I’m no expert in health economics, but there’s been a lot of commentary over the years from some who are suggesting that the artificial lifeline given to private insurers and hospitals has done just about zip to “take the pressure off the public hospital system”, while nicely fattening pay packets and profit margins for some. At enormous cost to the public purse.
These comments from the Doctors’ Reform Society seem apposite:
Insurers are angry and say 400,000 people will drop private coverage, but Dr Tim Woodruff says they should not expect the current level of tax support to continue.
“I’m not worried about how much whinging they do. [I am] just pointing out that it is whinging because of self-interest, because they’ve got a vested interest in keeping as much money from the taxpayer rolling into their coffers as possible,” he said.
“They’ve got every reason to complain but it’s not a reason that should deter the Government from doing what they’re doing.”
Obviously part of the way the Government will be justifying the adjustments to the Medicare levy thresholds will be in terms of the narrative of asking those who are better off to make sacrifices in the broader cause of combatting inflation, and reining in wasteful spending, but I’d also like to see this decision justified in terms of its health policy rationale. I await Nicola Roxon’s defence of it with interest.
The reason health insurance companies have trouble retaining members has nothing to do with tax or health policy. It has everything to do with the fact that some time during the last 20 years insurance companies forgot that they are supposed to provide, you know, insurance, in return for the insurance premiums they receive from customers.
Instead, insurance companies today receive insurance premiums in return for which they provide:
a) Expensive CBD and mall-located shopfronts, glossy brochures and marketing campaigns to explain the benefits and coverage of their policies.
b) Wages to low-level staff and middle managers to ensnare unwitting members of the public.
c) A raft of disclaimers and loopholes to prevent the paying out of proferred coverage.
d) Fees to lawyers to defend them against ever having to pay benefits.
e) Inflated salaries to executives to maintain the operation of the above.
f) If anything is left over, dividends to shareholders.
Who benefits? The insurance executives, the marketing industry, the lawyers and the shareholders. Who loses? The patient.
It’s not insurance, it’s extortion.
We don’t have a user-pays health system. We have a user-pays-and-pays-and-pays health system. Once with your Medicare levy. Again with insurance premiums. And a third time out-of-pocket when the insurance company fails to provide the promised benefit.
And in another bitter pill for the free-market ideologues to swallow, the Australian market isn’t actually big enough to sustain a viable private healthcover industry. That’s why those companies forever have their hand out to the taxpayer to support them. That’s why in the absence of supportive tax policy, these companies will die. Because the market isn’t big enough and because they deserve to.
Many supporters of private health look to the US for their cues. Well, in America’s heaven-or-hell health system, the reality is that if you’re covered, the quality and extent of care you receive is unsurpassed anywhere in the world. But this ‘heaven’ only results because the market is so large and so competitive that the insurance companies have to provide quality cover and quality care - or they simply won’t have any customers.
Whether ideologues like it or not, Australia is almost structurally bound to have a socialised health system because it’s the only economically supportable model given our population and taxation base.
i’ve looked closely into getting insurance twice this year, particularly with a kid needing orthodontics, and each time it just doesn’t quite seem to justify the expenditure.
As for me and dental…its seriously cheaper to save the contributions go to Thailand.
How can the private insurance moves yield lots of revenue for the private health funds if they don’t work - if they don’t get lots of people to take out private cover and use private hospitals?
That Australians are offered free public health services is distortionary in terms of demand. What is so intrinsically bad about getting wealthy preople to pay their share of health costs?
There are many instances in the economy of public subsidies designed to take off pressure from public goods. A major area is education. Offering transfers to private and church schools reduces demands for public schools and enriches the public school system net since the relief offered to the non-government school is much less than the cost of educating a child in the public schools.
Low income Australians would be worse off in health care terms without private health insurance and without non-government schools. More dollars could be spent on them.
hc, if you really believe that, I’ve got a nice bridge with fantastic harbour views that you might be interested in buying.
There’s no discretionary demand for health care. You get sick, you friggin’ need health care. That is not market distortion, it’s life.
It’s not a market governed by neat Keynesian supply and demand graphs, no matter how hard you wish, or how many times you say it, or how many prayers you mumble to the invisible hand to make it all better.
That’s another reason all the free-market ideas that have been tried in Australia’s health system have been so lacklustre in terms of take-up. Because the system in reality differs from that which the architects of these schemes imagine it to be. If you design a solution to the wrong problem, you get a botched result.
“There’s no discretionary demand for health care. You get sick, you friggin’ need health care. That is not market distortion, it’s life.”
Really, Mercurius?
My GP once remarked to me that half the people in his waiting room shouldn’t really be there.
What did he mean, I asked. Well, he explained, they had minor (or non-existent) ailments that they could treat themselves. Or they were oldies who were basically just there for a chat.
This isn’t to say they were all hypochondriacs, just that people tend to use things carelessly when they are provided free, or almost free, as medical treatment is. I would argue that much (though certainly not all) medical treatment is in fact discretionary and is responsive to price.
And there’s things like pathology tests. If it costs the patient nothing, there’s no incentive for the doctor not to run every test under the sun, including testing 85-year-old grannies for HIV.
