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Thursday, 6 December 1973
Page: 4447

Mr COATES (Denison) - The honourable member for Barker (Dr Forbes) said that if this scheme was not nationalised medicine he did not know what nationalisation was. He does not know what nationalisation is. I cannot think of any program which has been so wilfully misunderstood and so maliciously misrepresented as the health insurance scheme which is described in the White Paper and which is to be implemented by the Bills now before the House. The new program has decisive advantages over the present scheme and I shall outline some of them. But before I do so, I feel bound to correct a widespread misapprehension about the program which has been fostered by our opponents.

Spokesmen for the Australian Medical Association and private insurance funds have endeavoured to portray the Government's health insurance policy as a socialistic program to replace an existing private industry called 'voluntary insurance'. In the first place, the new program could not be described as socialised medicine but merely represents the attempt of the Labor Government to update this aspect of our social security in line with the standards of the second half of the 20th century. Just about every developed country in the world - and some developing countries, too - have adopted comprehensive, universal health insurance as part of their social security systems. Once the new program is introduced in Australia, only a handful of countries such as the United States of America and South Africa will remain as bastions of so-called voluntary insurance.

In Western Europe and Canada, universal health insurance is settled policy. Despite the misinformation with which we have all been bombarded, honourable members should know that these programs work and are popular. Let the Opposition contact their conservative counterparts in the parliaments of Great Britain, Canada and the Scandinavian countries. I doubt whether they would find a single member of any of them who would advocate the substitution of voluntary insurance for their present public schemes. Most of them would laugh at any such suggestion. Nor has the right-wing Government of Queensland any intention of terminating the free public hospital system in that State. So do not let us hear any more about the revolutionary nature of a program which is middle of the road by the standards of all but the most reactionary.

Let us look more closely for a moment at the present scheme which is neither voluntary nor is it insurance. It is a public program that has been farmed out to a group of private organisations. For the average man, contributions are not voluntary, but are simply another tax which he has to pay in order to qualify for the subsidies which are paid directly out of Australian Government revenue and to which he has contributed as a taxpayer- He cannot receive the benefits unless he is a member of a private fund. More than half the benefits the medical funds pay out are Government subsidies. The private funds take no underwriting risks, and their contribution and benefit rates are established by the Government. They are neither free nor enterprising. They are no more than agents for the collection and payment - at a handsome rate of commission - of public money. This is a function which can be performed far more efficiently and at less cost by public authorities. So do not let us have any more of the fiction that the new program will replace some sort of private competitive industry which provides value to its consumers.

I read with amazement the statement of the honourable member for Hotham (Mr Chipp) that he would go to the barricades in defence of the right of people to choose between insurance organisations. I have always been concerned with the defence of individual freedom but the right to choose between the Hospitals Contribution Fund of Australia and the Medical Benefits Fund of Australia is the most insignificant freedom I have ever heard of and the honourable member's preparedness to fight for it must be the most ludicrous campaign since Don Quixote tilted at windmills. It is a completely false competition. In the long period of consideration of its health insurance policy, the Government has endeavoured to meet the legitimate objections and problems which participants in the health care system brought forward. The result is a moderate and rational program which substitutes efficient and equitable insurance machinery for a scheme which was only saved from collapse in 1970 by massive subsidies. The honourable member for Barker referred to the result of the Nimmo committee report but he did not refer to the huge cost to the taxpayer for that patching up.

The position of the Opposition, and its allies in the AMA, the private funds, the Australian Democratic Labor Party and the private hospitals is that there is nothing wrong with the present scheme which a further reckless infusion of public money would not fix. The view of the Labor Government is that no amount of patching up of the present scheme could produce the benefits offered by the new program. Let me outline four major advantages of the new program. The first and most obvious advantage is that it will bring about universality of coverage. This is an objective which a scheme of this kind does automatically without any problem whatsoever and something that a voluntary insurance scheme cannot do at all. There are, in fact, well over one million people not covered by the present voluntary insurance scheme and we know at which end of the needs spectrum those one million people are. But we cannot expect the Opposition to be concerned about them. That is the so-called 'achievement' of the voluntary insurance program. There is consequently no argument about the fact that universal coverage will be a major improvement which only a public program of the kind we are putting forward can bring about.

The remedy proposed by our opponents is to extend the subsidised health benefits plan to bring in all the pensioners and low income earners. One would have thought that, if any aspect of the present scheme has been proved to be a complete disaster, it would be the subsidised health benefits plan, which covers about one person in twenty of those who are eligible for it. Under the subsidised health benefits plan, people with financial handicaps, some of whom have been deprived all their lives and who are often not very good at managing their own affairs, have to attend, fill out forms and go back and forth from department to insurance fund to produce evidence in order to get the same sorts of subsidies, in many cases, that a rich person gets automatically in the form of income tax concessions. The application of this scheme to pensioners would greatly increase government subsidies, doctors' incomes and the volume of money in the hands of the private funds. However, it will not, even at great promotional expense, bring about the universal coverage which the Government's program will achieve automatically. This has been proved by past attempts to promote the scheme. Honourable member's may call it compulsory if they like, but I prefer to call it automatic.

