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Monday, 10 April 2000
Page: 15622


Mr MURPHY (9:34 PM) —I am speaking tonight in support of the Health Legislation Amendment (Gap Cover Schemes) Bill 2000. However, this support is conditional on the issues of concern, which I will go into shortly, being investigated by a Senate legislation committee inquiry. The primary purpose of this bill is to allow the introduction of private health insurance policies which constrain the out-of-pocket costs faced by people who contribute and which do not entail formal contracts between health insurance funds and doctors.

The bill will amend two acts in an attempt to solve some of the more complex problems faced by consumers of health care: (1) the National Health Act 1953, which will allow the incorporation of broad heads of power to enable gap cover schemes to be developed by funds, and (2) the Health Insurance Act 1973, which will permit the automatic assignment of a contributor's Medicare benefit to a registered organisation or body to enable simplified billing and payment arrangements to be built into the gap cover scheme. The bill will also work to ensure that the Private Health Insurance Administration Council will be able to obtain information from funds about the operation of gap cover schemes.

These amendments are designed to tackle, legislatively, the concern felt by many consumers with regard to the gap between fees charged by medical practitioners for in-hospital procedures and the combined Medicare rebate and refunds from private health insurance. The cost of such gaps was estimated to be approximately $200 million in 1997-98 for contributors to private health insurance. The present arrangements see private health insurance cover 25 per cent of the schedule fee for in-hospital costs and the Medicare rebate cover 75 per cent of the medical expenses.

The problem with the gap lies where doctors charge a higher amount than the schedule fee. While I agree that medical practitioners are entitled to reasonable and consistent remuneration for their high level of skills, expertise and training, we know there are a number of money-hungry doctors giving their profession a bad name by refusing to have limits imposed on how much they charge patients above the schedule fees under purchaser-provider agreements. Some greedy doctors are charging astronomically high fees above the Medicare schedule fees. People who are on an average Australian wage, who can barely afford private health cover and who are faced with rising costs because of the GST will be further disadvantaged by the inflationary costs of health care in our country.

The Health Legislation (Private Health Insurance Reform) Amendment Act 1994 currently enables private health funds to cover the gaps caused by medical charges above the Medicare Benefits Schedule fee by paying more than the 25 per cent ceiling where a purchaser-provider agreement exists with the doctor or hospital concerned. The act also permits such agreements to be made between hospitals and private health insurance funds—hospital purchaser-provider agreements—and hospitals and doctors under practitioner agreements.

For the benefit of the other members in this House tonight, I would like to discuss for a moment the increased cost to health care consumers who have to pay the gap. Gap fees are steadily increasing. The worst thing is that this government is much more concerned about the cost of rebates to the budget than about doctors passing on these enormous costs directly to patients. For example, the costs of obstetrics care have increased gap fees through a complicated delivery rebate. In September 1998, 54 per cent of bills for childbirth were charged above the Medicare schedule fee. In fact, the average gap payment last June for complex childbirths was $218. This is scandalous! As my colleague the shadow health minister and member for Jagajaga, Jenny Macklin, has consistently said, gap charges are the main hindrance in encouraging people to take out private health insurance when it only partially covers the costs incurred by in-hospital procedures.

I note that one of the problems with this bill is that the schemes it permits will be designed by doctors or medical practitioners and private health funds and approved by the Minister for Health and Aged Care in order to resolve a problem faced by health consumers. It is my view that those faced with making a choice about obtaining insurance with different gap cover schemes, although they will have greater choice in options, will continue to pay out-of-pocket medical expenses.

There are other issues that health insurance consumers will have to face including: whether a role for the private health ombudsman would be envisaged; what, if any, penalties would apply to deter medical practitioners from acting in a manner which would be likely to disadvantage health consumers; and will consumers face significant increases in their premiums to access no-gap or known-gap schemes under the new legislation?

