the question of insurance cover. All Australians are now covered for health care. No Australian is refused reasonable health care because of lack of means or lack of insurance. Secondly, who are these people who are not insured under the present health scheme? The Minister certainly does not know; he does not even seem to know their total numbers. The figures he quoted in his White Paper are misleading, for - although the Minister denied it - the substantial number covered under the Repatriation Act were excluded.

I think it would be fair to say that about 92 per cent of the community are now insured. Of the 8 per cent that are not, some, of course, are very wealthy people who choose, in effect, to carry their own insurance. Forcing these people to join the health scheme, bearing in mind that 60 per cent of benefits they will receive will come from Consolidated Revenue, is of very doubtful social advantage. Others who are not now insured are transients and itinerants who will be at least as difficult to pick up under the Government's tax scheme as under the present scheme. It is worth noting that something like 3 million people who could be in the work force do not render tax returns, and that the Deeble report admits that only 80 per cent of the community would be covered initially under the Labor scheme. Even in Britain, which has had a tax financed health scheme for a quarter of a century, nearly 5 per cent of the community still are not covered. In fact, the Government's claim of wider coverage is both false and misleading.

The second claim trumpeted by the Minister - with snide comments on the number of private funds - is that it would be more efficient. The 1969 Nimmo Committee had this to say on this subject:

The Committee found no support at all for the often expressed view that the number of different organisations adds to the cost of the scheme. We examined the operations of a large number of friendly societies and closed funds and found that their service to contributors was extremely good and that they had been the most successful organisations in keeping management expenses within proper limits.

From all experience here and overseas, it will be very surprising - almost unbelievable - if a government department in fact provides cheaper and more efficient service than a private insurance firm. Further, the friendly societies and small union or industry based funds provide for their members personal and prompt service which a government department certainly could not match. Worst of all, of course, health insurance would be largely socialised, and freedom of choice would be eliminated. So the second claim of the Minister - that of increased efficiency - is clearly invalid.

The third advantage loudly trumpeted by the Minister is that it will be more equitable, because the contributions, instead of being a flat rate which is tax-deductible, will be a proportion of taxable income. Whether this is more equitable or not depends on how one views the principles of progressive income tax. But, however one views these principles, one must bear in mind that 60 per cent of the cost of health benefits will be paid by Consolidated Revenue towards which the higher income earners pay a disproportionate contribution, I draw this to the attention of the honourable member for Diamond Valley - and even the Minister cuts out the progressive health levy - the super tax - at taxable incomes of a little over $11,000 per year, although this of course is only in the first year. The $150 limit may well be lifted sharply in future years. So, the third claim of the Minister - that of increased equity - is debatable, to say the least.

The fourth advantage claimed by the Minster is that his new scheme will be no more expensive than the present scheme - and he produces calculations to prove it. Knowing the history of gross costing errors by the Minister and his staff in the past - I am sure honourable members will remember the recent embarrassing confessions before the Medical Fees Tribunal - and faced with this past, it is inevitable that the House will want to look very closely at his new calculations. And they are an interesting study! An economic and market research firm, Philip Shrapnel and Co. Ltd, recently carried out a detailed costing of the present and proposed health insurance schemes. It concluded that the Minister has underestimated costs by nearly $300m in the first year, that it would cost $380m more than the existing scheme in the first year, and that costs under the Hayden scheme will escalate sharply.

How did the Government come to make such a gross costing error? It seems that it forgot that pensioners were being brought fully into its scheme, and merely projected the present discounted costs of pensioner services, and also failed to allow for the inevitable sharp increase in pensioner visits to specialists. A mere error of $300m a year! What crass ineptitude! But how typical of this Government. I have been through the arguments that have been advanced in favour of the Hayden health scheme. None is valid. None gives a reason for dismantling the present highly successful national health scheme, with the inevitable chaos during the changeover. But this is not the worst. As well as having no real advantages, the Hayden health scheme has many very serious disadvantages. I should now like to examine these.

The first is the change in the method of payment of medical expenses and the clear preference of the Minister and his advisers for bulk billing. Bulk billing does have administrative advantages, but we are discussing a health scheme, not an accountants' scheme - and the effects of bulk billing are likely to be serious. It changes the whole nature of the scheme away from a reimbursement scheme, where the patient has a responsibility for his own medical expenses for which he is then substantially reimbursed. This not only provides a check on overutilisation - either by doctors or by patients - but also ensures the vital function of patient audit, that is, a check by the patient that the medical service has actually been performed. Without these checks our utilisation of health resources will be much less efficient.

