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Wednesday, 27 May 1987
Page: 3435

Dr KLUGMAN(5.37) —I strongly support the Health Legislation Amendment Bill. I do not think that I have enough time to comment generally on health policy and to deal with the specifics of the amendments. So I will deal with the more general points first. It is probably the most inopportune time to do this just as we are about to begin an election campaign but I think that there are problems which, sooner or later, must be faced by any government. There is a lot of hypocrisy on all sides-the medical profession, the public, the health insurance funds and even governments, of all political colours. Medical practitioners oppose government intervention and they object to all third party intervention. They emphasise the sanctity of the doctor-patient relationship, but they know that very few seriously ill patients could afford treatment without payment by a third party. In Australia they have always happily taken money from insurance companies in third party and workers compensation claims and for the treatment of pensioners, whether veterans, invalid pensioners or aged pensioners.

On the other hand, the public wants low taxation, first class treatment and facilities, little or no contribution at the time of service and a vague support for the doctor-patient relationship. Health insurance funds, whether public or private, want to discourage claims although they pay lip service to the doctor-patient relationship.

Governments of all political shades promise low taxation, complete cover, free hospitals, free or cheap pharmaceuticals, non-interference with the doctor-patient relationship and, interestingly, contrary to their general political philosophy, they seem to disagree only on whether a means test is good or bad. Similarly, we see the hypocrisy of members of the medical profession who strongly support freedom of choice of doctors by patients, as long as the State provides them with free facilities, which are very expensive, which they can use to boost their income. All members of the organised medical profession strongly support the principle of individual responsibility for payment of at least the patient moiety, but they advocate the existence of gap insurance, which is of course contrary to the principle of patient moiety.

Let me give some basic figures. In Australia there are about 27,000 active private medical practitioners. Those figures are based on at least one Medicare claim during the March 1986 quarter. About 10,350 of these are recognised specialists. We have about 70,000 beds in public hospitals and over 21,000 in private hospitals in Australia. Those figures are relevant because, when people give very impressive figures of 100,000 people on the waiting list, we have to remember that there are about 90,000 beds. As the average stay in hospital is five to seven days, that really represents only one or two weeks turnover.

The occupancy rate for beds in public hospitals for the year ended March 1986 was 64 per cent, varying from 52 per cent in Queensland to 67 per cent in New South Wales. For acute patients the bed days were 10.2 million Medicare, 3.9 million private and 638,000 for compensation and other ineligible patients. It may be interesting to note that the occupancy rate for private hospitals was 56 per cent, varying from 54 per cent in New South Wales to 61 per cent in Queensland. The recurrent cost of a bed day in major New South Wales public hospitals now exceeds $300. It is important to note that, even privately insured patients contribute only about $120 towards this, and even those with insurance for and using a single room contribute only about $200. The Government pays the rest.

We have about 5.7 hospital beds per 1,000 population compared with about 4.3 in the United States of America and far lower numbers in European countries. Yet we have a much younger population requiring fewer hospital beds. In the case of obstetric patients, the length of stay in hospital in Australia is between five and six days in the metropolitan areas and eight to nine days in the country. In the United States it is about half this time. If we look at the average length of stay in private hospitals in Australia for a number of common surgical procedures, we see significant variations. For example, for a curette the figure is 1.4 days in New South Wales and three days in Tasmania; for a hysterectomy it is 7.3 days in Queensland and 10.7 days in Tasmania. In the United States the average length of stay in federally owned hospitals decreased from 21.4 days in 1960 to 12.4 days in 1983, while the stay in non-federal non-profit hospitals has remained stationary at about 7.6 days. The average length of stay in the private hospitals is about six days. Remembering the huge cost of hospitals and the massive contribution of governments, either directly or indirectly, towards those costs-in the United States tax deductions are allowed for health expenditure or health insurance contributions-is it really interference on the part of governments to try to strictly regulate procedures? I do not think so. It is just essential.

