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Wednesday, 29 April 1987
Page: 2028

Senator WALTERS(7.06) —This report is the second of three Senate reports dealing with free enterprise health. The first dealt with private nursing homes. This report of the Select Committee on Private Hospitals and Nursing Homes deals with private hospitals and the next will deal with discretionary surgery. In our democratic society, our basic freedom is the right of choice in a system, whether it is education, employment, dwelling, health or freedom of speech. Any regulation imposed by the state on any of the services that we have come to accept as our right, rather than regard as a privilege, will interrupt the smooth delivery of that service. I quote from Sir Robert Menzies in his inaugural Sir Robert Menzies Lecture on `The Foundations of Australian Liberalism'. He said:

. . . we come to the real issue between the Socialists and the Liberals. For, when an acute problem arises, the Socialist first thinks of the Socialist solution. Should the Government conduct this matter? But the Liberal seeks first the private enterprise solution. Could private citizens, properly encouraged, solve this problem? It is only when we become satisfied, either that they can't or won't, that Government management comes into the picture. That is a vital difference of approach.

That is the basis of many of the recommendations in the minority report of this Committee. Market forces must be allowed to prevail provided that ethical and social standards are maintained by the providers. It is only if those standards fail that government should step in to regulate and control undesirable practices. In such cases the regulation must be only sufficient to control the problem. It is because so many of the Committee's recommendations attempt to add additional regulations to the private enterprise area in the private hospital system that we opposed so many of those recommendations.

The Chairman of the Committee has already given an overview of the Committee's recommendations so I will deal only with those recommendations with which I disagree. As I have said, the majority of the recommendations apply to State governments where the Senate Committee has no discretion at all. The Committee has been sitting for so many years now that so much of it is out of date. It has been pre-empted by the changes to the funding of private hospitals announced by the Treasurer (Mr Keating) in his Budget Speech in August 1986. We consider that this decision by the Government was a retrograde step and one that will exacerbate problems in both the public and private hospitals, rather than ease them.

As Senator Giles said, the majority of the Committee placed considerable weight behind a submission received from Professor Opit and Dr Morley who, on a number of occasions, were unable to substantiate their claims. Much of their submission implied malpractices associated with doctor ownership. On one occasion, when I asked for substantiation, Professor Opit said:

Access to the sort of information which we would need to substantiate our claims is not possible for us.

As I said, the minority group did not place such reliance on that unsubstantiated evidence as did the majority on the Committee. As Senator Giles said, potential exists, but that existence has never been proved.

We believe that the Medicare levy has been largely responsible for taking patients out of the private hospital sector, thus overloading the public hospital system. People are not able to afford both the Medicare levy and additional private hospital insurance. While the Committee was sitting, not enough attention was paid to the problem of occupancy rates in private hospitals. The Government has a number of options available that would lift the occupancy rate and, at the same time, reduce the waiting lists for admission to hospitals in the public sector. Therefore, the Medicare levy has resulted in taking patients out of the private sector and creating the very large waiting lists at hospitals that are concerning both Government and Opposition members. We recommended that patients who choose private hospital accommodation should not be forced to pay twice, as at present, through the Medicare levy and private hospital insurance. That would overcome some of the problems associated with the private hospital occupancy rates.

The Committee's concern about entrepreneur- ial medicine would be overcome by the abolition of bulk billing for all those other than disadvantaged patients. That is the policy of the Liberal Party and it is something in which I believe very strongly. We had considerable evidence of entrepreneurial medicine, and the Committee showed great concern about it. There is no doubt that entrepreneurial medicine flourishes under bulk billing. We are not the only people who believe that. Professor Penington, who is an adviser on health matters to the Government, has already come out publicly and said that bulk billing must be abolished to contain overservicing and additional hospital costs. While the Government refuses to take any notice of its medical adviser or of the Opposition, which has been putting the case to it so strongly for so many years, I guess that the majority of the Committee will also tend to ignore the evidence that it receives.

As I said, the majority of recommendations demanded that State governments carry out certain functions-something over which the Senate Committee certainly has no prerogative. I shall deal only with the major recommendations with which we disagree. I choose, first, recommendation 4 (ii), which provides:

That Directors of Nursing be appointed to private hospital boards of management.

The idea seemed very good. Certainly, private hospitals have matrons sitting in to give advice to the boards. The minority report stated:

We are concerned that the implementation of this recommendation could impose legal obligations such as possible Tort liability which some Directors of Nursing may be reluctant to assume. Therefore to regulate for the inclusion of Directors of Nursing on private hospital boards would in our opinion be counter productive especially when such people would usually be available at all times to advise the board without being tied by corporate legal responsibilities.