The Hayden health scheme also will change markedly the balance between public or standard beds and intermediate or private beds. How great this shift in balance will be depends on how many people will be prepared to take out private insurance to cover the cost of intermediate or private ward care - likely to cost something like $125 a year - as well as paying a super tax of 1.35 per cent of their taxable income for standard ward care. I do not think many people will do this.

Mr McKenzieThey will not need cover.


Mr HAMER - What will happen then? It is quite certain that there will be a substantial shift in bed use, and this will have serious consequences. There inevitably will be a shortage of standard ward beds for many years, and poorer people, who in some States - for example, Victoria - have had special rights to beds in public hospitals, will now have to compete for these beds with richer elements in the community. So much for the Labor Party's special consideration for the disadvantaged.

In the case of the private hospitals, many of which are of outstanding quality, they will have to change their whole nature by setting up standard wards. This in turn will mean much greater Government control, and the destruction of much that has made these private hospitals great. A statement by the Board of the Freemasons Hospital sums the problem up well. It said:

There appears to be no practicable way in which a hospital of the size of the Freemasons Hospital can combine public and private beds. The overhead and administrative problems involved, when dealing with a mixture of patient classifications in a total of about 140 patients, become out of proportion to the possible benefits.

Accordingly, it is submitted that the White Paper scheme in its present form is impracticable to operate, so far as it relates to the Freemasons Hospital, and likely in the ultimate event to result in endangering the continued existence of this hospital.

I add that this hospital is one of the finest in Australia. How great the danger of destruction of the private hospitals in can be seen from the Bill. Clause 34 (2) permits private hospitals to apply to the Minister for permission to open standard wards, and this they will most certainly have to do under the Hayden scheme. Clause 34 (3) provides that the Minister will determine how many beds should be taken over - the whole lot if he so decides - and clause 34 (4) provides that the Minister will decide how much the private hospital will be paid for taking in free standard ward patients. The Minister decides; the Minister determines; the Minister decides. What a perfect program for the takeover of private hospitals by the Federal Government - for the socialisation of private hospitals. But we should not be surprised at this. The Minister has been quite frank about it. In the 'Sydney Morning Herald' on 6 September 1972 he said:

The Labor Party is a socialist party and its aim as far as medical care is concerned is for the establishment of public enterprise.

Then there is the likely decline in the standard, and increase in the costs, of hospital care which will be caused by the change in the balance of hospital bed usage, coupled with change in the method of payment of the present honorary staff in public hospitals. At the moment, the honorary service in public hospitals is financed by the private sector. If this private sector is sharply reduced, and the specialist staff in public hospitals is simultaneously put on sessional payments or salary, the effect on the standard of medical care will be very serious. The specialists will become in effect salaried workers, with all the defects that occur when doctors are salaried. The results will be, of course, a lowering of the standard of care. Patients will be upset by unnecessary delays and waiting lists for hospital beds will lengthen. This may seem a gloomy prediction, but it is amply justified by all experience of such hospital care.

These are, to me, decisive reasons why this House should not contemplate accepting this ill-thought-out Labor health scheme. But I do not want to give the impression that there are no good points in the Labor health scheme. I approve of the bringing of pensioners fully into the health scheme, and I approve of the increase in the daily bed rate subsidy to hospitals. But both these could, and should, easily be incorporated into the existing health scheme. Incidentally, the increase in the bed subsidy is not as great as the Minister suggests. He correctly quotes the present rate as $2 a day for insured non-pensioner patients, but the special account payments increased the average daily benefit per bed for nonpensioner patients as at 30 June this year from $2 to $5.33 a day.

The elimination of the special account payments by the present Bill would have another unfortunate consequence. Under the existing health scheme members of a fund may be transferred to the special account, where the Government pays their benefits because of a pre-existing complaint, or chronic illness, or hospital stays in excess of a specific period - about 84 days - in any one year. Now the special account is to go, and long-term or chronic patients, who have insured themselves for private or intermediate ward accommodation, will be thrown out of this accommodation after about 3 months. This is iniquitous.

All the uproar and all the divisiveness, which have been caused by this ill-considered health scheme have diverted attention from real areas of health need. The Bill does nothing, for instance, to improve the standard of nursing homes or their admission, rehabilitation or discharge policies. It does nothing to solve the problem of families who are faced with crippling bills for elderly relatives in nursing homes which charge more than the standard fees. It does nothing to improve certainty in medical charges. It reduces the availability of benefits for para-medical services from many health funds. It is high time we stopped wasting our effort on this illconsidered, counter-productive, ramshackle and wasteful Labor health scheme, and got down to the real task which this Government is evading - how to improve the standard of health care of the Australian people.







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