I would also like to raise these further concerns: firstly, given the Australian Medical Association's antagonism to the present agreement system on the basis that it undermines medical practitioners' professional independence and their support for this bill, the question must be raised whether the legislation would inhibit the no-gap schemes which are already in existence. The real agenda of doctor groups may be to force out no-gap schemes in favour of known-gap schemes. The new arrangements are similar to the current schemes with an additional component of ministerial approval for the schemes.

Secondly, will the new schemes cause medical fees to escalate and bring about higher health insurance premiums? The new regulations provide that one of the criteria of a gap cover scheme includes that there is no inflationary effect. However, this is not clearly defined, and no sanctions are provided in the event that the scheme results in higher fees. Having heard previous assurances from the Prime Minister about increases in private health insurance, it is very hard for anyone to believe that there are no inflationary effects, especially when in 1998 the average gap grew by 6.5 per cent, three times the rate of inflation. Doctors are clearly pocketing money while most Australian wages remain stagnant.

Thirdly, will the proposed form of `informed financial consent' be effective in ensuring patients are aware in advance of any gap charges the doctor proposes to make? This change has my full support. I believe that patients must be informed well in advance—and I mean long before any surgery takes place—of the gap fee that will be incurred in dollar terms and as a percentage of the total fee. However, I remain to be convinced as to whether this will actually occur. The added problem is that patients may receive bills from a number of doctors—for example, surgeons, radiologists, anaesthetists and other assorted doctors—and each may have their own separate gap fees. This issue, as we know, is yet to be defined in this legislation and therefore raises some very serious issues if some unscrupulous practitioners abuse the way in which they obtain informed consent.

It is unthinkable—indeed, it is unacceptable—that a patient could learn what gap fees are payable only at the time of admission to hospital. It is also unthinkable that a patient could learn the bad news as he or she lies on a trolley waiting for that final call to be wheeled into the operating theatre. The scenario would be an ambush that would even make Ned Kelly blush.

Such action would tarnish the reputations of all those honest medical practitioners who do serve their communities and do not charge exorbitant fees. Many of my constituents in Lowe will clearly be affected by the changes in this legislation, and the government must ensure that consumers are well informed and, on that basis, are able to make decisions about what sort of private health insurance to obtain and what the gap fees are which will be charged. The fact that this bill does not define `informed financial consent' nor place any onus on doctors to let patients know in advance how much they will be slugged makes it mandatory for the Senate to alleviate these concerns when the bill finally arrives in the other chamber after it has had the scrutiny of a Senate legislation committee inquiry.

I turn now to one of the most important issues for my constituents in the Lowe electorate: the maintenance of a highly effective Medicare system. Labor has always believed that the provision of health care to all Australians is a priority. Just because you cannot afford private care does not mean you should be penalised. I believe that the amendments made to the Health Insurance Act 1973 to allow automatic assignment of a contributor's Medicare benefit to a registered organisation to facilitate simplified billing and payment arrangements to be built into the gap cover scheme will mean yet one more way in which bulk-billing will be undermined—something that the Liberal Party has always wished to accomplish. Bulk-billing is something that those who sit on this side of the House will defend to the death.

I also wish to talk tonight about the wasted billions spent on propping up the private health insurance sector. The Prime Minister and his government have funded an entire failing sector when they are not even prepared to ensure that workers receive their entitlements. They have propped up their rich mates, the doctors. They have done this because they are ideologically committed to helping those who can afford to help themselves. Let us look at the figures. The 30 per cent health insurance rebate was supposed to only cost $1.2 billion a year. However, what we actually saw, instead of the forecast 550,000 new members that would be attracted to private health insurance by the rebate, was a minuscule increase in the percentage of those taking out private health insurancejust over two per cent of the total population. This led to a blow-out of $800 million, taking the total cost to the taxpayer up to $2.2 billion. The taxpayer is footing the government's health insurance bills for a two per cent rise. And the companies continue to increase their premiums. There is something fundamentally wrong with this. The ordinary Australian understands the difficulties in trying to meet their bills—for example, meeting the mortgage payments, especially when interest rates are on the increase, the rising costs of petrol and food, the expenses associated with raising children and ensuring they get a good education and of course, after 1 July 2000, meeting the costs of the goods and services tax. All these are going to mean that not a lot of battlers—or, in fact, almost 70 per cent of the population—will be able to afford to take out private health insurance. The idea put forward by members on the government side that it will be of assistance if the government continues pouring money into a failing system is a fallacy.

