What's behind the medical insurance crisis?

BY DAVE RILEY

At the heart of the current medical insurance crisis is the private
health-care system. Without specialist doctors on call and guaranteed liability
coverage, private health care — much praised by successive Labor and Coalition
governments — is doomed.

But since the Australian Medical Association and the Royal College of
Surgeons are dedicated to propping up “free enterprise” medicine, there
is a rush to put together a relief package. The quick-fix option will be
the one governments support — insure the doctors somehow on the free market
and blame the patients for any problems.

As well as being medical professionals, doctors are small businesspeople
too. At issue is their right to make good money outside the public
health system and rising insurance premiums are slashing that. Because
they are doctors and there is a private health system to save, then it
behoved the Howard government to rescue private practice — and private
practice doctors — from this mess.

But it's not only doctors who are suffering from the current hike in
insurance premiums. All small businesses are. So who decides who
is worth saving? If the doctors get the nod, then why not some others as
well — like the electrical contractor or the fast-food franchisee?

The core thrust of successive Labor and Coalition governments these
last 20 years has been to convince us that we each individually must live
on and within our own resources. Instead of expecting a never-ending “welfare
state”, it was to private insurance schemes we were urged to turn.

Whether it was to health insurance, superannuation schemes or investment
portfolios, the hook was that these options would ensure that we could
sustain and protect our lifestyles.

They don't, as this crisis proves. We can neither access the services
we paid for nor expect the incomes we were promised.

In circumstances such as these, malpractice suits will increase. If
injury is incurred through assumed negligence then why should anyone be
forced to live within the resources on offer from an ever-being dismantled
public health system? (If injury is incurred through “act of God” or your
own stupidity, then I guess you're out of luck!) Of course, it makes sense
to go for a pay out. In these times, it's everyone for themselves.

We are also told that the scale of the payouts are too high and need
to be capped. That may seem a sound suggestion but it does have a major
defect — it opens up a can of worms. As soon as the legal system starts
working payouts to rule, then it becomes a parody of the scam known as
workers' compensation.

If a doctor through proven negligence causes a patient to lose all feeling
in their right arm, how much should the payout be? However, if an employer
through proven negligence causes a worker to lose all feeling in their
right arm, you can bet the figure is written down somewhere and it won't
be an astronomical sum.

So to cap payouts would basically ally medical insurance practice with
workers' compensation insurance practice and diminish patients' rights
to the same level as that of an ordinary worker.

We can safely assume it won't go the other way and workers' compensation
payouts won't rise to match those in medical malpractice suits.

Not only does the capping approach ally practice in medical negligence
cases with workers' compensation, it also begs the question of how high
a payout has to be before the insurance companies feel they need to raise
their premiums. It would be a question not of what the injured patient
deserved but what the insurance company said it could afford. And if the
insurance companies raise their premiums, maybe their accounts should be
vetted so that we all know that there really is a cause and effect. But
I don't see that happening.

As the insurance crisis continues, people's confidence in private insurance
cover in all its forms is sure to decline. The very tool used to protect
the individual or enterprise is going to cost more and more. On one hand,
insurance companies are refusing to underwrite certain bodies — such as
community groups — on the other, individuals and small enterprises will
choose — in order to survive financially — to function without any insurance
cover at all.

The current crisis has hit home where it has because the dichotomy of
the public and private health systems reflects a much larger contradiction
— the conflict between the need for health care to accessible to all and
the subordination of medical practice to private profit. Although people
may not be consciously aware of it, the current crisis also counterposes
two different forms of protection — user pays through a system of personal
and corporate insurance cover and a public welfare system.

From Green Left Weekly, June 5, 2002.

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From GLW issue 495