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Opposition's prescription for Medicare

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Media ReleaseJAMES PORTER, Federal Shadow M i n i s t e r for Health 7 t h March, 1985.OPPOSITION’S PRESCRIPTION FOR MEDICAREThe health system in Australia is in crisis; not Just in NSW, hut throughout Australia the shift from private to public health care has left the public hospitals unable to meet the rapidly growing demands brought on by Medicare.Health related disputes errupting around the country are not just local issues, but they go right to the heart of Medicare. These disputes would not have occurred under a Coalition Government and we would act immediately to resolve the problems of Medicare.The underlying issue everywhere is whether Australia wishes to continue down the path of a bureaucratic, expensive, nationalised health service or rebuild and improve upon our unique system of public and private health care.Despite the Prime Minister's assurances that his Government has no intention of destroying private health care in Australia, both the Medicare legislation and the Minister for Health, Dr. Blewett, are in fact destroying private practice. Whether it is intentions: or unintentional is beside the point.Ar. examination of what is occurring within the four key arenas of the health system makes clear what the outcome of this Government’spolicy will be.First, consumers have been induced to drop their private insurance cover and become public patients.Second, the private health funds are being seriously undermined through (a) the withdrawal of tax rebates, (b) the prohibition on gap insurance, (c) restrictions which prevent them from being able to meet competition from commercial insurers, and (d ) the with­drawal of re-insurance subsidies to enable insurers to provide affordable coverage for long-term, care.Third, the private hospital system is being strangled through unfair regulation and categorisation.Finally, we have the Government’s efforts to make all doctors Government employees through its pressure to bulk-bill all patient and the infamous section 17, which gives the Minister the ultimate control over doctors' contracts with public hospitals.The Opposition believes that it is Government's responsibility to provide assistance to those who are unable to meet the costs of health care, such as the poor, the elderly, and those suffering chronic or catastrophic illness, while those who can afford to insure privately should have the opportunity to do so without the added burden of paying twice for health cover by being compelled to also pay the full Medicare levy.

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The Hawke Government promised a Health system which would be fair,

equitable and efficient; however the system is in crisis.

The introduction of Medicare has led to a shift from private to

public health care, with public hospitals unable to meet the rapidly growing demand.

The transfer of patients from private hospitals to the public system has occurred much more quickly than had been anticipated, according to Dr Blewett.

Thousands of Australians who had traditionally exercised freedom of choice to take out private insurance have been encouraged, through direct Government economic pressure and the sweeping

promises of Medicare, to drop that insurance and turn to the

public sector.

The balance of private and public sectors in health care, which has been a hallmark of the Australian system over the last century, has

been destroyed, resulting in;

„ Waiting lists and queues Those most needing assistance - the elderly, the poor, and the

chronically ill - must now compete for services with those who can afford to pay for private insurance.

- In Melbourne the number of Victorians waiting for major surgery has more than doubled in the last two years, with

more than 16,000 now waiting for a hospital bed.


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la fl.A. Llic ^ueut Cut. eai , nose ana tnroat surgery at the Royal Adelaide Hospital has quadrupled; there is now a 12 month delay.

o Public hospital budgets squeezed

Public patient loads are increasing without the necessary substantial increase in funds; in addition fewer private dollars are going into the system. The result is inefficiency, low staff morale, industrial disputes, rationing of patient services,

and overall deterioration in standards.

- The deterioration of the public hospital system is such that the Royal Australian College of Surgeons is considering

training of surgeons in private hospitals instead of public hospitals.

o Demise of private health care in country areas Where choice of doctor and hospital is limited, patients are dropping their private insurance cover and opting to be treated

as public patients. Country doctors are seeing their proportion

of private practice dwindle substantially with a resultant

loss of income.


e GAP insurance prohibited - hardest hit are frequent users of doctors’ services.

0 Tax rebates - Withdrawal of rebate discouraged people from insuring


* Reinsurance subsidies cut This means health insurance funds have to charge more or penalise the elderly and chronically ill (those needing long

term care). ‘



Health Insurance Industry

Government has failed to ensure "community rating" whereby

the contributions of the currently healthy help to meet the costs of the sick; thus, costs for private insurance escalate as the better insurance risks drop out of the funds.

35-day rule ; t '

- The 35-day rule, together with the freeze on nursing home bed approvals followed by restrictive new guidelines for > those longer term patients in hospitals has left many who

are too sick to go home with nowhere to go.

