Australia marking time II. Education and health

THIS is the second in a four-part January series on how our politicians have not done a good job in adapting policy to changing circumstances or when policies do not work. This week it is education and health policies, both of which suffer from flaws which had their genesis in the Howard years and which successive governments have not fixed

THIS is the second in a four-part January series on how our politicians have not done a good job in adapting policy to changing circumstances or when policies do not work. This week it is education and health policies, both of which suffer from flaws which had their genesis in the Howard years and which successive governments have not fixed.

With education, I will start with an analogy. When I taught journalism and media law at UC, come exam time, I always advised students that they should answer every question required of them, even if they thought that they would make a complete hash of one question.

Make a rough stab at it no matter what, I told them, even if you think you would be better off concentrating on the questions you think you are good at. This is because it is far easier to get a mark of just 20 per cent for the dud question than it is to get the same extra marks for your best answer on another question, because to get the extra 20 percentage points on top of the 80 or so you might already have is near impossible.

So, too, with our schools. There is little point pouring extra money and resources into the better schools which are already achieving good educational outcomes. The money and resources are better directed at the worse schools (the dud question) where the potential to improve educational outcomes (get a quick 20-point boost) are relatively easy.

The Howard Government significantly increased funding to private schools as a vote winner because an increasing number of aspirational parents (often with good reason) thought that sending their children to private schools was worth the sacrifice.

The publically stated reason was that private schools were not getting a “fair” share because state government favoured public schools.

And so increasing amounts of money were being wasted in places where the money was not needed for education and so was spent on ancillaries.

The Gillard Government attempted to redress this with the “needs-based” Gonski Version 1 reforms. Alas, she succumbed to the bellowing that no school should be worse off under the reforms. The result was an unsustainable budget blow-out. Where else are you going to get the money to improve the lot of poor schools unless you pull back funding from the already more-than-well-off schools?

The result has been that on objective measures Australia’s education attainment has fallen in relation to other OECD countries. It is a damnable result that cannot be put down to not enough money in the system, but rather to the money being spent in the wrong places and on the wrong things.

Giving money to “schools” is not the same as giving money to “education”.

If no Federal Government has the fortitude to address this, maybe the Feds should remove themselves from school education entirely and let the states do it.

Gonski V2.0 perpetuates rather than fixes the problem.

Meanwhile, in the university sector the Feds are setting up for another educational backstep by freezing funding at 2017 levels, which in effect means freezing places. It means many qualified students will not get a place given population increases.

In health, also, a time bomb is ticking, again with its genesis in the Howard years.

The ideal behind Whitlam’s Medibank and its revival after the Fraser desecration by Hawke and Hayden’s Medibank was the simple proposition that people should be treated according to clinical need, not ability to pay.

Howard put the scalpel into that proposition using the same “entitlement” view of the world that the Coalition abhors elsewhere.

In both education and health, Howard and his Government argued and implemented the proposition that well-off people were “entitled” to whatever base level public provision is available in health and education and then to top that up with private health and education funding to get a superior result.

That is entirely different from the reasonable view that wealthy people need not engage with public health and education but buy their own in its entirety.

Howard did the opposite. He used public money to subsidise private health insurance by making it tax deducible.

It was argued under the banner of choice. Well, choice is fine if you choose to go it alone. But the Howard vision of choice was to grab your public-sector “entitlement” and top it up with your publicly subidised private health insurance.

This was the road to great inequality.

But fact is that no matter what one’s wealth, come a catastrophic or chronic health onslaught, the private sector is not interested. It cannot and does not deliver best and continued treatment for the big items: cancer and heart disease. For those, everyone ultimately requires the public system, even Kerry Packer.

The move by Coalition governments to transform Medicare from an efficient universal system of health insurance based on clinical need to a social-security safety net coupled with a grossly inefficient system of private health insurance, however, is facing an internal contradiction.

Successive governments, including Labor, have squeezed and freezed the amount that the government under Medicare pays doctors and specialists. It has got way with squeezed GPs because people can shop for a bulk-biller.

But now, the freeze and squeeze on Medicare payment to specialists is about to have a quite dramatic effect on the health system.

As the Government squeezes and freezes the Medicare payment to specialists, the specialists have responded. They have to cop the squeezed and frozen payment for public patients, but not for private patients. They can charge private patients a “gap”. Private insurers usually pay hospital costs and very little if any medical costs, such as the fees charged by specialists, so they do not pay the ever increasing “gap” charged by surgeons, anesthetists and other specialists.

Imagine the horror of soccer mum who is told that her son’s painful knee injury in the public sphere is elective and will be treated some time in the next year or so but if she draws upon her queue-jumping private insurance policy which gives immediate and free hospital treatment she will be charged a “gap” by the surgeon, anesthetist, intensive specialist which total up to $10,000.

The soccer mum will wonder why she bothered with private health insurance if the gap payments make it impossible to use and she has to take her son to the public system (with its attendant waiting list) anyway.

As the horror stories of gap payments permeate more people will abandon the private system, the very thing the Howard subsidisation of the private and screwing down of the public systems sought to reverse.

Federal. Governments need to ensure the private health system is ancillary and a helpful pressure valve to a public system which is the main game, not to try to make the public system a welfare prop and require the bulk of health care be provided by a private system which is demonstrably inefficient, unfair and incapable of providing for catastrophically and chronically ill Australians,
This article first appeared in The Canberra Times and Fairfax Media on 13 January 2018.

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