By Steve Painter
SYDNEY — The federal Liberal Party's health policy is "at best a throwback to the private health insurance system of the '60s", says Dr Con Costa, vice-president of the Doctor's Reform Society. In this, John Hewson is following in the footsteps of previous Liberal leaders Andrew Peacock and Malcolm Fraser.
Costa says the system in the '60s was "harsh even in those relatively good economic times" and "an administrative nightmare for both doctors and patients". Hewson aims to promote private insurance, which in the '60s resulted in unreasonably high health costs and left 17% of Australians without any health cover at all. The Whitlam government's Medibank program in the early '70s cut average income earners' medical expenses by nearly 50%.
At worst, the Hewson package could lead to US-style "Kentucky fried medicine" — largely privatised, a lot more expensive and able to deliver quality medical care only to those who can afford it. Around 35 million US citizens have no health cover, and many who do are in restrictive employer-backed schemes which limit job mobility.
While Hewson claims a private system would be more efficient, Costa points to a government inquiry in 1969, which said the private health funds had become "complex to the point of incomprehensibility, charging contributions beyond the means of many members of the community, paying less in benefits than the cost of medical and hospital services, causing serious and widespread hardship through the application of special account regulations and appropriating too much of its contribution income for operating expenses and accumulating excessive reserves".
Under the existing Medicare system, administrative costs are around 4% of total health outlay, whereas under the old private system they were around 14%. Moreover, Costa says the efficiency of a health system can be judged only on its ability to deliver health care where it is needed, not on the basis of "simple cost/benefit curves".
The Hewson approach would also result in windfall profits for specialists and investors in private hospitals at the expense of basic community health care and preventive medicine. An immediate increase from $21 to $33 in the cost of seeing a doctor would discourage people from seeking medical attention before problems became serious, and the situation would be made worse by the abolition of bulk-billing (which would mean patients would have to pay the doctor and then seek a rebate, instead of the present system under which the doctor is paid by Medicare). Medicare rebates would be reduced from the present 85%, and could fall to as little as 50%.
Meanwhile, there are signs that Labor is also "dropping the ball", says Costa. Federal health minister Brian Howe has "ruled out any o the public hospital system or an increase in the Medicare levy in the run-up to the next election. WA's Lawrence government is supporting increased incentives for private health insurance cover, while SA's Bannon government is supporting the ongoing construction of private hospitals."