Why dental care was excluded from Medicare and why it should now be included (an edited repost)

Mar 8, 2021

In 1974, the Whitlam Government decided to exclude dental care from Medicare for two reasons.  The first was cost. The second was political. Whitlam felt that combatting the doctors would be hard enough without having to combat dentists as well. Forty-six years later, with Australia much richer and the proven success of Medicare, it is now time for dental care to be progressively included in Medicare.

Gough Whitlam was well aware that any serious reform in healthcare would be greeted by the usual conservative response ‘where is the money coming from?’  The British National Health Service was wrongly criticised at the time for its alleged cost and waste. With the years, however, we can now see that the NHS is probably the best value for money of any healthcare service in the world despite Conservative governments underfunding and privatising key parts of it.

Yet Aneurin Bevan’s national health service was bitterly opposed by doctors and dentists. It was supported by a minority of doctors and overwhelmingly by nurses, and most importantly by the community.

But with the hatred of the NHS by Australian doctors, Whitlam did not want to add to his political problems by upsetting dentists as well.

So for financial and political reasons dental care was excluded from Medicare in 1974.

Medicare today should be progressively expanded to include dental care and by progressively tightening the means test on the $12 billion a year subsidy that is used to underwrite an inefficient private health insurance system. The $12 billion subsidy includes the rebate and the loss of tax revenue through tax incentives for high-income earners to take out private health insurance. Middle-class welfare writ large.

If people want private health insurance, that is their right, but there is no reason taxpayers should pay $12 billion a year to subsidise the socially divisive and nationally damaging private insurance boondoggle when publicly funded Medicare is available for all.

PHI is a lame duck industry propped up with taxpayers’ money. As Ross Gittins has said:  ‘it is a con’.  It does not deliver any health services. At great cost it churns money, including taxpayers’ money, for the benefit of private hospitals and better off people.

The damage it causes increases every year. Since 1999 when John Howard introduced the government subsidy, overall consumer prices have risen by only 50% but PHI premiums have risen by more than 150%. Many policies are ‘junk’, hard to follow, with surprising ‘exemptions’ and all sorts of gimmicks to try to attract new customers.

Whitlam established Medicare in 1974 to tackle the same sort of mess we find with PHI. The Nimmo Report at that time described the waste, inefficiency and unfairness of PHI. It is the same old mess today.

In addition to high costs the parasitic PHI system has other damaging consequences and risks:

  • It threatens our universal health system through seriously weakening the ability of Medicare as a single funder to control costs. We have seen the enormous damage PHI has wrought in the US. We are steadily going down the same dangerous path. On present trends, we will have a divided healthcare system, which is what conservatives want. One system for the wealthy with a safety net system for the indigent.
  • PHI companies do not have the market power to contest the power of health providers who set fees and prices for people who are privately insured. Prothesis suppliers are having a field day.
  • It favours the wealthy who can jump the public hospital queue by going to private hospitals.
  • It penalises people living in the country who have limited access to private hospitals.
  • Its administrative costs are three times higher than Medicare’s.
  • It has made it extremely difficult for public hospitals to retain specialists. Remuneration is often at least three times higher in private practice and private hospitals.
  • It has not taken the pressure off public hospitals.

The future of Medicare is at stake, but the ALP, the proud founder of Medibank/Medicare, doesn’t seem to appreciate it. At least the Liberal Party looks after its own. Private hospital owners such as Ramsay Healthcare, which profit from PHI, are large donors to the Liberal Party.

Given the mess and high cost of PHI it is not surprising that an Essential Report finds that Australians believe their money would be better spent in a Medicare Dental Scheme.

The results are from Essential Report polling published on 27 February 2018 – the latest polling I can find.

  1. Most Australians with private health insurance currently receive a subsidy from the Australian Government to help cover the cost of their premiums. Would you support or oppose abolishing the subsidy and using those funds to include dental care within Medicare?
  Total   Vote Labor Vote LNP Vote Greens Vote other
Total support 48%   55% 39% 65% 49%
Total oppose 32%   27% 45% 17% 35%
Strongly support 22% 28% 13% 31% 28%
Support 26% 27% 26% 34% 21%
Oppose 13% 11% 18% 6% 16%
Strongly oppose 19% 16% 27% 11% 19%
Don’t know 20% 17% 16% 18% 16%

Some 48% supported abolishing the private health insurance subsidy and using the money to include dental care within Medicare; 32% were opposed.

