Make Medicare better, don't wreck it

A major attack on Medicare is on the cards after the Abbott government has refused to rule out forcing all patients to pay an upfront cost when they visit the doctor.

Former health advisor to Tony Abbott, Terry Barnes, has written a paper to the federal government's “Commission of Audit” recommending a $6 up-front fee to see a doctor. The Commission of Audit was appointed by the federal government to propose business-friendly cuts to government spending in the lead up to the May budget.

Abbott government ministers claim that the commission is independent but in reality it is headed by Tony Shepherd from the Business Council of Australia. The BCA's chief economist Peter Crone also heads the commission's secretariat. Corporate profitability rather than community need will be the key drivers of the commission's recommendations.

Early critics of the proposed up-front fee include the Doctors Reform Society (DRS) and the Australian Medical Association.

Doctors have criticised the plan because it would amount to a false economy. The DRS says that even a small upfront cost would mean that people “stop seeing their GP, ending up sicker and going to hospital - which costs thousands of dollars a day versus the current $36 to see a GP bulk billed.”

According to the DRS, the Abbott government's refusal to rule out an up-front fee “opens the door to the destruction of Medicare as we have known it.”

Without commenting directly on Barnes' proposal, health minister Peter Dutton has indicated that he is supportive by saying that Medicare costs will become “unmanageable” unless the government cuts health spending. He also said that “it's hard to understand where we are going to find money [in the future] to pay for these services” referring to treatments for dementia and diabetes.

However, Terry Barnes' proposal is only aimed at “saving” $750 million over four years – less than $200 million per year. Current Medicare spending is in the order of $18 billion per year so the proposed upfront fee would barely make a dent in government health spending.

This proves that the $6 co-payment is merely the “thin edge of the wedge” against Medicare. If the government can get away with implementing such an upfront fee, it is reasonable to expect they will follow this up by extending upfront fees to non-GP services such as pathology and radiology tests and increasing the fees over time.

Barnes has already suggested upfront payments at hospital emergency departments as a measure to deter people from seeking health care there if they couldn't afford a doctor visit.

Many people today would laugh at the idea that there is no upfront fee to see a doctor. Medicare bulk billing is a thing of the past at many medical practices, or else severely restricted (for example limited to pensioners or people with health care cards).

Despite this, official Medicare statistics indicate that approximately 80% of Medicare services are bulk billed (up from less than 70% during the Howard government years). This apparent contradiction is probably best explained by the fact that a lot of Medicare services – such as pathology and radiology tests – are still bulk billed and that corporate-style super-clinics – infamous for five minute appointments – also typically bulk bill.

Already almost one fifth of health costs are borne by consumers through out-of-pocket expenses according to a Consumers Health Forum analysis of the last budget. Further, the numbers of people delaying a visit to the doctor for financial reasons has increased in recent years.

Australia has one of the highest rates of out pocket health payments in the OECD. A 2009 report by the Centre for Policy Development revealed that Australians pay over $15 billion a year in out-of-pocket health costs. This is more than double the amount contributed to the health system by private insurance companies.

This reveals that the government does not get value for money out of the billions of dollars used to subsidise private health insurance. The community would be better off if that money were simply redirecting straight to the public health system.

It is clear, however, that the proposal for upfront medical fees is motivated by a desire to push Australia in the direction of a more privatised health system.

“I make no apology for suggesting a modest price signal for bulk-billed GP and emergency department services, and encouraging people to question whether they really need a trip to the doctor,” said Barnes in a Fairfax opinion piece.

Bulk billing should be “confined” to those who can least afford the cost of medical care according to Barnes. Even these lucky few should be made to pay a co-payment, he said, but everyone else “should and must pay [for medical care], and shouldn't expect free treatment”.

This is an unrestrained argument for full privatisation of health services.

A fully privatised health system would be much more expensive than a totally free system. The United States for instance spends over 17% of its gross domestic product (GDP) on health – the highest in the OECD. By contrast, several European countries with completely free health services – that is no upfront fees at all – spend at or close to the OECD average of 9% of GDP.

Health care in Australia should be improved by ending government subsidies of private health insurance, moving away from a “health insurance model” to a free public service model and abolishing the flat rate Medicare levy to fund health care from general revenue. This could be paid for by increasing taxes on corporations and the very rich.

Con Costa of the DRS told Green Left that he is not against reforming Medicare. “We want a better system, but they're not talking about that. They're talking about wrecking the system.”

Costa said that people would get a better (and cheaper) health service by increasing federal funding for primary health care instead of waiting for illnesses to become acute, requiring hospitalisation. For example, the federal government could fund community nurses to be attached to medical clinics who could be available for routine checks and home care.

Already the threat of imposing a major step towards privatisation has provoked a whole series of “save Medicare” rallies in Australian capitals. If Tony Abbott wants to attack Medicare, we should respond with a determined plan, not only to defend it, but to make it better.

[This article by Alex Bainbridge was written for Green Left Weekly #993. Bainbridge is a Socialist Alliance candidate for the expected senate re-election in WA. Photos from Perth rally to save Medicare 11 January 2014.]