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Senate: Medicare Plus « Previous | |Next »
February 12, 2004

There is a political judgement buried in the daily media flows that a deal will be done over the Howard Government's Medicare Plus. What has been introduced into the Senate today is the safety net legislation that is part of the revised $2.4 billion Medicare Plus package.

The political background to this legislation is the Howard Government's slow strangling of Medicare and public hospitals over the last 7 years and Medicare’s continued popularity with Australian citizens. The Howard Government has continued to cry poor when funding Medicare, public hospitals and subsidised medications. It argues that the costs are becoming too great for any government to bear, hence the need for co-payment (out-of-pocket charges at point of service). Yet the Howard government happily pours ever increasing billions into the private health system. Medicare is worth defending despite the problems of uncapped fee-for-service medicine and inadequate rural medical services.

Abbott's MedicarePlus legislation is quite narrow. Most of the Package was implemented through regulation. It involves thresholds for all Medicare health expenses (safety net). The thresholds are $500 and $1000. Once reached an 80% rebate comes into play. The $500 threshold only applies to concession card holders and lower middle-income earners, whilst the $1000 threshold applies to everyone else.

Will the working poor be able to afford the $1000 of medical expenses? Is the effect of the rebate on specialist fees inflationary?

I was able to catch a bit of the Senate debate on Medicare Plus this morning. I'm trying to get a sense of how it all works. How are the deals done? What actually takes place in cutting a deal? How do the deals relate to the Senate debate?

There seems to be a ritualistic political debate between the Coalition and the ALP Senator's going on over safety net versus universal health system. I saw a bit of Senator Linda Kirk is more reasonable in presenting the ALP case. Of all the speakers Ursula Stevens was the most informed about the issues involved.

I saw nothing in the media about the negotiations. All I that I can see is the public debate in the Senate, which finished around lunchtime. The negotiations take place behind closed doors away from the public eye of the media. All we have is the odd news reports. One states that Tony Abbott is saying that he has ruled out making concessions on the Medicare safety net that were not in line with Government policy. Another states that the Independents are saying that they were keen to see Medicare returned to a universal health care system.

At the end the day nothing much had happened. Early reports said that negotiations were continuing and that progress was being made. That bland statement says nothing about whether the Independents have managed to pull Medicare Plus back to a universal health care system, let alone introduce some innovation into Medicare to break the doctor/drug style of medicine.

Media reports on Friday morning represent Abbott as saying that he was frustrated but confident. He was going to the hard work to get his package through. Abbott is looking at the Independent Senators proposal to extend allied health (podiatry, physiotherapy and dietics) to more people under Medicare. And so he should. It is innovative.

The ACTU is reported as saying the legislation should be blocked in a last ditched stand to save bulk billing. They do make some good points about the discrimination towards singles and the working poor in the Medicare Plus package.

However, the "Custer's last stand" means that everyone should side with the ALP. The ACTU assumption is that only the ALP has the right policies on health. Anything that is not in accord with the health policies of the ALP represents a sell out.

Why not good criticism of the public subsidy for the private health insurance industry. A large percent of money passing through private health insurance failsv to make it to private hospitals - it goes onancillary services, excess "gap" payments to medical practitioners, and to bureaucrats in the private health insurance industry. A criticism of subsidizing private insurance that accepts supporting private hospitals.

Why not a few ideas on how to bust open the power of the doctor cartel as well? Many Australians go to allied health professions to seek help for their aching wounded bodies. Why cannot we open the door to a multidisciplinary course of treatment under Medicare? Why not a broader conception of primary health care, which is the most important sector of any health system.

| Posted by Gary Sauer-Thompson at 10:11 AM | | Comments (7)


There is much more substance on the senate inquiry in the report which is available at
It seems that all participants took the inquiry seriously, but the Labor and Liberal members adopted their party lines, which leaves the minority parties to determine the ultimate recommendation.

Love your site.

It's fairly difficult to see how opposition to the govt's changes could be substantiated in principle. Introducing a two-tiered safety net for low income earners (a la the existing PBS) as well as an additional $5 Medicare rebate for these groups, meets the test of additional support for the needy, whilst leaving no-one worse off. Opposition to this is simply- It is not enough and we want to keep universal rebates for all.

It is hard to see the logic in the opposition to the govt's line that- It notes Labor's objection, but if they are are not happy with the additional support, they are free to up the ante, when in govt. Supporters of Labor's line on this, might like to envisage the boot on the other foot. A Labor govt proposes a percentage increase in funding to public schools as per its election platform. The Senate blocks the legislation, unless the govt gives an equal percentage rise to all schools, public and private. Some of us can see a problem for governance, if parties always take this stance, because of their particular predilictions.

And the public subsidy of private health insurance?

Corporate welfare should continue?

Why? Why the silence on that?

The public money would be better spent elsewhere in the health system.

Subsidising private health insurance is like subsidising private schools. In the absence of these incentives, a larger, per capita cost burden would have to be borne by all taxpayers, as more private subsidisers fell back into the public sector. As far as I'm aware the private health insurance rebate has bipartisan support, in recognition of this fact.

The commonwealth justified its support for private health insurance on the need to keep pressure off public hospitals and to prevent the collapse of the private hospital system.

I distinctly recall the fear campaign and penalities to push Australians into private health insurance. That is not there with private schools.

Collapse of the private hospital system would be disastrous.

But it is not clear that the only way to prevent this collapse is to subsidize private health insurance.

Why not direct funding of private hospitals.Leave out the middle men. Are they not left out the funding of private schools?

So we can ask:

Are the private hospitals dependent on private health insurance?

Can we not draw a distinction between private sector funding and private sector provision of hospital services.

So you could have big increase in private sector funding (eg., through the public subsidies for private health insurance) and modest increases in the transfer to private hospitals.

Gary, I see some reasoning in your argument but you might like to consider the following. With my family covered by Mutual Community Hospital Cover, I can recall a bit of a panic last year as MC wanted to only pay X for a raft of private hospitals, while the hospital group/s were holding out for a higher amount Y. They negotiated a compromise deal and we as members breathed a sigh of relief. Clearly the MBFs have some clout here in holding down prices, which we as individuals don't. A similar analogy would apply to electricity pricing with hoisehold consumers cf large industrial users. We have seen the results of that in our household bills.

As well I have had to use the emergency services of Ashford Hospital(private) on a couple of occasions for my sports injured offspring on a Saturday night.(daughter with a broken scaphoid bone and son with a broken jaw requiring hospitalisation) I recall i had to pay an out of hours up front fee of $100 for the privilege of not queuing for hours at a public hospital. You also contribute with gap fees for particular medicare item treatments. Without private cover, my family would be clogging up the public system. Without the insurance rebate, that's where we'd be.

Not at all. You pay the private health insurance for the services provided by the private hospital.The government gives the private hospital a subsidy for the services you mentioned above.

The private hospital is paid directly by the federal government. That cuts out the health insurance industry.Why do they need to be subsidised?

Surely it's the provision of services by the private hosiptal system that needs to be subsidised, not the PHI industry.