Private hospital categorisation

Dr Deeble has stated,

"Putting private hospitals into three classes is the

very first step towards putting Private Hospitals in the public system."

The 1 per cent levy The 1 per cent levy bears no relationship to the actual costs

of Medicare; after five months of operation, the cost of Medicare blew out from $1790m to $2050m - an increase of $260m. The levy was estimated in the Budget to raise $1191m - far short of the actual cost of Medicare.

Cost contained through pressure on providers Labor believes that cost containment will be most effective

through pressure on providers.

- Section 17 - gives Dr Blewett control over doctors'

contracts with public hospitals.

- Practitioners hounded in search of evidence of fraud

($7m spent to recover $900,000).

- Pressure O n doctors to bulk-bill.


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Extension of bulk-billing means:

- increased opportunities for abuse of the medical benefits system, - reduced income for doctors, - an eventual total dependence on Government

financing of health care, and .

- undermining the doctor/patient relationship


The Labor Government’s doctrinaire approach in negotiation — and in particular the attitude of contempt which the Minister for Health, Dr Blewett, has displayed toward the medical profession— has driven a wedge between the

Government and the doctors, and has damaged the prospect of resolution of the problems.

Federal support of the Wran Government's outrageous plan to import doctors to replace the highly qualified specialists

in New South Wales. In their haste to replace private practitioners with salaried doctors, the Government apparently prefers to bring in doctors from other countries— despite our oversupply in some specialties--to staff public hsopitals.

These doctors may be prepared to accept whatever conditions the Government lays down rather than to preserve the high standard of care which Australians have enjoyed under a

system of private and public health care.

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Australia roust choose whether it wishes to go down the path of

a bureaucratic, expensive, nationalised health service or rebuild and improve upon Australia's unique system of public and private health care.

We believe it is Government's responsibility to provide assistance to those who are unable to meet the costs of health care, such as pensioners, low income earners, unemployed, and those suffering

chronic or catastrophic illness, while those who can afford to Insure privately should have the opportunity to do so without the added burden of paying twice for health cover by being compelled to also pay the full Medicare levy.

We therefore maintain the position we have consistently promoted, that opting out provisions are essential.

High on the agenda is the need to remove the severe problems faced by the elderly, the chronically ill, and the poor caused

by Medicare.

The Coalition Parties propose the following immediate steps be taken to remove the problems caused by Medicare.

1. * Allowing private health insurance funds to cover the 'gap' between the schedule fee and Medicare rebate for medical


2. Restore stability and create more genuine competition within

the insurance market by (a) requiring all health Insurers, including general insurers

. to abide by the same rules, e.g. to operate under the same Acts of Parliament, but at the same time limiting government regulation to the minimum necessary to ensure

• fair competition and community rating, and .

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(b) encouraging insurers to extend their range of tables to include optional packages that could reduce any unnecessary use of services and reduce administrative costs, while at the same time reducing insurance

premiums. ·

Restore geographically widespread service for health insurance by allowing private insurers to act as agents for Medicare.

Relax the '35 day rule,* and devise in conjunction with public and private hospitals, nursing homes and insurers, satisfactory ways of meeting the needs of the long-term

sick without causing financial hardship and distress.

Restore hospital re-insurance subisdy to a level to enable pirvate insurers to reduce the costs of private insurance and to allow more effective methods of subsidy of long-term

care to evolve.

Review the guidelines for approval of nursing home and hostel construction to ensure that those assessed as needing such accommodation have somewhere to go.

Replace Labor's system of categorisation of private hospitals with a system based on patient needs and services, with particular emphasis on relieving the desperate situation of pyschiatric patients. The budgetary allocation for

bed/day subsidies under categorisation will be retained but paid out under a new formula related to the type of

service provided and the type of patient treated.

Remove the unnecessary provision of section 17 of the Health Insurance Act which gives the Federal Health Minister an unnecessary level of control over doctors' contracts

with public hospitals.


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9. Limit bulk-billing by doctors to patients with pensioner health benefit cards, health care cards, and other concessional entitlements.

10. Eliminate unnecessary regulations and paperwork affecting doctors, hospitals, and others associated with the health care system.

11. Restore effective consultative mechanisms with the medical profession to provide advice to the Minister for Health on matters affecting the profession.

The measures outlined represent the essential first steps towards the development of a health system based on choice, quality, comfort and security.


"Let me make it clear . . . that my Government will not brook any basic changes in the structure of Medicare."

Hawke 20/2/85