Rudd's two-tiered health system

August 2, 2009

If the rhetoric of the National Health and Hospitals Reform Commission's report on Australia's health system is taken at face value, health care in Australia will get an impressive overhaul courtesy of the federal government.

Released on July 28, A healthier future for all Australians marks "the biggest shakeup since Medicare", SBS News said on July 27. Prime Minister Kevin Rudd said it was "a major report with major implications for the nation". The report said: "We need to re-design health services around people."

Yet the main thrust of the report is a determined push on competition, user-pays health care and a bigger role for the private sector.

The commission put the state-based health system in its crosshairs. It proposed the creation of "competing health plans" that would force state governments to compete with private insurers, overseen and funded by the federal government.

In a blatant swing towards greater privatisation of health care, the commission proposed the government introduce federally subsidised "health plans" for a range of basic health services.

This would enable private health funds to compete directly against the chronically underfunded and overstretched public health system to provide services covered by Medicare. Unsurprisingly, private health funds have welcomed the proposal heartily.
The federal government set up the commission in February 2008 to review the nation's health system.

The report recognised the crisis in healthcare across Australia. The report found "hospitals are under severe pressure, directly influencing their ability to provide safe, high quality, accessible and timely care to all patients".

It offered five priorities for the health system. These included: address the appalling health situation of Indigenous people, improve care for people with mental illness, more support for people living in remote areas, and improve access to dental care. "Timely access to quality care in public hospitals", was the fifth priority.

Despite these "priorities", the report has been criticised by health professionals for a failure to move beyond mere rhetoric and generalities.

The report recommended the formation of a new national authority for Aboriginal and Torres Strait Islander health funding and services. However, the National Aboriginal Community Controlled Health Organisation (NACCHO) chairperson Mick Adams criticised the plan for being "barely developed" in a July 27 statement.

"There's no detail on how the $58 million Health Authority might work to ensure Aboriginal people's role in setting the priorities to improve our health for example", Adams said.

The Rural Doctors Association of Australia said that a lack of clear proposals for improving remote health — supposedly another priority — is a gaping omission. "Rural Australia is already suffering from a shortage of 17,000 health professionals", said the association's Dr Nola Mayfield on July 27.

"The crucial element missing from the report is any recommendation for substantial new initiatives to get more doctors and other healthcare professionals to the bush", she said.
Private healthcare in Australia is already considerably expensive. It is heavily subsidised by the government. The Doctors Reform Society said the changes proposed in the report would mean private healthcare would expand. Market-based competition instead of universal access will be encouraged.

Doctors Reform Society President Dr Tim Woodruff said the report had some "excellent ideas" but was still "ultimately about entrenching those vested interests, about a long term vision for health care as a commodity to be subject to competition and the market", according to the health blog Croakey.

The report also proposed a 0.75% rise in the Medicare levy to pay for a national dental scheme to cover basic dental services — Denticare.

Oral health is a critical part of overall health. Yet many Australians lack access to affordable dental health services. In 2006, the Australian Dental Journal estimated 35% of people do not have access to proper dental care. Eighty-five percent of dentists are private practitioners.

Woodruff welcomed the proposal to make dental care a universal entitlement. However, he pointed out: "The Denticare proposal is at odds with the Commission's comment that 'we want to translate universal entitlement into universal access'. Denticare will encourage dentists to stay in areas of relative affluence, supported by taxes.

"Those without teeth unfortunate enough to have limited mobility and live in poorer areas will remain toothless," said Woodruff.

"Denticare also guarantees that those who have the money for private insurance can get faster access. That's choice before equity. It should be the opposite."

The Denticare proposal would not provide genuine universal coverage. People would be able to "choose" between private dental care or the public system. The government would pay for about 85% of private dental services, leaving the patient to cover the shortfall.

Greens Senator Bob Brown criticised the Denticare plan on July 27 for its heavy reliance "on subsidised private health insurance. Getting good dental care should be like Medicare — available to all regardless of wealth or privilege."

On July 28, Rudd spoke at length about the "guiding principles" of the government's plan for healthcare. The emphasis, he said, was a system that "focused on people", is concerned with prevention, minimises waiting times and provides better access, quality and safety.

However, the report's key recommendations will not achieve any of these things. Health reform, in the eyes of the government, is code for neoliberal, market-inspired changes that increase the power and profits of private companies.

Health campaigner and policy advisor Fiona Armstrong summed up many of the problems with the report on Croakey on July 28.

"Not content with the current status quo of a two-tier system in hospital care, the commission has recommend[ed] we extend this to all health care and, in a highly risky first step towards managed care system, proposes a greatly increased role for the private sector and private health insurers," she said.

"This report should make the poor, the disadvantaged, the truly sick, and anyone with an sense of fairness very afraid for what lies ahead."

A better health outcome is not the goal here. If that were the case we would have seen proposals for a dramatic expansion of Medicare, the end of government subsidies to private health insurance and a health care system based on free, equal and timely access for all.

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