Not to say I agree with Harry’s views that private health insurance is a great system; just about everywhere does more efficiently than the United States - including us, despite the myriad inefficiencies in the Australian health system. The only parts of the US system that do work reasonably are the socialized bits, like VA health system for armed forces veterans.
Paulus wrote:
That’s garbage Paulus. There are massive swathes of the community who cost us all a fortune because they *don’t* go to the doctor when they need to. From simple things like infected teeth causing heart problems, early diagnosis of breast and prostate cancers, runaway secondary infections, hearing problems in poorer socioeconomic kids that condemn them to bad education outcomes, that the list goes on and on.
You hear this kind of anecdotal rubbish all the time when commentary starts up about socialised health care (waiting rooms full of hypochondriacs), but the facts are that if people (and particularly men) went to the doctor earlier rather than later, it’d be cheaper for everybody. That and finding a few more doctors.
Paulus, you should revise that last statement to read “I would argue that much frivolous, fake or attention-getting behaviour is in fact discretionary and is responsive to price.”
But actual medical need is not responsive to price. Still don’t believe me? Read on…
This will come as a shock to market fundamentalists. Brace yourselves: bacteria, viruses, cancers, traumus and degenerative conditions don’t know how much they cost too fix and don’t take any notice of the price tag! Egads!
Furthermore, for patients in need, as anybody who has had a serious illness would understand, no amount of money is too much to pay. Health is irreplaceable and priceless. People will keep paying till their last dollar to get well again if they have to, but I’d argue that it’s a very inefficent use of resources to send somebody bankrupt before they’re well enough to rejoin the workforce.
Getting sick and needing care is not responsive to price. It’s not a market, it’s an essential human service.
Why is that so hard for market eggheads to understand?
Which they need to see a doctor to determine whether it’s actually a minor aliment or something more.
Pushing for private health care is going to do nothing to help the poor elderly people who are currently burdening the health system because the age care system is in such a poor state.
In the short term it will quite possibly be somewhat responsive to price. However introducing price pressures will most significantly impact preventative and early detection medical expenditure because this is what is viewed as ‘discretionary’. As preventative and early detection are much more efficient than reactive/curative care, as reduction in spending in these areas will result in a cost blow out in the long run.
There was a story a couple of months ago on the 7:30 Report that gave an example (yes, an anecdote, not data) of how the public system distorts people’s choices. A guy had hurt his ankle playing footy on a Saturday. It was still sore on the Monday, so he presented to his local hospital emergency department. The reporter asked why he had not just gone to his GP. The guy said that he knew the GP would send him off to get an X-Ray, and it was quicker and cheaper for him to show up at the hospital where they would just send him up to the radiology department, rather than his GP sending him across town to a private raidology clinic.
Now the point of the story is that Mercurius is right - people’s need for health services is generally not price sensitive (the dude had a sore ankle). But how we respond to that need can be influenced by price. Having a hospital emergency ward that essentailly doubles as a free (bulk-billing) GP and radiology clinic encourages people to take that option. But from a societal point of view, that’s a waste of resources. The guy just had a bad sprain, he wasn’t in any critical need of immediate medical attention, and he took up valuable ER resources.
Now if the hospital charged him a premium for getting standard GP services in hospital when he could have gone to a GP, he might have made a different choice - a better choice from a societal point of view.
Now the other side of the problem is that there simply aren’t enough bulk-billing GPs out there. Personally, I never have a problem getting an appointment with a GP on the day, but I live close to the city, and I can afford to pay about $30 out of my own pocket. Maybe not the most equitable outcome, but I don’t take up time at the ER.
From a policy perspective, I think the Medicare Surcharge threshold has moved too far up the income scale - maybe raise it to $60k or $70k, but having it at $100k is going to lead to a lot of people (who can afford private cover) dropping out of private health insurance and putting extra strain on the public system. Given that we already have a mixed (public-private) system, this is a bad result for everybody who relies on the public system, particularly the old and the poor (who btoh tend to be sicker than the young and wealthy).
“And there’s things like pathology tests. If it costs the patient nothing, there’s no incentive for the doctor not to run every test under the sun…”
And if the cost is borne by the patient, there’s still no disincentive for doctors. And if the cost is borne by doctors, they’ll pass it onto the patient.
If doctors are irresponsible in their use of resources, that’s not going to be fixed by upping a fee.
d
Should anybody be in doubt about the market failure in the US here’s a recent article discussing per-capita spending on health and life expecancy for selected countries.
And for visual impact the associated chart [link]“
What David Rubie said above. I’d rather see people ‘overservicing’ themselves, rather than waiting to see a doctor until the problem becomes serious. It takes a many more resources to fix the serious problem than the minor one it may have been if caught early.
It can also take a lot of pathology tests to work out what a problem is. I’d rather have the overzealous GP, thank you.
One of the major costs in the health system is the labour - doctors and nurses.
This is the first crack at doctors fees. Under the current system the health funds have no incentive whatsoever to be controlling one of their major outlays - doctors fees.
It’s my impression that earlier this year the funds were given at least two tasks -
1. set up a peak body who’s first job was to educate the public about what the margins and workings of their business were - this was mildly successful (I heard about it…anyone else?)