Those most likely to support the idea were Greens voters (65%), Labor voters (55%) and those aged 18-34 (57%).

Those most likely to oppose were Liberal National voters (45%) and those aged 55+ (44%)

The Report shows that Australians believe that health and equity would be much improved if the $12 billion subsidy were abolished over time and the funds allocated to universal dental care within Medicare.

I have estimated a  fully implemented Medicare Dental Scheme would cost about $12 billion a year. (Private health insurance and funding a Medicare Dental Scheme)

In December 2016 the National Council of Social Services in NSW in its report ‘Poor Health: the cost of living in NSW’ found that:

  • Almost 40% of people earning under $75,000 p.a. cannot afford to see a dentist.
  • Of those who do see a dentist, one in five do not go ahead with the recommended treatment because it is too expensive.
  • Poor dental health not only affects a person’s overall health but also makes it harder to find a job, particularly for young people.
  • There is a huge disparity in the availability of dental services, particularly in rural and remote areas.
  • There were 107,322 adults and 13,284 children on NSW public dental waiting lists.

The situation has worsened since then.

In this blog on 23 August, 2018, Professor Lesley Russell, adjunct associate professor at the Menzies Centre for Health Policy at Sydney University, pointed out that the total amount spent on dental care was $9.9 billion in 2015/16  and individuals contributed 51% for out-of-pocket dental costs.

Bad teeth cause of sickness, malnutrition, disability and even death. In 2015/16, there were more than 67,000 preventable hospital admissions because of poor oral hygiene.

The Whitlam and Hawke governments established Medicare largely because of the inefficiency and unfairness of private health insurance. But with the Coalition government pouring more and more subsidies into private health insurance, Medicare is being effectively privatized and dental care needs are being ignored.

What can be done?

Professor Lesley Russell suggested the following.

If a Medicare-style (dental) program is a step too far and too expensive, I pragmatically offer a set of smaller options that could be implemented to put the mouth back into health care and close the dental/medical divide:

  1. Government funding should focus on the best-value investments, which span three broad areas: fluoridation, preventive services for children, and preventive and treatment services for the poor and those with special needs.
  2. Dental and medical professionals must become partners in delivering health care services. This should entail some shared training, a recognition that dental services are an integral part of primary care, inclusion of dental information on Personally Controlled Electronic Health Records and professional courtesies around patient referrals.
  3. A “Dental Health Service Corps” made up of dentists and dental staff, doctors, nurses, community/Aboriginal Health Workers and public health professionals could ameliorate the maldistribution of the dental workforce and take oral health services and education where they are needed.
  4. Health promotion activities around tackling obesity, smoking and substance abuse, breastfeeding and better management of chronic conditions and the use of multiple medications need to include oral health information. Help with oral hygiene is also a critical aspect of care for the frail aged, people with mental illness, people with disabilities and those on certain medication regimes.
  5. Governments should consider establishing emergency dental services within hospital emergency departments, at least on weekends.
  6. If private health insurance funds are serious about greater involvement in primary care to keep patients out of acute care, they must consider providing better access to dental care with reduced out-of-pocket costs.

The Whitlam government established Medibank/Medicare 44 years ago. The Hawke government revived and revised it 35 years ago.  It is surely time for it to be updated and modernised. It has proved its value, but some changes are necessary, including coverage of dental care.

As with the establishment of Medibank/Medicare, there will be strong political opposition to any significant change which might upset the providers. The key political issue is to go over the heads of the powerful providers, such as doctors, dentists, pharmacists, private hospitals and private health insurance companies – and win the debate with the community. The community is seldom consulted about its interests and needs in healthcare. Invariably the ‘debate’ is dominated by the loud and powerful voices of providers.

When Essential Media polled the community, the results were conclusive that it prefers expanded dental care within Medicare and reduced taxpayer funding for  private health insurance.

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