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1992 Australian medical association national convention

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Leader of the Opposition











Parliament House, Canberra, A.C.T. 2600 Phone 2774022

I am pleased to be here today to have this opportunity to address your Conference and, in fact, to officially open the 1992

National Conference of the Australian Medical Association.

In doing so I am very conscious of the distinction that John Stone drew, last night, between real doctors and medical doctors. If you read some of the polls that have been done on me and what people know about me there is an overwhelming impression that I'm

a medical doctor and so I stand up with great pride and say I'm not - I'm a real doctor.

The only major surgery I've done in recent years has been on policy for the Coalition Parties but I have seen a lot of

scalpels .... wielded in Parliament House, mostly by the New

South Wales Right, and mostly in the course of the last few

months and perhaps more to come in terms of the dispute that is taking place now in pre-selection in New South Wales.

It is a problem we labour under, of course, with the titles of doctor. I think that a lot of people thought that Dr Blewett was a medical doctor when he had the health portfolio a couple of years ago. They simply found out that he was the most aptly

named politician around.

Brian Howe, of course, has tried a lot harder in the job. But his name raises the question, unfortunately he provides no answers.

I, of course, don't want to comment on your Presidential race tomorrow. I simply wish all the candidates w e l l ! I just wonder whether H. Ross Perot is not going to come through the pack.

The AMA President, of course, has a major responsibility in continuing the vital job of not only voicing the concerns of the medical profession on a whole range of health issues but just as importantly to continue to push for appropriate changes in the way our Governments administer our national health system.

Some of us, of course, in the Coalition have not always seen eye to eye with the AMA on a range of issues (Bruce Shepherd can

vouch for that!), we have nevertheless valued the very

significant role that AMA has played, and will continue to play, in the ongoing health policy debate.

As Leader of the Opposition, I am delighted to be with you for many reasons.

One of them is that it we have Health Policy which was the source of some debate in the past. One of them is that it gives me the opportunity to assure you that the Coalition Parties will be going to the next election with a Health Policy that is, we

believe, in the best interest of all Australians - doctors, health providers and consumers alike.

I am also pleased to be here in the context of a decision I took last week and that was to elevate our Shadow Health spokesman, Dr Bob Woods, a medical doctor, to the Shadow Cabinet.


Not only was this in recognition of Bob's excellent work in the portfolio and in developing our health policy but also because the health policy debate will be one of the major issues, I

believe, at the next election. It is a debate we intend to win decisively and it is an election we intend to win decisively.

The Health Policy we have developed cannot be properly understood in isolation from the overall Fiahtback! package. We've set down a very detailed strategy in Fiahtback! and health is an essential element of that strategy. I think it is important, this morning, that you recognise that fundamentally important point.

Fiahtback! was motivated by a clear objective: to face up

honestly to Australia's current problems, to formulate a clear idea of the type of country we want, and we've worked in terms of the year 2000, and to devise national policies that will make such a country a reality.

It was in that spirit that we addressed all the major areas of public policy making, including taxation, jobs, industrial relations, infrastructure, government spending, family assistance, aged care, education and, of course, health care.

The starting point in all these policy areas was to confront the reality of where we are as a nation, and then to measure against that where we want to go and what's got to be done to get there.

In the area of health policy, we highlighted the crisis in health care that has been created by Labor's Medicare system.

The hard reality for Australia is that Labor's so-called "free" and universal health system has led to a grossly inefficient, not so universal and definitely unstable health care delivery system that cannot be sustained.

To adapt Christopher Wren's words : "if you seek Labor's health care monument, look around you". I urge you to look at a number of facts.

Look at the hopelessly over-worked and inefficient state of our public hospital system with 70,000 - 100,000 Australians now on public hospital waiting lists

By contrast, look at the grossly under-utilised

private system with average bed occupancy rates of only 55-60% in private hospitals

And consider the fact that in many rural areas of

Australia, there is an increasing incidence of

hospital closures or services being seriously


This is an outrageous state of affairs. Particularly so when you consider that many rural communities have,


for many years, financially contributed to the running of those hospitals.