2. devise a system to put pressure on costs (bzzzz, fail)
In the absence of self regulation, real regulation is being attempted.
Now in the Rudd ‘business as usual’ system this supplier (the funds) will sink or swim on merit. also, there’s both policy and penalty going on here to show the funds that Nicola is serious after they took her for an embarrassing ride earlier this year on the price increase. ‘Get back in your box’ would be a nice way of putting it.
Who’s going to fund the FOI case for finding the treasury document that shows less cost to the taxpayer in 12 years time when the funds are gone (virtually or totally)?
“That Australians are offered free public health services is distortionary in terms of demand”
It’s only free if doctors bulk bill. If they charge, then the patient pays, and only gets part of that payment back as a refund from Medicare.
It ain’t free, somebody has to pay, no matter what.
A system where lots of people get health care free, whilst others have to pay a serious amount of money (also known as “medicare”) is indisputably most unfair.
Well yes that describes the problem pretty well. Most people want whatever it costs to investigate or fix a medical problem if the probability is very low - and all at once rather than progressing from most likely to least likely. However, whether we like it or not, the health system does need to work out where to allocate resources best rather than assuming there is an infinitely big bucket of money.
Re: the changes to medicare, I would have much preferred they used a larger stick (increase the surcharge) and remove the carrot (the 30% subsidy). This would raise more money to put into the public health system, rather than just give the middle class another tax cut. But then I suspect this is more about ideology rather than fixing anything
What I would like to see is some reporting on what percentage of health fund payments goes to payment and what is taken up in overhead or profit (similar to what you see for charities).
I disagree - you don’t need to take out private health insurance. If you don’t you might end up paying the surchage, but then if you use the public system instead of the private system you’ll be costing the community more anyway, so if you’re capable its quite appropriate to pay higher taxes.
How much infrastructure does the private system pay for?
To my mind as someone who can afford private health and does take it out I am quite happy to pay taxes to pay for people who genuinely cannot afford proper health care, eg Pensioners, unemployed etc and it needs to be of a good standard. No luxuries, but those people need to have reasonable surety they will get a good outcome. However I see no reason why I should pay larger taxes for those who CAN afford private health and CHOOSE not to take it out.
To my mind where Swan really got this wrong is if the medicare surcharge was costing the lower income end say a $1000pa then he would have been better off to give them a $1000 rebate NOT tied to their being a health fund member. That way it puts them back in the same place in terms of their family budget but does NOT give an incentive to drop private health. Social justice achieved and no additional pressure placed on public health system
Mercurius,
People that err on the side of markets only do so where there is an opportunity for actual markets to exist.
Many therapies are under exclusive patent (ie monopoly) and thus frequency of occurrence makes no pricing difference whatsoever. Once said patent expires, there is opportunity for price reduction based on competition. However, given the pace of medical research, this often means that the price reductions take effect once a therapy has been removed from the PBS because it has been superceded by a superior therapy.
To presume that big pharma don’t take the PBS subsidy into account in their pricing policies is foolish. I am not sure that there is a practical alternative though as to remove essential therapies from the PBS would be overly expensive for patients. I would hope that big pharma are pumping their funds back into research for new therapies - although sometimes this can be difficult to quantify.
One of the biggest scandals in public healthcare is the extent to which big pharma run clinical research on public health patients without footing the medical bill for the health costs incurred - instead they pass it onto the public purse. Private hospitals demand that big pharma pay for every last cent of cost incurred, but unfortunately public hospitals seem unable/unwilling to do so. Given that a significant amount of this research involves elective procedures, it really is quite a scandal.
SATP, if you don’t want to pay any more than you already do in taxes and medicare levy, you can always go to a doctor who bulk bills.
Mercurius, reading further back:
“The reason health insurance companies have trouble retaining members has nothing to do with tax or health policy. It has everything to do with the fact that some time during the last 20 years insurance companies forgot that they are supposed to provide, you know, insurance, in return for the insurance premiums they receive from customers.”
I’m not sure this is correct or easily verifiable. My experience working in Health Care is that people leave Health Insurance funds because they are too well and generally see no need for it. I think the raising of the medical levy will also provide a bit of extra motivation for young-ish, healthy people to leave Private Health Funds come tax-time. The effect of this exodus will probably be felt in the coming 10-20 years as more Gen X-ers seek elective procedures. Mercurius, my information was that rates of membership of Health Funds had largely stabilised over the last 5 years. I would need to check that to confirm though.
Further, Mercurius says:
“And in another bitter pill for the free-market ideologues to swallow, the Australian market isn’t actually big enough to sustain a viable private healthcover industry. That’s why those companies forever have their hand out to the taxpayer to support them. That’s why in the absence of supportive tax policy, these companies will die. Because the market isn’t big enough and because they deserve to.”
I’m not sure what the Private Health rebate (or any government rebate!) has to do with “free-market ideology”. The original purpose of the rebate was to encourage those who could afford (with some government top-up) to utilise private health to do so in order to reduce demand on the public system. There are many legitimate ideological battles to be had between free-market & regulated service provision. I’m just not sure how this battle applies to the Australian health care system! When the government part subsidises private service provision, this does not equate to the imposition of free market ideologies!