The second big advantage of the new program is that the money that it raises will be collected in a far more equitable manner. It is absolutely indefensible that a public scheme should be financed in such a way that the richer a person is the lower his contribution will be. That as the way the present health insurance scheme works because of the great importance of tax deductions. This amounts to a great subsidy paid by lower income earners to those who are better off, a transfer of income in the wrong direction. The alternative, which , is being adopted in this program, is to relate contributions to a capacity to pay. We are using taxable income as the best measure we have of people's capacity to pay. It is a straightforward one and one in which the collection costs and the marginal inequities are as small as it is possible to make them. One thing that just cannot be done under the present scheme is to bring about a fair and consistent relationship between people's means and the contributions they pay. Under the new program we can not only make a general rule which is equitable, but we can also provide for further exemptions for low income families and other special groups, which leave everyone protected but which do not add significantly to administrative costs. The present scheme fails absymally in all of these objectives.

The third advantage, but by no means the most important, is that this program has the capacity to produce very substantial administrative economies. I suppose they could be put at a minimum of $10m to $20m a year. The final figure depends on what sort of cooperation we have from doctors and how many economies we can produce in the accounting systems of hospitals. But about $10m a year, which is the present cost of collecting contributions, would be saved straightaway. Now SI Om a year is perhaps not such a tremendous sum in these days of billion dollar public expenditure programs but it is a sum that can be very usefully applied elsewhere even within the health care system. With SI Om a year over a 10-year program we could bring into existence some hundreds of community health centres, which would be a much more efficient way to use money than keeping primitive accounting systems going in voluntary insurance funds, and paying commissions for collecting contributions. These 3 arguments - the universality, the equity and the savingsadd up to a strong case for a public program. But an additional justification in the long term is that the new program will promote the development of a better health care system. Providing good health care means not only spending money - the present scheme does that in large measure - but also spending money and using resources in a rational and planned way.

The increases in subsidies in the last few years under the voluntary insurance scheme have intensified the biases towards particular services. We all know that some health services are saleable and profitable and others are not. But profitability and access to financial resources by no means coincide with needs. For example, since 1970 we have had a great upsurge in cosmetic surgery. There are benefits under the existing program for the provision of hair transplants, and there has been a great proliferation of private surgical hospitals all over the country. At the same time there are unmet needs for basic care. While the present scheme pays large subsidies for services which really have a minimal relationship to medical need it provides nothing for health centres in low income areas, which could bring primary care to people who are badly served by the present scheme.

It is not the task of a health insurance program to say what the shape of the health care system should be. This is the function of people whose expertise is in health care administration and planning. The Australian Government has appointed a Hospitals and Health Services Commission headed by Dr Sidney Sax to advise it on the way the health care system ought to develop in a rational way in the future. This Commission has already made an interim report in which it has plumped for the development of regional and community-based programs of a comprehensive character. There is only one way to decide what services ought to be provided or where the extra dollars ought to be spent and that is to look at communities and regions and measure the needs of their populations. When the money that people pay for health insurance is collected through a levy on the whole community into a common pot, it can be allocated in accordance with observed needs. To keep the existing system would make that just so much more difficult.

What we are aiming to do through the health insurance program and the Hospitals and Health Services Commission is to steer the evolution of the whole health care system in a different direction. When our program is implemented in July 1974 things will be so little different because of transitional arrangements that people will wonder what all the fuss was about. But the mechanism of the program will have changed the biases in the money flows, and our health care system in Australia will be very different in 1980 or 1985 from what it would have been if the present scheme were to continue. In this respect I must emphasise the evolutionary nature of the program. Improvements cannot be achieved all at once but it is most important that the system evolve in a direction which improves the quality and accessibility of care for consumers. It is the consumers of health care that one hears so little about from the Opposition. It is the vested interests we hear about. I believe that the evolution will also be good for those who produce health services, even though they pretend not to agree that this is so.

When one looks at the advantages the new program offers, and makes real comparisons with the present scheme, one can only wonder why the Opposition has chosen to make the introduction of the new program a major partisan issue, on which it is prepared, in the words of the honourable member for Hotham (Mr Chipp) to go to the barricades to deny the Government's mandate. It is not just a matter of one saying we have a mandate and so we are going to do this; the fact is that we have commitments to the people who put us into power to do what we said we would do and there can be no backing down from that. The only answer one can give is that the Opposition - as in the case of its attitude on the States Grants (Schools) Bill - is acting as the defender of the vested interests of privilege. It has come out as the unashamed mouthpiece of the Australian Medical Association, the large health insurance funds and the small group of rich private hospitals, particularly in Melbourne, whose contributions to the shortage of beds in that city is to threaten to close their hospitals down.

The honourable member for Hotham, the great self-professed small '1' liberal, is now acting as unashamed spokesman for the most reactionary political elements in the country. And on the side of the consumer, the Opposition, as in the case of education, wants to prevent the transfer of iniquitous subsidies from the well-to-do to those whose financial capacities are less and whose needs are greater. They are appealing, in the crudest terms, to the greed and self-interest of people who, under the present scheme, not only enjoy prvileged access to health care but also receive such large subsidies through the tax system that they pay less for it than people on lower incomes pay for public treatment. But, on the basis of its position on the States Grants (Schools) Bill, I suppose we should not expect the Opposition to show any great concern for the needy and the strugglers in our society. The Australian people should know the true reason why the Opposition is trying to prevent the enactment of the health insurance program. It claims to be lighting for such principles as freedom of choice and quality of care, but both these principles are incorporated, and indeed extended, in the Government's program. The Opposition's real objectives in health insurance are the protection of vested interests and subsidies to the rich, as they have been over the 23 years up to last December.

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