I was recently one of the so-called academic “experts” on the ABC’s Australia Talks, trying to make the point that Commonwealth subsidies for private health insurance really do nothing to ease the pressure on public hospitals. Rather, all they do is to re-allocate resources, but they don’t create new resources.
It was hard to get that point across, and time was running out.
Then I was saved by a caller from Tusmore, who said in her best Adelaide accent:
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“I’ve heard that academic chappie talking about private insurance, but I have it, and it allowed me to jump straight to the front of the queue for elective surgery. I think everyone should have it.”
I still thank her for making my point, in plain language which is so elusive to academics.
It’s weird for governments to subsidise queue-jumping, particularly when they are being criticised for under-resourcing areas where there is great need – such as indigenous health and emergency wards.
It’s weirder still for the subsidies to be so generous. The 30 percent rebate is only part of the incentive, with the one percent tax rebate for “high” income earners with private insurance being the far more significant subsidy. For anyone with an income above $70,000, the one percent rebate more than pays for a basic $700 policy.
When the Howard Government introduced incentives for private insurance early in its term, its rhetoric was about “self-reliance”, but insurance, by definition, is about buying out of self-reliance. Political conservatives may suggest we should not depend on the “nanny state” to pay for our health care, but they consider it OK to make us dependent on the “nanny corporation” – the private insurer.
In fact, the cruelest blow of the policy is that those truly self-reliant people who pay for private hospital episodes, dentistry and other services are denied the support of the rebates.
There is strong evidence, from OECD data, that private health insurance does not buy better health care but it certainly buys more expensive health care; the USA is the strongest case in point.
That is not to suggest the only alternative is some “socialised” health care system. Contrary to the scaremongering of the health insurers, we can still have a strong private sector without private insurance; indeed it would make sense for the Government to pass the $4 billion annual subsidies more directly to the private hospitals, without an administrative overhead being siphoned off by private insurers, and with the benefit of ensuring that scarce health care resources are not being wasted.
That would really take pressure off our hospitals.