Partially true. If they really believed in the free market, they would’ve let the commercial health funds fail without the rebate. Maybe Rudd is more of a free marketeer than Howard was!
But I think what the former government believed in was ideologically-driven. Their ideological script told them that ‘markets are Good and will Fix Everything’ and they weren’t about to let inconvenient truths such as Australia’s market being too small to trammel their ideology. So what they set up was not a real free market, but a cardboard cut-out of a free market. Sort of like those wild west Hollywood sets where the buildings are painted on the front of wooden boards, propped up behind with sticks.
When a government uses taxpayer money to prop up commercial enterprises in a market that isn’t viable due to structural factors (ie not enought people!), well I think on any reasonable definition that counts as an ideological act. The former government were incapable of recognising the reality before them because it didn’t accord with what their ideology told them Must Be The Case.
The “free-market ideology” comes into it when you consider it would have been more cost effective to spend that money on the public health system rather than spend it on the rebate. Most of the cost of the rebate is going to people who were already in private health insurance anyway. The cost of the 30% rebate plus the gap in medicare levy is much more than the marginal saving (25% of scheduled fee) of the number of people that shifted to private health insurance (~10%). The numbers make no sense, so it can only be the blind ideology (private > public) that backed the policy.
Ayup. I finally took out good (as distinct from minimal) private health cover when the husband of a friend was diagnosed with cancer and had the life-saving surgery within a couple of days, but not before they’d been told by the surly but effective surgeon that if they’d not had private health cover then he (the husband not the surgeon) would have been told, though of course not in so many words, to go home and die.
But even now that I fork out vast sums every three months, I still can’t get any kind of treatment or consultation without turning my pockets inside out.
Mercurius,
“When a government uses taxpayer money to prop up commercial enterprises in a market that isn’t viable due to structural factors (ie not enought people!), well I think on any reasonable definition that counts as an ideological act.”
Which/what market are you talking about? The only markets in Australian Health Care are the competition between PRIVATE medical clinics for patients and the competition between PRIVATE hospitals for patients/ highly regarded specialists. I’m not entirely sure how/what effect the private healthcare rebate had on these markets or even how would would go about quantifying such an effect. Is there any evidence whatsoever that the purpose of the private health rebate was to “prop up commercial enterprises’? I’m pretty sure the purpose was to reduce patronage of public hospitals! Exactly what this has to do with “markets” is completely beyond me! The debate about “public” vs “private” is not NECESSARILY cognate with a debate about free-markets vs regulated transactions.
Desipis says,
“The “free-market ideology” comes into it when you consider it would have been more cost effective to spend that money on the public health system rather than spend it on the rebate. Most of the cost of the rebate is going to people who were already in private health insurance anyway. The cost of the 30% rebate plus the gap in medicare levy is much more than the marginal saving (25% of scheduled fee) of the number of people that shifted to private health insurance (~10%). The numbers make no sense, so it can only be the blind ideology (private > public) that backed the policy.”
I’m sorry Desipis, but I really think that you completely misunderstand what belief in markets actually is. Belief in markets is not about preferring public to private, it’s about believing that where markets exist, they tend to provide a more efficacious and efficient service than a regulated service-provider. Many private ventures are not free-markets in the sense that there is genuine competition for the provision of services. If you read what I wrote above, I argue that the Australian Health care system taken - inclusive of public and private prividers - has never been a market.
By all means, oppose government subsidy of private providers. But please try to understand that people that believe in free-markets and people who believe in government subsidies ARE NOT NECESSARILY THE SAME!
I read nurses are hoping for the right to write prescriptions. I regularly go to the doctor for prescription renewal, they’re written for a limited time period. Like so many oldies it’s blood pressure, it ain’t gonna change soon. A registered nurse is capable of taking blood pressure measures, renewing a prescription or passing me to a doctor if it were to rise.
Chatting to a doctor is not my choice of good conversation! and the wait pains my arse no end.
I don’t believe the BS about people seeing a doctor to chat, it’s prescription ritual driving them.
Nurses would love more authority, they carry out the existing duties in my experience very well.
fluff4
My recent experience of GP surgeries (three different ones in inner city Brisbane) makes me highly sceptical of the “chat to the doctor” meme too. If you’re in there for more than 3 minutes you’re doing really well, and that’s usually after a wait of an hour after the scheduled time, and the standard price for a quick consultation in these parts is $62, for which the Medicare rebate is $32.
Quite. I’m often tempted to say ‘That was a billable hour, you know. By sheer coincidence, I charge $30 an hour.’
Mark,
I think it depends on the doctor. A few years ago I had a doctor who used to insist I make a separate appointment for esch ailment I wanted to see her about (eg cancer injections, arthritis, chest complaints) even if that meant I had to come back over several weeks. The two doctors in the practice I go to now treat all my illnesses at one consultation,plus any new ones, plus renew prescriptions when necessary.And they bulk-bill.Am now very impressed and satisfied.
Paul, if you were living in Brisbane and you could find a bulk billing doctor outside 24 hour medical centres where you’d be lucky to get two minutes, you’d be doing very well indeed.
Not sure if I understood your last comment, Mark, but there are actually bulk billing doctors in Brisbane. I sometimes go to the one at Fairfield Gardens if all I have to do is renew a prescription or get a doctor’s certificate.
