Some months ago, I wrote that the original design of Medicare had a fundamental defect. Alas, Labor’s $8.5 billion injection – instantly matched by the Coalition – does not fully address it. A good start but not visionary enough. It is another example of Medicare telling us a great deal about Australian politics and Australian politicians, and it will do so again this election.
The original defect in Medicare was that it paid GPs only a percentage (usually 75 or 85) of the scheduled fee if they “bulk-billed” – that is charged the patient nothing. But if governments want to give GPs an incentive to bulk-bill, the payment to the GP should be, say, 115 percent of the scheduled fee and that non-bulk-billing GPs would get only, say, 85 percent. A carrot and a stick.
The reasoning behind the original scheme was that, because GPs were saving on administration, they should accept a lesser fee. But in these days of electronic transfers and computer accounting it makes no sense at all. The administration costs of charging the extra 15 or 25 per cent is negligible. And while you are at it, why not charge even more. That is what the GPs have been doing.
The Coalition believes people should look after themselves and that the private sector is more efficient. So Medicare should be undermined whenever they think they can get away with it electorally.
Labor believes in the universality of free health provision because it is for the common good.
Labor’s $8.5 billion to apply bulk-billion incentives to every patient is a move towards restoring universality, which successive Coalition Governments undermined – bribing, scaring, and blackmailing people into taking out private insurance; pushing Medicare as a mere safety net; and reducing GP payments by not indexing properly so GPs have been forced to abandon bulk-billing wherever possible.
Labor’s $8.5 billion will now provide incentives to bulk-bill all patients, not just children and those on benefits as was introduced by Tony Abbott in a way to characterise Medicare as just a safety net, not a universal scheme.
The Coalition matched the $8.5 billion almost immediately, without any thought, just to nullify it. It would never have come up with the policy itself. The Coalition would love to get rid of Medicare altogether and have a US-style private system. But Australians have experienced 40 years of Medicare and like it, flawed as it is. It would be political suicide to propose abolishing it. So, it can only be done by stealth.
The Coalition does not have universal health care in its heart. Its destruction is in its DNA. Voters should be deeply sceptical about the Coalition’s matching promise. You can almost bet they will find a way to rechannel the money so it goes to reducing Medicare’s universality, not increasing it.
Bulk-billing GPs have borne the brunt of the Coalition’s stealth attack on Medicare. They should have a very substantial catch-up, and in a way that makes bulk-billing pretty much universal. It would happen more quickly if the Government did not just give more to bulk-billing GPs but also reduced the payment to those who do not.
And with specialists, too, there needs to be much bigger incentives to those who bulk-bill and reduced payments to those who do not. Maybe Medicare payments should cut out altogether when gap fees rise too much – certainly if they are more than the scheduled fee itself.
Sure, if people want to insure themselves privately, let their insurance fund pay for the totality of the cost (without any public input) and charge premiums accordingly.
Medicare reveals something else about recent political trends in Australia – policy on the hop. Something as important as changes to Medicare should warrant a lot of public discussion and thought about overall aims and whether the proposals will meet the aims.
Looking at the new scheme, it is quite likely that a lot of the incentive money will go to practices and GPs that already bulk-bill and not a lot of the rest will swap to bulk-billing. You will still need your credit card and will continue to do so until the schedule fees pass a reality test of what it costs to provide care and what is a decent reward for medical training.
That was happening in the late 1980s and has gone downhill ever since.
During a cost-of-living crisis, Labor misses a critical point. Even though 80 per cent or so of consultations are bulk-billed, only half of patients are now bulk-billed all the time. So, half of the voters are bringing out their credit card at the surgery.
The miss match is because those who are mostly bulk-billed – children and people on aged, sickness, and other benefits – tend to use services way more than average.
More importantly, the Government has fewer health dollars with which to increase scheduled fees for GPs and specialists while it spends so much on wasteful private health.
Private health is little more than the delivery of commodified services: hips, knees, routine heart treatment such as stents and so on. They shut out anything risky, complicated or chronic. Childbirth, accident and emergency, long-term cancer treatment, and complicated heart surgery are all out.
The reason why governments should put a free universal health scheme ahead of any private subsidising is that it is more cost effective. It delivers greater good health to a great number at lower cost.
Medicare spends between 3 and 4 percent on administration. Private health spends about 14. Private cover has become worse with the for-profit health funds now taking 70 cent of the market.
Prime Minister Anthony Albanese’s job is not, as he once put it, going after Tories. His job is to develop policies that are in the interests of the broad mass of voters and start putting them into effect – not promising policies for after the election.
That is the way to counter all the right-wing misinformation and exaggeration about woke policies or waste in the public sector – deliver efficient public services especially in health and education.
Choosing between your health care and the pursuit of culture wars would then become much easier.
In a way, it is the conservatives reason d’etre to go after Labor – just tearing things down without any of their own vision for a just and fair society
Crispin Hull
This article first appeared in The Canberra Times and other Australian media on 2 March 2025.
A fundamental flaw in health is the public levy to support the health system. The Medicare Levy (percentage, exemptions, basis on taxable incomes often minimised et al) hasn’t changed in decades. The main problem with private health insurance, apart from the definition of health, is the principle of insurance. Insurance is profit driven rather than health service driven. If all the payments to Medicare and private health insurance were combined on dollar value within overall government controlled health system we might get on the right track.