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  Issue No 48 Official Organ of LaborNet 31 March 2000  

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Health

Making Sense of Medicare


Nurses lift the lid on the Medicare myths as they shape up for a major national campaign.

 
 

The Australian health care debate has often become a battlefield in which politicians, doctors, nurses, health bureaucrats and private sector companies continually exchange blows.

Many key players seek to use the debate to gain leverage for their own arguments and horror stories - and the resulting confusion is only exacerbated by news headlines which regularly announce "health crisis", "long waiting lists", "cost blow-outs" and "problems with care".

It's time to examine the true state of health care in this country: to tackle the myths about Medicare and to let the Australian public examine their health system clearly and fairly.

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MYTH #1: "PUBLIC HOSPITALS ARE COLLAPSING."

Reality check:

Public hospitals are under stress. The latest available figures show over 5 million admissions per annum by Australian hospitals, with public hospitals accounting for approximately 70 per cent (AIHW, 1998, p198).

Between 1991-1992 and 1995-1996 there was a 22 per cent increase in public hospital admissions. At the same time, average length of stay fell from 4.8 days to 4.3 days, largely due to a greater focus on day surgery (AIHW,1998, p 200).

Public hospitals also provide over 3.4 million outpatient and emergency services per year (AIHW, 1998, p 204).

Waiting times for elective surgery have often been used as an indicator of crisis in hospitals and the figures strike a resonance with the community. No-one wants to wait when they are in need of care, although most people understand that urgent cases must be dealt with first. Despite the bad publicity, the reality is that Australia has similar waiting times for elective procedures as Canada and New Zealand. We significantly outperform the United Kingdom on waiting times. And despite popular belief, a recent survey found that overall estimated clearance times (the time it would take to clear waiting lists) are actually falling (AIHW, 1998, p 209).

Australian public hospitals are clearly not collapsing.

Some commentators say that increased patient demands and rising expectations are placing pressure on the public system. However, changes and reductions in government funding have played a major role. Neither the State or Federal governments have consistently provided an adequate growth in funding.

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MYTH #2: "AN AGEING POPULATION LEADS TO AN AVALANCHE OF COSTS."

Reality check:

National and international analyses of trends over the past ten years have consistently punctured the claim that an ageing population is the chief cause of high demand and cost blow-outs.

An OECD report of 17 countries found that through the 1980s the impact of an ageing population on the growth of health costs was at most 0.3% per annum. Projecting into the next century this same report was able to attribute - at worst - a rise in health costs of only 0.7% per annum due to an ageing population.

Comparable countries that already have ageing populations, similar to those forecast for Australia well into the 21st century, do not report health care costs higher than ours are now.

In fact, the largest driver of new and higher costs continues to be the impact of new technologies and "supplier induced demand" (Oxley & MacFarlan 1994).

Older people are getting healthier and staying healthier longer. While the elderly have always been major users of health care, the pressure on the health system due to ageing will get proportionately lighter by comparison with earlier times. (Sax 1993, Frics 1989, Rowland 1991, McCallum & Geiselhart 1996, Richardson 1999)

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MYTH #3: "MEDICARE SHOULD BE A SAFETY NET FOR THE POOR. THE WELL OFF ARE FREELOADING ON THE PUBLIC SYSTEM."

Reality check:

The strength of Medicare is that it is for all of us! Everybody pays a fair proportion, dictated by their income. The "well-off" pay more because they can afford to do so. If Medicare became only a safety net for the "poor" and the more "well-off" were "encouraged" to use the private health system and contribute less to Medicare, Australia would see the destruction of our equitable health system.

If Medicare was no longer universal, well-off people would no longer have a stake in its quality. The poor and sick would then be worse off, not better, as the level and quality of care declined. Even in financial terms, keeping the better-off people contributing to Medicare makes much more budgetary sense than any "opting out".

