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Tuesday, 11 December 1973
Page: 2678

The PRESIDENT -Is leave granted? There being no objection, leave is granted. (The speech read as follows)-

The Bill before the Senate provides for payments for medical benefits, hospital services and certain other specific services, and is the culmination of a great deal of investigation, planning and community debate concerning the most equitable and efficient means of providing health insurance coverage for all Australians. The Bill will enact principles for a health insurance program which were placed before the public at the last Federal election and for which the Government was given a clear mandate. They are principles which have had firm community support for several years and which have withstood, in recent months, a deliberate campaign of deceit and misrepresentation such as has seldom been seen in this country.

The legislation the Government is now proposing represents a sincere endeavour to build a new health benefits system in a way which will meet the expectations of the public for high quality health services to be readily accessible to all, which will expand rather than inhibit the opportunities for freedom of choice, which will promote efficiency in the delivery of health services and which will assist in the upgrading of hospital and community based health facilities. The principles of social equity, universal coverage and cost efficiency which form the Government's intentions in this legislation are central to our whole philosophy of social progress. These principles have been, and will continue to be, pursued with great determination. This determination, however, has not been characterised by doctrinaire or rigid viewpoints which might exclude freedom of choice and flexibility. I submit that the course of the debate on our health insurance proposals, including our deliberately open government' approach to our policy planning, speaks for itself about our attitude of listening carefully to responsible criticism and seeking to achieve the best balance possible between the legitimate interests of patients, doctors and hospital managements.

Honourable senators will remember that we published in April of this year the report of the Health Insurance Planning Committee which outlined a series of proposals on how a health insurance program could be introduced. When I tabled the report in this House I emphasised that its contents were proposals only and that we looked forward to widespread and valuable debate. After 6 months of debate throughout the community we published a White Paper setting out our intentions for this legislation. Objective critics throughout the country have noted that the White Paper demonstrates the Government's receptiveness to constructive criticism about the health insurance proposals. It is in that light and in that spirit that this legislation has been drafted. As far as I can ascertain such an open government' exercise has not been undertaken before in Australia and I feel it is a significant innovation and, although it has not yet attracted such widespread attention as the health insurance proposals, I would call the attention of honourable senators to the fact that I have also tabled in this House a discussion paper on the Australian Assistance Plan. This concept of placing our proposals for social innovations and improvements before the public for discussion before final policy details are expressed in legislation is one which I advocated as an Opposition spokesman and which, despite the advantages which can be taken by unscrupulous pressure group opponents, I believe to be both desirable and necessary.

We have undertaken this 'open government' exercise while adhering to the principles presented to the people of Australia for a new and equitable health insurance system and for which, I repeat, we were given a clear mandate.

Before proceeding to outline the purpose of specific clauses within the Bill, I will mention in broad detail the salient points of the health insurance program which will result from this legislation. I must first explain, however, that this

Bill is the main legislative instrument for the introduction and operation of our health insurance program. As honourable senators are aware, a Bill has already been introduced which provides for the establishment of the Australian Health Insurance Commission, the main function of which will be to operate the Program. Further legislation relating to the scope and operation of private health insurance organisations and the introduction of levies on taxable income and on motor vehicle third party and workers' compensation insurers and the protection of individual privacy will be introduced in the autumn sittings of 1974. In the meantime provisions are included in the Bill to protect personal records. Together this legislative framework will provide for a health insurance program such as I shall now outline.

The program will enable all residents of Australia to be automatically covered by medical and hospital benefits. Pensioners at present eligible for general practitioner consultation services under the pensioner medical service will have their eligibility extended to a full range of medical services, including specialist services, under arrangements designed so that they receive these services free of charge. All other residents Will be entitled to receive medical benefits which wil total at least 85 per cent of the cost of medical services for which doctors charge the appropriate fees. In no case Will any single medical service where the scheduled fee is charged cost the patient more than $5.

