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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

just a few porkies « Previous | |Next »
October 10, 2003

In The Bulletin this week Maxine McKew has lunch with John Dwyer, who fronts the Australian Health Reform Alliance. Dwyer talks a lot of sense about the current health crisis.

It is a crisis. It cost Kay Patterson her job. She was cut loose. Health becomes a major debacle on several fronts for the Howard Government. Aged-care, remember, has already chewed up Judi Moylan and Bronwyn Bishop. That rising star, Julie Bishop, is the fifth minister responsible for aged-care since 1996.

The Australian Health Reform Alliance was formed when it seemed that the reform agenda had been lost. The Commonwealth and States and Territories had lost the plot on health reform as they started to squabble amongst themselves. Things were becoming dysfunctional in the health system.

Dwyer highlights a key reason for the overloading at public hopitals. He says that:

"... on any day, overloaded public hospitals (funded by the states) are dealing with emergency or geriatric patients who could otherwise be cared for in (federal-funded) GP health centres or nursing homes. An example: nearly every day during the past ­winter, the Prince of Wales was forced to turn away ambulances, including those ­carrying patients with life-­threatening conditions, because of overflowing ­emergency departments."

He then mentions three ways in which the Howard Government has been consistently telling porkies when it comes to the public health:

"The first porky is that the government's changes to Medicare are designed to make the system fairer. That is definitely untrue."

It is untrue because the reform package, is designed to prop up bulk billing for the poor and elderly but effectively makes it easier for doctors to charge the rest of us more. That does not lead to equity of outcome. It is not a question of money. A $5 pay rise for an average GP consultation costs the taxpayer $500m. Recently there was $2bn spent on the 'hamburger' tax cut. This is about values not money.

The second porkie Dwyer mentions is

"....the bald-faced statement from the prime minister that the private insurance rebate is taking the pressure off public hospitals. If there was any blip of help initially, it's long since gone. What the PM is doing is confusing increased activity in the private hospitals and making an incorrect linkage. As we all know, lots of Australians, no matter how wealthy, are in public hospitals because that's where the sophisticated services are. All the health economists can demonstrate this to any impartial person's satisfaction. Equally, there are plenty of ways that we could better use the money that's now propping up private insurance to also help the public system."

Again, it's about values not money. The aim of using $2.4bn a year on federal finances is to faciliate private health industry and to run down public health system.

The third porkie? It is

is the PM's constant refrain that if the public hospitals are a mess, then it's a state responsibility. The message we've tried to get through for months is that what happens to primary care affects hospitals and vice versa. In health, integ­ration is everything. If GPs in a certain area aren't earning enough money to operate an after-hours service then we'll immediately see increased numbers in emergency wards in hospitals. The same if there aren't enough nursing beds. This is not to let the states off the hook either. They need to be far more transparent about everything. The fact is it's totally irresponsible for either the federal or state governments to talk about the issues as if we're dealing with islands of health care."

What we can say is that the Howard Government is not commited to fixing a dysfunctional public health system. As we see with medical indemnity insurance it will endeavour to politically manage the situation to ensure its re-election by preventing an electoral backlash. It is more interested in buying time and de-politicizing the issue Ithan ensuring a vibrant and universal public health system. It's vision is one of a health system run by big corporations making a profit, whilst the public health system is transformed into charity hospitals run by nuns and volunteers.

The Howard Government would really like to get out of public health. If it could, it would repudiate the egalitarian heritage of social democracy. Its policies of more and more deregulation and less and less social spending indicate a continual retreat from egalitarianism, despite the community's support for most types of social spending through the provision of public services. This is particularly the case in health.

The papers from the Alliance's recent health summit can be found here.

| Posted by Gary Sauer-Thompson at 9:22 AM | | Comments (3)


My assessment of the current 'crisis' in health care is largely one of the squeeze on providers' incomes coming to a head, due to the impact of the legal profession. Medicos incomes have been squeezed by successive Govts. trying to plug the dyke of rising health costs. Generally Medicare rebates have not risen in line with practise costs. With a typical example from 1 medico(obstetrician as I recall) in the news lately, he explained how his indemnity insurance had risen from $200 to $50,000 pa from 1982 to the present, while his consultation rebate had doubled over the same period to $52.Whilst medicos have generally tolerated this slow rebate attrition to their incomes, the legal costs of doing business have now forced their hand.