The next major recommendation with which we differed was No. 9. It said that all private hospitals should inform the relevant State health authorities of all changes of ownership within 14 days of such change. That creates a great deal of regulation for the private hospital system. The recommendation also said that all private hospitals should:

provide the relevant State health authority with full details of all owners of the private hospital and, if the owners are companies, full details including the names, occupations and addresses of all directors.

We believe that such additional regulation is unnecessary, although, patients are entitled to know whether a referring doctor has a financial interest in the hospital to which that patient is admitted. Our recommendation reads:

All States pass legislation requiring medical practitioners who have financial interest in a private hospital to inform the patients (or where more appropriate the patient's relatives) in writing of that financial interest when referring patients to the private hospital.

If the whole of that recommendation were acted upon, the States would be imposing severe and extraordinary regulations on a very small section of the community, well over that that is required in other areas. The next major recommendation to which I wish to refer is No 12. It said that each State should pass legislation prohibiting medical practitioners, or their families from having any financial interest in a private hospital. That does not take into consideration that only 58 per cent of doctors who have any financial interest in private hospitals refer patients to them. The remaining 42 per cent do not refer patients to hospitals in which they have a financial interest. It also ignores the fact that in many centres where a certain facility does not exist, a group of doctors will often set up a private hospital facility to meet the need. That facility would not be provided otherwise. To prohibit that occurring would be detrimental to the community as a whole.

Recommendation No. 16 states that professional medical bodies should thoroughly review and redraft their ethical codes in relation to regulating undesirable entrepreneurial activities by their members. As I have already said, the concern about entrepreneurial issues can easily be overcome by not having universal bulk billing, but having it only for the disadvantaged and pensioner groups. We do not believe that this is possible in any State because the Australian Medical Association-I would like to make a correction to my minority report here-which is the major professional body of the medical profession, has a membership of only 50 per cent of the doctors. In my minority report I said that the membership was 60 per cent of the doctors. However, a report by Sir Robert Cotton on the structure of the AMA which has just come out gives a membership figure of just over 50 per cent. So I have sought a change to the figure in my report. When only 50 per cent of doctors belong to the AMA and the ultimate sanction-indeed, the only sanction of any value-is that the doctor is expelled from the AMA and joins the other 50 per cent of members of his profession who are not members, it is a very little detriment to him. Not to change the legislation to give teeth to the AMA but just to ask the AMA to reinforce its professional bodies and upgrade its ethical standards is of no practical purpose at all.

Recommendation No. 20 deals with accreditation. It suggests that in the long term States should introduce legislation requiring that as a condition of licence private hospitals should seek accreditation, and make sure that they get it, by the Australian Council on Hospital Standards. That recommendation goes against all the evidence we were given. We were given considerable evidence in this regard. All the evidence was that the best way to go about it was to have voluntary accreditation. We have accepted the evidence the Committee was given. We believed that voluntary accreditation was the correct way to go. The increase in the number of private hospitals seeking accreditation and getting it is an indication that that method is working.

Recommendation No. 24 was also of concern to us. Recommendation No. 24 of the majority report recommends that superspecialty services be confined to the major teaching hospitals. The minority report indicates that there are quite a number of superspecialty services in private hospitals already and that unless a private hospital in a particular area indulged in superspecialty services the services would be denied to that community. I take the situation in Hobart where a certain private hospital does all the hip replacements in Hobart because the major teaching hospital there does not have the proper facilities to do them. If this private hospital were denied the right to practise this superspecialty service, the Hobart community would be greatly disadvantaged.

Senator Brownhill and I believe that the majority Committee members treated the report as a doctor bashing exercise. I was particularly concerned that it should not come across like that, but the acceptance of so much of the evidence from Professor Opit and Dr Morley-unsubstantiated evidence-was an indication that my concern was well founded. I join the Chairman in thanking Dr Sax for the assistance he gave us. I certainly thank the Committee staff, who were very helpful to me, particularly in compiling the minority report. I appreciate the assistance they gave me and thank them for all the assistance they gave the Committee during the compilation of the report. I thank previous staff members-the Committee has been going for such a very long time-who were with us when we first started out. I am not quite sure in what year we started out.

Senator Giles —It was 1981.

Senator WALTERS —It was 1981; so we have been going a long time. We started on 25 November 1981. We have had a number of staff in that period. I would like to put on record the assistance which earlier members of the staff gave us.