Adult residents Will be issued with health insurance cards as a means of establishing entitlement to benefits. There Will be no obligation to produce the card for any purpose. I wish to emphasise that the cards will simply be a device to make the claiming of benefits as convenient as possible. Clause 5 of the BUI covers the issue of the cards. I have mentioned that legislation complementary to this BUI Will provide safeguards against the misuse of these cards and will also guarantee privacy of information for individual citizens. I draw the attention of honourable senators to what the White Paper say on the matter of the health insurance cards and privacy of information. On the matter of the card it states:

It will not be necessary for a card to be produced to a doctor or hospital for a patient to receive medical or hospital services. It must be emphasised that the purpose of the card is simply to enable members of the public to obtain benefit payments as conveniently as possible. It should be borne in mind that many existing health insurance funds require contributors to produce numbered membership cards or books to facilitate benefit claim processing. Indeed, one large fund is issuing to contributors membership cards similar to the health insurance cards proposed for the Program. '

On the matter of privacy in general the White Paper states:

The Government will insist that complete confidentiality regarding individual patients and doctors is maintained by the Commission. The information required for the processing of claims will be less than is now required by private health insurance funds. A special committee has been established by the Government to recommend steps necessary to guarantee the privacy of individuals. '

To held finance the Program taxpayers will pay a levy of 1.35 per cent on their taxable incomes. People whose incomes are below certain levels will be exempted from the levy. The maximum amount of levy any taxpayer will have to contribute in the first year of the program will be $150. This Bill does not specifically provide for the introduction of the levy. As I have mentioned, other legislation will be introduced during the Autumn 1974 sittings of this House for this purpose. I should mention that careful study will be given to the question of exemptions from the payment of the levy, with particular reference to Repatriation beneficiaries, Service personnel and low income earners.

Within the health insurance program, there will be complete freedom of patients to choose their own doctors in private practice. Both public and private hospital treatment will be provided for within the program. Patients admitted to public hospitals will be able to choose either to enter a standard ward and to receive full hospital care free of cost, or to be private patients with preference in allocation of any intermediate or private ward accommodation, under the care of their own doctors. In respect of public hospitals these arrangements will stem from separate agreements to be negotiated with the State governments. I should mention that negotiations are well advanced with several States but that the States of New South Wales and Victoria have indicated they would prefer to wait until this legislation has been passed before entering into substantive negotiations. Medical fees charged to private patients in hospital will attract medical benefits under the program. Patients who incur hospital charges will, through hospital insurance with private funds, be able to cover their hospital charges. Hospital benefit tables will be designed to meet the costs of intermediate and private ward fees in public hospitals and fees for most types of accommodation in non-public hospitals. Private medical insurance funds will be able to offer coverage against medical costs to the extent that they are not covered by benefits under the program.

That, then, is a general outline of how the program will work for the public. I would like now to outline in more detail for honourable senators the principles contained in the more significant clauses of the Bill. Before doing so, however, I remind honourable senators that the health insurance program is outlined in the White Paper which has been widely distributed and is available to all who are interested in the subject. Rather than go into perhaps excessive detail at this stage and delay the Senate I would ask honourable senators to consider what I shall now say in conjunction with the intentions and detail contained in the White Paper.

For the information of honourable senators studying the Bill, Part I, clauses 1 to 7, are the preliminary sections. Part II, clauses 8 to 23, cover the medical benefit provisions. Part III, clauses 24 to 38, cover the payments for hospital services. Part IV, clauses 39 to 46, cover health program grants. Part V, clauses 47 to 124, covers committees and review tribunals. Part VI, clauses 125 and 126, relates to financial arrangements and Part VII, clauses 127 to 133, covers miscellaneous provisions. In addition, there are 2 schedules, one setting out the schedule of appropriate fees and the second setting out the heads of agreement for the agreements to be negotiated with the States. I should also point out that the Bill is drafted so that all clauses will come into operation on the date of Royal Assent except where it is otherwise specified that a clause will operate from a date to be proclaimed. This has been done to enable administrative procedures necessary to the early introduction of the program to be implemented at the appropriate times.

While the Bill provides for all residents of Australia to be eligible for the benefits of the program, it also makes provisions which will allow, at some future time, the introduction of arrangements whereby non-residents of Australia may purchase Australian health insurance program coverage by payment of a suitable premium. The above provisions relate to the eligibility of people while in Australia. The Bill also makes provision for the payment of medical and hospital benefits to Australian residents who incur medical and hospital expenses while overseas. These payments will be made from the commencement of the program. The Government also intends to enter into negotiations with overseas governments with a view to the initiation of reciprocal arrangements for the coverage of medical and hospital costs. The authority for such agreements is outlined in clause 7 of the Bill.

