May 14, 2014

Health: political theatre aside, health cuts a bitter pill to swallow

The government has delivered a masterful stroke of political pageantry in linking a GP co-payment with medical research funds. Unfortunately, it comes at the expense of the poor and the sick, writes health journalist and Croakey contributor Jennifer Doggett.

With the bulk of the health budget already in the public domain, last night’s budget speech from Treasurer Joe Hockey was less about new announcements and more about selling the already unpopular measures to the Australian public. Attempting to convince consumers to cough up more for their healthcare is not an easy task, and in spinning the new payments as "opportunity, not austerity", Hockey brought political performance art to a new level. Indeed, with his love of a cliched image ("we all need to share the heavy lifting"), the smoke-and-mirrors acts (pay more for GPs but get a cure for cancer!) and a show-stopper of a stunt (the world’s biggest medical research fund!), the Treasurer seemed at times only one bearded transvestite away from a winning Eurovision entry. The much-debated GP co-payment, along with an additional $5 for non-concessional Pharmaceutical Benefits Scheme prescriptions, were predictably the focus of much media and stakeholder attention. The net impact of these additional co-payments will be to increase the cost burden on people who are poor, sick and vulnerable, creating additional access barriers to cost-effective preventive care and potentially increasing downstream healthcare costs. The small reduction in the Medicare safety net thresholds, to start in 2016, is woefully inadequate to support the increased numbers of people who will have difficulty meeting their healthcare expenses. So unpopular are these measures that they have united in opposition consumers, academics, health economists, peak health bodies and (incredibly) both the conservative (Australian Medical Association) and the left-wing (Doctors’ Reform Society) arms of the medical profession. In fact, regardless of where they sit on the political spectrum, it appears that doctors (not unreasonably) object to becoming de facto tax collectors for the government -- particularly not for a government that has the chutzpah to trumpet its commitment to "lower, simpler, fairer taxes" and administrative simplicity, while simultaneously asking GPs to collect $3.5 billion of additional revenue on its behalf, in $5 increments. Linking the co-payments to the creation of a new medical research fund makes no economic or policy sense. While clearly there are some benefits from increased medical research activity, all the evidence suggests that the biggest return on our investment in health is in prevention, public health and primary care, precisely those areas that have been most savagely cut in this budget. Perhaps less significantly, given the number of other "non-core" promises the government has abandoned, the funnelling of co-payment dollars to medical research also undermines Prime Minister Tony Abbott's pre-election commitment to direct money from "the back office to frontline services". However, politically this move is masterful. It creates an association in the community between co-payments and medical research (we’re not just paying a GP tax, we’re funding a cure for dementia!), thus reducing the inevitable backlash from hitting up the sick and the poor. It also puts more pressure on the opposition, Greens and crossbenchers to pass the relevant legislation, as by opposing it the government can argue they will be obstructing the progress of medical research. The changes announced to Medicare Locals, which will morph into Primary Health Networks, were also expected in response to recommendations of the Horvath Review, released earlier this week. These new networks will differ from MLs in that they will be established via tender and encouraged to partner with private health insurers. In an echo of MLs’ previous incarnation as divisions of general practice, the government has stated that these new organisations will be more GP-centric, establishing Clinical Councils, with "a significant GP presence", along with local consumer advisory committees. The budget papers state that their role will be to "ensure primary health care and acute care sectors work together to improve patient care", leaving open questions about their role in health promotion and disease prevention. In response to another recommendation from the review, funding for the peak ML body, the Australian Medicare Locals Alliance, will cease from June 2014.
"... this budget hands the states both the incentive and the justification to use every opportunity they can find to shift health costs back to the Commonwealth."
A slightly more positive response to the budget came from the National Aboriginal Community Controlled Health Organisation, perhaps relieved to be spared the brutal cuts experienced by other health sectors. NACCHO welcomed continued funding for the 150 Aboriginal community controlled health services around Australia, with Justin Mohamed, chair of the National Aboriginal Community Controlled Health Organisation, saying: "The 2014 budget funding means we can continue to provide high-quality, culturally appropriate healthcare to our people for another year." However, the NACCHO chair also noted that the introduction of co-payments for GP visits will hit Aboriginal and Torres Strait Islander Australians hard, as they are "low-income earners and suffer the highest level of chronic disease, requiring regular GP visits". The National Rural Health Alliance also welcomed some rural health initiatives, including "the modest commitments made on rural health in the 2013 election campaign", such as funding for additional GP consultation rooms for supervising registrars and medical students in rural and remote locations, and a small investment in scholarships for nursing and allied health. However, the aliance did not comment on the decision to scrap the rural dental infrastructure scheme and how this will impact on rural Australians who already have problems accessing dentists. Sending a clear signal to the states that the previous federal government’s co-operative agenda on health is over, the Treasurer announced that the Commonwealth will walk away from its commitment to share equally in growth hospital funding, indexing funding to a combination of growth in the consumer price index and population, from 2017-18.  This has been seen by some political commentators as part of a broader strategy to put pressure on state governments to agree to an increase in the GST.  By reducing hospital funding and potentially increasing demand for emergency department services (due to the GP co-payment), this budget hands the states both the incentive and the justification to use every opportunity they can find to shift health costs back to the Commonwealth. Overall, this budget was never going to be an easy sell for the government. Despite its efforts in talking up the "budget crisis", it’s hard to convince the community that making the poorest pay more for basic healthcare stacks up with removing politicians’ lifetime gold pass entitlements as a fair share of the "heavy lifting". However, whether or not, as some commentators forecast, the budget measures spell the death of Medicare and universal healthcare remains to be seen. While the public health system has clearly taken some heavy hits in this budget, Medicare has previously proved more resilient than many have predicted, outlasting much longer acrimonious political environments including 11 years under John Howard’s prime ministership. Tony Abbott and Joe Hockey are not the first politicians to think that with a few budgetary gambits they can turn Medicare into a safety net system for the disadvantaged, and given the response to their first budget from the health sector and the community, they may not be the last.

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5 thoughts on “Health: political theatre aside, health cuts a bitter pill to swallow

  1. klewso

    Paper-clipping the co-payment to the funding of such research, a wedge to catch Labor, by The Climate Change Denialists Party which is then going to pick “Good Idea” winners to fund their research? Can’t wait for their justifications and winners?
    If only “Climate Change Refutation Research” could be manipulated to “medical research”?

  2. Bill Gates

    Yep…..ya sick mate…..not in a position to argue if u want to get better/see the doctor….so pay up or Die! By the way did I mention that we are bringing back death taxes if we still can’t balance the budget! regard Tony & Joe.

  3. CML

    With Labor and the Greens already saying they will vote against the $7 co-payment, Clive Palmer’s interview on Lateline tonight was encouraging. He says all four of the PUP senators will also vote against this ‘policy’.
    That adds up to 39 votes in the new Senate, which is a majority. Bye, bye co-payment!!

  4. CML

    Addition to comment above: If the rAbbot doesn’t like that outcome, he can always go to a double dissolution!
    And my bet is, he doesn’t have the intestinal fortitude for that!!

  5. Lee Miller

    I must say how very noble of our glorious PM that he cannot look a pensioner in the eye (as he’s taxpayer funded, high income for LIFE)without being able to say that he will pay exactly the same as they will.

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