This is the first in a series on policy by respected blogger Ad astra; policy that might improve this nation’s situation, policy that Bill Shorten and Labor ought to consider. This first article looks at healthcare policy.
While it’s easy for Bill Shorten to sit back and watch Tony Abbott and his government self-destruct, he could accelerate that process by presenting the electorate with alternative policies, visionary policies, policies that had more appeal than the Coalition’s, more inherent merit, more chance of solving our nation’s problems.
As yet, Labor has not provided a convenient forum for those who have a view on policy to contribute to its policy formulation. This is my way of having my say.
I begin with healthcare, an area with which I am familiar.
Australia has an excellent healthcare system, not perfect, but one of the best in the world, and one of the most cost effective. Here we spend about 9.5% of GDP on healthcare; the US spends 17.7%, yet has much inferior heath outcomes.
Its backbone is its primary care services, provided by well-trained general practitioners, or family doctors, as we prefer to call them. To provide specialist services we have some of the most expert consultants in the world. They work in hospitals and in private practice. They are equipped with the highly sophisticated technology. We have a splendid hospital system, a network of nursing home facilities, and a sterling coterie of allied health professionals: nurses, therapists of many kinds, and paramedic personnel.
The pressing question is what will we need in healthcare in the years ahead, and how we might pay for it.
Everyone knows that our population is ageing. Life expectancy at birth is now over eighty-four for women, and over eighty for men. We have a lot of living to do.
Ageing brings in its wake physical and mental illness, dementia and disability. Obesity has become a national epidemic, even among the young. It predisposes to type 2 diabetes, heart disease, stroke, and even some cancers. Dementia is on the increase, filling our aged care facilities and using more and more healthcare resources. Mental illness and disability are becoming increasingly prevalent.
Medical science and therapeutics are advancing rapidly. They offer more and more sophisticated therapy every year, but at a cost. Telemedicine is coming into its own, offering as it does many benefits, but again at a cost.
Ask people in the street if they believe we deserve the sophisticated healthcare system we have, and see how many say ‘no’. We all want the very best for ourselves, and for our own when they are ill, disabled and demented. Ask how we might pay for it, and wait patiently for the answers.
Clearly the cost of healthcare will rise and rise and rise because excellent healthcare is what the people want and feel they deserve. There is no value in thinking about rationing healthcare – the people simply will not buy it.
Given that our nation, through its governing bodies, has an obligation to provide healthcare to all who need it, how might they pay for it, as indeed they must?
The Abbott government acknowledges the problem, but unsurprisingly has taken its own idiosyncratic approach to financing it. As with so many other areas of government, austerity is its focus. Spending less is seen as the answer; raising more revenue seems to be off the agenda.
Without consulting stakeholders: the AMA, doctors, healthcare workers, patients, or anyone who might have had a worthwhile opinion, then Health Minister Peter Dutton, rated overwhelmingly by over a thousand doctors surveyed by Australian Doctor magazine as ‘the worst health minister in living memory’, thrust his $7 co-payment for GP consultations on an unprepared audience. It was to give them a ‘price signal’, one designed to discourage patients making ‘unnecessary’ visits to their GP.
The reaction was predictable. The AMA, doctors, the public, and most notably the Senate, rejected the idea as poorly thought-through, impractical, and perhaps most importantly, poorly directed. GPs, the core of the healthcare system, became the main target; they were the ones put under the pump. After the patients, the group that would lose the most would be general practitioners, who provide most of the preventive care and chronic disease management and thereby contribute most to keeping people in optimal health and out of the very expensive hospital system. Laudably, the AMA was strident in its resistance to measures that targeted GPs, and insistent that general practice must be supported. It insisted that rather than directing the proceeds of the co-payment to a medical research fund, it should be directed into general practice.
When the Senate rejected this proposal, Abbott ditched the $7 co-payment scheme and unveiled another policy that would see a co-payment of up to $5 levied against patients over the age of 16 who did not have a concession card. Doctors would have the ‘discretion’ to raise prices by up to $5 to cover the reduced rebate. Thereby, costs would be guaranteed to rise. Next, Dutton proposed that there be a lower rebate paid to GPs for consultations under 10 minutes, resulting in less income for short consultations; the $37.05 rebate currently claimed for 6 – 19 minute consultations would be changed so that for consultations under 10 minutes doctors would receive only $16.95 for concessional patients and $11.95 for other patients, an unacceptable and arbitrary reduction of GP income for short consultations, which comprise a substantial proportion of their income.