The proper operation of the medical benefit arrangements within the program will depend on doctors in private practice accepting a responsibility to charge appropriate fees. This will enable benefits to be set at levels which will ensure a proper degree of financial protection for the public against the costs of medical treatment. Schedule 1 of the Bill, incorporates the determination made by the Medical Fees Tribunal under the chairmanship of Mr Justice Ludeke, for consultations and visits. It is expected that, on completion of its inquiries, the Medical Fees Tribunal will issue a further determination covering the remaining medical services in the schedule. The Government will move as quickly as possible to incorporate in the schedule the fees which the Tribunal then recommends. The Bill provides that benefits will be calculated at 85 per cent of appropriate fees outlined in Schedule 1 of this Bill or to a formula which will provide that in no case where the scheduled fee is charged, does the cost to the patient exceed $5. The operation of this formula will mean that for all medical services where the fee is greater than $33, the benefit will be more than 85 per cent. I should point out that surgical procedures and anaesthetics constitute separate medical services and that the $5 maximum gap will apply to each service.

The program is based on preservation of the patient-doctor relationship and indeed this relationship has always been an essential feature of our proposals. The methods by which a patient exercises his entitlement to benefits are part of this relationship and, under the program, will remain a matter between the patient and doctor. Basically there are three convenient methods provided in the Bill for the claiming of benefits. In precis form, the methods by which patients may receive their entitlements are:

1.   Be billed by the doctor, pay the doctor and then claim benefits from the Health Insurance Commission.

2.   Forward the unpaid doctor's bill to the Health Insurance Commission and receive back the appropriate benefits in the form of a cheque payable to the doctor. In this case it would be the patient's responsibility to forward the cheque to the doctor and the balance of the account would be a matter between the doctor and the patient.

3.   Assign to the doctor the benefits payable for a particular service where the doctor is prepared to accept the benefit as full payment for the service. The doctor would then claim his payment from the Health Insurance Commission and the patient would not have to pay anthing.

The assignment of benefits will have particular significance for pensioners who have pensioner medical service cards. The Bill requires the Minister to request doctors to undertake that where medical services are provided to persons who present to the doctor a pensioner medical service card, the doctors should give these pensioners an opportunity of assigning their benefits to the doctor instead of receiving a doctors account. The effect of assigning benefits will be that the doctors accept the benefits as full payment for services they provide to eligible pensioners. This arrangement is designed so that, on the one hand, eligible pensioners enjoy the same entitlement to medical services as everybody else in the community and, on the other, that they are not charged anything for services they at present receive free. At present pensioners eligible for the pensioners medical service are entitled only to general practitioner surgery and home visit consultation services. They are not entitled to procedural items provided by general practitioners and they are not covered for any services provided by private medical specialists. The new arrangements will give them coverage for all of those services.

Clause 13 of the Bill sets out the arrangements which are to apply when there is a medical attendance as a result of which spectacle lenses are prescribed. For such attendances the regulations will prescribe that the benefit which will be payable will be that part of the benefit specified in the Schedule which is financed by the health insurance levy. The principle which has been adopted is that the new benefit in these cases will take the place of the fund benefit which has generally been paid in the past. Commonwealth benefit has not been paid in the past and consequently the new arrangements will not place patients at a disadvantage in comparison with the existing arrangements. The actual amount of benefit under the new arrangements will depend on the scheduled fee for the consultation concerned. This will vary depending on whether it is a consultation with a specialist to whom the patient has been referred or whether the patient consults the specialist directly. Assuming that the normal benefit where no spectacles are prescribed is, say, $16, the benefit for a consultation at which spectacles are prescribed will be 40 per cent of $16, that is $6.40. The patient will be left to pay the doctor the balance of his fee. Patients who consult optometrists will pay the optometrist's consulting fee, which will not be eligible for benefits. Because optometrists' consulting fees are considerably lower than medical specialists' fees, patients generally will be left in approximately the same situation whether they consult a medical specialist or an optometrist. This is the situation which has existed under the present scheme. The arrangements incorporated in the Bill are interim measures and the Government has established a working party to thoroughly review the arrangements with a view to recommending what measures can be taken to resolve the difficult issues that exist in this matter.

