There is one sure way of destroying Medicare – prevent timely, reasonable changes that ensure Medicare fits changing circumstances.
Labor, the Democrats and the Greens seem to have a mindset that questions the motives of everything the Government does – and along with much of the media commentary, they assume everything the Government proposes must be bad.
Instead, they should look at the merits of what is being proposed. They should look at what is likely to happen if we continue on our merry way not adapting to circumstance. They should look at what is likely to happen if what is proposed is put in place and they should look at what is likely to happen if other proposals are put in place.
Since its inception 20 years ago, Medicare has never come near paying for itself. Last year it cost about $8 billion. The Medicare levy raised about $1.3 billion – just 16 per cent of the cost.
It would be more realistic to reduce income tax by 7 percentage points and increase the Medicare levy by 7 percentage points, so that the resulting 8.5 per cent levy would cover the $8 billion cost. People would then see on their tax returns the true cost of Medicare.
Of more importance, though, is setting out public – as distinct from political — aims for health spending, and getting the system to match these ends.
Some of those aims are: to ensure no-one is denied health care because they cannot afford it; to ensure no-one faces catastrophic health costs; to contain costs; to ensure the system is not milked by any group – particularly doctors and pharmaceutical companies; to ensure providers get reasonable returns for services provided; and to ensure that Australia stays in the top league of health-care innovation and research.
One of those aims is not – and never has been – to have that any Australian can walk into a doctor’s surgery and walk out treated and pay nothing. Universal bulk-billing has never been an aim of Medicare, nor should it be.
An ageing population and increased medical technology means health consumers ultimately will have to pay more, after all, they are getting more and better services. It is silly to run away from that proposition.
This being the case, every dollar the system can get from patients is valuable. Universal bulk-billing in fact reduces the amount of money coming into the system. It means someone, somewhere in the system has to go without, or money has to be made up from elsewhere. Doctors are not going to sit by idly and watch their incomes fall. They will make it up elsewhere – probably by campaigning for more government money. And if they fail, they will do what doctors in all countries where socialised medicine unfairly cuts incomes – go elsewhere. That would be to Australia’s detriment.
Universal bulk-billing should not be the aim. Rather the aim should be to reduce costs for the needy and ensure that the better off pay without the bills becoming catastrophically high. This is precisely what the Government has done.
At present, doctors bulk-bill, not according to patient need, but according to supply and demand for doctors. Where there are many doctors they bulk bill, irrespective of the means of their patients. Where there is a monopoly out of the main city centres, the doctor need not bulk bill. There is no incentive to bulk bill other than charity (which, to be fair, many doctors apply). With the incentives under the Government’s new proposal, nearly all doctors will bulk-bill all needy patients (insofar as the health card is a true measure of need – but every measure will have some anomaly). Great.
Some doctors might up the charges to others. The Government denies this, but even if it happens, so what? Where the market tolerates it, doctors can increase their charges now.
Perhaps the best guard against doctors increasing their charges is the Government’s new billing regime. Instead of patients paying the full fee and claiming a rebate on Medicare, they will just pay the balance at the time of consultation. The Government sells this as an efficiency and convenience for patients, which it is. But it also sends a more direct and stronger price signal than present arrangements. At present, patients only have a woolly idea of their final net payment. They pay at the surgery with a feeling that they will get a significant portion back. Under the Government’s new proposal, they will know precisely how much they will be out of pocket and will make comparisons with the experience of friends and relatives who use other doctors.
Who knows, doctors might start advertising their up-front fee, just like petrol?
This might be the competitive sleeper in the Government’s arrangements. In any event, it is better than Labor’s proposal to increase substantially the schedule fee.
That proposal is folly. History shows us what happens when the schedule fee goes up. Doctors merely put up their fees commensurately to what the market will bear – a tad less than 40 per cent (or $15) on top of the Medicare rebate. They will not increase bulk-billing. If the schedule fee goes up from $25 to $42 as the doctors want, the typical non-bulk-billed fee will be $57 instead of $40, and the taxpayer will foot the bill.
Whether intended or not, the Government’s proposals seem more likely to contain costs. Coupled with the insurance plan against annual costs of more than $1000, they will obviate catastrophic costs. Doctors will get no greater chance at milking the system, or be milked by it.
If anything, the Government should have introduced a co-payment to prevent over-servicing. It could have increased welfare benefits to compensate – or even over-compensate, so no-one was worse off. But with a price signal of a co-payment it would have reduced over-servicing that always accompanies “free” services. The experience with the Pharmaceutical Benefits Scheme with this arrangement shows its value.
And Labor’s opposition to the Government’s changes in the Pharmaceutical Benefits Scheme, like their opposition to the Medicare changes, will undermine the public side of Australia’s health system more surely than modest changes to make them more affordable and sustainable.
Labor will be in government itself one day. It is in danger now of setting a pattern for blocking sensible changes to health funding. If it does that an unreformed Medicare and Pharmaceutical Benefits Scheme will more surely collapse under their own weight than any Coalition changes.
In any event, the Coalition (especially its most determined privateers) is constrained. The lesson of the 1993 election, surely, was that proposals to kill Medicare would kill an aspiring Government. But that should not mean Medicare is completely untouchable – especially when some delicate life-enhancing surgery is needed.
Indeed, a failure to reform and preserve Medicare through malign (SUBS: malign) neglect might be as electorally dangerous as its active destruction. And that holds for both sides of politics.