The head of the doctor’s union, Australian Medical Association (AMA) president, Brian Owler, yesterday gave an address to the National Press Club, in which he raised concern that Australia is heading down the path of a US-style health system. From The AFR:
He said the $7 GP co-payment, cuts to hospital funding agreements and changes to general practice training programs as the worst aspects…
Apart from the budget, Dr Owler said another top concern was the back-door entry of private health insurers into primary care…
“Despite the protests of innocence, I fear a concerted effort on behalf of private health insurers to undermine and control the medical profession,” Dr Owler said.
“The stage is being set for a US-style managed care system in both the primary care and hospital settings. I am concerned that the government is also looking towards such a system.”
The government was very closely engaged with the private health insurers, Dr Owler said, and giving them a greater role in the health system was a logical extension of its “user pays” mindset.
In principle, I do not oppose a small co-payment for GPs services and emergency visits provided there are adequate safeguards for lower income earners and those with chronic medical conditions, and the benefits of implementing such a measure more than offsets the administrative costs. Most other developed nations with strong socially-inclusive health systems, such as New Zealand and Sweden, run such a model, and the sky has not fallen in.
The AMA seems to agree with this view, last month agreeing to provide the Government with alternative co-payment models that would exempt some people from the GP co-payment, such as those with health care cards, as well as visits to emergency.
Cutting overall health funding and shifting primary care costs onto private health insurers is a far greater concern, in my view, and would likely lead to an escalation in private health insurance premiums. While such a reform may lower direct costs to the Budget, overall health costs to the economy (and households) could rise significantly, making the community worse-off as a whole.
On this point, the US health system illustrates the perils of moving towards a privatised system. There, healthcare consumes 18% of GDP, versus 9% in Australia, despite 16% of US households not being covered by any form of health insurance and much worse overall health outcomes.
As noted previously, a recent survey by Bloomberg ranking countries based on three criteria: life expectancy; relative per capita cost of health care (percentage of GDP per capita); and the absolute per capita cost of health care, showed Australia to have the 7th most efficient health care system in the world, ranking the highest amongst Anglosphere nations (although New Zealand and Ireland were excluded from the survey due to their small size). By contrast, the United States’ health system ranked very poorly, coming in at 46th place out of 48.
The Government should, therefore, be very wary about making fundamental changes to the health system, including shifting health provision to private operators. In this respect, the AMA’s concerns are justified.
