Opinion & Commentary
Medicare: Australia’s very sick sacred cow
When the Prime Minister was under the gun for her ‘gushing’ speech to the US Congress on Q&A on Monday night, she said that Australians and Americans were very different kinds of people. The former believed in the ‘fair go’, whereas the later were individualistic and distrusted government.
To illustrate her point, she reached into the standard playbook of the Left and pointed to the different attitudes that prevail in each country regarding health care.
According to the PM, when Australians look at the debate that has raged in the US over ‘Obamacare’, they wonder what on earth Americans are going on about. Because here in this country, we know that ‘Medicare works’.
For many people this will ring true.
Medicare is widely considered to be symbol of national equity. The sentiment is that in a wealthy country like Australia, no one should go without health care due to disadvantage, nor be bankrupted by medical bills.
This is fair enough as far as it goes. But whether Medicare actually ‘works’ for those who most need assistance to access health services is another question altogether.
Yet, speaking from experience, if you dare to raise any doubts about the ‘jewel in the crown’ of Australian social democracy, you will provoke every ‘true believer’ in the land.
Question the wisdom of Medicare in any way, shape, or form, and you are guaranteed to provoke the following loaded response, which is calculated to kill any debate about health reform stone dead.
“If we change Medicare, Australia will end up like America with people dying out front of the hospital.”
Yet there is a factual reply that confounds the popular, Michael Moore-esque, conceit.
That reply is that Medicare now kills more Australians than the national road toll. An estimated 1500 avoidable deaths occur each year due delayed emergency treatment
The facts are that one third of emergency patients have to wait longer than eight hours before gaining admission to a bed, because public hospital bed numbers have been cut by one third since the start of Medicare.
This situation has been rightly dubbed the ‘hospital crisis’, and it includes the avoidable deaths that are caused by long waiting times for elective surgery.
The truth is that thousands of Australian are dying each year because of long waits to get into overcrowded public hospitals.
What this illustrates are the systemic problems with Medicare.
When Medicare was introduced in 1984, Australians were told it would be all so simple and equitable: each Australian would pay a levy on their income according to their means, and receive treatment according to their needs.
The reality is that an inverse care law applies under the scheme, which means patients with the greatest health needs receive the least responsive services.
This is the result of Medicare operating as what health economists describe as a ‘reverse insurance’ system.
Medicare provides GP and other medical services on demand on a fee-for-service basis. All consultations and tests are either bulk billed or eligible for a rebate under the Medical Benefits Scheme. The MBS budget is uncapped and is funded entirely by the Federal Government.
This means Medicare is fundamentally flawed in principle. No sound health insurance system should cover minor medical costs from the first dollar spent because this inevitably leads to overuse and waste. Because consumers face either no charge or lower charges, unnecessary consultations and tests are encouraged.
The MBS is a political ‘sacred cow’ for this very reason: Australians are in love with bulk billing because they can go to the doctor for ‘free’ whenever they like.
What isn’t understood is that the ever-increasing and open-ended cost of the MBS has led to funding and service imbalances in the hospital sector.
To offset MBS spending, the Federal Government has always limited its financial exposure to the cost of public hospital care by giving the states only capped hospital grants.
The predictable response by financially over-stretched state governments has been to impose blunt expenditure controls in the public hospital system including massive cuts to bed numbers.
The result is that many Australians with serious health needs requiring hospital care do not receive timely treatment due to the tight ‘caps’ on hospital funding that federal and state governments both use to limit the cost of our ‘free’ health system.
The perverse outcome is that Medicare leaves people over-entitled at the least serious end of the health care spectrum, while the cost of the most serious, most expensive illnesses are inadequately covered.
If Australians are serious about the fabled ‘fair go’, then the view we should take is that Medicare fails to live up to the national ethos.
Medicare means that even the well and worried receive unrestricted, subsidised doctor visits, while the sickest patients languish in the hospital queues that are the daily reality around the country.
Before banging on about the evils of the US health system, Australians would be better off admitting that the way Medicare ‘works’ is deeply inequitable.
Jeremy Sammut is a research fellow at The Centre for Independent Studies.
