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Thursday, 2 December 2004
Page: 117

Senator NETTLE (4:53 PM) —The Health Insurance Amendment (100% Medicare Rebate and Other Measures) Bill 2004 implements the coalition's election policy to increase the Medicare rebate for consultations provided by general practitioners. It is a long way short of 100 per cent Medicare. The government claims that the measure will make GP services more affordable, but that is far from certain. In fact, the AMA has recommended GPs increase the fees they charge. This means that increasing the Medicare rebate to 100 per cent of the schedule fee will be meaningless for the many patients who cannot find a bulk-billing doctor. In some places, 70 per cent of the population cannot find a bulk-billing doctor and they will continue to pay out-of-pocket expenses. Contrary to the Minister for Health and Ageing's recent refrain that these expenses have fallen, in many parts of Australia people are being charged a sum that is twice the schedule fee. The measure this bill implements will make next to no difference to these people when they visit their GP.

Just like the ill-conceived Medicare safety net, which this bill also addresses, this measure simply provides more cash to doctors with no public health outcome. It is part of the government's drive to privatise our public health system. This drive includes the differential GP rebate that focuses on bulk-billing some people, not all Australians, and which was extended to certain marginal seats just before the election was called; the 21 per cent rise in the patient charge for essential medicines that takes effect from next month; and the wasteful $2.4 billion a year private health insurance rebate which the government now wants to extend at a cost of $1 billion over four years and which the ALP says it will now support after having denounced it during the election campaign.

These measures result in a massive transfer of public health funds to the private sector. Australians are increasingly left to pay for health services they expected their taxes would fund through the public system, while the government's policy delivers more profits to insurance companies, private hospitals and private medical practitioners. The Greens are not opposed to private health care, but we say the priority for public funds should be public health care. Public funds spent on health services should deliver public benefits, such as timely access to quality care based on medical need, not capacity to pay. The Greens' vision for health care is fair and economically responsible, and is supported by the recently released OECD report on private health insurance.

The coalition government finds itself in a difficult position when it comes to our public health system. It is led by a prime minister who abhors the concept of universal access to fee-free public services for essential health needs. Yet this is the principle that underpins Medicare. Australians, unlike the Prime Minister, support Medicare. They see the personal, social and economic benefits of providing essential health services through progressive taxation. So the Prime Minister decided that his earlier blunt, public condemnation of Medicare, and bulk-billing in particular, was not politically palatable. Instead, the government seeks to destroy Medicare by stealth, little by little, measure by measure.

The Minister for Health and Ageing, Tony Abbott, boasted this week that the Howard government had invested $11 billion in health in just over a year—since he has been health minister. The critical question people are asking is: where has it gone? It has gone towards election bribes, towards ill-conceived measures and straight into the pockets of private health insurance funds. Not only does Minister Abbott think out-of-pocket expenses are inevitable; he thinks they are desirable. Speaking during the debate on this bill earlier this week, he said:

No-one likes to pay gaps. Everyone would prefer, if possible, to pay nothing and, if we have to pay something, to pay as little as possible, but the fact is that there is no such thing as free medicine. All health services have to be paid for, either by taxpayers or by patients, and it is no bad thing that there are at least some price signals in our health system, because it makes patients conscious of what they are getting and is a significant deterrent against overservicing and overuse of our health services.

Not only are these remarks astonishing; they are alarming. To have the health minister discourage people from seeing a GP when they need to or from buying their prescription medicines is not only socially indefensible; it is economically irresponsible. Preventative medicine is the best medicine and it is good economics. `Price signals' in areas of essential services disadvantage low-income earners and their families. In the case of health, they disadvantage people with serious and chronic illnesses. The mother of a small child with measles does not need to be reminded about `price signals'; she needs to be able to afford to take her son to the doctor.

The government's price signals—abandoning bulk-billing for many Australians—have led to a fall of seven per cent over the last six years in the number of GP services. The minister said he was confident that the government's policies would cause the number of GP services to rise `at least for the next couple of years'. There is no reason to suspect that the government's policies will increase affordability of GP services and, even if they did, the minister is not confident it would last very long. The government's approach is short-sighted—suited to the electoral cycle but not to building a robust, socially just and economically responsible health system.

As we know, low-income earners are more likely to have an illness or chronic condition than high-income earners, but ill health can strike any one of us at any time. Therefore, we all have an investment in ensuring that there are no financial barriers to any Australian who needs essential public health services. That is why the Greens argue so strongly that we should be promoting bulk-billing for everyone and not just for some people, as the government has done with the differential rebate. It is incomprehensible how the health minister can say with a straight face, `Bulk-billing is important and should be widely available,' when his government has done so much to restrict access to bulk-billing.

