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Wednesday, 14 September 1983
Page: 836


Dr BLEWETT (Minister for Health)(12.34 a.m.) —First of all, the honourable member for Dundas (Mr Ruddock) applied what was the first and sensible question; that is, do I believe that some private hospitals have been charging fees which are excessive? My answer to that is, quite clearly, yes. It is an affirmative answer which would be given by anybody who has examined the private hospital situation over the last two years. Some of the sorts of evidence one can bring to having that belief are the way in which private hospital fees have piggy backed on purely arbitrary State government public hospital charges over the last two years as a result of the last health insurance change of the previous Government. One can compare the quite extraordinary narrowness of range of private hospital charges despite the very different costs of those hospitals.

Another piece of evidence is to recognise that many of the hospitals we are talking about provide services very similar to good nursing homes and yet charge a bed day charge three times that of the nursing home. All of that evidence is around. If honourable members opposite were at all concerned with issues of cost containment of health in this country, they would realise that an honest government has to face those kinds of problems. The honourable member for Mackellar (Mr Carlton) said: 'Well, I do not think the Commonwealth Government should be getting involved in this issue. I do not think it should be pursuing cost containment in this area'. Not too much money is involved at the Commonwealth level in this sort of issue.

I think it is about time that I reminded the House of what the taxpayer does contribute directly out of Commonwealth funds to the private hospital sector. Last year it was some $86.7m. In the first full year of Medicare it will be $133 .2m. If the Commonwealth taxpayer is to be asked to provide those subsidies-all Commonwealth taxpayers, not just the ones using private hospitals-this Government accepts the responsibility that there must be efforts to contain costs in the private hospital area. Let me illustrate what we have tried to do generally with this legislation. We have tried to provide at the cheapest possible level a portable private insurance which would be portable between private sections of public hospitals and a whole range of different cost private hospitals. In order to get that insurance figure down as low as possible, we have to look very carefully at costs in the private hospital area. That is the fundamental assumption which underlines the policy. I think they are perfectly defensible policies for any government which is concerned with cost containment and which has a responsibility for the expenditure of taxpayers' money.

However, I think we have tried, as far as possible, to create a system which will, on the whole, benefit the best private hospitals in all catergories. We have tried to provide, through this system, as low a level of insurance rating as possible and to make it portable between the different types of hospitals. A lot of misinformation is being fed around on this issue. I suppose that is always possible because, as with the previous Government's health schemes, these final details of what the private insurance people will actually charge are not usually available when the legislation is drawn up because they relate to that legislation.

Let me say, first of all, that there has been no categorisation of any hospital . As part of the Government's consultation with all the groups concerned, the principles of categorisation have been sent to the State governments concerned, the private hospitals associations concerned-that is, the representative private hospital associations-in each State and also to the Voluntary Health Insurance Association of Australia because the insurance industry is equally concerned with this issue. We are waiting for responses to those guidelines. This is part of the consultation which we have embarked upon in relation to this and a whole range of matters in the area. Let me assure people that there has been no categorisation as yet, that the bodies concerned are being consulted for their views on the draft guidelines which have been circulated. When categorisation does take place there will be appeal procedures.

We are aware that the two issues which have been raised tonight are peculiarly difficult, that is, the particular nature of the bush nursing hospitals in Victoria and certain private psychiatric hospitals in various parts of Australia . As people have pointed out, the bush nursing hospitals in Victoria are in a unique situation-certainly that pattern of bush nursing hospitals provisions- which is not found in most other States. Much misinformation has been circulated on this matter, some of it, I am afraid, by the Victorian Bush Nursing Association itself. For the past 10 years-whether under the original Medibank scheme or under the five different schemes which were introduced by the Fraser Government-anyone who sought treatment in those bush nursing hospitals, be they a pensioner or a member of the general public, had to have private hospital insurance to cover them for the expense of that stay. They had to have insurance which would provide private hospital cover. Pensioners have not been able to go into those bush nursing hospitals without taking out private insurance cover. Of course, the same is true of ordinary members of the public.

That situation has existed for more than a decade. Of course, it will exist under Medicare. If people wish to make use of these hospitals they will have to take out the extra private hospital insurance. As I say, bush nursing hospitals are private hospitals and are not covered, therefore, by the current pensioner health benefit card or the health care card. People will not be able to obtain services through the Medicare system in bush nursing hospitals as in all other private hospitals. They will need that extra private insurance. However, I point out that at the moment hospital insurance costs from the private funds, in order to cover oneself for treatment in a bush hospital, are approximately $8 a week. Under Medicare that extra cover will cost about $5 a week for many of the reasons we have--


Mr Carlton —You do not know that.


Dr BLEWETT —It will be about $5 a week for many of the reasons I have already stated.


Mr Cadman —But they will pay twice.


Dr BLEWETT —We are now talking only about the hospital cover. The levy will cover their medical treatment. So, if we add their income and the figure of approximately $5, we will find that two out of three families will pay less for that cover. The remaining one-third of families will pay more. I point out that if people want private hospital cover they can obtain it at a cheaper cost than they can get it at the moment. Nevertheless in relation to the categorisation, there remain particular issues with regard to bush nursing hospitals in Victoria . I am having consultations with the Minister for Health in Victoria because he is aware of specific problems in this area. We will look very carefully at the points made in the submission, when decisions are made in relation to categorisation.

I think we have a unique problem. We will do our best to meet it. I have also assured the private hospitals that we will monitor very carefully the pattern of occupancy over the six months. If problems arise we will look at ways in which we can cope with that problem. On the evidence of Medibank there is no expectation that that will occur. The interesting thing was that in the one full year of Medibank, the 1975-76 year, occupation of private hospitals went up, not down. It may well be that a similar pattern will occur on this occasion. Certainly, the evidence of 1975-76 would suggest that that may occur. We have been made thoroughly aware of the specific problems in relation to bush nursing hospitals. We will have consultations with the Victorian Government over this matter. We will look at it very carefully in relation to categorisation.

The same applies to certain psychiatric hospitals which again create problems in relation to the basic principles we have laid down for categorisation. That is why people have sometimes drawn conclusions from those draft principles which may not be applicable when the final principles are arrived at. There is a special problem in relation to certain high quality psycho-geratric provisions in certain States. I assure the honourable member for Dundas that we are aware of both the general problem and the particular problem in relation to the hospital to which he referred. We will do our best to meet it.

Finally, I make the point with which I began: We do have cost containment responsibilities. I would have thought that all rational members on both sides of the House would be looking at ways in which we can produce a private insurance system in relation to private hospitals whereby people can pay as little as possible for that insurance and be guaranteed that hospital charges are appropriate.