For some considerable time, the Feds have been fighting rising health expenditure (in particular the exponential growth in pathology services), by restricting the level of rebates to doctors. Faced with an aging population, Govts of all political persuasions face a daunting task in this regard.

IMO what is not properly understood about rising legal costs, is its impact on pathology overservicing. I have a strong feeling that many medicos now use pathology services as a safety net against legal prosecution, the costs of which are very high, but indeterminate. A skin specialist will now send a specimen off for testing after removal of a skin cancer. A simple vasectomy will also result in pathology testing of removed tissue. How much pathology testing is now carried out to prove (ie produce evidence in the patient's file) that the doctor did what he knew he did? We also have the well reported evidence, of extremely high intervention rates in childbirth, which probably points to this fear of litigation.

Private or public, we are now facing an uphill battle with rising health costs due to demographics. Add to this the increasing burden of litigation, in an area of inexact science and decision-making and we have a problem of very large proportions. We cannot do anything about demographics, but might society come to the view that health professionals should be exempt from litigation?

A quick perusal of the Medicare and Health stats picks up some of the trends in health costs.

From the ABS Household Expenditure Surveys (run every 5 years from coincidentally the beginning of Medicare in 1984 to the latest in 1998/99) health as a proportion of total HE has risen from 3.9% in 84 to 4.7% in 99. Now you have to understand that this measure of expenditure is NET of any refunds from Medicare, private insurance or employers(Workcover,etc) which we all know is ultimately paid by us as consumers or taxpayers. As well it is important to notice that households now had to pay more for health through the Medicare Levy on their incomes.One way to avoid this extra impost was for the young and healthy to progressively abandon private health insurance, until the 30% private health insurance tax rebate (and age penalty entry) encouraged many not to do so.

From the ABS Year Book Aust 2002, "While the proportion of Household health expenditure spent on health practitioner's fees has remained fairly constant since 1984, expenditure on individual items has fluctuated. In particular, GP doctors fees have decreased from 3.8% of total health expenditure in 1984 to 2.4% in 1998-99 while specialists doctors fees have increased from 3.9% to 7.8%" Also the proportion of total HE spent on medicines, pharmaceuticals and therapeutic aplliances has increased from 20% to 25% over the same period despite the PBS subsidies.

From Medicare Statistics(try and similar)we find that in the period 1984/85 (12m to June) to 2002/03 (12m to June) the level of bulk-billing increased by 22.6 percentage points with the most significant area being pathology (+40.3 percentage points) Now in the 12m to June 2003 overall 67.8% of health services were bulk billed(or patient billed at or below the Scheduled Fee) while 69.5% of GPs bulk billed. At the highest level of the bulk billing spectrum was Enhanced Primary Care at 99.6% with Anaesthetics the lowest at 13.8%. Well the anecdotal Observa should have suspected Pathology Services would be bulk billed 90.5% of the time.

With a falling percentage of our private health expenditure going to our family GP, whose income is being screwed by lagging Medicare rebates, is it any wonder some regions are experiencing GP shortages? The indemnity insurance crisis is the catalyst for his Specialist brethren to call a halt to this trend.(peculiarly enough when he has fared better in the proportion private expenditure on health than his fellow GP. Could this be a further sign that with the increasing fear of litigation the GP is flicking more marginal cases on to his Specialist mates?)

Faced with the ever increasing prospect of litigation, your GP is probably calling up an ever increasing number of 'free'(well for 9 out of 10) pathology services, many of them to protect his butt.

If you thought the indemnity crisis was the main one facing health, page24 of The Advertiser Oct 15, points to more storm clouds on the horizon.

"Subsidies for medicines passed the $5 billion mark for the first time last financial year.
Finance Minister Nick Minchin said yesterday the Pharmaceutical Benefits Scheme was growing at a rate of 10% a year and was unsustainable.
He said if the PBS continued at that rate, in 13 years more money would be spent on the scheme than on education."

Welcome to the demographic health problem of aging population. Q: Where do educationalists think govts of all persuasions will be tempted to look for some extra lolly?