For those simpletons who see the Hawke Government as socialist-occasionally we get interjections along those lines from the honourable member for Denison (Mr Hodgman), who has obviously panicked and returned to Tasmania-and the Reagan Administration as free enterprise, it is interesting to note that the percentage of the Federal Budget spent on health care in Australia is just below 10 per cent and in the United States is around 11.5 per cent. For fiscal year 1985 federal health care in the United States amounted to $US108.9 billion out of a total Budget of $US946 billion. Yet it is important to remember that the United States Budget carries the huge burden of defence of the free world and currently has a Budget deficit of some $A200 billion compared with our approximately $3 billion or $4 billion. If Australia used the United States so-called spending restraints, we could have a Budget deficit of over $13 billion, which is even more than an update of the last Howard-Fraser Budget. If anybody is surprised at the United States figures, will they please read The Triumph of Politics by David Stockman, who was President Reagan's Director of the Office of Management and Budget for 4 1/2 years.

Hypocrisy comes from the Australian Medical Association and many individual doctors who pretend that they do not want government intervention. In the meantime, all the other health professionals, from dentists to physiotherapists, want to get their snouts into the public trough currently reserved for medical practitioners and optometrists. By the way, during 1985-86, for practitioners whose total fees charged exceeded $40,000-that is, active doctors-the mean total of fees charged to Medicare patients for different peer groups per year is included in a table which I seek leave to have incorporated in Hansard.

Leave granted.

The table read as follows-






Specialist Physician...










Diagnostic Radiologist...


General Surgeon...


Cardio-thoracic Surgeon...


Orthopaedic Surgeon...


Plastic Surgeon...


Ophthalmic Surgeon...


Dr KLUGMAN —It basically shows that the fees charged to Medicare patients in 1985-86 by general practitioners were just over $100,000, by specialist physicians $166,000, dermatologists $185,000, obstetricians and gynaecologists $178,000, pathologists $1,298,000 and diagnostic radiologists $483,000. It goes on to include cardio-thoracic surgeons and others. Well over 90 per cent of this money came from the Commonwealth Government and it must be noted when looking at the table that some of these groups receive a large additional amount from non-Medicare patients; for example, in the case of orthopaedic surgeons, from third party insurance claims or workers compensation payments.

I believe firmly that no Australian should be denied access to health care only because of lack of money, just as I believe that no young Australian should be denied access to tertiary or any other form of education only because of lack of money. This is and must be the basic Australian Labor Party policy. However, I do not believe that it necessarily follows that my children should get a free university education or that I should get free medical and hospital treatment. I believe means test are essential if we want to reduce taxation. Politicians have to be tough and honest enough to say so. It is interesting to note that, whenever we propose any means test on benefits, whether medical, as we are doing today in a sense when we decrease the amount of money paid to people with private insurance, or any other benefit, members of the Opposition, with the hypocrisy befitting good politicians, say that, while they support lower taxation and lower payouts, the ones proposed by the Government are the wrong ones. They always say that.

The estimated total health care expenditure in Australia this year will be over $17 billion. The private sector will contribute about 25 per cent of this-just over $4 billion-and the Commonwealth and State governments will contribute the rest, with the Commonwealth Government contributing the major share directly and the rest via various grants to State governments. The other three major items are for hospital services, subsidising pharmaceuticals and payments of nursing home benefits. In other words, I am sure we all agree that the cost of providing health care is very significant and that the Government will want to and will need to use regulations and controls to prevent what is regarded as unnecessary expenditure. I congratulate the Government on some of the steps that it has taken in these proposed amendments.

Health politics are usually conducted in a favourable political climate. The notion of health is a popular one. For good or ill, the public remains convinced of the efficacy of medicine in promoting and maintaining health and believes that future medical advances guarantee less sickness and longer life. This results in strong popular support for spending money in all fields of health-public health, medical research and especially medical care services. The only important constraint is obviously budgetary; that is, people do not want their taxes raised or budgets unbalanced if this will hurt the economy. Other fields are not so fortunate when they enter the political arena. Welfare spending, for example, is not merely opposed because of possible adverse tax or spending consequences, but there are important segments of the public who oppose welfare spending in principle. We have all heard the arguments.