In any medical benefits system it is necessary to have expert, independent committees to make recommendations on such complex matters as the scope of the medical services to be covered, the level of appropriate fees to be included in the schedule and to adjudicate on matters relating to the provision of services which attract medical benefits. The Bill, in Part V, provides for the establishment of a number of committees for the purposes I have outlined. The existing Specialist Recognition Advisory Committee for each State and the Specialist Recognition Appeal Committee are to be continued. The functions and operations of these committees will be the same as those established under the existing legislation. In fact the Bill provides for the present committees to be continue these activities.

A Medical Benefit Advisory Committee will be established with the broad functions of determining the nature and scope of medical services to be included in the Schedule and the fees for those services. The members of this Committee will be appointed by the Minister after consultation with the Australian Medical Association or any other association or college that the Minister considers appropriate. I should mention that within its broad functions, this Committee will have the power to formulate principles for the determination of fees in respect of medical services which are of undue length or complexity. This will enable appropriate benefits to be paid in particular cases where a medical practitioner is justified in charging in excess of the scheduled fee for any service. In practice the Bill provides for the Health Insurance Commission to determine fees in such circumstances in accordance with the principles laid down by the Committee.

Honourable senators will recognise that it is necessary to have a method of ensuring that false or excessive claims are not made on public funds. We have indicated, in the White Paper on our health insurance program, that we will consult with the medical profession about appropriate forms of 'peer review' arrangements. In this Bill, we have made provision for committees of inquiry whose functions relate to the services provided to pensioners but I wish to stress that we will be consulting with the medical profession to ensure that, on the one hand, there is no abuse of the medical benefits system and, on the other, that the professional freedoms of doctors are protected.

Under the present committee of inquiry system, there is no established right of appeal for doctors against whom rulings are made by the committees. Division 4 of Part V of this Bill establishes a Medical Services Review Tribunal to which a medical practitioner who is dissatisfied with a determination of a committee of inquiry may appeal for a review of the determination. In addition a further avenue of appeal will be available, on questions on law, to the Australian Industrial Court.

I turn now to the arrangements covering payments for hospital services. These are contained in Part III of the Bill. The administrative procedures spelt out in the Bill provide that all hospitals must be approved for the purposes of hospital payments. In this context I would point out that all hospitals currently approved under the National Health Act must apply for approval under this legislation so as to become eligible for Australian Government payments. The basis of the hospital payment arrangements will be agreements to be negotiated separately with each State Government. The agreements have not, of course, been formulated at this stage but Schedule 2 of the Bill sets out heads around which such agreements will be negotiated.

In broad terms these heads of agreements envisage arrangements under which everybody will be entitled to receive comprehensive standard ward hospital treatment free of charge. They also envisage that up to 50 per cent of the net operating costs of public hospitals will be met by the Australian Government. This commitment by the Australian Government will comprise daily bed payments at the rate of $16 payable direct to hospitals with the balance of the committment being paid direct to State Governments.

Before mentioning the arrangements for hospitals not covered by agreements with the States there is a point on terminology I think it is important to make. The term private hospital is often used to categorise all hospitals not owned by the State or Australian Governments. It should be noted, however, that there are some privately owned religious, charitable and community hospitals which regard themselves as public hospitals. These hospitals are certainly public in the sense of the functions they perform despite the fact that they may not be owned and operated by government authorities. The comments about, and safeguards for, what we referred to in the White Paper as private, religious, charitable or community hospitals are meant to apply also to the type of hospitals I have just referred to.

For hospitals not covered by the agreements with the States, the Australian Government will pay daily bed payments of $16. In addition, the Bill provides for supplementary daily bed payments to certain religious, charitable and community hospitals where these hospitals provide free treatment to patients whom they accept as 'hospital patients'. As has been unequivocally stated in the White Paper, these hospitals will be free to set and control their own policies without Government interference and they will retain the sole right to appoint the members of their governing bodies. A corollary of this is that they will retain autonomy of management in the medico-moral area.

