JOHN THOMPSON. Privatising Medicare by stealth.

Like the frog in hot water, Medicare’s privatisation by stealth can only result in an unfortunate end – despite the current government’s protestations of innocence.  

During the recent election the Coalition fumed about Labor’s charge that the Coalition was intent on privatising Medicare. Liberal Party Federal Director Tony Nutt condemned it as a cold-blooded lie; Malcolm Turnbull said it was a shameful lie; and, not surprisingly, the Murdoch press claimed there was no evidence of privatisation intent.

However, recent events suggest that the Coalition had commenced the privatisation process before the election either purposefully (in which case their indignant charges against Labor ring hollow) or unwittingly (in which case their incompetence is evident). The privatisation process actually began with the freezing of the Medicare rebate paid to providers.

Privatisation can take many forms and has multiple meanings. The term can refer to the direct sale of a government enterprise or service through the sale of shares (Telstra), by public auction or tender (electricity services), or by direct negotiation. Privatisation can involve contracting out government functions, such as prisons or hospitals or using management consultants instead of public servants for policy development. It can also refer to the transfer of control of state controlled enterprises or functions to private operators (public transport). Privatisation has also been defined (by Cook and Kirkpatrick) as “a range of different policy initiatives intended to change the balance between the public and private sector and the services they provide.” The Coalition’s Medicare rebate freeze was one such policy change that will, over time, change that balance between the public and private provision of health services. Instead of the government funding a universal health system, as health costs increase there will be an inexorable transfer of financial responsibility from the public sector to the private sector.

The media and the peak medical bodies are reporting that this creeping privatisation is now taking place and beginning to bite as more and more doctors are charging more and more because the fixed Medicare rebate is meeting less and less of their costs. Like the frog in hot water, Medicare’s privatisation by stealth can only result in an unfortunate end – despite the current government’s protestations of innocence.

John Thompson is an economist with experience in primary health.

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