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Thursday, 13 April 2000
Page: 15898

Dr LAWRENCE (10:14 AM) —The Medicare Levy Amendment (CPI Indexation) Bill 1999, as we have heard, actually provides for the amendment of the Medicare levy threshold in line with CPI movements, and it continues Labor's practice of annually indexing Medicare levy thresholds. It is in fact a very rare example of government action which actually supports, rather than undermines, the Medicare contract between the government and the Australian people. The tragedy is that in so many other ways the government has been shredding that contract and seeking to destroy community confidence in Medicare. Promise after promise has been broken. In June 1995 John Howard, the now Prime Minister, said:

I would rather promise half of what people might: want and honour 100 per cent of it than commit myself to everything and deliver only half of it.

Of course, he has broken that promise, and many others like it, his 1998 election night commitment to reconciliation being the most recent example. During the election debate in 1996 Mr Howard solemnly intoned:

... every single dollar of the promises that I made to the Australian people are going to be kept ...

In reality, the Prime Minister has short-changed the Australian people to the tune of at least $17 billion, and probably more, worth of broken promises over four years, not to mention the never, ever promise on the GST. One of the clearest promises this government made—and it was made by the coalition before the 1996 and the 1998 elections—was that they would not change Medicare: on their oath, they would not change Medicare. They were insistent that they would retain it in the form developed and implemented by Labor. They call themselves friends of Medicare. With friends like that, who needs enemies? They said they would not revert to the Fightback formula, with which we are all familiar. And in the coalition health policy launch before the last election we got the assurance:

We will maintain Medicare in its entirety ...

And further:

None of the health policy initiatives will entail cuts to funding for public hospitals ...

As we have just heard, the opposite is the case. These were very important promises to the Australian people, since it is almost certain that one of the main reasons the conservatives lost in 1993 was their commitment to wind back Medicare and the public hospital sector. They got the message that people did not like it, so they changed their tune, changed their official position at least. After years of attacking Medicare—indeed, decades—their official public stance is now, as we have heard, that they support and value Medicare. I am sorry I do not believe it. They are all innocence when accused of watering down universal access and public provision, which is what they have been doing since their election in 1996. Indeed, the current minister regurgitates more than his usual volume of bile when this suggestion is made, and he usually directs it at our shadow minister

The government went to the last election and the one before that assuring the public that they would maintain Medicare and improve access to appropriate health care, including reducing waiting times. They have failed on all counts. The reality is very different from these promises. Once in government the Liberals' longstanding antipathy to Medicare was quickly in evidence, and still is. It has been consolidated in the series of moves which undermine Medicare's integrity. Their actions belie their pious posturing on this point, and there is a strong strand of hostility evident in their actions. That is ultimately how they have to be judged, not by their words. We have seen since 1996 a combination of policy neglect and some pretty savage cuts to the public system. This follows several years of similar action by conservative state governments. It has compounded the problem.

In 1996, for instance, in the first budget $800 million was cut from public hospitals alone by a combination of cuts to financial assistance grants to the states and by direct cuts which were justified on very spurious grounds of `cost shifting'. We are all probably well aware that the Commonwealth Dental Program was completely shelved, $400 million abolished. Pharmaceutical co-payments for pensioners and families reduced government funding by $732 million in that budget alone, and transferred the costs directly to the users, again undermining the Medicare contract. A further $1 billion was saved by freezing the GP rebate and restricting provider numbers, again undermining Medicare. This was, right at the outset, a full-frontal attack on the cornerstones of the Medicare compact with the Australian people, especially since these funds, insultingly, went to prop up the private health funds. Thirty per cent of people had private health insurance; 70 per cent were paying for that. As Premier Kennett remarked in his typically pungent fashion, this was `money down the drain'. This is one case where I agree with him, and there are not many. The use of money, needed for public hospitals, to pay for the private health insurance rebates was also a very clear breach of another promise in their 1996 policy document, which stated:

... the private health insurance incentives will not be funded from the public hospital system or the health grants to the states ...

Perhaps the `not' was a typographical error. It is clear that they always intended this switch, as they foreshadowed in Fightback. We have seen a sustained strategy to undermine our faith as a community in the capacity of Medicare to provide a reliable, quality health care system for Australia. We are seeing longer and longer waiting lists, industrial disruption, increased costs and greater anxiety about standards of care. And they all take their toll. Our hospitals and their very dedicated staff are now working under what I think is intolerable pressure, and it is starting to show. And if this was not a sufficient indication of the government's desire to corrode the key elements of Medicare, in 1997 a further $673 million was removed from the budget. A string of Medicare offices were closed—mainly, I might say, in Labor constituencies. That restricted access to full payment services, again undermining Medicare.