The Medicare safety net is another poor piece of health policy. The Greens argued against the Medicare safety net from the start because we could see what the government refused to see—that the safety net would be expensive and it would encourage higher fees. The government originally forecast the safety net to cost $120 million this financial year, but Treasury figures released just before the election revealed that the anticipated cost has doubled already. If the trend continues then the safety net will cost more than $1 billion over the next four years. This is more than double the original $440 million forecast.

The government's economic irresponsibility continues when it comes to the Pharmaceutical Benefits Scheme. The government has reportedly ensured that US drug companies will be able to take legal action to stop generic drugs entering the Australian marketplace. This arrangement—part of the final round of negotiations to secure the implementation of the US-Australia Free Trade Agreement—will undermine the Pharmaceutical Benefits Scheme, which relies heavily on generic medicines.

The government has also taken the short-sighted view of imposing a higher patient charge on sick people as a quick fix to ensuring that the Pharmaceutical Benefits Scheme is secure for the long term. Making sick people, many of them on low incomes, and people with a chronic illness pay 21 per cent more for their essential medicines from next month is no good for their health or the nation's health budget. User charges hurt poor people most, and they undermine efforts to keep people healthy or make them well again. The health department estimated that five million fewer scripts would be filled as a result of lifting the patient charge so much.

Not content with the imposition of such a high price signal through increasing patient charges, which was made possible when Labor reversed its opposition to the rise, Treasurer Costello is talking about further increases in the patient charge, purportedly to keep the PBS sustainable. This is the same government that in an election campaign miraculously found $831 million in PBS savings by imposing a cap on the price the government will pay for generic medicines. The Prime Minister admitted that the government had not looked at this particular saving within the PBS before increasing the patient charge by 21 per cent. This casts great doubt on just how diligent the government has been in looking for ways to keep the PBS sustainable whilst guaranteeing its objective of making essential medicines available to all Australians at affordable prices. The Greens proposed an inquiry into the sustainability of the Pharmaceutical Benefits Scheme over a year ago now and were not supported in such a call.

On top of imposing hardship on people filling scripts for PBS medicines, the government wants to squander almost half a billion dollars more on increasing the private health insurance rebate for older Australians. Prime Minister John Howard said a year ago that the government did not plan to increase the rebate but a week before calling the election he changed his mind. The rebate uses public funds to subsidise private health insurance premiums. The benefits go largely to high-income earners who would be able to buy health insurance anyway without the rebate. The rebate already costs $2.4 billion a year and the cost rises every time the government allows the private health insurance funds to increase their premiums.

Now the government wants to increase the rebate from 30 per cent to 35 per cent for people aged between 65 years and 69 years and from 30 per cent to 40 per cent for those aged 70 years and older. This would cost at least $445 million over four years, and more as premiums rise. This is a totally uncapped, financially irresponsible expenditure of public health funds. The Labor Party described this proposed rebate increase as a waste of public funds when it was announced. Labor leader Mark Latham left little room for doubt about the ALP's view when he said:

This is a government that wants to privatise health in this country ... Labor is not going to tolerate that. Labor will always have a priority of putting our scarce public money into public health, into universal access, so that people have got the fundamentals of Medicare available to them all the time.

But now the ALP have decided that the government has a mandate to waste public health funds in this way, so they have indicated they will support them.

An OECD report into private health insurance which was released last month demonstrates the corrosive effects of a policy that promotes private health insurance as a major element in the health system. It leads to a two-tiered health system where people with private insurance obtain faster access to health services than those who use the public system. This has major social implications. Under this government we will see a further erosion of the principle of access to health services based on medical need as it continues to shovel more and more public money to advantage those who have the wherewithal to buy faster access through purchasing private health insurance. Everyone would be better off if the funds went to public health, because the public health system treats everyone according to their medical needs rather than their capacity to pay.

Early next year the Senate will reach a crossroads with Medicare when it considers whether to entrench the redirection of public funds to private health care by increasing the private health insurance rebate for older Australians. The long-term implications of this choice are profound. Australian National University academic Gwen Gray presents the choice starkly in her recently published book The Politics of Medicare. She says:

... the health system as reshaped by the Howard government cannot work. The combination of Medicare and a large private sector is a highly unstable arrangement which cannot survive. Eventually the Commonwealth will be forced either to spend even more tax money to subsidise private insurance or to abolish Medicare altogether.

The private health insurance rebate increase is to be examined by a Senate inquiry, and I hope that the Labor Party will reconsider their support for this measure and join the Greens in deciding to prioritise public health for public health money, not private health insurance. The Greens' election health policy proposed increasing the Medicare rebate for GP services by around $5 along with other measures to promote better access to primary health care. We will not be opposing this bill, although we do have a second reading amendment. I move the second reading amendment on behalf of the Australian Greens:

At the end of the motion add:

“but the Senate notes that the Government has:

(a) failed to support bulkbilling for all Australians;

(b) privatised Australia's health system; and

(c) undermined the principle of universality which is the foundation of a socially just and economically responsible health system”.