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Shadow and Health Ministers discuss their respective plans for health policy reform

MATTHEW ABRAHAM: The Opposition's failure to come up with a saleable health policy was one of the final triggers for the last federal election. Now, almost twelve months later, the current Shadow Minister, Dr Bob Woods, is still trying to finalise a health policy. The latest option is for a radical free market policy based on health care vouchers, and the abolition of Medicare. Dr Woods is with us now.

Well, is this a case of going back to the '50s?

BOB WOODS: Well, in terms of allowing people to look after their own future, there is some truth in that approach, but let me emphasise first of all, this is just one of a range of options that we are looking at. It's by no means necessarily the option we will adopt. It has some advantages. What we will be doing is looking at the various options in terms of health policy, to make sure we get three things: that we get quality health care offered; that we get good access to that health care by the population; and that we get efficient delivery of health services. If this option checks out better than the other options, then it is the one we will go for. If it doesn't, then we will go for one of the others.

MATTHEW ABRAHAM: I understand that this particular voucher option, if we can call it that, attracted a fair bit of interest in Dr Hewson's office.

BOB WOODS: Well, one of the attractions about this of course, is that it does devolve some of the day to day running from the Commonwealth, on to the coalface, if you like, where the services are delivered, and it allows more free market involvement and more competition. So there are some advantages in this sort of approach, particularly there are some other considerations to take into account.

MATTHEW ABRAHAM: There are some funding problems, I understand - the small question of a billion dollars.

BOB WOODS: It depends on how you organise it, but the basic structure of the system, as proposed by John Logan, which is the one we are talking about - one of many we are looking at - says that we will encourage people to take out private insurance; and for a group, the pensioner group and the disadvantaged group, we will offer vouchers for that private insurance, so it gives the pensioners private insurance. Now the cost of it depends on who else you give vouchers to, and how much you give in terms of subsidy.

MATTHEW ABRAHAM: I see, so maybe not everybody will get vouchers.

BOB WOODS: That's right. I mean, presumably you wouldn't want to give vouchers to those who are rich and well off. You are really targeting the vouchers towards the poorly paid in our society. Obviously the pensioner group would be one.

MATTHEW ABRAHAM: What's the kick-back here, I mean, what's the benefit of having vouchers?

BOB WOODS: Well, that way, the pensioner group for example, would get access to private hospitals, private insurance, and all the other advantages of that, which of course would be very attractive for many people in that group.

MATTHEW ABRAHAM: Would the vouchers be sufficient to cover the cost of that sort of care?

BOB WOODS: I think you would have to make sure that for the pensioner group, at least, you give a voucher which would cover pretty well the whole cost. But as you moved up the scale to other people who are perhaps not well paid, but not necessarily pensioners, you would probably cut off the level of the voucher, and certainly Logan's proposition is that you have a sliding scale of vouchers which gives full compensation right at the bottom of the financial scale, and less compensation higher up.

MATTHEW ABRAHAM: Dr Woods, do you concede there is a fair bit of support in the community, on polling and anecdotal evidence, I suppose, for Medicare?

BOB WOODS: Oh yes, I think you have to be realistic and say, look, there are advantages and disadvantages to Medicare.

MATTHEW ABRAHAM: Well, if it ain't broke, why fix it?

BOB WOODS: Well, it is broke - it is broke in many ways. I mean, we have these three criteria to design a health policy on, which is quality, access and efficiency. It doesn't give good access to a whole section of the population. I mean, the waiting lists that are around, I think are evidence of that. It certainly doesn't deliver systems efficiently and there's doubts about the quality in many areas. I mean, the quality of care offered at our major teaching hospitals and major public hospitals is very good, but at some of the other areas, it is really second rate.

MATTHEW ABRAHAM: Are you able to guarantee that no Australians will be financially worse off, under an Opposition or a coalition government health policy?

BOB WOODS: What we would like to do is if the people are worse off, they are worse off by choice. Now, whether we are able to achieve that depends on how much subsidy we give to the pensioner group and those other groups, in terms of whichever policy we take up, because there obviously will be subsidies towards those groups, whether we finish up with a voucher system or some other alternative.

MATTHEW ABRAHAM: Dr Woods, do you think in the 1990s, you can sell this sort of system. I mean, we are talking about quite a sophisticated electorate, an electorate that's used to organising its own credit and so on, do you think you are going to be able to wind people back to handing out vouchers?

BOB WOODS: Well, I think if you're talking about a sophisticated electorate which is able to look after its own credit, you're talking about a sophisticated electorate which would in fact, be able to look after its own private health insurance, and for those who are not able to, you are giving vouchers. I mean, in many ways, this particular option, which as I say, is one of many, fits in better with your definition of the electorate.

MATTHEW ABRAHAM: Alright, when should be see the final shape of the ...

