The Guardian 27 July, 2005

Poisonous potential
in new Government health policy


Bob Briton

Federal Health Minister Tony Abbott may insist his latest plan will have "a very limited place in the health system", but the "fund holding" proposal for the treatment of chronically ill patients sets a precedent and presents a danger to the way all health and other social services are delivered in Australia.


Under the proposal, funds will be allocated to the doctor of a chronically ill patient to manage his or her health care; $1000 a year could be allocated for each patient with diabetes, for example. The doctor will then have to budget for the services the patient needs. Unfortunately, because the severity of the patientís condition is not considered in the allocation of funds, certain higher cost services could be put off-limits to very ill patients regardless of the clinical benefits they might provide. The opportunities for the private health insurance industry to move in and "top up" the patientís fund holding account and make those services available are all too obvious.

The funding blow out caused by the over-servicing and specialist fee hikes that accompanied the federal governmentís Medicare "safety net" of 2004 is being used to promote the proposal. However, the plan ó already the model of primary health funding in the UK ó also fits very nicely with concepts of self-provisioning, voucher systems and individual social security accounts now being discussed by various neo-liberal governments in developed countries.

The voucher system involves the allocation of a specified amount of money for each individual to be spent by that person on a particular type of service, in this case medical. This amount would provide for a basic level (safety net) of services, for which the government pays the providers, and any expenses over and above that amount would be the responsibility of individuals involved (through private health insurance or out of their pocket).

Across the Tasman, New Zealandís opposition National Party is toying with the idea of vouchers for patients who qualify for surgery in a public hospital but where the hospital is unable to provide it within a benchmark six months waiting period. The patient could take the government voucher to a private hospital and put it towards the cost of getting the procedure done there.

Andrew Blair, immediate past president of New Zealandís Private Hospitals Association said the idea had been floated to health insurance companies who are quite excited at the prospect of offering new "products" to cover the gap between the value of the voucher and the cost of private hospital surgery.

The potential for change and increased profits from health care is causing a shakedown in the corporate sector at the moment. The Australian Competition and Consumer Commission is said to be set to approve the merger of hospital groups Ramsay Health Care and Affinity. Medibank Private is negotiating with 99 hospitals to become part of the insurerís "Members Choice" network. Former NRMA head Eric Dodd is now leading moves to de-≠mutualise MBF. It looks likely that the smaller of the more than 40 funds in the health insurance trade, with less marketing power and less ability to do deals with hospital groups, will get swallowed up or simply go under.

Of course, anything that can turn a profit has to be privatised and so it is that there is a renewed push for the privatisation of the government-owned Medibank Private. Treasurer Costello is in favour. Finance Minister Minchin has rediscovered a Telstra-like "conflict of interests" with the government "Ö having the responsibility to regulate the private health insurance industry but owning the biggest player in it." In these arguments the government feels no need to demonstrate how it has advantaged Medibank Private over its competitors. It will rely on the weight of pro-business bias in the corporate media over decades to do the main work of silencing critics.

Medibank Private has three million members, is the biggest insurer in NSW and Victoria and the second biggest in Queensland. It has recovered from a loss of $175.5 million in 2002 to record healthy profits ever since. Last year it notched up a net profit of $45 million. According to the governmentís backers, a tidy sum like that belongs in private hands and it seems MBF and UK insurer BUPA are interested in buying. The government may opt to sell it off with a share offering but, either way; it wants to privatise the asset.

With its industrial relations legislation, the full sale of Telstra and pro-transnational changes to the media foreign and cross-ownership rules to push through, it may be months before the government presents a bill for privatisation of Medibank Private. But they will get around to it. Like the "foot-in-the-door" fund-holding proposal for the treatment of chronically ill patients, it is another important step along the path to US-style, fully privatised "managed healthcare".

If ever that odious health system should be imposed on Australia, expect the campaign for vouchers for parents to use for their childrenís education to have already started.

Back to index page