…And if so, that purpose was based on an ideological assumption that private organisations would do a better job of providing healthcare than a government provider. Little wonder, since they could inflate their premiums by 30% thanks to the government’s generosity with taxpayers’ money. All of which looks exactly like propping up a commercial enterprise to me.
To be honest, I’m not sure what the purpose was, but the effect was most definitely to prop up commercial enterprises, and it sure didn’t reduce patronage of public hospitals. So on any account, it was either a failure of policy or a nasty bit of ideology, or, as I think, both.
Sorry, but as a GenXer, I’m genetically incapable of believing anything the government tell me. You’re not a Y-er by any chance, are you?
Tell you what, after I sell the Harbour Bridge to hc, I could broker you an excellent deal to buy it off him second-hand at half price - plus my commission, of course..!
frank luff,
Nurses doing drug prescription would be a major jump in duties, liabilites and expectations which many nurses would be unwilling to take. A similar system occurs in the US with a fair amount of research showing that it does not necessarily lead to better healthcare outcomes in terms of either ongoing patient care/management or patient satisfaction. In terms of pricing, I can guarantee that nurses would make a substantial wage claim for the addition of drug prescription duties to their list of responsibilities. Also, please bear in mind that we have a massive shortage of nurses in both the private and the public systems!
Mark,
It’s hard to quantify the “go to the Doctor for a chat” thing. Certainly it’s more noticeable amongst veterans and wives of veterans. The really noticeable factor though is the amount of visits which could have been reduced with lifestyle/dietary/educational intervention! For some specialists this is reaching such a critical point that an increasing number will simply not see patients in the private system who still smoke regularly despite repeated warnings or refuse to alter their dietary habits prior to surgery and seek the necessary psychiatric/psychological counselling for excessive-eating disorders. Obviously these individuals unfortunately just bounce over to the public system.
Although I don’t go to the doctor because I’m bored (if anything I should probably go more regularly), the last two GP’s I’ve had (one only for a short time, the other over a period of 7 years) have been quite chatty and would always be in there for more than just 3 minutes.
I agree waiting periods can be a real but then the places I’ve been to have been happy for people to ring beforehand to see how late they are running - and given that most doctors attempt to fit in more urgent cases at the last minute, its understandable. At least you can get the medicare rebate straight back now via EFTPOS rather than ending up with a big pile of receipts that get lost.
I realise that government subsidies don’t make a free market, but what other rationale is there to drive towards a private system other than the supposed benefits of a market based solution?
Mercurius,
I’m a cynical Gen X-er too I’m afraid. So cynical in fact that I’m unconvinced by statements like “xyz represents an ideological attack on such-and-such public service”! Like you, I’m cynical of governments and what they tell me - which is why I believe in markets!
Again, I’m not sure that the purpose of the rebate was an: “…ideological assumption that private organisations would do a better job of providing healthcare than a government provider.”
I think a more likely assumption was not neccessarily that the private organisation “would do a better job” but rather that it would reduce uptake of public services.
Sure as a Liberal I think that private services tend to be better than public services. However, this would be a positive externality of burden-shifting rather than a primary outcome. This is a distinction here that I think is really important to highlight!
rosie, there don’t appear to be any bulk billing doctors in the Valley or New Farm.
Maybe I’m naive, but I’d trust the government over an insurance company’s marketing department any day.
Desipis,
“I realise that government subsidies don’t make a free market, but what other rationale is there to drive towards a private system other than the supposed benefits of a market based solution?”
It’s called cost-shifting and governments love it because they think it will be a panacea against raising taxes to fund a greater uptake in usage of public services.
Certainly I think private hospitals shit all over public hospitals. But what would fix that? Government money? How much more money? Once money is injected, how do we keep costs (doctor/nursing/allied staff wages) low? How do we stop “rich freeloaders” taking up spaces that should on social justice grounds be reserved for “working families”? Personally I am very sceptical of the ability of governments to ensure positive public service externalities - no matter how well funded the public service is! Given this, until the day I see an excellent public health facility, I will scrimp and save so that I can go private!
Desipis,
“No child will live in poverty…”
“This is the recession we had to have”
“We will have a treaty with indigenous Australians”
“There will never be a GST”
“There are weapons of mass-destruction in Iraq”
Insurance company marketers may suck but at least Insurance companies can be held to account in the courts for breach of contract. However, it’s been well-establised in the Australian Legal System that governments can’t be held accountable for election/policy promises upon which the electorate relies!
Agree with all Mercurius’ posts here, absolutely.
Why on Earth would anything think that privatised healthcare would be efficient or ethical, at all?
Consider:
1. People do not choose to fall ill or get injured. But once this has happened, they want fixing, as fast and efficiently as possible, at as low a price as possible.
2. Private businesses exist to make a profit. If they are publicly listed, they are legally required to prioritise the interests of their shareholders above all else. Hence, they need to charge as high prices as they can, acquire more customers, minimise infrastructure/maintenance costs, and so on.
If the business paradigm is properly applied to healthcare, then private health providers should be making people ill, overprescribing, overcharging for treatment, and running down clinics and hospitals, while private insurers should be charging as high premiums as possible but using every feasible loophole to avoid payouts.
