Medicare: Robin Hood tactics needed

Media has been alive with comments about the Albanese Government losing steam and even the possibility of Peter Dutton becoming Prime Minister. 

Then there are the contradictory tea leaves of history. On one hand, no Government has lost power after just one term for nearly a century, so this first-term government should be safe. On the other hand, no Prime Minister has obtained a second term for a quarter of a century – that was John Howard in 1998, and even then, he did not win the two-party-preferred vote.

Since the Voice referendum, much has also been made of the power of negativity and opposition for opposition’s sake. It is easy to get traction being negative and blaming the Government for economic woes beyond its control.

James Scullin was blamed for the world’s Great Depression and lost office after one term in 1932.

Prime Minister Anthony Albanese might be blamed for the world inflicting inflation and interest-rate rises that have caused so much pain.

True, the Government has done a bit here and there, but still the cost-of-living crisis continues, and voters do not seem to acknowledge the things it has done.

So, what is Albanese to do? It has to be big or the voters, who are increasingly disengaged, will not notice. But it also has to be Machiavellian by wedging the Opposition.

The one thing that has helped Labor electorally on and off for the past 40 years has been Medicare. Former Prime Minister Tony Abbott often said that private health insurance was in the Coalition’s DNA. True, but it is a pretty shallow gene pool.

What he really meant was that wrecking Medicare is in the Coalition’s DNA. Malcolm Fraser destroyed Medibank (Medicare’s earlier version) in the late 1970s, before it got too much traction.

John Howard set about undermining Medicare in 1996, but after 13 years of free, universal health insurance, the voters loved it, so he could not abolish it outright, only undermine its foundations in the hope it would collapse. 

This is now happening through rebates not keeping up with costs, particularly for GPs; massive gap fees imposed by specialists; and a shortage of doctors.

We are slowly seeing the replacement of a universal health-insurance scheme with a US-style system under which the rich get over treated and the poor don’t get treated at all.

Medicare is not even a safety net if the waiting time is so long that patients die in the queue before being treated.

But now, even those who can still afford private health insurance are facing grim choices. The hospital stay is usually covered by insurance, but the surgeon’s and anaesthetist’s gap fees are becoming so high that timely operations are beyond their reach, so many privately insured people must be wondering why they bother with private insurance.

Many privately insured people over the past half decade or have found that they cannot afford to use their private health insurance because even though the hospital fees are covered, the surgeon’s fees (less an ever-shrinking Medicare rebate) are not. So, they have no choice but to move to the public system and go on the waiting list.

We see the consequences. The public waiting list for hip replacements, for example, has blown out. It is now 153 days, 95 days more than it was five years ago. It is similar with most procedures.

The fatuous policy of the Howard Government that you can prop up the health system by providing carrots and sticks for people to keep private health insurance is falling apart.

The strain on the public system and its waiting lists engenders enough fear for people to cling to their insurance. In turn that keeps open a market for specialists to charge whatever the private market will bear, which is quite a lot given the state of the public system.

Albanese should take a leaf out of Howard’s book, but in reverse. The strategic carrots and sticks should be designed to get people to leave the inefficient private sector and bolster the more efficient public sector.

On the carrot side, it will take a lot of money. The Medicare rebates will have to be doubled to make general practice sustainable. Universal dental care will cost a lot, but it will be popular. Where will that money come from?

One obvious place is to reverse the Stage 3 tax cuts. They will be going to people on high incomes who either don’t vote Labor or vote Labor on moral grounds and so will not change their vote if the tax cuts go.

Another place is to take the stick to private health insurance by removing the rebate. Re rebate was introduced by Howard with hardly any consultation. Surely, one of the touted virtues of the private sector is that it does not have to be propped up the public sector. If it has to be propped up what I the point of it other than some ideological obsession?

The $6 billion a year saved on the private insurance rebate could be put in public hospitals to reduce waiting lists and into increasing the Medicare rebate for GPs.

The tax penalty for medium- and high-income earners not having private health insurance should also be removed.

Another stick would be to introduce an equivalent to a scaled reverse means test for specialists’ fees.

The Medicare rebate should not automatically apply to every specialists’ procedure. It should be conditional on the specialist charging a reasonable fee. The more a specialist charges above the standard Medicare rebate, the lower the rebate should become, until it disappears. 

It would require a substantial increase in the rebates, of course, to make the practice of medicine viable. But that could be paid for by reversing the Stage 3 tax cuts.

The voters would then face a stark choice: tax cuts for the rich few or free dental care, expanded bulk billing, and specialists’ fees brought back to reality for everyone.

Medicare needs a massive infusion for money to make it universal and free, rather that some inadequate, begrudgingly given, safety net. If Medicare is properly revived, the private system without props would be exposed for the inefficient, unnecessary ideological crusade that it has been since 1973.

Crispin Hull 

This article first appeared The Canberra Times and other Australian media on 5 December 2023.

2 thoughts on “Medicare: Robin Hood tactics needed”

  1. I don’t quite buy, economic woes being “beyond” government’s control, with voters not “acknowledging” Treasury’s thrilling efforts. Squarely, Albanese not Dutton is responsible for the inflationary effects of massive half-million migration, and rather squibbing it with the energy cartel. Before we even discuss: wealth thrashing labour, stagnant household incomes, falling real wages, rising house prices 4eva, or rental and homelessness crises.

  2. Great exposee,Mr Hull. we need people with your ability to get to the gritty bits making policy , Keep up the pressure

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