. In many respects, it is their hospital and now they

are being taken away from them.

. Look at the fact that the Medicare levy now only funds about 19% of total health expenditure.

. Look at the over-servicing and over-usage that bulk­ billing and other factors have facilitated and put such great strain on the health budget.

. Look at the growing problem with the over-supply of

doctors, particularly migrant doctors, where I am advised that over 3,600 migrant doctors have applied to take the next Australian Medical Exam to practise in this country.

. Look at the declining state of private health

insurance with just 40% of Australians now taking out private health cover compared to 67% prior to


. And finally, look at the fact that while Labor prides itself on keeping Commonwealth health expenditure down to around 8% of GDP per year, they have done so only

through rationing services and progressively reducing standards.

The inescapable conclusion is that Labor has misled the public about the true cost of health services.

It has failed to introduce the correct price signals that would prevent abuse.

Medicare is in crisis. It's not free, it's not fair and it

doesn't w o r k .

As I have said, our so called "free" health system consumes about 8 per cent of out total national product - that's more than $30 billion every year. And the Medicare tax levy - which is

supposed to fund this "free" system - actually pays for less than one fifth of all health spending.

When public patients go to public hospitals they don't actually face a bill. But when private patients go to public hospitals, public patients to private hospitals, all patients to some doctors and some patients to most doctors - they pay.

In this sense, Medicare - with its promise of universal "free" medicine - is really "Medicon".

Let me give you an example.


Two people arrive at casualty with the same injuries to get the same treatment. But one patient admits to being privately insured.

The patient in one bed leaves hospital, with a warm inner glow, full of goodwill towards a supposedly free health care system. He, of course, would overlook the fact that he's already paid the levy and other taxes in the process.

Meanwhile, the other patient with health insurance has not only paid the levy and other taxes but hefty premiums and may also have been slugged for the gap between his insurance contribution and the hospital's charge.

Health care is only free for some because others are paying a hefty subsidy.

Labor's Medicare has resulted in a scarcity of beds for the genuinely needy, particularly the less well-off aged, and gives no incentive for those who can afford it to take out private health insurance. No wonder 20-25% of those earning more than

$40,000 a year fail to take out private insurance.

Perhaps most damagingly, Labor's health policy has placed a disproportionate burden of national health costs on the taxpayer - and as Government budgets have been sgueezed - the health care system has become starved of resources, the quality of services has been reduced, public hospitals have been run down, and health care professionals have become disillusioned and dispirited.

And now with the worst fiscal policy situation in our history, with both and State and Federal Governments facing massive deficits, the health system is rapidly approaching its crisis point.

Moreover Medicare is not fair to people with private health insurance - they are basically paying for the privilege of paying again every time they visit a hospital.

For many years, of course, the economies of Eastern Europe tried to pretend that you could have universal access to desirable commodities at virtually no cost.

In communist Russia, for instance, bread and housing were virtually free - the result was that people queued for hours for a simple loaf of bread and waited for years and years to occupy a miserable over-crowded apartment.

Socialism is dead in Russia and the rest of Eastern Europe - but it lives on amongst Australian health planners who refuse to face the fact that "free" goods have to be rationed here in Australia.

The same system; the same results - queues, over-crowding, under­ investment, and, in some cases, shoddy product.


What we have now in the Australian health care system is nothing less than a gross misuse and misallocation of resources and talent. I put it to you that this is a tragedy.

Australia has some of the world's best doctors and has performed some of the world's most pioneering medical techniques. We have, in short I guess, first world medical capability with a third world delivery system. Australia's first rate medical reducers

are dramatically let down by Australia's poor political

leadership and third rate administrators. And quite frankly, this situation can not be allowed to continue.

Yet in passing, I'd like to praise the recent attempts of Brian Howe.

Brian Howe was the first Labor politician since 1972 to

acknowledge the problems of a supposedly free health system. His proposal, which was to implement a small charge for GP

visits, was the first, or could be seen as the first, step

towards a proper set of price signals.

Whilst we had reservations about the method of implementation, we strongly supported the principle.