These proposals cascaded one on top of the other, leaving those affected angry, and the public bewildered. It was a disastrous comedy of errors.
The Royal Australian College of General Practitioners, who train and certify GPs, made its position quite clear in a considered statement: “Many patients are in a position to make a contribution to the cost of their healthcare, and the RACGP believes general practitioners should be able to determine a fair and equitable fee for their services.
“The RACGP therefore supports the right of GPs to set fees that ensure the viability of their practices whilst acknowledging the Government’s right to set the patient rebate for medical services.
“The Government should not determine fees, or mandate out-of-pocket costs, for patient services.”
So where are we at?
Many practices set their fees at a level above the Medicare rebate, and patients attending those practices pay the gap between the fee and the Medicare rebate or what they might receive from their health insurer. Why the government sought to interfere with this system, which has been in place for years, could be attributed to the government’s ideological position of user-pays, ‘price signals’, and of course saving money. The fact that, as with the 2014 budget, those least able to pay the co-payment were the most heavily penalised seemed quite acceptable to this government.
There is nothing inherently wrong with a co-payment, provided it targets those who can afford to pay and are willing to do so. The existing system was working; why change it?
There is a cogent argument that millionaires ought not to be able to avoid paying for medical services simply by attending a practice that bulk-bills every patient. Such a practice seems unfair. Yet such millionaires might claim that since Medicare is at least partly funded from the Medicare levy, and since the levy is a progressive tax that penalises most heavily the higher earners, they are entitled to free healthcare as they have paid for it via their Medicare levy payments. That seems like a good topic for a debate on ethics!
So where is the solution?
In my view, what is needed is increased revenue to fund healthcare, not punitive cuts to GP payments (specialists were not affected at all), not ‘price signals’ to patients to inhibit visits to their GPs. Sussan Ley the new Health Minister has now ‘solved’ the awkward notion of ‘price signals’; they are now ‘value signals’, which she hopes will immediately shift public opinion in their favour!
At present the 1.5% Medicare levy on income covers 55% of healthcare costs. It could cover more; even all costs were it to be increased. The public seems less averse to paying a higher levy or more tax when what it is delivering is apparent. If the public wants the sort of healthcare system we have and will need in the years ahead, are advised what it will cost, are asked to contribute via a higher Medicare levy, and are shown where their money is being spent and on what, in my view the majority would be amenable to such a change.
Of course income tax could be increased to cover the cost of healthcare, but taxpayers resent seeing their taxes disappear out of sight into a black hole; on the other hand, so-called ‘hypothecated’ taxes, where their purpose is clear, such as the Medicare levy, are much more acceptable to them.
They would realise that because the Medicare levy is a progressive tax based on income, it takes more from higher income earners than the lower, and the very lowest earners are exempt. It is a fair tax, as is our progressive income tax system.
Were the levy to be increased gradually, say by one quarter of one per cent per year or two until it reached a level that could properly fund healthcare, which by the way is estimated to climb from $19 billion per year today to $34 billion a year in the next decade to 2024, it might not be felt too acutely by the taxpayer. Most of us can adapt to gradual changes; it is the sudden, unexpected, excessive and unfair changes that people resent and reject.
Do glance through Robyn Oyeniyi’s comprehensive article in the AIMN: Medicare is the wrong target particularly the revealing graphs, one of which shows that GP consultations account for only 10% of healthcare expenditure, yet this sector is what our government targeted! She suggests the Medicare levy be doubled from 1.5% to 3%: “… the easiest solution would be to increase the Medicare levy to 3%…
So if I were Bill Shorten, I would completely abandon the Coalition ploy of penalising patients and their doctors to save money. I would put aside all the apprehension about tax increases that so scare politicians, firmly grasp this prickly nettle, lay out the case for properly funding healthcare to meet our needs, needs that will magnify as we age, explain carefully what benefits will be offered to all who live in this country, then with the help of actuaries spell out what it will cost now and in the years ahead, and finally make clear how gradual increases to the Medicare levy would cover that cost. That would take courage, but the people just might buy it.
But I’m not Bill Shorten; I’m not up for election in 2016; I haven’t got a vindictive opponent waiting to stoke up his ‘Great Big New Tax’ manta to tear Labor down.
Have you got the courage Bill?
Ad astra is a retired medical academic who, after a 14 year period in rural family practice, became intensely involved for the next 35 years in undergraduate, vocational and postgraduate medical education for family medicine.
This article was first published on TPS Extra.
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