The ACT’s health budget is suffering through no fault of the ACT. The decline in private health cover and the refusal of many who have the cover to admit themselves as private patients in the public-hospital system is causing the ACT Government to pay an increasingly higher percentage of hospital costs. Indeed, the percentage has risen from about 60 per cent a decade ago to 93.1 per cent now.
The trouble is that privately insured patients find that after visiting a public hospital they get a higher bill for the same service than public patients on Medicare only for exactly the same service. Moreover, they do not fare much better than public patients when it comes to cue jumping or getting private rooms. There is no incentive to nominate as a private patient. The result is the ACT picks up the full tab, rather than the insurance company.
It is one of the many anomalies caused by cost shifting between the state level, the federal level and the private sector. It does not make for efficient allocation of health resources.
The Carnell Government was correct in asserting on Monday that federal government policy was not addressing the issue, though yesterday the Federal Health Minister, Michael Wooldridge, made some concessions, particularly in the home-care area. However, the ACT’s response of allowing a further private hospital is not likely to provide the answer. Big-ticket items are usually done in public hospitals and in any event, private hospitals always require public subsidy.
But short of the two tiers of government engaging in a full-scale reorganisation of Australian health funding, the states and territories will be condemned to piecemeal cost shifting exercises to meet short-term budgetary targets.