Importantly for politicians, health has become established in public opinion as something so meritorious that its provision is regarded as a right. The increase in the health sector share of the GNP from about 4.5 per cent to 10 per cent in the 1960s and 1970s in most Western industrialised countries followed. I said earlier that in the United States the increase has been even higher than here.

I would like to use my favourite quotation from H. L. Mencken:

To every complex problem, there is a simple solution. And it is always wrong.

Contrary to expectations, it became increasingly apparent that spending for health services was limitless; development of high technological medical services was reaching the stage of diminishing marginal social benefits; there was an over supply of hospital beds; increasing the supply of beds and doctors was not the solution to problems of maldistribution by location and type of practice; it was perilous to rely on professional self-regulation alone for the attainment of goals of economy and quality; and unrealistically high public confidence in the benefits of medical treatment was resulting in the `medicalisation' of many social problems that could be better dealt with through other means. I can give examples of care of the elderly, as the Minister for Community Services (Mr Hurford) is sitting at the table. I could refer also to drug and alcohol. The final problem was that the magnitude of health spending was an impediment to economic growth. Governments therefore had to try to put a stop to overservicing by doctors and hospitals and thus interfered in some ways with perceived civil liberties of doctors and patients.

By offering unlimited service to an insatiable public demand, the cost of living up to the political promise has been so great that the health systems have become controversial political issues and, in some instances, liabilities rather than the assets that their proponents thought they would be when they introduced them. In the short term and especially in times of affluence, they were politically beneficial. However, especially where prosperity declined and tax revenues fell, government sponsored health systems began to make up an increasing and alarming proportion of the Government's budget at the expense of other services.

Governments are obviously concerned and are attempting to have the populace change its lifestyle, since many illnesses now appear to be directly related to modern day living. Up to the present, most of these measures have been proposed on a voluntary basis. However, the suggestion is now being made that if individuals are unwilling to change their lifestyles, they may have to be required to do so. Should this happen, there is bound to be a reaction from those individuals who hold dear the concept of individual freedom. Although government intervention may be an acceptable action for many areas, such as pollution control and seat belt legislation, it remains to be seen how acceptable it will be if it is applied to overall lifestyle. For example, even though I have always been a non-smoker, I consider the present proposals to ban even passive smoking extreme interferences with civil liberties.

However, from the point of view of a government having to raise the revenue necessary to run the health system, it may ultimately be necessary for it to dictate lifestyle. This would seem logical if behaviour has the greatest effect on demands for health care and, hence, the cost of meeting the demands.

One of the things that concerns me is that there is continuing pressure to increase the number of hospital beds in Australia. The argument that there must be no empty beds was advanced by the acting spokesman for the Opposition in this House. It is important to remember that, hopefully, the number of bed days used in the community will decrease significantly. I draw the attention of honourable members to an article by Frank E. Samuel, Jr, entitled Health Care in America. Changes and Challenges, a reprint from Vital Speeches of the Day at page 335. The speeches were given in Paris, France-a good place to be if one is in charge of health care in the United States-on 4 to 5 December 1986. No doubt the trip was paid for by those who take out insurance in the United States. The important point to remember is that Frank Samuel criticised-and I criticise very strongly-the system of straight fee for service health insurance.

I note that earlier this year-and not for the first time, but more actively-the Minister promoted health maintenance organisations. In the long run that is the only way to reduce expenditure and provide reasonable benefits for people. It is terribly important to do that. To my mind, there is no real alternative, as long as we provide people with free medical and hospital services and make it possible for ordinary medical practitioners, especially the so-called medical entrepreneurs, to in effect write out their own cheques on the Government Treasury by providing, in many cases, extremely unnecessary services and relying on public pressure to oppose any sort of restriction in that regard. To my mind, we can never successfully go down that road and I hope that the Government will try to change to a different system of paying for health care.

Mr DEPUTY SPEAKER (Mr Drummond) —Order! The honourable member's time has expired.