BOB WOODS: We have organised a seminar for the whole joint party room, on 21 March, which will be listening to a whole range of experts from both sides of the political spectrum, including people like Dick Scotton, who was one of the architects of Medicare, and John Logan, who is one of the architects of the voucher system. We will have a, I think, full and frank discussion is the words I should probably use, about the options and the directions we need to go in, and hopefully, that will accelerate the process fairly rapidly.

MATTHEW ABRAHAM: Alright, back to my original question - when should we see the health policy?

BOB WOODS: Well, I hope it won't be too long after that.


BOB WOODS: I would hope it would be this year, yes.

MATTHEW ABRAHAM: Dr Woods, thank you for your time this morning. The Opposition spokesman on health, Dr Bob Woods. Now the Federal Minister for Health is Brian Howe, who is with us now.

Mr Howe, would a voucher system work, in your view?

BRIAN HOWE: Well, it would be very strange, as I've just heard you suggest, to dismantle Medicare, given that it's got 70 percent popularity - there's seven out of every ten people believe that .. are quite satisfied with the Medicare system. So first of all, we would certainly not be in the business of scrapping Medicare or moving to any system that was fundamentally very different. I think the voucher kind of approach is one that obviously the Opposition are thinking of in terms of, not only health but education, perhaps housing, and as I think Opposition sources have indicated, once you go down this track, you see a blowing out of costs, and there are reports there of a billion dollars additional health expenditure. Well frankly, my interest is to reduce, or at least put a rein in on health expenditure. It's certainly not to see it blow out without any real controls being built in to the system being adopted.

MATTHEW ABRAHAM: But do you give people themselves, greater control over where they spend their health dollar, or education dollar, for that matter?

BRIAN HOWE: Well, I think what you are talking about really, is rationing, and it reminds me in some respects of petrol rationing after the war. I mean, when you start to ration a good, then you've got to decide who .. how you manage the cut-off point. I mean, who is not going to be able to get a voucher if the cost of the scheme is going to be reined in - is it someone who has already had two hip operations? Is it someone who is too old, as it were, to feel that you need to invest the money?

MATTHEW ABRAHAM: Well no, but ...

BRIAN HOWE: I think probably you're talking about rationing ...

MATTHEW ABRAHAM: Well, the Federal Government, at the moment, Mr Howe, effectively does that by setting means testing of various entitlements.

BRIAN HOWE: I mean, the beauty of Medicare is that it is a universal health insurance. There is no question of means testing and of course, we know that in health, the public doesn't want to discriminate: it doesn't want to discriminate between the poor and the not-so-poor; between the chronically ill and those who have a temporary illness or an injury or something like that. We don't want to see discrimination in health because that would produce a distinction between the deserving and undeserving. I am afraid the Opposition aren't so concerned about those niceties.

MATTHEW ABRAHAM: Why shouldn't health care be means tested?

BRIAN HOWE: I think that essentially, because health is in a sense, dealt with on the basis of need, that is your need for treatment. I mean, health is not a discretionary good - for the most part, we receive health care because we need it, and there isn't a market there. It is a system that in a sense, is always going to be controlled by the experts, by the professionals, by the doctors. I think once you introduce those kind of market notions into health, you are going down a slippery slope which essentially means that the most needy, in a sense, are going to go back to the bottom of the queue, as they were in the numerous health options that we've seen floated by conservatives over now, half a century.

MATTHEW ABRAHAM: Mr Howe, you are undertaking a major review of existing health policy. What sort of things are you looking at then, if you are not looking at these sort of options?

BRIAN HOWE: Well, we are certainly looking at the question of demand for health services, and we are concerned about that and we will be releasing one of the background papers of the national health strategy, this week. John Deeble is putting out a paper this week which will show people what in fact is occurring, and help people to understand some of the problems that we do have to deal with, not in Medicare as such, but problems that we face in the Australian health system. We do have, if I might say so, a pattern in this country of using medical services at a rate that certainly is above other countries.

MATTHEW ABRAHAM: When would you expect that review to be complete?

BRIAN HOWE: Well, it will be not a review that will be completed just like that. It will be a review that will have a number of issues papers that the Government will address, as we come to them, that is, we are not going to put it all together and have one big review. We are having a series of issues papers and background papers that will be a basis of the Government's approach to reform in the health area. But let me emphasise, we are not re-opening the issue of health insurance - we have won four elections on Medicare. What we are looking at is real problems that exist in our health system, and how those problems can be addressed.

MATTHEW ABRAHAM: Are you going to re-open the question of the Medicare levy?

BRIAN HOWE: No, that's not on the table. Essentially, Medicare is I don't think the issue and this is not a review into Medicare. It is a review into our health system and so we have to deal with a range of concerns that people feel. Frankly, when we ask people, how do you feel about Medicare, they say they love it, so we'd be a bit silly to have a review into Medicare as such.

MATTHEW ABRAHAM: So the levy stays at its current level, for this term of government?

BRIAN HOWE: The Prime Minister indicated that, and certainly, I wouldn't expect to see any change there.

MATTHEW ABRAHAM: Minister Brian Howe, thanks for your time.