TIM WOODRUFF. What’s wrong with Labor’s Private Healthcare Discussion Paper? (Croakey)

Feb 4, 2019

In 2017 I referred a patient for relatively simple orthopaedic surgery on her wrist to enable her to get back to working in a café.  She had been advised that she was a category 3 patient and should be operated on within 365 days. During this period she couldn’t do her usual part-time work which she could juggle around child care commitments. Furthermore, Centrelink required her to apply for jobs she couldn’t do. It took 6 months to even get on the waiting list. She finally had the surgery 15 months after I referred her. 

Another of my patients had a similar problem. Retired, it stopped him playing golf. He was operated on within a month and is happily back on the golf course. He had publicly subsidised private health insurance (PHI).

Both received high quality health care except for the time delay for the first patient.

Labor’s proposed inquiry

The Labor Party plans to have a Productivity Commission inquiry into the private sector if it wins this year. It has released a consultation paper regarding what terms of reference the inquiry should have. It lists 6 principles underlying its approach. It is reassuring that the first principle is 

A commitment to Medicare as a universal health insurance scheme that provides every Australian with the highest quality of health care regardless of where they live and their capacity to pay.’

Timing of surgery is an integral part of ‘the highest quality of health care’. The stated commitment therefore requires that Labor address this major problem. 

The next principle relates to the ‘finely balanced public/private mix’.  It does not mention that with evidence like the above, we currently have a very unbalanced public/private mix which results in patients and their families exposed to avoidable suffering because they can’t afford PHI. The other 4 principles are about improving the quality and affordability of private health insurance. 

Labor finds itself on the horns of a dilemma. It doesn’t want the PHI rebate to be an election issue. Labor is a broad church and many in the party and their supporters believe that as high earners they deserve faster access to elective surgery than lower income earners. The cost of the PHI rebate to taxpayers is $11 billion. It helps richer patients avoid long public hospital waiting lists. It is inefficient and inequitable. But even those Labor politicians who accept that are understandably worried that ‘disunity is death’. 

Fundamental contradictions

Despite that, the deeply concerning thing about this paper is its failure to recognise that the first principle is completely at odds with simply improving the quality and affordability of publicly subsidised PHI.   Health budgets will always be limited, and continuing taxpayer support for PHI at a cost that is 10% of total Government outlays on health care is incompatible with timely access to care for those who will never have PHI and rely on the under-resourced public system. 

The biggest threat to PHI and to the private hospital industry is a publicly funded health system which fulfils the first principle Labor has listed ‘provides every Australian with the highest quality of health care’. The paper details some suggestive questions for the Commission but they are all about improving PHI. None are about the first principle. Instead, or at least in addition, Labor should be asking the Productivity Commission to look at the most efficient way to fulfil that principle. 

Combining that principle with efficiency would be very productive. If that is what the Commission was asked to do we would at least be able to start considering the major changes required to address the problems of equitable access. This could include a gradual reduction in the PHI rebate with a corresponding increase in resources for the public hospital system and primary health care, or consideration of a hospital benefit as has been suggested by the Department of Prime Minister and Cabinet a few years ago. 

Running away from answers

Labor appears to be running away from getting the real answers despite the fact that all this would happen after the election, and therefore pose minimal threat to the result. It is either completely lacking courage or is so intimately committed to the privatisation of our health system despite its rhetoric, that it is not prepared to even consider asking the right questions. 

Meanwhile another of my patient continues on her narcotic analgesics as she waits for her total hip replacement, supported by her daughter who takes time out from her own family to help her mother deal with the multiple doctors’ visits and the narcotic induced nausea and constipation. It’s only been 6 months since I referred her. 

She’s finally on the list and will probably be operated on within 365 days as hip replacements are generally Category 3 urgency and over 95% manage to get surgery in that time as the guidelines suggest. That’s a year out of her life which is almost entirely avoidable if politicians decided it was a concern.  Her bowls mate is back on the green 4 months after being referred for her surgery. She has publicly subsidised PHI.

Dr Tim Woodruff is president of the Doctors Reform Society, an organisation of doctors and medical students promoting measures to improve health for all, in a socially just and equitable way.  On twitter @drsreform

This article was published by Croakey on the 29th of January. 

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4 thoughts on “TIM WOODRUFF. What’s wrong with Labor’s Private Healthcare Discussion Paper? (Croakey)

  1. My answer to the almost-upon-us health crisis;
    Stop all government assistance to PHI’s. Sink or swim under your own steam. Anyone wants PHI? Pay for it.
    Cap and price fix doctor’s reliance/plundering of Medicare. Charge any more than 25% on top of Medicare rebate… lose the rebate entirely – then charge whatever you like. Sink or swim under your own steam.
    Charge PHI doctors and patients the FULL amount when they access public hospitals and public care.
    Same for private schools. You accept government money… account for it.

  2. my comment submitted on Labor’s private healthcare discussion paper:
    which I think pretty much mirrors Tim’s article

    “this paper from a potential new Labor government is bloody amazing?

    • A commitment to Medicare as a universal health insurance scheme that provides every Australian with the highest quality of health care regardless of where they live and their capacity to pay.
    • A recognition that this commitment relies on the finely balanced public/private mix that exists within Australia’s unique health care system.

    The first principle seems straight Labor policy

    the second principle bows low to Howard/Costello (and Abbott, etc) in screwing Medicare by throwing tax payers funds to prop up the wasteful and health-damaging private for-profit health hospital, medical (especially specialists) parasites

    the other four principles are a series of problems faced by the PHI industry in gobblegook language dreamed up by PHI public relations to cover their indefensible existance

    Health is extremely important (probably most important) to me and many other voters that are likely to vote Labor. Why prepare a document that will turn us right off.

    Perhaps you are worried too many voters have swallowed the PHI propaganda and are trying to fool them into sticking with those voters .”

  3. I increasingly think that Australia needs a National Equality Policy Inquiry, just as we had a National Competition Policy Inquiry (chaired by Professor Hilmer).

    The inquiry would consult the public on what relevant domain(s) in which equality ought to be fostered. It’s not necessarily equal wealth or equal income, the relevant domain might be equal opportunity for every child. (I personally would argue for Amartya Sen’s capability approach, where the relevant domain is people’s capability to live lives and pursue goals that they each have reason to value.)

    I also suggest renaming the National Competition Commission and call it the “Equality & Competition Commission”. All government policy ought to be reviewed to ensure that it promotes equality (in the relevant domain(s)) and competitive markets, and any departures (e.g., restriction on competition or equality of opportunity) ought to be scrutinised and justified, and reviewed regularly to assess whether the reasons for departing from equality and competitive markets continue to apply.

    Every inquiry held by the Productivity Commission should contain an Equality Impact Statement. Any recommendations by Productivity Commission needs to be assessed in terms of its impact on equality, and any departures from equality (in the relevant domain(s)) ought to be justified by the Productivity Commission, not just on efficiency grounds. After all, as a community, we have reason to value not just efficiency, but equality.

    In fact, efficiency is not an end goal, but a means to other things that we value. Whereas equality (in a relevant domain) is something we can value intrinsically.

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