An odd pill for a sick industry
Budget changes to the health system have left the industry less than impressed, writes Siobhain Ryan
ON budget night, the Rudd Government got to work on Australia’s health system. It delivered a dose of good news with its $10 billion fund to finance future health and hospital infrastructure, before surgically removing a few hundred million dollars from general practice, pathology, drug wholesalers and dispensers.
Then it did something drastic, that hadn’t been tried in over a decade. It cut one of the arteries to the private health industry.
The change was a simple one. From July 1, the government will lift the income threshold where the Medicare levy surcharge cuts in from $50,000 to $100,000 a year for singles and from $100,000 to $150,000 for families.
It will forgo $660 million over four years from the reform — the amount the penalty for failing to hold private health cover would have raised. But it will save even more — $960 million in total — because it won’t have to shoulder 30 per cent or more of the cost of health cover through the rebate system.
The Australian Medical Association, Australian Health Insurance Association and individual insurers this week predicted dire results from the move.
First 400,000, then 600,000 and even as many as one million people could dump their health cover, according to the estimates rolled out over the week.
Those Australians forced to wait longer on public hospital queues and those Australians who will pay more for their private health insurance must wonder why the Government has made such a blinkered decision,’’ the AHIA said.
Treasury settled on an exodus of 485,000 people as the basis for its budget costing — still an alarming enough number for health insurers, representing about 5 per cent of people they cover for hospital treatment.
Wayne Swan sought to placate the industry the day after the budget, at a National Press Club address, saying Labor remained a
supporter of private health insurance’’, as well as of the 30 per cent rebate for private cover. But the fact the new Rudd Government clawed back more in a single measure from one health sector than it did from any other in its first health budge says something profound about its priorities. Those priorities aren’t just about Swan’s working families’’ — the ones he says were unfairly hit by a threshold that hasn’t been adjusted since its introduction more than a decade ago. They’re also about shifting the balance between the private and public health sectors.
The ALP’s policy platform may be more conciliatory than it once was towards the Howard Government’s health fund incentives, but it still rates Medicare and free public hospitals as the cornerstones of Australia’s health system. So it’s not surprising that just as money is being withdrawn from private health, more is being funnelled into public hospitals.
In the budget the Government scrapped the Coalition’s $2.5 billion Heath and Medical Infrastructure Fund — which was to be supplemented by the privatisation of public health fund Medibank Private — for its $10 billion version drawn from budget surpluses.
The fund, the biggest single investment in health infrastructure ever made by an Australian government, is part of the Government’s reform agenda to equip Aus- tralia’s health and hospital system for the future’’, Health Minister Nicola Roxon says.
It’s also a way of quietening the concerns of the states and territories about former health fund members adding to the queues at their public hospitals. But it will only buy their silence for so long. The Rudd Government has already postponed new federal-state health funding agreements once, pushing the deadline for striking a new deal till the end of the year. Further, the long and often bitter negotiations will only focus attention on the delay between when Kevin Rudd first promised real improvements and funding boosts to public hospitals, and when they will be delivered.
The problem he and Roxon face in health is that they’re dealing with more immediate, inter-related problems than any one budget or flagship long-term investment fund can solve.
They want, for example, to move away from six-minute medicine’’ but will have to revamp the complex 700-plus page Medicare schedule of services billed by doctors and other health workers to do so.
They want to make healthcare more accessible in the bush, but must boost and redistribute the health workforce first. And they want to co-ordinate care for the chronically ill, but will have to take on professional silos between doctors, nurses and other health workers to achieve that end.
These changes may come, yet the start made in this week’s budget was a modest one. Even the Rudd Government’s much-vaunted preventive health strategy — selling the simple messages of nutrition, exercise and health screening — won’t be delivered before June next year, waiting as it is on yet another taskforce report.
As a result, the budget measures federal Labor rolls out ahead of its broader reforms risk appearing ad hoc, out of context or, at worst, downright opportunistic.
Last month’s 70 per cent hike in the tax on alcopops, for instance, won’t, as Nicola Roxon first implied, result in a cut to current consumption levels of the flavoured premixed drinks.
Treasury modelling has since shown the $3.1 billion tax will not reverse growth in the volume of alcopops drunk, leaving her exposed her to Opposition attack. Opposition health spokesman Joe Hockey asked this week: How can the Rudd Government claim they are initiating a new health measure when they predict an increase in alcohol consumption?’’
The tax will return revenue to the Government’s contingency reserve for over a year before Roxon’s promise that it will help fund Australia’s biggest preventive health push is realised.
Little wonder Hockey claims the public expects more of a legacy from the health budget than higher taxes and more pressure on public hospitals from falling private health membership: The Rudd Government’s first budget has failed its health check’’.
Ambulances queue: The Rudd Government has allocated $10 billion for ailing hospital infrastructure