Like so much else in recent days, that co-payment proposal fell victim to Labor's leadership struggles. Paul Keating promised that he would scrap the co-payment in return for leadership votes - not because it was bad policy. Simply because he thought it was bad politics.

The Prime Minister, in other words, sacrificed his convictions on the altar of his ambition. We have an even worse health system as part of the price of having Paul Keating as our Prime


Where does that leave us?

A public health system in crisis, a private health system

seriously undermined through Labor's ideological mind-set, a Minister with no credibility or ability to reform and - if one prominent Labor backbencher is right (George Gear in a recent Bulletin) - a hidden agenda to nationalise health and wipe out

the private medicine.

Don't just take my word for it.

This very week, the Health Minister in the West Australian Labor Government, Mr Keith Wilson, said - and I quote - that Medicare was the "most inefficient and ramshackle hospital funding system one could imagine" and that the Federal Government was - again

I quote - refusing "to face reality on this issue".

In response, Mr Howe - a man whose political position forces him to say what he is known not to believe - claimed that the West Australian Labor Government's support for private insurance was an "aberration".


Against this background, the Coalition Parties had no alternative but to undertake to transform Medicare into a viable and stable system of quality health care. We are absolutely committed to making the necessary changes, however politically difficult they may be, and in doing so in a phased way that is affordable and

sensitive to the needs of the community.

I said earlier that the Coalition's Health Policy cannot be properly understood in isolation from our general Fiahtback! strategy.

And I wish to take some time this morning to spell out how the changes we are introducing in health care are part of the wider changes we are advocating. Changes which are designed to limit the role of government and enhance the freedom of individuals.

Fightback! constitutes an integrated package of reforms. The reforms we advocate have an interaction and they have a

cohesiveness that is absolutely fundamental. At the heart of all of them, including health policy, lies a clear view of the role of Government and a clear view of the rights of the individual.

We believe that much of the current disillusionment with

Government and with politicians in Australia is as a result of the frustration that has emerged where hopes that Government's have created, or raised, over many years has simply not been filled - not been matched by action.

Governments have, for example, peddled the myths about the so called "free" health care. Yet, increasingly, people experienced the very real practical problems which that policy has entailed.

What Fiahtback 1 embodies is a call for Australians to abandon the habit of looking to government to solve all their problems. Our purpose is to restore to people the independence they have lost to social engineers.

This is the critical difference between us and the Labor

Government on health policy and indeed in every aspect of our policy.

For u s , equity means giving everyone the right to pursue their own goals in life without being penalised and brought back to the lowest common denominator if they succeed. For Labor, equity means promoting government as the first, not the last, resort and

concentrating more on redistributing wealth than creating it.

For us, equity means fairness between all sections of the

community, rural and metropolitan, rich and poor, young and old.

For us, compassion means a job for everyone who wants one,

providing incentives to self-respect through work rather than government welfare and giving appropriate assistance to those in greatest need.


For Labor, compassion means compensating individuals for the opportunities that Labor policies have never given them.

We believe that strong government, not big government, is the best way to increase individual responsibility, reward effort and reject mediocrity.

The expansion of individual freedom and choice will, therefore, be at the heart of the policies of the next Coalition Government.

What we believe is that an Australia in which people have the freedom to pursue what is important to them will be a more

productive and internationally competitive Australia.

We believe that the community has a responsibility to help those in need - those who cannot help themselves.

But we do not believe that we must help those who choose not to help themselves.

Our commitment to individual choice, private enterprise and economic growth is one that derives not from ideology but from what we believe will achieve the best practical results.

We want to give Australians the chance to show what they can achieve when the official, the regulator and the tax man get off their backs and when they are once again guaranteed rewards and opportunities.

For too long - encouraged by the Labor Party - Australia has been living a lie.

We have kidded ourselves that you can tax people to the hilt without destroying incentive; that you can grant everyone the same wage rise without destroying initiative; that you can throw Government money at every social problem without destroying self­

help; that you can load business with red tape, black tape, and green tape without destroying national wealth and that you can constantly knock your country without destroying national pride.

