In February this year, while refusing to confirm his government was considering introducing GP co-payments, Tony Abbott said, “As a health minister in a former government, I used to say that government was the best friend Medicare has ever had. This leopard doesn’t change his spots and I want this government, likewise, to be the best friend Medicare has ever had.”
History tells us that this leopard does in fact change his spots when it becomes politically expedient to do so and that the Coalition were dragged kicking and screaming to Medicare.
Originally, the scheme was called Medibank and was a major plank in Whitlam’s 1972 election platform. The coalition Liberal and National parties opposed Medibank. The legislation to implement it was twice rejected by the Senate. Following the 1974 double dissolution election, the legislation was again rejected by the Senate but passed at an historic joint sitting of the parliament. Medibank came into operation on July 1, 1975.
The Fraser Coalition government neutered Medibank, with taxpayers able to opt out of paying an increased levy in favour of private insurance.
The Hawke government reintroduced Medibank, rebadging it as Medicare. Financing arrangements were modified but the scheme was effectively the same as the one introduced by Whitlam. Throughout the 1980s, Medicare continued to be criticised by the Coalition. Whilst the 1993 election is remembered as a referendum on John Hewson’s GST, changes to Medicare were also an issue. For many years, bulk billing seemed to be at risk from a change of government. The 1993 election effectively led to bipartisan support for Medicare.
After Howard was elected, membership of private health funds fell to just over 30% in December 1998. With a mixture of financial carrots and sticks, private insurance peaked at 46% in December 2000 – and has remained at around this level ever since. This also generated a largely new for-profit private hospital industry.
By late 2003, bulk billing had fallen to 66%, from its peak of 80% under Paul Keating’s Labor government (1991 to 1996). These rising out-of-pocket costs for visiting a GP fuelled discontent with the government. Tony Abbott was appointed Health Minister and, to address this problem, promptly increased rebates to GPs. This quickly changed the trend. By 2004, bulk billing rates were back over 70% and Abbott declared the government was now “Medicare’s greatest friend”.
True to his highly political approach to the portfolio, the reforms Abbott can claim were driven by election timing.
Colorectal (bowel) cancer screening had a substantial amount of research and successful pilot schemes behind it. It was added to the Coalition’s 2004 election promises, partly to meet the attractions of Labor’s Medicare Gold – which promised to end waiting lists for over-75s. At the same time, the government subsidy to cover private health insurance premiums was increased for members over 65 and even higher for those over 70.
Out-of-pocket costs were also hitting consumers who used specialist services – again through charges well above the rebate offered by Medicare. The Medicare Safety Net – which gave an additional subsidy if costs of specialist in-hospital services passed a threshold – was intended to fix this problem. With no control over specialists’ fee-setting, this proved a recipe for further fee inflation and much of the benefit went to those who were better off. The 20% of Australians living in the wealthiest areas received 55% of Safety Net benefits, whereas those 20% living in poorest areas received less than 4% of benefits, largely due to wealthy people being more likely to see specialists.
The Safety Net reduced the competitive pressures that some doctors faced and increased their ability to charge higher fees, particularly in specialty areas such as private obstetrics and assisted-reproductive technology services. For every dollar the government spent on the Safety Net, around 43 cents went towards increased doctor fees and 57 cents went towards reducing patients’ out-of-pocket costs.
During the 2004 election, Tony Abbott used a Four Corners interview to give his “absolutely rock-solid, ironclad commitment” that the Government would not, after the election, lift the thresholds for the Medicare rebates.
TICKY FULLERTON: Will this Government commit to keeping the Medicare-plus-safety-net as it is now in place after the election?
TONY ABBOTT: Yes.
TICKY FULLERTON: That’s a cast-iron commitment?
TONY ABBOTT: Cast-iron commitment. Absolutely.
TICKY FULLERTON: 80 per cent of out-of-pocket expenses rebatable over $300, over $700?
TONY ABBOTT: That is an absolutely rock solid, iron-clad commitment.
However, in 2005, Tony Abbott and the Howard Government raised the Medicare Safety Net threshold from $300 to $500 for lower income families, and $700 to $1000 for everybody else.
When speaking to Laurie Oakes, Abbott said the Government was being responsible because it was changing opinions when circumstances changed.
TONY ABBOTT: Laurie, again, I can understand your dwelling on this. But, but sometimes governments have to choose between a range of unpalatable alternatives. Now…
LAURIE OAKES: One of the unpalatable alternatives is telling the truth, presumably.
TONY ABBOTT: We set up this safety net back in March of last year. Thinking that it was going to cost $440 million.
LAURIE OAKES: You knew by the election it was $1.3 billion.
