Opinion & Commentary
Free hospital care is unsustainable
Tony Blair has belled the cat on the unsustainable fiction of a free and universal health system. In his autobiography, the former British prime minister says what no serving politician could and survive electorally.
He writes that as technology advances and people live longer, there's no way the healthcare systems of developed nations can survive at a reasonable cost with a minimum level of equity in provision without putting individual responsibility and public health policy at the centre of the debate.
Decades of government-run, taxpayer-funded health care have created a pernicious sense of entitlement among voters that defies economic reality. This makes genuine health reform notoriously difficult to achieve despite the financial and other problems confronting health systems such as Australia's Medicare.
To turn the situation around, policy-makers must tackle a generation's worth of entitlement and bust the myth that public health systems can provide unlimited access to free health care.
A worthwhile initial step in the right direction would be to reintroduce nominal charges for public hospital care. This could take the form of an accommodation fee, reflecting the transfer of normal living costs to the hospital. Such a fee is the norm in France, whose health system is noted for its equity and quality.
A few facts about the hospital system demonstrate why it's so important to promote cultural change and end the free lunch mentality in health.
The start of Medicare in 1984 occasioned a large fall in private health fund membership. All of the cost of the free public hospital care demanded by the newly un-insured was shifted on to government budgets.
The response by state governments was predictable. Wholesale cuts to public bed numbers were implemented to contain health spending and restrict access to services. This led to the emergence of long queues for elective surgery in the late 1980s. But worse was to come.
In the 90s, hospital managers came under fierce political pressure to cut waiting times and decided to run hospitals beyond maximum bed capacity to maximise elective surgery. The hospital crisis of the 2000s is the result. More than one-third of patients requiring unplanned admission now wait longer than eight hours for a bed to become available. Forcing the sickest patients to queue on trolleys in emergency department corridors is an immoral, irrational and deeply inequitable way of rationing the provision of health care.
Throwing more money at the public system is no answer. Real spending on Australia's highly bureaucratic public hospitals increased by 64 per cent over the past decade, yet bed shortages and waiting times grew worse.
Along with nominal charges for public hospital care, other commonsense reforms can improve performance and deliver more front-line services. Putting local boards back in charge of running hospitals can cut administrative overheads and improve efficiency. Creating a voucher system for elective surgery can increase choice, competition and productivity. Sole funding by the commonwealth on an activity basis can change incentives and make hospitals operate in a financially accountable way.
But the bottom line is that no public health system can possibly afford an unrestricted supply of hospital care. The unrealistic expectations politicians have cultivated for a generation must be lowered. Australians need to get used to the idea of having to pay more for health services out of their pockets.
The only way to do this is to follow Blair's advice and put individual responsibility at the centre of an informed debate about the future of health services. What we need is a non-partisan ``your health, your responsibility'' national public education campaign backed by the moral suasion of the federal government.
The general public needs to be informed that rationing of services by waiting based on relative need will continue to be an unavoidable feature of Medicare. No set of reforms can eliminate elective waiting lists, because the health budget is limited and public hospitals need to give priority to emergency patients.
What should be stressed is how the political pressure to increase elective surgery has directly contributed to long emergency queues in overcrowded hospitals. Individuals who do not wish to wait for elective surgery should be told to take out private health insurance to gain access to much quicker care in private hospitals.
The social benefits of individual responsibility for health care should also be highlighted. Higher rates of private cover among the uninsured two-thirds of the population will mean timelier and more equitable access to public hospital treatment for the sickest and poorest Australians.
Without action along these lines, governments will continue to struggle to deliver the undeliverable promise of free hospital care. There are no quick fixes and honesty is the best policy. Our mixed public and private system must be strengthened if we are to have a sustainable health and hospital system into the future.
Jeremy Sammut is a research fellow at the Centre for Independent Studies and co-author with Wolfgang Kasper and John Graham of the new CIS publication No Quick Fix: Three Essays on the Future of the Australian Hospital System.
