In A Health Policy for Australia: reclaiming universal health care, we assert and demonstrate that public universal health insurance should be a central feature of our health system. With more rhetoric than logic, and apparently without having read the statement, Health Minister Tony Abbott reacted to our statement by extolling the value of private insurance (see Wednesday's Hansard). His case is threadbare.
We need to arrest the trend to a two-tier system. We are paying an increasingly heavy price for so-called ‘choice' in health care between look-alike health insurance intermediaries. We risk losing not only the health benefits but the social cohesion which is promoted by a universal system.
The private health funds including Medibank Private are price-takers in the market and are helping to ratchet up health costs. Every country in the world that has a substantial private health insurance industry has high health costs – the United States is the most obvious example. Medicare, with its buying clout, can negotiate and set rates in the market. This market strength is essential to control costs.
Health insurance subsidies are not taking pressure off public hospitals. Instead they have opened up new private demand. And the financial benefits of the subsidies are skewed in favour of the well-off. 80% of the richest 20% of Australians have private health insurance, compared to only about 25% of the poorest 20% of Australians.
Government support of health insurance funds is clearly damaging our health system. If people want private insurance, so be it, but it should not be subsidised and paid for through inefficient intermediaries which increase their premiums at about double the rate of inflation year by year. The subsidisation of private health insurance is not a health program, it is corporate welfare.
In seeking to reclaim universal health care, we do not propose that we have a free system. Payments should be according to means. Incomes for most Australians have grown substantially since Medicare was introduced 30 years ago.
Further, we do not suggest that a universal public health insurance system pre-supposes a view about whether health services should be delivered by public or private organizations. In fact, we suggest that the government subsidy to the health insurance industry would be better spent through direct funding to private hospitals. This would have provided an additional $1.2 m to private hospitals in 2003/4.
We also believe that ministers and their departments need to take more responsibility for ‘health' in its broadest sense. Too often the focus is on responsibility for health care programs. Many factors outside the health portfolio have a major impact on the health of Australians. Poverty, particularly amongst indigenous Australians, is a clear example.
We propose a major reorientation of health services in Australia through the staged development of multidisciplinary community health centres. We expect that they would be largely private centres. The decision in each case would depend on the particular circumstances. We outline the case for community health centres in our statement. These centres would be the drivers of change from a sickness to a health focus. They would also be an opportunity to reform archaic health workforce practices.
We believe that in addition to inequities, there are major inefficiencies in the present health arrangements — restrictive practices and shortages in the workforce, commonwealth and state fragmentation — and that our health care can be improved without significant increase in expenditure.
We also need to introduce countervailing power in the health sector. The debate about health resources currently only takes place between ministers and doctors. The community is excluded. The media savvy and influential are able to skew the spending of our scarce health dollars. The urgent, for example waiting lists, takes priority over the important, for example mental and aboriginal health. We need to formalise community engagement at every level in order to establish the real and informed priorities of the community in the spending of their health dollars. There are proven methodologies, such as citizens' juries, to give the community an effective voice in advising governments.
We urge the Commonwealth Government and any state or territory to negotiate a Joint Commonwealth-State Health Agreement which, with appropriate governance, would pool funds and jointly administer health programs in the co-operating state.
It is time to stop tinkering with a health sector that is coming to the end of its design life. The sector is currently held together by dedicated and professional people. They deserve better. We need fundamental reform.