MEDICAL MADNESS IN AUSTRALIA

Expensive surgery for the elderly is not the best use of taxpayers' money, writes Ross Gittins

Whichever side wins this election, the new government will be committed to pouring a mighty lot more money into Medicare over coming decades - far more than either side is willing to admit. But this huge injection of taxpayers' funds is likely to do more to enhance doctors' incomes than improve the quality of our health care.

The present bout of renovations to Medicare began in response to the public's concern about a sharp decline in bulk-billing by general practitioners. This decline occurred because the Howard Government had spent the past eight years sitting on the schedule fee - stopping it from rising as much as doctors' costs were rising. Watching enviously while specialists' incomes continued to grow strongly, many GPs finally broke out of the system, cutting back their bulk-billing so they could charge fees well above the schedule fee. Getting them back into the bulk-billing paddock - where the rate at which their fees rise is effectively controlled by the Government - won't be easy now they've tasted financial freedom.

Both parties give the impression they're trying to preserve bulk-billing, but only Labor is genuine. Only it is offering GPs the monetary incentives needed to possibly - possibly - lure them back into the system and get the proportion of GP consultations that are bulk-billed back up to the 80 per cent level John Howard inherited. The Liberals have limited their inducements to encourage the bulk-billing of pensioners and children. They appeared to match Labor's recent offer to pay a 100 per cent (as opposed to the present 85 per cent) rebate on the schedule fee for GP consultations, but the appearance is deceptive. Labor would pay the higher rebate only to doctors who bulk-bill, whereas the Libs would pay it also to patients who were not bulk-billed - thereby permitting GPs who so chose to increase their fees by the same amount as the increase in the rebate. So the Libs' version is designed to allow doctors to share the largesse.

Rather than seek to restore bulk-billing, the Libs' approach has been to introduce a safety net where, once a family's out-of-pocket payments (ie, doctor's fee minus Medicare rebate) exceed a threshold of $300 or $700 a year, Medicare picks up 80 per cent of all further out-of-pocket payments during the year. So the Libs are saying, we're going to let bulk-billing continue to wither for most people, but don't worry, we've got this other way of protecting you from undue expense. What's more, bulk-billing is limited mainly to GP visits, whereas our safety net comes into its own with specialists' fees, most of which are way above the schedule fee.

There's no denying the safety net is very generous (mainly because a misguided minority in the Senate forced the Government to accept much lower threshold levels than made sense). This is why the measure will cost far more than the Government originally bargained for. And indeed, the early figures for this year suggest the cost to the taxpayer will be double what was expected. Those figures showed that payments to people in Brendan Nelson's prosperous North Shore electorate exceeded those going to people in the whole of South Australia.

Actually, that isn't surprising. It's in the most prosperous suburbs that doctors don't bother bulk-billing and know they can charge way above the schedule fee, while patients can afford lots of visits to specialists even at high prices. This says the lion's share of taxpayers' money to be spent on the safety net will go to patients who don't particularly need help (including yours truly) and to those specialists in the best suburbs with the highest fees. Worse, the advent of the safety net removes the last constraint on the freedom of doctors to raise their fees: conscience. Don't worry that your patients can't afford your fee increase - as soon as they're over a quite low threshold, the taxpayer will be picking up 80 per cent of the rise. So the safety net is likely to underwrite a continuing surge in doctors' fees. Its cost will just keep exploding - but with surprisingly little of the benefit going to needy patients.

In its own way, however, Labor's rival offer, Medicare Gold, would be just as dubious and wasteful. This is the promise to end hospital waiting lists for people aged 75 and over by giving them the equivalent of free private health insurance. The proposal has two attractions from a policy perspective: it would end the duckshoving between public hospitals (state) and nursing homes (federal) over care of the frail aged, and it would make public and private hospitals part of a single, integrated system. Apart from that, Medicare Gold is bad news. Despite all Labor's fulminating over the evils of a two-tier health system, that's just what it would be: Medicare Gold for those old enough, Medicare Ordinary for the rest. This discrimination would be on the basis of age, not need. The old wouldn't face queues for elective surgery, but everyone else would. The old would get free private health insurance, everyone else would have to pay.

This is a tacit admission from Labor that by itself, Medicare is not up to snuff. For decent treatment, you must have additional, private insurance. Private insurance is now an integral part of Labor's version of Medicare. Wow. By giving the elderly unfettered access to "free" hospital treatment, their doctors would gain an open go in ordering additional procedures. A $20,000 heart bypass for someone in their 80s? Not a problem. Might keep them going a few months longer.

Because specialists would be paid a higher (private) fee for operations, a lot more of them would make themselves available. Even so, the blowout in demand would lead to a constant threat of waiting lists emerging. Every time that happened, a Labor government would be under pressure to keep its promise by pouring yet more taxpayers' money into system. It would be a never-ending struggle, with a cost that was completely open-ended.

The pollies will never admit it, but waiting lists for elective surgery aren't an unfortunate accident - they're a design feature. Pollies of both colours - federal and state - use them to keep a lid on growth in the cost of public hospitals that would otherwise be uncontrollable. If Labor gave oldies an exemption from queuing, there's nothing surer than that the queues for you and me would be longer - and this despite hugely increased spending on the oldies and their doctors.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

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