The financing of the program will take place through the mechanism of a Health Insurance Fund, which will be established under Part VI of the Bill. All payments authorised by this legislation will be paid by the Health Insurance Commission out of this Fund. I should mention that when the levies I have referred to earlier are in operation, the revenue derived will be paid into the Fund, as will payments from consolidated revenue and amounts recovered under the provisions of the Bill.

In conclusion, I turn to the reasons why the Government has committed itself so firmly to seeing that the legislative proposals I have just outlined are brought into operation. I mentioned at the beginning of this speech that our proposals seek social equity in health insurance. We believe this to be an obligation of government. And, we believe, the Australian Government not only has an obligation in this respect, it also has a clear duty, as the custodian of public funds, to ensure that taxpayers get the best value in terms of health services for the money they contribute. This, in turn, means we have a duty to see that money is not wasted on an inefficient system of health insurance.

As an indication of scale it is worth noting that the Australian Government will spend over $350m in the 1973-74 financial year on direct subsidies to hospital and medical benefit funds, on pensioner medical and hospital services and on repatriation medical services. There is also a substantial indirect subsidy through taxation concessions, which are of course also a cost to the Australian Government revenue. A great deal of this money will be spent in propping up the ramshackle, inequitable and wasteful private health insurance scheme- a scheme which can only retain any facade of respectability through the injection of more and more taxpayers' money. For the record the average proportion of medical benefit refunds met directly by the Australian

Government has risen from 45 per cent in 1969-70 to 56 per cent in 1972-73.

One of the reasons for all this is simply that the 90 health funds, with their separate and often extravagant managements, are wasteful. They unnecessarily accumulate large amounts of reserves. At the last count these reserves totalled over $ 124m. The larger funds spend a significant proportion of their contributors' funds in salesmanshipin chasing new members and in paying head bounties for each one signed up. In all some 15 per cent of the contributions of medical benefit funds is lost in administration expenses. With a universal system, in which everybody is automatically covered and in which we can dispense with the services of bounty hunters, we can cut this rate in half. The money saved will be re-applied to finance better benefits for more people. For the same total cost as would be needed to sustain the present scheme we can provide improved coverage and we can bring into our program over a million people who at present lack proper protection against the costs of medical and hospital treatment.

The Opposition now acknowledges that the present scheme has defects. They had some 20 years with the scheme but only very recently, under the pressure of the logic of our proposals, have they acknowledged that what they were once fond of hailing as 'the best scheme in the world' has serious deficiencies. So now, in pretending to have a policy on health insurance, they are proposing a $300m first aid job to patch up the low income family and pensioner sections of their scheme. What I must point out quite forcibly here is that this $300m would be additional to the total cost of the medical and hospital services covered by private health insurance and by pensioner medical and hospital services and repatriation medical services. The program we are proposing will, with no addition to the costs of the present system, cover everybody in the community. But the time is past for 'band aid' health care expedients. Like other advanced countries of the world Australia needs a health insurance program which will truly provide the doctor and the hospital of the citizen's choice at the price he can afford.

A lot of specious nonsense has been spoken in recent months about freedom of choice and the doctor-patient relationship. Our program gives true freedom. It gives freedom from fear cif the financial consequences of illness, it gives freedom of choice of doctor and hospital and it does this in a way which does not levy a penalty on the sick and the economically less fortunate members of this community.

The present system is indeed a 'scheme'. It is an iniquitous method of ensuring that those who can best afford health care get it more cheaply than those who can least afford it. It perpetuates social inequality and it wastes public money. Our program is not one which stems from doctrinaire beliefs but it is one which flows from a sense of social justice. It is a program which rejects the belief that health care is a commodity to be traded rather than a social utility to be used to improve the quality of living. It is at the same time a program which acknowledges the professional and vocational aspirations of those who provide health services. It is, in total, a program which is a challenge to the social conscience of this Parliament and this nation. It is indeed a program which must cause this Parliament to decide whether health care is to be a privilege to be purchased or a right to be enjoyed equally by every Australian. I commend the Bill to the Senate.

Debate (on motion by Senator Withers) adjourned.

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