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HEALTH COSTS – BEFORE AND AFTER THE ELECTION
Stone the crows! We need to get the election out of the way so the country can get back to proper politics.
You may not have noticed that there is an argument afoot over health costs. No, not in the campaign – neither side dares point out to voters over 60 that they do not have a constitutional right to immortality, with the state picking up the cost of healthcare. But, in the real world, where interest groups squabble over public money, there is a push for private insurers to cover visits to the GP. [i]
This is now illegal but it would not be if the industry had its way, according to the Fin’s Joanna Heath who is making the running on this yarn. Medibank Private chief George Savvides says if members could insure for GP visits, major health problems could be caught earlier, thus saving everybody money down the line.[ii]
Of course, this assumes that people who can afford private cover do not go to the doctor because they can’t afford the gap payment some GPs charge. Perhaps the health funds have figures on this, but it strikes the Crows as a little unlikely. According to the ABS, just 5 per cent of people with private health cover don’t see a GP because of cost (the figure for those without is 8 per cent).[iii]
Mark Fitzgibbon from NIB supports Savvides on GP gap insurance, saying “it would improve the value proposition of health insurance and give us an opportunity to offer commercial encouragement for GPs to better care for our chronically ill. … I think it would give us vital information at the health insurer about our policy holders which in the end allows us to help them better manage their health.” [iv]
Opposition health spokesman Peter Dutton agrees, saying:
It makes sense for insurers and governments to put every effort into keeping people out of expensive tertiary hospitals. It’s better for their health and it’s better for the taxpayer … If there are innovative ways in which we can provide support to people who are insured, we’d be happy to consider that.[v]
Or he did, until the election. According to The Age, at the end of last week, Dutton ruled out allowing private insurers to cover GP visits.[vi]
I wonder why he did that? Preventative medicine is a mantra among social engineers. There is even a new agency devoted to keep us all healthy by bossing us about (and, no, the Crows had never heard of the Australian National Preventative Health Agency, either).[vii]
As put by the National Primary Health Care Strategy Framework (did not know about it either) we need: “A strong, responsive and sustainable primary health care system that improves health care for all Australians, especially those who currently experience inequitable health outcomes, by keeping people healthy, preventing illness, reducing the need for hospital services and improving management of chronic conditions.” [viii]
Good oh, but the Crows can contemplate what the government would have done if Mr Dutton had endorsed the idea of insurers picking up GP charges beyond the bulk billing rate last week. Quick as you can say “GST on a jar of vegemite” Kevin Rudd would warn of higher health costs.
He would have a point – costs would increase. Admittedly, not for the 82 per cent of bulk billed GP visits, at least not at first.[ix] But people whose GP charges-up would likely be slugged as doctors billed the maximum private insurance would pay. “It would have the perverse effect of reducing the percentage of privately insured patients who are currently bulk-billed as GPs sought to charge the maximum allowed by the private insurer for a full rebate,” according to Health Department advice opposing the proposal. [x]
And, what a surprise, it would push up premiums, which in turn would cost the feds $3.4bn over the first five years as the private insurance rebate increased to cover the bills for people who still collect the subsidy (for example, families with incomes less than $176,000).[xi]
The Crows also can’t help wondering how long it would take for bulk billing GPs to demand an increase in what the feds pay them to match the privately insured premium hike, which they would say was necessary to (a) prevent a two tier primary care system and because (b) well because.
Just as it is never wise to stand between premiers and buckets of money, it is a rare minister who denies the medical lobby’s deep-seated belief that prescription pads should be deposit slips.
Health economics experts Anne-marie Boxall and James A Gillespie argue that, “with constant, often lurid, warnings about the future budgetary impacts of health expenditure ringing in their ears, Australian governments are unlikely to pour new money into health care.” [xii]
At which the Crows just caw. With the majority of Australians not paying anywhere near the full cost of their care (co-payments amounted to 17.5 per cent in 2009-10) there is no chance of their cutting consumption. [xiii] The number of GP services billed per person across the country rose from 4.9 to 5.7 between 2004-05 and 2011-12. Bob Birrell suggests the problem is GPs over-servicing but patients have to present before they can.[xiv]
And in the absence of consumer resistance, prices rise. Medibank is in a blue with private hospital chain Ramsay Health Care over what the former should pay the latter. “To meet the rising costs of wages as well as the ever-increasing costs of healthcare technology and infrastructure, it is fundamental that health funds pay appropriate rates to private hospitals or the whole value proposition of health insurance would be undermined,” Ramsay argues.[xv]
It seems as if the more services you can insure, the more they will cost and the more premiums will rise. Which is where we came in.
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[ii] Joanna Heath, “ Medibank promotes private cover deal,” Australian Financial Review, July 24
[iv] Joanna Heath, “Private health insurers pressure Peter Dutton on GP visits,” Australian Financial Review, August 9
[v] Joanna Heath, “Consumers Health Forum says Medicare needs work,” Australian Financial Review, April 29
[vi] Dan Harrison, “GP cover ruled out,” The Age, August 17
[ix] AAP, “Record GP bulk billing rates: Plibersek,” The Australian May 13
[x] Joanna Heath, “Health department opposes insurance for GP consultations,” Australian Financial Review, August 15
[xii] Boxall and Gillespie, Making Medicine: The politics of universal healthcare in Australia, (Sydney, 2013) 181
[xv] Georgia Wilkins, “Medibank digs in over costs row with hospital group,” Sydney Morning Herald, August 17