I noted the member for Moreton's comments when he spoke on this bill and talked about members of the Labor Party having an `absolute hatred of freedom of choice'. They were his words. The member also said it is dreadful that Australians should conform to `one encompassing socialistic medical scheme'. Well, I have some news for the member for Moreton. What I think is dreadful is this government's ideological commitment to ensuring that 70 per cent of Australians have no health cover at all. What I think is disgusting is that, under the Liberal Party's ideal health system, if you do not have any money you do not have access to any health care, just like the American system. What I think the member for Moreton has is an absolute hatred of those people in society who do not have any money and are therefore incapable of self-help. The member for Moreton should have a bit more compassion, stop spouting Liberal propaganda and start to look in detail at the model of Medicare. In government in the 1970s and 1980s, the Labor Party did the right thing by ordinary Australians by setting up a health care system which everyone had a right to access. The progressive levy which exists on Medicare ensures that every person contributes to the system. It does not matter whether you are wealthy or poor; you are still afforded a quality level of health care in this country. That is the way it should be. The Medicare system has even managed to keep aggregate costs below those of other nations. It is a great system, which many other countries envy. The private markets in places such as the United States of America cannot control costs. They are inflating at a much higher and faster rate than Australian costs. It is not about having a socialistic system; it is about delivering value for money for all Australians and ensuring that every person—rich or poor—has the right to the same level of health care. The government is upset with Medicare because it is a system that has worked and they are unable to cope because they cannot pull it apart by cutting funds to hospitals and introducing rebates.

We know that a proper study of no-gap schemes operating under existing legislation is yet to be done. My concern with this bill we are debating in this chamber tonight is that it does not allow for the push by the doctors to increase their fees. Moreover, the AMA, the servile agent of the doctors, the doctors' union, will do its level best to secure increases in doctors' fees. You never hear the minister for workplace relations or the health minister bagging the AMA like they bag the workers' unions day in and day out in this chamber.



Mr MURPHY —No, because they are friends, and all their friends obviously make substantial donations to the Liberal and National parties.


Mr Pyne —You'll never prove that.


Mr Murphy —For the benefit of the member for Sturt, make no mistake—the AMA is a union. I would like to hear the Minister for Health and Aged Care, the Minister for Employment, Workplace Relations and Small Business and the Prime Minister acknowledge that in this chamber. But every day they come in here bagging the unions, and we have to suffer it as if there is something dreadful about being associated with a union.



Mr MURPHY —The unions are on the way back, don't you worry about that—in the words of that immortal leader in Queensland. Imagine if a small group of doctors were able to get high returns from the health funds so they could bolster their already inflated incomes. This will no doubt spill over and put greater pressure on the health insurance premiums and the public health system.

In conclusion, we support the bill but with some grave reservations which clearly have to be ironed out in the Senate, because plainly the proponents of this bill are interested in looking after themselves and not looking after the battlers. This health system that we have should be fair to everyone and not favour the rich over the poor.


Mr Brough —You supported the bill.


Mr MURPHY —We have already foreshadowed that some of the concerns that we have expressed here, and the ones I have expressed, will be ironed out when it gets to the Senate. I have been talking about those matters in relation to the doctors' fees and the AMA. I say to those on the other side of the House: your friends the AMA, who look after your interests, are a union—make no mistake about it. They are only about inflating the doctors' salaries; they are not about looking after the beneficiaries. (Time expired)