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MYTH #4: "MORE PRIVATE INSURANCE WILL HELP PUBLIC HOSPITALS."

Reality check:

Private health insurance contributes a very small amount to the entire health care system. It has been estimated that a rise of about 1% in the Medicare levy would easily provide the same amount of funds that private health insurance contributes to health care. Funding of the health system through private health insurance is also very inefficient.

Private health insurance companies spend 13.5% of their funds on administration whereas Medicare only uses only 3.5% of its funds for administration (Livingstone 1997). Dollars provided through Medicare therefore "buy" more direct health services.

It is important to stress that money paid by consumers to private health insurance companies does not buy health services - it buys insurance. Some of these funds go into reserves, effectively becoming "dead money" which does not produce health care.

The Commonwealth Government's recent 30% private health insurance rebate has mainly replaced $1.6 billion in private health insurance premiums previously paid by consumers. There is no guarantee that public hospital demand will fall as a result.

Public hospitals are a major supplier of some services (eg. research, emergency services, care of the chronically ill and staff training) not generally provided by private hospitals.

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MYTH #5: "INTRODUCING CHARGES FOR PUBLIC HOSPITALS WILL FIX THE PROBLEM."

Reality check:

Often people suggest that co-payments, or user charges, will reduce demand for public hospitals. However, international evidence suggests this would not happen to any significant extent. In fact, the main impact would be financial and it would hit hardest for those most in need - people on low incomes, their children and those with poor health. For more information about co-payments, see Richardson J, 1991) .

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CONCLUSION

In a modern democracy, it is inevitable and desirable that different groups will have different viewpoints. This is as true concerning health care as it is about anything else. But we can at least demand that they rely on facts not myths to argue their case. Australia's health is too important to expect anything less.


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*    Click here for more on the Medicare campaign

*   View entire issue - print all of the articles!

*   Issue 48 contents

In this issue
Features
*  Interview: The New President
At the end of her first week in the job, new ACTU President Sharan Burrow trades emails with Workers Online.
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*  Health: Making Sense of Medicare
Nurses lift the lid on the Medicare myths as they shape up for a major national campaign.
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*  Unions: Bush Bashing
The Finance Sector Union is taking to the road to pressure the government to impose community service obligations on banks.
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*  Politics: The French Connection
While Victorian building unions are seeking a 36 hour week, Eurpoean nations like France are taking a more communcal approach to working time.
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*  Economics: Mutual Obligation
New statistics show that an increasing number of people are volunteering to contribute to the community.
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*  History: Living Library - Part II
More on the rich labour history that is housed within the walls of Sydney's Mitchell Library.
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*  International: Russian Revolution
Russian trade unions are calling for the revision of a draft Labour Code, against the backdrop of Presidential elections.
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*  Review: Casino Royale
Laurie Aaron's new book is sparking a lively debate about how a progressive agenda can be adapted to the challenges of globalisation.
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*  Satire: Chop ‘em Up and Stick ‘em in Acid”
The West Australian Government is poised to pass Pakistani-style sentencing laws.
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News
»  Workers Demand Internet Access to Organise
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»  ILO Condemns Australian Labor Laws
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»  Flying Doctor Grounds Aussie Jobs
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»  Bank-Bulance Hits the Road
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»  April Deadline on Olympics Pay Claim
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»  Pressure Builds on Stellar Contract
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»  Shares Plummets But Rio Bosses Get Millions
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»  Nurses to Launch Medicare Campaign
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»  Action Boosts Wages for Disabled Workers
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»  SA Workers Close Building Industry
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»  Political Economy for Activists
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»  Workers to Set the Tunes for Dili Streets
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»  OBITUARY - George Petersen (1921-2000)
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Columns
»  The Soapbox
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»  Sport
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»  Trades Hall
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»  Tool Shed
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Letters to the editor
»  An Open Letter to Ansett
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»  Moved by Wal's Life Story
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»  The Problem With Mandatory Sentencing
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