The changes to Medicare already introduced by the Howard government include slashing new doctors' access to Medicare provider numbers, abolition of rebates for reversal of sterilisation, reduced rebates for some IVF procedures and for psychiatric consultations and reduced rebates on some other surgical and diagnostic procedures.
"Of more significance", writes Stefania Siedlecky in New Doctor, journal of the Doctors' Reform Society, "is the decision to put a one-year freeze on increases in GPs' schedule fees, which may prove a disincentive to bulk billing".
While the Coalition promised, in last year's election campaign, to maintain Medicare, it has already violated many other promises. Moreover, the previous Liberal government, that of Malcolm Fraser, came to office pledging to maintain Medibank (Medicare's forerunner) but ended up converting it into just another health fund, though one owned by the government.
Fraser's treasurer, who carried out much of the dismantling of Medibank, was John Howard.
Siedlecky's article — "The Liberals and Medicare: can we trust Howard and Wooldridge?" — outlines this history. Medibank was introduced by the Whitlam government in July 1975. It was a universal insurance scheme, providing free treatment in public hospitals, bulk billing and 85% rebates on doctors' fees based on a common fee schedule.
It was to be financed by a levy of 1.35% of taxable income, but the levy bills were not passed by the opposition-controlled Senate, and Medibank was financed from general revenue.
Slicing up Medibank
Only four months after the Coalition gained office, a Medibank Review Committee was set up. Its report was not made public, but the Fraser-Howard government proceeded to dismantle Medibank.
In October 1976, health insurance was made compulsory for people above a low income threshold. Those not holding private health insurance were levied 2.5% on their taxable income.
In May 1978, bulk billing was abolished, except for pensioners and the disadvantaged. Bulk billing rebates were reduced to 75% of the scheduled fee.
In November 1978, the health insurance levy was abolished. The Commonwealth paid a rebate of 40% on the scheduled fee, with maximum patient payment of $20. Rebates were payable through private insurance companies or Medibank Private. There was a rebate of 75% for the disadvantaged.
In September 1979, replacing the 40% rebate, all patients now paid the first $20; benefits were to be paid for both insured and non-insured on scheduled fees in excess of $20. Patients could take out private insurance to cover the first $20. Rebates for the disadvantaged remained at 75% of the scheduled fees.
In 1981, free access to public hospitals was restricted to pensioners and the disadvantaged. The Commonwealth paid a flat 30% rebate on scheduled fees; basic level insurance rebates increased from 75% to 85%, with a maximum payment of $10 by insured patients.
Medibank was not the only health casualty of the Coalition government, Siedlecky points out.
The Coalition had promised to preserve the Community Health Program introduced by Labor in 1973. By 1981, the program had been"devolved" to the states, but without states' commitments to continue the various projects.
Community health centres, set up in Canberra under Whitlam against strong opposition from the Australian Medical Association, reverted to private practice. In other states, opposition by the AMA meant that few centres provided general medical services.
The Family Planning Program had its funding cut by almost half. Clinic services, provided free under Medibank, were now charged, except for disadvantaged patients.
Medicare
Successive Coalition shadow health ministers have stated their opposition to Medicare and proposed changes to build up the private health insurance system.
In 1984, Jim Carlton proposed to limit bulk billing, limit free public hospital treatment to the disadvantaged and allow people to opt out of Medicare if they took out private health insurance. He suggested establishing health maintenance organisations on the US model.
In 1987, Michael Baume proposed abolishing bulk billing except for the disadvantaged, allowing people to opt out of Medicare, having patients pay the first $250 of a medical bill, which could be covered by private health insurance, a tax rebate for low income earners to take out private health insurance and for Medibank Private to become independent.
In 1990, Peter Shack intended to establish a commission to recommend changes to Medicare, make public hospital care free only for pensioners and the disadvantaged, give tax rebates to assist private health insurance payments and introduce gap insurance.
In 1993 Hewson's Fightback! proposed free health care for pensioners and health care card holders only. Bulk billing would be abolished except for welfare recipients, tax credits given to encourage taking out private health insurance and additional funds given to private health insurers to compensate for the increase in elderly taking out private health insurance.
Following the 1993 election, which was seen as a public expression of support for Medicare, Liberal tactics changed. In 1994, Bronwyn Bishop, shadow health minister, stated support for universal bulk billing, continuation of Medicare and additional incentives for taking out private health insurance.
In his book The Heart of Liberalism (1994), John Herron considered that bulk billing had led to a cost blow-out. His suggestions included no-claim bonuses on health insurance, differential rebates and restriction of the number of doctors in urban areas.
In 1987, John Howard described Medicare as one of the greatest failures of the Hawke government. As leader of the opposition, in a 1995 radio interview, he stated a commitment to keep Medicare and the "universality of it", and to retain bulk billing but also a commitment to support people taking out private health insurance.
In his June 1995 "headland" speech, Howard said: "Maintaining choice between public and private health care with the underpinning of the Medicare system is the preferred option of the great majority of Australians ... We shall also retain bulk billing and community rating."
In July 1995, Michael Wooldridge confirmed the commitment to retain bulk billing, with no increase in the Medicare levy, but suggested a direct subsidy to health funds.
"It is not clear whether this is a commitment or a 'core' commitment according to Liberal Party definitions", Siedlecky concludes. "Nevertheless, the Doctors' Reform Society is wary of the changes announced by Wooldridge and the possible hidden agenda behind the pre-election commitment to Medicare.