Our basic belief - embodied in our health policy as in all our other policies - is that John and Joan Citizen know what's best for them.

In health, as in everything else, let's get Canberra off peoples' backs and let's get Government hands out of peoples pockets.

These days, there's quite a trend against so-called "god doctors" who treat their patients like problems to be solved instead of human beings who need to be involved in their own treatment.

I'd like to see the same trend against "god bureaucrats" who regard Australian citizens as incompetent fools who need to be organised for their own good.


Therefore, our policy is designed to give more power to consumers and less power to regulators. We want to establish a health market which enables people to chose their own doctor, their own hospital and their own health fund.

These principles underpin our Fightback! strategy and all our policy making. They are the principles, in particular, that inspire our objective for health care policy and our means of achieving it.

The broad objectives of our Health Policy are clear.

We want to reduce the dominance of government in the nation's health system to the advantage of patients, professionals and other health care workers alike.

We want to restore a proper balance between individual and family responsibility for their own health care, on the one hand, and the responsibilities of government, on the other.

As individuals and families are provided under our economic, taxation and social security policies with the opportunities to earn more income and are given a greater choice in the disposal of their incomes, and as a restored economy encourages private

investment in the provision of worthwhile goods and services and jobs, more and more elements of health care delivery will be capable of being provided more efficiently, more effectively and at lower cost by the private sector.

We want to end the starvation of funds to the health system by achieving a better mix of private and public funding and service delivery.

We want to maintain universal coverage of health care for the whole population, while expecting those who can afford it to take some responsibility for their own health costs

We want to maintain and improve existing standards of health care delivery for pensioners, war veterans, and welfare beneficiaries.

We want to provide a momentum for change that will encourage the States to improve hospitals and health care delivery systems.

We want to improve productivity within our hospital systems by eradicating the waste and inefficiency so often put about by lax management and restrictive work practices.

We want to ensure doctor numbers are appropriate by restraining the number of migrant doctors.

We want to help develop a world-class health system that can export its services, particularly to the Asia-Pacific region where I personally believe enormous opportunities exist.


And, most importantly, we want to restore quality to our health care system, and an essential requirement for that is to restore the integrity and effectiveness of private medical practice.

To achieve these objectives, we have spelt out a specific and phased program of reform that will cause least disruption to consumers, providers and governments.

Our policy is, of course, well known to those of you in this

audience, so I will not go through it in detail. But the key

elements are the abolition of bulk-billing for non-pensioners and beneficiaries; tax credits - to encourage private insurance and expanded private insurance industry and genuine microreform of the hospitals.

We will do this in an environment which will effectively

"quarantine" all health related issues from the one-off price effect of our Goods and Services Tax.

Let me spell out exactly what this means:

* For visits to the doctor - no GST.

* For stays in hospital - no GST.

* For accommodation in nursing homes - no GST.

* For prescriptions, medicines and medical appliances GST.

* On payment of health insurance premiums - no GST.

- no

Because we will abolish a whole range of major taxes such as payroll tax, petrol tax and sales tax and because we will

dramatically lower other infrastructure costs without imposing a GST on health spending - we believe health costs will actually fall in Australia.

Ladies and Gentlemen, unlike Fightback! - which contained more than 30 pages of health policy - Labor's so-called One Nation plan contains not a single page on health policy.

A Coalition Government will maintain all existing benefits for pensioners and health care card holders. We will also heavily subsidise pensioners and others on low incomes to take out private insurance.

In effect low income pensioners will get access to basic private cover.

We will not reduce any health benefits or services to war

veterans, war widows and their dependants.

To overcome the absurdity of a choked public hospital system and a grossly under-utilised private system, we will give individuals


and families real incentives, through a system of tax credits, to take out private health insurance.

This will better allocate resources and thus benefit both the private and public systems.

Where as the aged, for example, I think that policy means, in a sense, taking a block of people who are currently in the queues at public hospitals and moving them across to the private

hospital system for treatment.

We estimate that over time one and a half million people will move across into private insurance which will take an enormous load of the public hospital system.