TONY ABBOTT: We, we discovered in September-October that it was going to cost a lot more. We made a decision in a budget context that the best thing we could do for the long-term health of the economy, and indeed for the long-term health of the Medicare system, to change the thresholds.
LAURIE OAKES: And con the people through the election.
Speaking to The Weekend Australian, Abbott confessed, “Plainly it’s good to honour the last syllable of the last pledge but it’s also good to honour the team. So I’ll be supporting the team.”
Tony made changes that drove up fees, gave doctors and wealthy people more, made promises he couldn’t keep in an election campaign, and then hit low income earners in the budget to pay for the cost blowout, justifying it with team solidarity – sound familiar?
Abbott is an interesting individual because he is one who can say “sorry” when required. In this case, he states, “I made a categoric statement that turned out not to be true”. But sorry to whom? The political team he plays for or the ordinary followers who support the team and performances he has led them to expect?
Tony Abbott, as Health Minister, was unsympathetic to the new public health push from the World Health Organization, aimed at the social determinants of health. He saw health as a matter of individual choice, and ill-health in medical terms around the prevention and cure of particular diseases.
In 2006, Abbott rejected a half-hearted push from Labor state health ministers for restrictions on junk food advertising to children as a move to the “nanny state”.
Apparently individual choice for women was a different matter when it came to the availability of the abortion pill, RU486. Abbott fought to keep ministerial discretion over the availability of such drugs – making the much-quoted observation he would have to be convinced that doctors were not presenting abortion as an “easy option” before prescribing a “backyard miscarriage”.
His veto powers were removed after a major revolt led by women parliamentarians from all parties.
Abbott ended his term of minister as he began – focused on politics rather than substantive policy. As Labor’s demands for a more national approach to hospital policy mounted, Abbott responded by upping the ante, declaring that:
the only big reform worth considering is giving one level of government – inevitably the federal government – responsibility for the entire health system.
He was quickly silenced on this by Howard, who had no intention of entering the mire of federal state relations and the management of hospital systems.
In the 2010 Budget, the Rudd government introduced Safety Net caps for a small number of Medicare services where there was evidence of high Safety Net expenditure and doctor fee increases. The caps placed limits on the amount a patient can claim under the Safety Net. Government expenditure on the Safety Net fell by a dramatic 42% that year.
Despite promising before the 2013 election not to cut money for health, the Coalition will dramatically shrink the Commonwealth’s share of hospital funding, cutting its annual contribution by $15 billion by 2024, with the deepest cuts beginning in 2017. In the meantime it will cut more than $200 million in reward payments for hospitals meeting federally-imposed performance targets for surgery and emergency treatment.
They have once again fiddled with the Safety Net. If you spend over the relevant threshold amount on out-of-pocket costs for eligible out-of-hospital services, Medicare will soon pay 80% of any subsequent out-of-pocket costs, but only up to an amount totalling 150% of the scheduled fee (not 300% as it is now under the Extended Medicare Safety net for many services). The spending threshold for relief under the Medicare safety net will be lowered, but the benefits payable will be capped, a change that is expected to produce more than $260 million in savings. This shifts more of the risk of excessively high fees onto individuals rather than the government.
Not only has the government slashed funding to hospitals and tried to send “price signals” to discourage people from seeing a GP or having tests, they have also attacked preventative health measures.
Terminating a partnership agreement with the states on preventive health will save $368 million, while $3 million will be cut from anti-smoking campaigns, and the National Preventive Health Agency will be abolished.
This is all the more galling when we read that more than half a million dollars is being splurged on focus groups to help spruik uncapping university fees.
If you visit the Liberal Party facebook page you will find several graphics designed to convince us that Medicare is unsustainable no doubt in an attempt to get us to agree to some iteration of the GP co-payment.
Mr Dutton said: “The Coalition is the greatest friend Medicare ever had, and with millions of Australians facing the challenges of obesity, diabetes and dementia into the next generation, our task now is to make sure we strengthen and improve our health system into the future.”
John Deeble, who in 1968 co-authored proposals that formed the basis of the Whitlam government’s Medibank and the Hawke government’s Medicare, dismissed as a “furphy” suggestions by Peter Dutton that Medicare risked becoming unaffordable.
“In a rich country, in an advanced society, anything is sustainable if the society says it is.”
He suggested raising the Medicare levy to 2.75 per cent to help meet growing health costs, saying such a change would raise more revenue every year than would be yielded once through the sale of Medibank Private.
Neal Blewett, who was health minister when Medicare was introduced, said the Abbott government would pay heavily if it undermined Medicare.
“The Liberals never managed to win an election in the 1980s and 1990s until they committed themselves to Medicare,” he said. “[They] need to remember that; that there’s a very strong commitment in the community to Medicare.”
Let’s remind them.
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