Any competing provider that behaves better will be driven into the wall, so for the patient, there will be a “choice” between near-identical evils.
This is clearly not a sane way to provide healthcare. Why bother pretending at all that a “market” or for-profit system is in any way advantageous over government-run single-provider?
Nationalise the whole damn lot, and charge an appropriate Medicare levy.
A few points here in the interesting discussion:
- my own (admittedly limited to childbirth) informal data collection suggests people who went public actually got better health outcomes (doctors always on hand, good midwifes on roster, 24 hour anaethistist not playing golf, teaching doctors are all in public system) - but worse accommodation afterwards (ie public rooms suck). Suffice to say, the jury is well out on whether private healthcare is actually better health wise. However, yes, your room will be nicer.
- There was a study some time ago (i wish I could find it) which noted that 4% of public funds went on administration, and 14% for private. ie private is, on some scores, woefully inefficient on basic measures. Admittedly that would include returns to shareholder,s I guess - but that just means one in seven health dollars doesn’t go to “health”.
- We dont really have a public v private system at all, but a bizarre cross breed. Thus, your average “private” health consultation gets public monies in several ways 1: medicare rebate; 2. 30% insurance rebate, and sometimes 3. its contracted to a public hospital anyway - thus EXTENDING public waiting lists, rather than the opposite. I dont have the slightest problem with number 1, since it meant to be universal - but 2 and 3 annoy me on public policy grounds
- On waiting lists, you can bet your bottom dollar that if there was *any evidence at all* of private take-up reducing public waiting lists, the last government would have adduced it publicly, avec trumpets. They didn’t. By contrast, several studies debunk the myth, noting that the punitive surcharged system merely led to minimal cover uptake, which doesn’t do anything to elective surgery lists.
- Finally, just looking at public policy: how much of the 30% of public money (for allegedly ‘private’ subscribers) has effectively been flushed down a toilet after premium rises? Where ’s the public value for money? It must be down around 10% instead of 30% by now in terms of actual health impact - having just been an enormous boon for insurance companies.
Oh the naivety of healthy people. Bless. I used to think that private health insurance was a rip-off, until I developed a huge kidney-stone that couldn’t be removed first-go. I then discovered that anything other than ‘you are about to die right now’ - including severe and debilitating but not life-threatening pain - is considered elective. Oh the horrors of the public waiting list. Now I have private health insurance.
But having just watched Sicko, I thank God will still do have Medicare and I ‘choose’ to have private health insurance so that I never have to suffer three months of severe and debilitating pain on a waiting list again.
(In my sorry case of woe, I forked out $4000 of my own cash as an uninsured patient paying for a private procedure that actually didn’t end up working anyhow, and I was back on the public waiting list but with a $4000 hole in my pocket.)
Never take your health for granted peoples.
It would be wrong to make the assumption that treatment in a private hospital comes without cost aside from the insurance. When I had an operation at St Andrew’s in 2004, I was out of pocket around $2000. The insurance didn’t cover the fees of the surgeon and the anaesthetist (I had to pay the substantial gap between their fees and the medicare schedule) or for that matter the gaps between specialist appointments and radiography and the medicare rebates. All the private insurance covered was the $500 a night for the hospital itself. Then there’s medication, etc.
I have only a couple of points:-
the medicare levy has been a bone of contention for me as a lesbian. As my income is over $50000 but the federal government refuses to recognise I am in a relationship with a dependent partner, I am meant to pay the toll for not having taken out private insurance. I have therefore on my last 3 tax returns simply not ticked the box to declare the sex of my partner, whilst faithfully providing all other details - her age, name, income etc. I’ll cop not getting several thousand dollars of tax return back because I can’t claim her as a dependent partner, but I draw the line at paying more tax on the basis of the government declaring our loving relationship either doesn’t exist or isn’t valid.
So from a purely personal selfish point of view, at least this change will mean I will no longer have to refrain from giving the ATO information.
As for the private health/public health system here, while I’m too lazy to go google and provide links, my memory is that every major study into the effects of provding the dis/incentive for wealthy Australians to get private health insurance has failed spectacularly to reduce pressure on the public system. In fact, I know down here in Tas it has exacerbated it, with privately insured patients being able to ‘queue jump’ (yeah probably not the best slang term) into public beds to get treatment ahead of more acute uninsured patients.
The whole thing is a big con. I self-insure personally. But I can say I would gladly pay more tax towards an improved accessible public health system for everyone. If France can do it, why can’t we?
I agree with AndyC when he wrote: “Nationalise the whole damn lot, and charge an appropriate Medicare levy” but until that time, I’m a member of a not-for-profit health insurance fund) I could never go through that pain again.
Antonio @ 41 “Certainly I think private hospitals shit all over public hospitals.”
Are you talking from experience? As a big user of medical services (both private and public) over the past few years as a result of cancer and other serious illnesses, there is no doubt in my mind that the public system ’shits’ all over the private system.
I might have been lucky, but I certainly have the distinct impression over that time that specialists in the public system were far more caring than many of the private specialists. Perhaps doctors in the public system are more ideologically-driven towards patient outcomes rather than doctors incomes.