The tax credit system will be specifically targeted at lower income individuals and families, as well as those aged over 65 years of age.

Conversely, we will oblige those families who have higher incomes, namely those above $50,000 a year, to either take out private health insurance or pay a special surcharge on the Medicare levy.

A Coalition Government will ensure that all reasonable charges are able to be covered by private health insurance if an

individual so wishes, subject to co-payments being required to minimise over-use and over-servicing.

For those taking out private health insurance, full medical cover up to an AMA schedule level, subject to certain patient co­ payments, will be allowed.

Subject to appropriate prudential requirements and basic standards, flexibility in private health cover, and competition between those providing it, will be encouraged.

A Coalition Government will end the Government monopoly on medical insurance and will allow private health funds to compete in both medical and hospital insurance. We will encourage other insurers to enter into and offer both types of insurance.

A Coalition Government will be committed to patient co-payments as an important part of restraining the over-use of services. We will therefore require co-payments as part of medical

insurance cover options.

We will retain bulk-billing only for pensioners, health care card holders, the disabled, veterans and war widows.

One of the greatest faults of Labor's management of the health system is that they have consciously allowed Medicare to become an unfettered production line health service.


Everybody thinks it's free, and both health providers and clients have been guilty of fostering an environment of over-use and over-service.

There is no doubt that patient overusage and doctor overservicing both divert resources away from real need.

Most of you here would agree that overusage and overservicing is widespread.

Part of over servicing is due to the increasing practice of defensive medicine, brought about by the high risks of


Yet the real culprit responsible for over servicing is the availability of bulk billing and the perception that visits to the doctor are "free".

Since bulk billing was instituted in 1984 the number of Medicare items rebated (doctors' consultations, operations, pathology tests etc) has increased from 110 million items in 1984 to 146 million items in 1989, at a time when there has been no

significant change in either the size of the population, the age of the population or the structure of the Medicare schedule.

I think it begs the question of why we haven't seen any data

since 1989 to indicate the extent to which those Medicare rebated items have dramatically increased, I imagine, in the last few years, even from that very high level of 146 million items in 1989.

Yet, in spite of this increase in Medicare items rebated, there has been no significant overall improvement in the health of the nation.

Indeed bulk billing, as was predicted at the time of the

introduction of Medicare in 1984, has lead to a deterioration in medical practice, particularly general practice.

Pressures on general practitioners' incomes have lead inexorably to shorter and less thorough consultations, often accompanied by unnecessary referrals to specialists.

The overall costs have risen while the incomes of conscientious general practitioners have declined.

There is no doubt that bulk billing has lead to a decline in

professional standards in much of Australian medical practice.

There can be no compromise in the standards of medical practice, which in Australia have been among the highest in the world.

Judicious and modest use of good quality services and an

appropriate level of remuneration for doctors are absolutely essential ingredients in the reform of Medicare.


Importantly we will institute a complete overhaul of the Medicare Benefits Schedule with one overriding aim to improve the quality of health care and also to encourage the practise of preventative medicine.

We want the general practitioner to again become the cornerstone of a first class health system.

Let me conclude by reminding you of the last Labor scare campaign in relation to the health industry.

In 1990, Labor flooded marginal seats with letters aimed at intimidating pensioners. The "mediscare" campaign was one of the most striking - and, as it turns out, most dishonest campaigns that we've seen in a very long time in Australia.

Can anyone remember Bob Hawke - the bloke who sometime appears on 60 Minutes?

In 1990 he barnstormed the country endlessly repeating his health policy - it was just two words, he said: "Medicare stays".

What he forgot to add was "Medicare stays - but only for 15


The Coalition Parties' genuine attempt to reform our ailing health system presented us, as a Party, as you are aware with a great challenge.

Yet equally, I challenge each and every one of you here today to fight for a better health system.

It is your responsibility to provide the best service possible to your patient.

If, for whatever reason, that cannot be done due to inadequate funding or misguided policies, then it surely is your duty to seek change and actively support those who offer much needed reform.

In the interest of Australia's health care, I look forward to you meeting that challenge in the near future.