The negative effects of this and other elements of the conservative strategy are now very substantial, and it is fair to say that hospitals in our public system are on the edge. Severely ill patients are being left for hours on trolleys in hospital corridors. Every time people hear a story like that they think, `Well, I must go off to the private system.' It is pushing them away. Privatised services in a lot of states are actually cutting access to critical services, like palliative care and psychiatric services. Staff are severely overworked and as a result turnover is extremely high. In some cases there are shortages of nurses. In my own state there have been glossy ads to recruit school leavers, but there are no effective remedies in sight and the problem is not going away. It is because the conditions they work under are intolerable. In my own state too the children's hospital, Princess Margaret, has been forced to rely on public donations to upgrade its intensive care unit. This is not a frill; this is basic. While the Premier, Mr Court, is busy building a belltower to his own memory—and it will be his memory—worth $5.5 million, just $5 million in total was allocated last year for the capital works needs in our metropolitan hospitals. The women's hospital, King Edward, alone needs at least $20 million to bring it up to standard.

A recent technology audit has shown that these two hospitals have medical equipment which is unsafe, unreliable and obsolete. It is no wonder that doctors are fleeing, too. A lot of specialists are being lured to the private system by big cash injections—higher salaries—and they are less willing to work in the underfunded public sector with its inadequate equipment. What is the result? Waiting lists blow out yet again. These strategies have been accurately described, I think, by one medical practitioner as the `piecemeal necrosis of Medicare'. I agree. What is astounding to me is that the government has taken no action to remedy the number of problems in our health system, particularly the need for extra funds.

Indeed, as we have heard, the government has cut back on what should be available to the states. This has compounded the problems created by conservative state governments ripping funds out of hospitals over the last few years. What has been the government's solution to this? To slash its own funding even further and to put money into the private hospital system. It has been willing to pour funds, as we have heard, into what is an ill-conceived and very expensive rebate scheme for private health insurance. This money was pilfered from the public hospital system. Any health economist could have warned them—and many did, as it happens—that the introduction of these rebates into an open-ended private health insurance market would simply result in higher costs; and so it has. In the first year of operation the costs have blown out by $500 million. And how many extra people do we have in private insurance for that $2.19 billion per annum and rising? Somewhat less than three per cent.

This is a windfall for the suppliers of services in the private sector, but it does practically nothing for consumers, especially for that 70 per cent who rely on the public health system—increasingly nervously, I might say. The costs, as I have suggested, have blown out well beyond those budgeted for—from $1.3 billion to $2.19 billion. Every new policyholder adds to that already obscene cost. Every time this strategy succeeds in bringing a new person into private health insurance, up go the costs, and there is no reduction in pressure on the public system. I will discuss in a while why that is such a stupid policy. The rebate is a subsidy to the private health insurance industry which—and I think this is an important point—already exceeds the budgetary assistance given to the mining, manufacturing and primary industry sectors combined. It is a subsidy for 30 per cent of the community.

The government has consistently argued that the more people have private health insurance the less will be the pressure on the public health system. In a way, it means to ensure that by taking funds out of the public system. Unfortunately it is absolutely wrong about that point. It could not be more wrong. Some very recently completed research by Professor Duckett and Terri Jackson from the School of Public Health at La Trobe University, which is due to be published next week in, I think, the Medical Journal of Australia, concludes, after careful analysis, that the new health insurance rebate is a very inefficient way of assisting public hospitals—if that is indeed what it was designed to do; forgive my scepticism. They found—and there are precedents for this—that the estimated average cost per weighted separation, which is a fancy way of saying the cost per patient or per admission adjusted to take account of differences in the ways costs of care and depreciation are met, shows that private hospitals are more expensive than public hospitals. They are not more efficient; they are more expensive—to the tune of $1,941 in the case of a private hospital compared to $1,774 in the case of a public hospital. That is a very conservative estimate. So every time you transfer someone from the public to the private system you are costing Australians, either as consumers or taxpayers, more money. Does that make sense? It does not make any sense to me.

They found in their analysis that, if the subsidy that is now being applied in private health were applied directly to enhancing the capacity of the public hospital system, that system could easily meet most of the additional numbers of people required to be accommodated—some 60 per cent. Again this underlines, if it needed underlining, that this is a very inefficient way of taking the pressure off the public system. In fact it does nothing of the kind, especially when you consider the fact that a lot of the procedures undertaken in private hospitals are unnecessary. Why else would you have a 40 per cent caesarean section rate among some women privately insured? That is not natural, I can tell you.