Wow Andyc,
I have a revelation for you. Many/most of the most talented specialists are in private practice. (Similarly, most of the best barristers are in private practice!)
Can you be an ethical nurse/doctor and be in the private system? Absolutely!
So why would talented people go private if they are ethical people? Because the facilities are better, the organisation is less-bureaucratic, shit gets done and you are remunerated appropriately.
Nationalise the system and the talented specialists will go the big US private hospitals where they are remunerated for their time appropriately, they have decent equipment, they are staffed appropriately by well-trained support staff, they can conduct private research and they don’t have an endless stream of government forms to complete.
Andyc, look into the history of medical research and discovery. Very little of it happens in countries with completely socialised medicine. Why not, what’s the motivation for innovation?
Public healthcare certainly has an important place in a humane society but socialised healthcare doesn’t necessary lead to better outcomes and private providers aren’t necessarily inhuman vultures. Moderation in approach and a mixed system with choices is important!
As for the public system being ethical or efficient - well I just printed out your comment and put it on the wall of our lunchroom here at one of the private hospitals I work at. First comment from one of the orderlies - “if public is so great, try f**king working in it!”
Oh dear…
Sublimecowgirl has the Free Marketeers reponse: “cheaper to save the contributions (&) go to Thailand” …
Considering that chances are good, (and getting better) that the thai (malaysian/indian/chinese/whatever) dentist/medico was trained here, (and ain’t it grand that education exports are our 3rd biggest export industry, eclipsed only by iron ore and coal) it’s a pretty good percentage bet that the service standard will be acceptable. It’s a hell of a long way to go for a broken arm tho, and very carbon unfriendly.
Solution: bring PriceIsRight thai/indian/chinese/whatever medicos here, sort of. Lets build a few Hospital Ships.
On land, Bovis, Hassell etc will be extracting 1.23 billion from taxpayers to produce a lousy 750 beds, whereas mercyships new “Africa Mercy” (six operating theatres, 78 hospital beds, state-of-the-art equipment) delivers at half that per bed price: for the same spend, we’d get twice as many beds, which is about what we need in the next 30 years. The ships have at least a 30 year operational life, on par with that of the old PA hospital for example. I doubt the new PA will be there in 30 years time, the design was outdated before it was even up: central water garden ha ha ha, it’s an ugly pile of rocks with pipes sticking up. Got a lot of aluminium cladding bought but, likewise the new mater, funny about that.
With hospital ships you could have a bit of a cruise holiday to go with your bypass, and as long as the good ships of the Girtbysea line aren’t legally part of australia (within the self serving clutches of the AMA and medical Colleges regulatory regimes), it could take advantage of better bang per buck overseas ( or even on the seas) trained doctors.
Too easy.
Public health waiting list are horrendous and anyone with the a serious complaint and the financial means will pay to have treatment done privately.
I wonder how many Australians are now involved in “medical tourism”? I know a few who have gone to VN for dental work.
But why are public health waiting lists horrendous? Surely the enormous diversion of federal resources into private health - some billions of dollars a year - has something to do with it?
You haven’t done the math, have you? Divide those billions by the number of people in private health insurance then compare it to the billions spent in the public system divided by the number of uninsured people.
Left E said:
Is this actually correct? My understanding is that in most cases the public hospitals have the facilities available to do extra operations, they just don’t have the budget to pay the doctors/nurses and whatever bits and pieces they use up. So when a privately funded patient goes into a public hospital it doesn’t affect the public waiting list at all (except potentially remove someone from the list)
In some cases this is actually much more important than you might at first think - having recently spent quite a bit of time with a relative who was very very ill, the privacy and very flexible visiting hours as you weren’t disturbing other patients was greatly appreciated.
andy said:
Well our GP system is private healthcare. Do you think it would run better and be more ethical if the government closed down all the privately run doctors clinics, employed them all on a salary instead and opened up government run operations?
Mark,
Nope no Bulk-Billers in New Farm/Valley. You probably need to move to a marginal seat for that!
Lefty E,
I saw that study too. There was some debate about what constitutes “administration” in the public health system and the extent to which accounting methods in the public system mask or redistribute administrative costs across or up the chain. My understanding is that public hospitals are not costed as discrete entities unlike private hospitals. I could be wrong though and would be happy to be corrected…
When you say:
“We dont really have a public v private system at all, but a bizarre cross breed. Thus, your average “private” health consultation gets public monies in several ways…”
I largely agree with you although it does depend on the intervention/nature of the consult. This is why I was bemused by Mercurius’ denunciation of the move towards “free-market” healthcare in Australia!
Further, I agree with you that the government subsidy for private healthcare doesn’t seem to have affected waiting lists for (I presume you mean) most elective procedures. I’m not defending the policy but rather trying to properly deconstruct the purpose of the policy.
Mark again:
Yeah absolutely people should be prepared for the funding gap in private healthcare which the Private Insurer may not cover due to various reasons (age, health habits, length of time on policy, nature of intervention etc…).
Myriad:
Yeah the discrimination for queer couples with the rebate is f**ked up and should definitely change.
