Why is our health system going 'sicko'

August 24, 2007

Health was thrown into the pre-election spotlight on August 1 when PM John Howard stepped in to rescue Mersey Hospital in Tasmania from financial difficulties. In a mantra with some similarities to that used to justify the takeover of Indigenous communities in the Northern Territory, Howard blamed an inefficient state government for its inability to solve the crisis.

The hospital is located in the Liberal marginal seat of Braddon, leading the ALP to claim that Howard's move was just a stunt to shore up votes for the coming federal election. This claim was further backed by a national plan released by the Coalition on August 8 to take over several other public hospitals if necessary. Not to be left out, the ALP announced on August 23 that if elected, it would take over all public hospitals and place them under federal control.

Amid all the election hype, it's easy to lose the important issues behind this debate. But health — which affects everyone — cuts to the heart of social policy in Australia. Australia has a universal system of health insurance, which means that any person can choose to have their health needs — at least in part — funded through social spending rather than out of their own pocket. However Australia has massive private health coverage, with 44% of Australians covered by the private system in 2002.

Government policies to promote private insurance have furthered this shift. In 2003, the government offered a 30% tax rebate to people choosing the private system. This encouraged many to make the change, as did the commercials showing people suffering life-altering injuries that required elective surgery for which the waiting lines are extremely long in the public system. Changes to tax laws were also part of this shift, penalising medium-to-high-income earners who chose to remain in the public system.

At the same time, the Coalition has starved Medicare of funds while failing to increase the Medicare rebate alongside increasing costs for providing medical services. This significantly reduced the number of doctors willing to bulk bill (charging the government rather than the individual patient for a consultation), placing increased pressure on hospital emergency departments in areas where bulk-billing GPs were in short supply. Howard has long argued that Medicare was designed not as a universal health-care system, but merely as a "safety net" for the poor.

Mike Moore's latest film Sicko tells the reality of the US health-care system, where profits reign supreme and medical insurance companies give bonuses to doctors who find ways to deny people care and thus save the insurance companies money. Horror stories of people without coverage, and worse — those who believed themselves covered but discovered they were not — are exposed in the documentary. It shows how the most powerful country in the world, with the richest millionaires and the most expensive military, lacks the compassion to provide health care for its weakest and most vulnerable.

The film also shows that the great US empire lacks the capacity even to provide decent health care for its own emergency crews, including the firefighters, police and ambulance workers who responded to the 9/11 terrorist attacks in New York. These were full-time skilled and healthy personnel who thought they were covered for the sorts of dangers and illnesses their job exposed them to. But they weren't. As a result they are denied care and Moore's film has a running plot line of chasing insurance companies to force them to justify their denial of care.

While the US is an easy target in this case, being notorious for its corporate-driven policies, there is a push to introduce a similar system here. The Centre for Independent Studies, a think-tank with many supporters in the Liberal Party, has been pushing for the "marketisation" of health care since the Coalition took power in 1996.

In 1998, Macquarie University Vice-Chancellor Steven Schwartz gave a lecture to the institute detailing the need to introduce market forces into the health industry in order to counter the government domination of the industry since the introduction of Medicare in 1984. He argued for greater competition between health-care providers, better options for the rich to choose the private system and more incentive to reduce health "consumption".

In a little piece of neoliberal dreaming, Schwartz argued: "At present, there is no incentive to cut back on health care consumption. If I forego seeing the doctor for a sore throat, the country gains, but my reward is microscopic. We will never get control over health expenditures until we make it worthwhile for people to economise." Ironically, the August 18 Business Review Weekly ran an article claiming that workers who continue to work despite illness, i.e. doing exactly what Schwartz said, cost the Australian economy $25 billion a year through lost productivity.

Some of Schwartz's other proposals are of the same ludicrous nature, but there is a definite attempt to promote the private system by cutting funds to the public system and thereby organising "a system in which health services are provided for profit and purchased by consumers. In a market-driven system, competition will produce better access, lower prices, and ensure that capital is allocated more efficiently."

In such a system, the patient becomes a consumer and has consumer rights, which the private health insurer will attempt to meet. But the profit motive adds a new factor to the funding of health: inherently money is removed from health-care workers, hospitals and services and placed instead in shareholder pockets. The "economising" that Schwartz proposes is not carried out by patients, but by profit-seeking corporations that wish to minimise costs by determining whether or not patients are covered for care. Sicko shows the horrible extent that this could reach.

The impact of such proposals can be seen already in Australia's two-tier health insurance world. In 2003, Professor Steven Leeder, the director of the Australian Health Policy Institute at the University of Sydney, wrote a paper entitled Achieving Equity in the Australian Health System, where he directly attacked federal government policies. "At present", he wrote, "many Australians do not have equitable access to good quality health care".

The reasons for this, Leeder explained, include: "Some general practitioners have closed their books, health care services are scarce in poorer areas, and, in rural towns, 'up-front' payments for consultations are increasing while bulk-billing is in decline. Indeed, there were recent reports of some patients having received more speedy attention because they were willing to pay a surcharge. All these things tear us away from equitable primary health care.

"Public hospital infrastructure is growing old and needs replacement.

"Access to high technology is patchy ... investigation and treatment of heart disease is three times more common among privately insured patients.

"Access to timely surgery is uneven, with private patients getting it quickly and public patients often waiting for a long time.

"Access to dentistry and ancillary health care services is inequitable — better access to high-quality services is offered to those who are privately insured and/or wealthy."

Many of these problems are a result of public money subsidising private care — a sort of welfare for the better-off while the poor often wait for years to gain access to publicly funded equivalent care. This has all been implemented in the name of taking pressure off the public system, but has actually starved public health of funds.

The public health-care system isn't falling, it has been pushed. By devoting more public money to private companies and rewarding those who make the shift to private care, less funding is available for public health care. While Labor and Liberal governments blame each other over who owns what, as long as private health insurance companies can run the system for profit, human need will come second and health care will become more and more "sicko".

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