I think it is timely to have a look at the attacks that have been made on Medicare, particularly as there is plenty of international evidence that this formula—moving people from public to private by providing rebates for private health insurance—is a recipe for an expensive, second-rate system which is ultimately unfair to low and middle income families. They cannot afford to keep up private health insurance, even with the rebates. This formula also produces inferior health outcomes. You spend more and you get more intervention, but people are not any better off. Perhaps we should not be surprised at this because for his whole political career the Prime Minister has been an opponent of Medicare and universal health care. We are now seeing his attitudes realised in policy and action, as opposed to the fine words he speaks before every election campaign.

The Prime Minister voted against Medibank when he first became an MP. In fact I think that was probably the first vote he ever took in the joint sitting of the houses at that time. In the early eighties he dismantled Medibank when he was Treasurer. He opposed it again in the late eighties when he became the Leader of the Opposition—indeed he railed against it—and again in 1993, with the much derided Fightback package. Before the 1996 election the old John Howard—before he became Prime Minister—said, among other things, that `Medicare had been an unmitigated disaster'. He called it `medi-mess' and a `shemozzle'. He said he would `pull it apart' and `get rid of bulk-billing'. He knew that the community approval of Medicare, however, and their repudiation of the Fightback model in 1993 meant that the government had to change its tune, as I have indicated. With their noses pretty bloodied by that experience, the conservatives have tried to soften their stance.

We have been asked in this community to believe, against the evidence, that the coalition unequivocally support Medicare—clearly they do not—and to believe that John Howard was a changed man, but clearly he is not. Blood will out and his change of heart was never really believable, as the track record of the government now shows. If you listen to what they have been advocating over the last 30 years, you can see this, perhaps in a slightly different form, coming to pass. The conservatives and especially the Prime Minister have argued at various times for the abolition of bulk-billing; limiting access to public hospitals to the disadvantaged, and they are heading in that direction very quickly now; increasing the Medicare levy, and that has been done; introducing compulsory fees, and they have tried that in various areas; introducing unaffordable tax breaks for private health insurance, and we have doozey of a scheme that is going to cost taxpayers dearly; opting out of Medicare in favour of private health insurance, and that is on in force; reducing the Medicare rebate, which was frozen for a period; providing big subsidies to private health insurers and private hospitals; and allowing unfettered gap insurance, and we are about to see some version of that, too.

These very stale old prescriptions are now being introduced by stealth. People are being told one thing and the government are doing another. The Liberal Party and their coalition partner have had no ideas about health care for 30 years. They have always resented the Medicare model and are wilfully determined, in my view, to destroy it without any comprehensive examination of the impact of their actions. For instance, regarding those cost equivalents I talked about earlier, why would you do that as a matter of public policy? They really want to stifle discussion and prevent careful analysis by saying, `No, we're friends of Medicare. We're behind Medicare. What are you talking about?' They are visiting neglect on the public provision of key health services. They apparently hope that the public system will become the residual system and private provision will prevail.

They talk about needing to have a robust private system. What about a robust public system? It is the one that the majority of Australians use. They hope to convince the community that only through private health insurance and private medicine can they expect decent services. We have seen that on the television night after night. The only way you can survive, we are told, and get good care is with private health insurance. Fortunately, that happens to be absolute rubbish, but they are pushing hospitals in that direction. People are being told that their taxes cannot buy good health and cannot buy good hospital services so they will have to take out private health insurance. The government have been spending millions of dollars on advertising, advertising which effectively at its core denigrates the public system. They should be boosting and improving the public system for the majority of Australians. Their advertising and their behaviour suggest that the public system, since it is for the less well off, need not be too flash. They say, `Don't worry about it. You can get out of it. You can jump the queue, go to the private system and get the best care there. We will look after the people who cannot afford it in the public system.' When it comes to public provision, they think near enough will do. Well, I have another message for the minister and the government. It will not do, and the people of Australia will not let it do.

It is fair to say that Medicare is under serious threat. The coalition government's health policy is now determined not by the people in this place but by the private health insurance industry and selected specialist medical practitioners, some of whom have got some pretty good breaks at various times from this government. The 30 per cent rebate for holders of private health insurance is being paid for by the general taxpayer, and it is ample evidence that the coalition are already well advanced in implementing their real anti-Medicare agenda. Whether they are vehemently opposing Medicare or claiming to help it—and they have worn both hats at various times—their policies have the effect of promoting private insurance at the expense of the public system. I believe that the quality of the health care system, the public system, the one available to the majority, is one of the key indicators of whether we have a right to call ourselves a decent, caring society. In my view, the current government clearly fail this test. Australians paying the Medicare levy, which is what this bill is about, do not want to see the health system cut, hospitals privatised and the development of a two-tier hospital system. They do not want to see our basic social infrastructure run down and marginalised. To their view, I say: hear, hear.