Resuscitating Medicare

EDITORIAL MONDAY 19.10.09.
The news that the Australian Medical Association will recommend that general practitioners increase their fee for a standard consultation above the rate of increase in the Medicare rebate is no surprise. Ever since the introduction of Medicare the indexation of the official scheduled fee, and with it the rebate, has failed to keep pace with the increase in both the actual cost of medical services and the cost of living in general. Every year, the fee recommended by the AMA has increased by a little bit more, so that now patients who are not bulk billed are paying almost half of the fee charged by their doctor, and from November 1, the gap will grow just a little bit more.

Of course, not all doctors charge the recommended fee set by the AMA. Many charge less, and most still make bulk billed services available to many of their patients. But the fact remains that the rebate paid by Medicare is gradually being whittled away in real terms to the point where it will ultimately become meaningless unless something is done to remedy the situation. An while 78% of GPs are still prepared to bulk bill, there is a growing difficulty for patients in finding specialists, pathologists, radiologists and anaesthetists who will do the same. In fact 74% of specialists do not.

While there has been a great deal of discussion about the challenges confronting our public hospitals, the truth is that our whole health system is in need of reform to deliver better access to first class care. Part of that picture is the Medicare system, and the delivery of GP and specialist services in the community. The National Health and Hospitals Reform Commission examined the possibility of a network of regional health authorities to better distribute health funding around the nation, but rejected it as to complex and inefficient. The Commission has instead recommended further investigation of a proposal to set up something called Medicare Select.

The idea for Medicare Select is for Medicare to offer a premium level of service which would essentially compete with private health insurance funds. It would mean that those who are able to pay would be able to choose a blue ribbon version of Medicare, or a private health fund, introducing a competitive pressure which would supposedly help to keep health fund premium prices affordable. Unfortunately, such a plan would do nothing to alleviate the problems besetting what would then become Medicare Basic. In fact, it could very well make them worse.

In a system where well off patients are encouraged to pay an extra fee for a premium service, the obvious risk is that the basic service will become even more basic over time, until it is little more than the sort of low level health program seen in a place like the United States. In other words, not much help at all, and effectively the end of Medicare as we know it, completely abandoning the principles on which it was originally based. Ironically, we already had a Government owned private health insurer once… it was called Medibank Private. It was the leftover of the original public health insurance scheme introduced by the Whitlam government, and was privatized only a short time ago. It seems quite bizarre to create a new publicly owned insurer after we have just sold the old one.

Medicare is a system which works well, and has done since it was introduced. The only thing hampering it is the reluctance of the government to properly fund it. Time and time again research has shown that most people would be happy to pay a higher Medicare Levy on their tax if it means that we get the health system we were promised. There is even a sound argument for increasing the surcharge to encourage more people to choose private insurance. But the idea of creating a premium Medicare service is contrary to principles of Medicare itself, and would most likely be the beginning of the end of one of the best health care systems in the world.