The National Association of Specialist Obstetricians and Gynaecologists recently issued this media release warning that expectant mothers are facing an “expensive surprise” thanks to Federal Budget cuts to the obstetric safety net which took effect on January 1. The Association is worried, it says, that “women and their families are not fully aware” of the cutbacks.

Sally Tracy, Professor of Midwifery at the University of Sydney, thought a little historical context might give readers a deeper understanding of the issues involved, and reassure women that the reform is aimed at creating a fairer system. She writes:

“The Medicare Safety Net was aimed at protecting all Australians from high out-of-pocket costs for medical services provided outside hospital.

In March 2004 the Howard Government changed the Medicare Safety Net to allow for an unlimited, non means tested increase in the supplement payable for Medicare benefits for these charges over and above a threshold set by the government each year.

The inherent risks in introducing an unlimited benefit were soon realised when it was discovered that the safety net was not necessarily benefiting those with a low to middle income or who were sickest in the community, despite the existence of a lower threshold making it easier for them to qualify.

The people who really benefited were the providers themselves. It was found that some doctors were cleverly taking advantage of the safety net to increase their fees with the knowledge that the majority of the cost would be refunded by the government. In 2008 this cost Medicare (and the taxpayer) the sum of $211.3 million.

In fact in the five years since the introduction of the new safety net, fees charged by private obstetricians for in-hospital services reduced by six per cent, whilst the fees charged for out of hospital expenses such as the ‘antenatal care package’ increased by 267 per cent.

So from the 1st of January 2010 the Rudd Government determined there would no longer be an unlimited safety net to supplement out of pocket expenses, instead there would be a cap on the level of the safety net benefit for each selected Medicare item.

Naturally those private obstetricians who had previously benefited from such a lucrative bonus were bound to cry foul.

Keep in mind that during the Howard era, the Safety Net rort combined with the Commonwealth government’s 2-billion dollar a year uncapped 30% private health insurance rebate wrought havoc with public health system funding.

And as always, women and families most in need were the losers.

The claim that Australian families who are attended by a specialist obstetrician during pregnancy will be nearly $1000 worse off is simply not true.

Those who will be ‘worse off’ from the beginning of 2010 are those who for the past five years have been reaping a rich harvest from the health system.

NASOG claims it is worth remembering that the Government does not pay doctors – the Government provides rebates to patients.

The Rudd government would be mad to heed the NASOG plea to wind back safety net rebates for private obstetric services.

Yes, women will get a shock when they realize that the antenatal fees they are being charged are no longer fully refundable through the Medicare Safety Net.

Sensible women will deduce that the thousands of dollars they were charged with the promise of being reimbursed through the Medicare safety net had nothing to do with the quality of care they were buying and everything to do with profiting from the system.

Women will soon work it out that these thousand dollar private obstetric ‘antenatal packages’ will disappear once the government’s golden goose is dead.

In 2008 the $414 million the government spent on the safety net was an increase of 30 per cent on the previous year. Where would it end?

As Minister Roxon said in the second reading of the Health Insurance Amendment (Extended Medicare Safety Net) Bill 2009 on the 28th May 2009; “Unless we make these changes now, this expenditure will continue to grow rapidly. This bill creates a mechanism by which the government can responsibly manage expenditure on the safety net”.

Despite the hand wringing of private obstetric specialists, Australian women should take heart.

Nicola Roxon’s proposed government investment of $120.5 million over four years though a maternity services reform package will provide a much greater choice for women in their maternity services. What’s more it won’t cost us an arm and a leg.”

Conflict of Interest
Dr Sally K Tracy is Professor of Midwifery at the University of Sydney. She has a vested interest in encouraging the Commonwealth government to increase accessibility to midwifery care for all women; and fully supports the Commonwealth government’s initiatives under the maternity services reform package.