Rodney:
Yeah I work in private health and have seemingly spent half my life in the healthcare systems with severe allergies. There are very few specialists who can treat my condition in Queensland so I’m often forced to endure the 11th hell that is our public hospital system. So I have both a personal and ideological aversion to the public system. That said though, I am happy to spent my own money on my private health.
I’m sorry, mel, that doesn’t make any sense to me. It appears to assume a fixed cost of “health” per individual whereas surely what we’re talking about is the cost of infrastructure and staff.
There are four things I wanted to add about the private health system.
First. Do NOT go to a private hospital if you are really, life threateningly sick. They are very pleasant, the food is nice, everyone is polite but they are not tooled up for it. For instance, you are lucky if there are any doctors on site after hours at all. Private hospitals are set up for surgery and minor medical ailments, not emergency care. I would suggest whichever is your largest, central teaching hospital. PC, that surgeon was, to put it frankly, full of it.
Secondly. The majority of private doctoring happens in an outpatient setting with absolutely no benefit coming from your health fund. I am extremely impressed that anyone can run a clinic on a bulk-billing basis as a GP, virtually no-one can do it as a specialist physician. We are too damn slow. So we charge.
Thirdly. People finding themselves as simultaneously patient and consumer end up buying silly things. There are few people with the knowledge to even approach the informed status required for an economic relationship and, when one is sick, the last thing you want to be doing is suspiciously negotiating with your doctor. You just want to be looked after and have everything done. So you end up either wanting silly things or just saying yes a lot. Real temptation to do something low yield but reasonably harmless and lucrative for the doctor and the hospital in that. So the insurer steps in.
Fourthly. Because of this, private health insurance does not mean you buy the health care you want. It is, as mentioned, virtually impossible to be in a position to figure out what you want in the first place. Instead, you pay for a third party to buy your health care for you. Now, Australian insurers are fairly benign, mainly because the public system saves them from expensive diseases, chronic illness and really sick people. Still, there is always someone paying for the service apart from you. To my mind that is a role for which government is better suited.
And, to preempt the more rabid among us, yes I would rather the NHS than the Cleveland Clinic.
My insurer doesn’t cover any gap whatsoever, Antonio, which is probably why it’s relatively cheap.
Personally, I’ve paid for private medical care out of my own pocket when required (dental and major surgery) and while I’m not ‘over the hill’ yet it’s been cheaper over the course of my life than paying anything to a fund. You’ll find that if you discuss this with your ethical doctor or radiologist you get a very different price than if you elected to have the same procedures done through private insurance.
And there’s the rub - the insurance companies have been revealed to me to be little more than an inflationary middleman, and there’s no control on that behaviour in the system at present.
The idea that you can pay money to a fund with little certainty as to your out of pocket expense at the end of a health event not only dissuades people from joining but it’s a major cause of people leaving too. The term “insurance” is blatant deceptive marketing IMO.
That’s what I’m trying to get at, onimod. I suspect that people are aware that with dental procedures, etc, they will only receive maybe about 50% of the cost back from private health funds. I’m not so certain those who haven’t used private cover for surgery realise the story might be much the same with that for a much higher out of pocket expense.
I think thats being a bit unfair. Have had first hand experience of specialists turning up at 9pm or even 11pm night after night. Seeing them back again at 9am in the morning sometimes was quite a surprise too.
And not a regional hospital either. I’ve been told if that I get sick in Canberra I should if at all possible get to a Sydney hospital - not an issue of ethics or intentions, just that in the smaller hospitals the doctors don’t get as much experience.
Dr. S the friends and family I have who are nurses all the same thing. If you’re really ill, to a large, public teaching hospital.
But that’s not the same as having doctors there 24/7. Some smaller private hospitals just don’t have that at all.
Chris- Yes, we will trundle in if called but if I live 25 minutes away then that may be the length of time it takes before you are seen. There are a number of illnesses where that is dangerously long. Most of us don’t refer or admit patients to private hospitals who are likely to get bad quickly. There are some private places that are set up for very sick people with intensive care staff on site but those are the exceptions rather than the rule. Also, sick people are less profitable than elective surgery and, given the public system exists, most private hospitals are not designed for them.
Also, in my experience rural and regional hospitals are pretty good. It is the outer suburban ones that have the most difficulties. Largely because country towns are nicer places to live than the urban fringe, I suspect.
Mark said:
“My insurer doesn’t cover any gap whatsoever, Antonio, which is probably why it’s relatively cheap.”
That sucks Mark. Perhaps with your recent documented health battles you should consider upgrading on both your health insurance and your auto-immune system!
Seriously though, I would strongly recommend that people carefully understand their private health policies and exercise their right to switch funds if they are dissatisfied with the options. There is a fair amount of competition among the various health funds (and I think it might also increase with the lifiting on the Medicare surcharge) so it can pay off to keep regularly appraised of the various offers.
For instance, when I was recovering from surgery, nurses decided that I might be in danger of getting pneumonia, and I was put on oxygen. I didn’t see the surgeon who’d operated on me for some days (which also incidentally might have earned the hospital a few more multiples of $500, because his say so was needed to discharge me). I think that if I’d taken a real turn for the worse, they’d probably have had to bundle me into an ambulance and take me down the road to the RBH.
Antonio, I suspect giving up smoking would solve both health and financial woes for me!